Opinion: Ofwat director Adam Cooper on the shadow market

For the water industry and the Open Water programme, October means two things.

Firstly, the opening of the shadow market. Two years of planning, developing, building and legislating coming together in this final and extremely important phase of opening the retail market for water and waste water services to over a million eligible business, charity and public sector customers.

But secondly, it also affords an opportunity to reflect, for a moment, on what has been achieved in a relatively short time and the credit due to those involved in bringing together such a complex programme of work.

The start of the shadow market phase moves the programme further towards the implementation of the enduring market arrangements – in other words the implementation of one of the most significant changes in the water industry for decades…..and that means to use a well-worn phrase, there is no room for complacency – there is still a huge amount of work to be done and all involved are only too keenly aware of that.

Over the next six months as the companies test out systems and processes in shadow, very much in the spotlight will be customer engagement. A national survey, commissioned by Ofwat to measure levels of customer awareness and understanding of the retail market is about to get underway with results expected later in the autumn.

Those results will then shape targeted activity to ensure eligible customers have sufficient understanding to help them make an informed decision about the water and waste water retail services. The results will also support the water companies’ more localised customer engagement.

The Open Water website was recently relaunched with content devised largely from user testing and feedback across the industry. This will continue to be expanded and added to as market opening approaches.

In addition to customer engagement, during October, Ofwat is very much turning its attention to preparation for the enduring market. The industry can expect the statutory consultation on the Wholesale-Retail Code to be issued by Ofwat along with the consultation on the non-statutory Market Arrangements Code. This sets out arrangements for how the retail water market will operate, including the setting up of a panel to help oversee the codes of practice and any changes to these.

Proposals for measuring market outcomes and performance monitoring are being drafted and Ofwat is holding an event in October to explore its draft monitoring framework principles. In addition, a recent workshop explored principles around a code of conduct for Third Party Intermediaries and this will now be taken forward based on the feedback from that day.

Adam Cooper, director of market opening, Ofwat