With competition in the English water market due to commence in April 2017, those managing the deregulation programme are working to tight deadlines, and big changes are happening behind the scenes for your water suppliers.
Market Operator Services Ltd (MOSL) was set up specifically for the task of introducing competition for non-household customers. MOSL is a private company, owned and funded by water companies – but with an obligation to act independently and impartially, for the benefit of all market participants. Its members are working closely with DEFRA and Ofwat, to ensure that the operational capability exists to support England’s new open market. Here’s a look at how things are progressing so far, and at how MOSL will be working with water companies to lay the foundations of a competitive marketplace over the coming months.
The first and all-important “design and build” stage for the new open market is well underway, and is due for completion by 31 March 2016. This stage has two key elements:
The Central Market Operating System (CMOS) is under development by MOSL, and will become the digital platform through which wholesalers and retailers interact. This is reported to be on track for phase 1 completion by April 2016.
Between April and September of this year, the programme will move into the testing stage. This involves not only the testing of new systems to ensure they comply with the market rules, but also the validating of data supplied by those companies participating in the market. There is an obligation on all water and sewerage companies to provide complete and accurate data on their current customers, and they will be under pressure to provide this in a timely fashion, so that the market may open on time.
From April 2016, water and sewerage companies can apply to MOSL for a Market Entry Assurance Certification (MEAC), which will allow them entry to the new open market 12 months later. Alongside this certification, all companies will require a Water Supply and Sewerage License (WSSL) from Ofwat. Companies will need MEAC before being allowed to participate in the shadow market operation within stage three. Read more about the licensing application process.
Once the testing phase is over, the final step in the process will be to run a “shadow” market, which will serve to identify any potential problems or issues before the market goes live. The shadow market will run for six months between October 2016 and March 2017, will require participation from both incumbent suppliers and new entrants, and will begin to test the processes put in place for the switching of customers.
In early 2017, a final decision on whether or not the market is ready to open will be made by the Secretary of State. The whole programme is running to extremely tight timescales, with mounting pressure being placed on water companies; who will be busy developing their retail arm, separating out operations, and compiling their data over the coming months. Some water companies are expected to exit the market this October, concentrating their efforts on the domestic marketplace instead.
Whilst all of this is going on behind the scenes, it will pay to stay informed and get your own business ready for the changes that will come with deregulation. Take a look at 5 things you should be doing to get ready for deregulation.
For any other questions regarding deregulation, or to find out about a free water audit for your business, expert help is available.