Market Operator Services Limited (MOSL) said companies will be required to submit performance improvement plans to help address issues they encounter throughout implementation of the new market.
The firm said it would help companies establish and then monitor against performance improvement plans to address issues that emerge from the process of market entry assurance certification up until September 2016.
“If a market participant’s initial data upload has a high proportion of supply points which fail validation then MOSL will consider preventing that participant from entering the shadow market until a performance improvement plan has been implemented,” it said.
MOSL has published guidance for companies planning to take part in the competitive market for non-household water customers, setting out key actions that participant companies will need to take with respect to market systems, data and processes.
It said it expects water companies to use the shadow market, due to run from October 2016 until go-live, to identify and resolve issues with data in a safe environment. It added that participants should operate the market processes during the shadow market as they would in production mode, using it as an opportunity to assess their own readiness.
Additionally, water companies must gain a market entry assurance certificate (MEAC), and satisfy the other trading conditions, in order to become trading parties and be granted access to the central systems by the market operator, MOSL said.
Without certification a company will not be granted a water supply and sewerage licence (WSSL) and will be unable to participate in the market or exit. It will also be unable to participate in the shadow market.
MOSL chief executive Ben Jeffs said: “The market and company readiness plan is another important milestone for the programme and provides companies with the next level of detail on what companies need to do to prepare for the new market.
“The plan is a culmination of many discussions we have had with the industry over recent months and brings together a lot of the thinking. It also provides the foundation for many of the conversations that we will be having with the industry over the coming months.”
MOSL will develop a number of market and company readiness (MCR) reports including ‘heat maps’, and share the templates with market participants in January 2016.
The new market is being delivered by the Open Water programme, which is led by the Department for Environment, Food and Rural Affairs (Defra) and supported by Ofwat and MOSL.
MOSL is responsible for delivering and operating the central information systems and processes that will enable the market to function.
The environment secretary is due to make a final decision on whether to open the market in February 2017, which will take into account assurances provided by the Open Water partners and individual water companies.