The market operator of the non-domestic water sector has acknowledged the “healthy impatience” for legacy issues to be resolved once and for all.
In its business plan for 2020/21 MOSL has committed to a review of metering and to build bridges between retailers and wholesalers.
It has also committed to reduce complexity and worked through concerns about an initial suggestion of a 10 per cent increase in its budget, to settle on a final rise of 4.7 per cent.
The metering review promises to “facilitate increased senior level strategic engagement” to drive policy and strategy changes aimed at resolving market frictions and setting a “clear future vision and direction for metering in the market”.
Speaking to Utility Week, MOSL chief executive Sarah McMath said she recognised the sector needed to move on from concerns that had dogged it since market opening.
She said: “The hard truth is that none of the companies in this market are currently turning a profit. We need to move away from the view that the water retail market is just too hard to do business in. We have operators who work across utilities and across nations. We need to move away from being the section of the market they find difficult.
“One of the things that I’ve been surprised about coming into the market is the level of distrust across various parties. I hope that this is the start of us working towards a position of trust and collaboration – and that people trust MOSL in the role that we have undertaken.”
On the metering review, she said: “Metering has emerged clearly as a point of friction in the market. The plan is that the review will start off as broad as possible for a holistic viewpoint – starting with what does a good journey look like. Some of the issues can’t be solved by MOSL alone.
“The meter reading onus was given to the suppliers originally because at market opening it seemed like all the value was with the wholesalers. However, there was the unintended consequence around efficiency. We’ve often got two people, in two vans driving down the same street to take two sets of meter readings – one household, one non-domestic.
“There is limited value in this market and those kind of inefficiencies eat up that value.”
The business plan reiterates support for the bilateral transactions project but acknowledges a strong challenge from members that the business case needs to be clearer before solution costs can be committed to. As a result these have been removed from the current budget.
The plan sets out five key themes to commit to in 2020/21:
- Service Excellence: MOSL says it will place a “relentless focus on providing transparent, measurable and value for money core and additional services, supported by improvements in how we engage and interact with trading parties”.
- Market Assurance: The market operator has pledged to “use a range of tools to measure, understand and provide evidence-based assurance of the performance of the market, including MOSL’s own performance” and will “take action where necessary to address both individual trading party and overall market issues and risks”.
- Market Improvement: MOSL says: “We will work proactively with trading parties, governance groups, Ofwat and other stakeholders to identify solutions and make improvements that contribute towards a simpler, better functioning market that works in the interests of participants and customers.
- Governance: Support will be provided and, where appropriate, evidence-based input and challenge to the market governance groups to “facilitate and promote an effective and value for money model of governance for the market.
- Building Capability: “We will build MOSL’s people, data insight and technology capabilities, seeking to foster a culture of learning, collaboration and innovation across the market to help to move the dial in all areas of market operation and improvement.”
A full interview with Sarah McMath will be available to members next week