Utility Week

Introducing Your brand new water retail insight and intelligence service From the people behind The latest business opportunities, and threats From the UK's leading water industry analysts and journalists Exclusive market data and intelligence Connecting brokers to wholesalers, retailers and customers Quickly identify competitive advantages Fortnightly industry monitor FORTNIGHTLY INDUSTRY MONITOR Understand water wholesalers and their approaches to retail From the people behind FORTNIGHTLY INDUSTRY MONITOR CLAIM YOUR COMPLETELY FREE TRIAL SUBSCRIPTION TODAY AT UTILITY-WEEK.CO.UK/RETAIL As many as one in ten customers could be missing from the water market's central database, retailers have claimed, urging wholesalers to follow the example of Anglian Water and pay them to identify missing customers. Retailer Everflow said it has found that, on average, data for 8-10 per cent of customers is missing from the database. Customer services director Josh Gill insisted wholesalers must follow the lead of those that are "more progressive", such as Anglian Water, which has put cash incentives in place of £350 per 'gap site' – the term for a missing customer. Gill said that without incen- tives, it was not worth a retailer's time to process gap sites – mean- ing customers could be leˆ out of the market for the long term. He said: "Bearing in mind that the average margin for a customer is about 8 per cent in the market, where is the incentive for a retailer to pursue these sites?" Charles Vincent, managing director of consultancy 1 in 10 customers 'missing' If retailers are not incentivised to process incomplete data, customerscouldbele outofthemarketforthelongterm W AT E R M A R K E T MOSLneedsabig hittertotakeover fromBenJeffs.The ofworktodo. Headhunters willbescouringthe electricity,gasand telecoms. Whereverthenew bosscomesfrom,they will need to combine deeptechnicalskills withcustomer- facingexpertise,and conversationthenew chiefexectuivefaces isthatofMOSL'sfund- ing.Thecompanywas bankrolledbythemar- ket'slargestwholesal- erspriortomarket opening,butthebill thefinancialburdenis toohigh. Ultimately,itcomes downtovalue.Ifthe newMOSLchiefexec- utiveisabletowork withthemarketto resolveteethingissues NEWS 28.04.2017 1 Issue 003 www.water-retail.com/UtilityWeekIntelligence "Headhunters will be scouring the market for a replacement" M O S L N E E D S A B I G H I T T E R 1.4 million premises have been loaded into the central system to enable the market to open on time on 1 April." Jeffs said it was "always rec- ognised" that data quality would be judged by customers and those operating in the market, in response to market forces and upon switching. Further work will be required by all trading parties, retailers included, in the live market to improve data quality. "We are therefore expecting similar challenges to those faced by other markets as we go through the commis- sioning period over the next 18 months or so. Ultimately, data quality is a matter for trading parties. There is no silver bullet – it will be a case of checking, checking and checking again. MOSL will, of course, play BEHIND THE HEADLINES • It was a feat to get the market open on time – but data quality suffered, and must now be brought up to scratch • Customers will suffer from poor data – and ultimately, the market's reputation • Anglian has taken a lead by offering incentives for the identification of miss- ing customers, and other wholesalers should follow its part in supporting trading parties' efforts in the interest of the end customer." Central market data con- tains all relevant information on non-household custom- ers to allow trading parties to invoice for wholesale and retail charges. The data should contain accurate information on all customer sites for billing addresses, the addresses of sites that are receiving water and sewerage services, the tariff type that should be applied and the location of all the meters. If this data is not correct then it is the immediate relationship between retailer and customer that suffers. The customer may become unhappy with delayed or incorrect retail invoicing, or perceived lack of knowledge of the site metering arrangements. This may result in the customer moving to an alternative retailer, in the belief that an improved level of customer service will be delivered. However, the same issues will arise with the new retailer if the central market data is not corrected. The responsibility for clean- ing up patchy or incomplete data now falls on the retailers – and this comes at a cost. Waterscan managing director Neil Pendle said he believes the market data is fit for purpose, but the "real issue" is that the burden for cleaning the data falls on the retailers and not the wholesalers that prepared and loaded it in the first place. And ADSM director Gareth Stevens warned that the corrective action comes at a financial cost to retailers, which some may come to realise is "more significant" than they originally anticipated. WE SAY Ascendancy Water, compared the English market's patchy data to that of Scotland when the market opened north of the border. He told Water.Retail England can learn from Scotland and improve data for customers "much more quickly". "Switching will bring poor data into sharp focus for wholesalers, retailers and customers," he said. "The reputation of the market will depend on how quickly and proactively these data issues are resolved." Market Operator Services Limited (MOSL) insisted that data quality has been a "con- tinual area of focus" throughout the market opening process. "The initial challenge ahead of market opening was one of data compliance, in which water companies were required to align their data to the formats set out in the market codes," said chief executive Ben Jeffs. "Given that this data had been collected over many years and extracted from a myriad of dif- ferent, oˆen legacy, systems, this has been no small feat. The result is that more than Introducing new water retail intelligence service From the people behind The latest business opportunities, and threats From the UK's leading water industry analysts and journalists Connecting brokers to wholesalers, retailers and customers Fortnightly industry monitor FORTNIGHTLY INDUSTRY MONITOR Understand water wholesalers and their approaches to retail From the people behind FORTNIGHTLY INDUSTRY MONITOR CLAIM YOUR COMPLETELY FREE TRIAL SUBSCRIPTION TODAY AT UTILITY-WEEK.CO.UK/RETAIL conversationthenew isthatofMOSL'sfund- ing.Thecompanywas bankrolledbythemar- ket'slargestwholesal- 50:50 thefinancialburdenis toohigh. Ultimately,itcomes downtovalue.Ifthe newMOSLchiefexec- utiveisabletowork withthemarketto resolveteethingissues and convince retailers NEWS 28.04.2017 1 in supporting trading efforts in the interest of customer." Central market data con- relevant information non-household custom- allow trading parties invoice for wholesale and charges. The data should accurate information customer sites for billing addresses, the addresses of that are receiving water sewerage services, the tariff that should be applied and location of all the meters. data is not correct then immediate relationship between retailer and customer suffers. The customer may unhappy with delayed incorrect retail invoicing, or perceived lack of knowledge of metering arrangements. may result in the customer to an alternative retailer, belief that an improved customer service will be delivered. However, the same will arise with the new if the central market data corrected. responsibility for clean- up patchy or incomplete now falls on the retailers and this comes at a cost. Waterscan managing director Pendle said he believes the data is fit for purpose, "real issue" is that the for cleaning the data the retailers and not the wholesalers that prepared and it in the first place. And director Gareth Stevens that the corrective action at a financial cost to retailers, which some may come realise is "more significant" they originally anticipated. NEWS 15.06.2018 1 Issue 031 www.water-retail.com / UtilityWeek Intelligence W AT E R M A R K E T V I E W L O I S V A L L E LY The 26 retailers in the market could soon be joined by another new entrant. Tor Water is expect- ing to get its licence imminently a er being sent a "minded to grant" letter by the Director Jiro Wilson told Water.Retail the company is "inches away" from switch- ing customers, and that his team is "very excited" about turn- ing "prospects into customers". Water chief executive John Reynolds has warned in The Times that the market is in danger of rapidly consolidating into a "big four" – like the giants that dominate other sectors such as energy, accounting and supermarkets. He suggests a big four has already emerged, consisting Water (according to The Times, which pre- sumably means Wave), Business Stream, and Castle Water itself, which has spent more than £100 million buy- ing the non-household customer books of Thames Water, South East Water and Portsmouth Water, as well as Scottish retailer peer Cobalt Water. This ing the second-largest retailer in the UK. Reynolds is not alone in his prediction. Another senior water leader told Water. Retail 's sister brand Utility Week they also see further tie-ups, leading to fewer, large retailers. Which retailer will be next? My money is, as always, on York- "Water bosses see further tie-ups, leading to fewer larger retailers" A BIG FOUR FOR WATER? The Ofwat spokesperson added: "The WSSL application process and market entry assur- ance process are distinct and separate processes carried out by Ofwat and MOSL respectively. However, the outcomes of each process are interdependent. "For clarity, completing the MEAC is a necessary step for Ofwat's consideration of whether to grant a WSSL. However, the completion of the market entry assurance process in no way removes the discretion for Ofwat to approve or reject a licence application." Meanwhile, Ofwat has granted Smarta Water a water supply and sewerage licence. Smarta – part of water and energy consultant Smarta Envi- ronment – had applied for its licence in February. The company said: "We are committed to provide a high-quality consistent level of customer service, underpinned by a competitive pricing strategy with an innovative approach to increasing efficiency, improving sustainability and reducing the costs to and for our customers." Retailer hopeful Tor Water has said it expects to be granted its water supply and sewerage licence "soon", a‰er it received a "minded to" grant notification from Ofwat. The company's managing director Jiro Wilson told Water. Retail the team is "very excited" about "changing its prospects into customers". "Having been given the 'minded to' grant notification we are inches away from switch- ing customers. We have had an overwhelming positive response to the quotes with 100 per cent of those contacting us wanting to switch," he added. "All that is missing are the final certificates and we will be able to get busy with the paperwork. With customers eager to embrace the competi- tion changes it is a great feeling knowing you can make a differ- ence in a company that values your skills." The company applied to Ofwat for its licence in April last year, with a plan to target the South West of England. BEHIND THE HEADLINES Tor Water nears market entry Aspiring market entrant is confident it will be granted a water supply and sewerage licence and says it has had an 'overwhelmingly positive response' from potential customers In issue 20 of Water.Retail, it was reported that Tor was seeking a capital investor to help launch the business. At the time, the prospective new entrant said it had received a "no objections" notification from Ofwat "pend- ing adequate finances". Although unable to comment on the individual licence appli- cations, Ofwat confirmed that it issues a "minded to" grant letter on the "successful conclusion of its assessment process". "We will not formally grant a water supply and sewerage licence (WSSL) to an applicant until we have received confir- mation from MOSL that the applicant has satisfactorily completed MEAC [market entry assurance certification]," said a spokesperson. MEAC provides assurance that a company seeking to become a trading party in the retail market has the required systems, processes and capabilities to fulfil its market obligations. Without certification from MOSL, an applicant will not be granted a WSSL and will be unable to participate in the market. MARCH 2017 – Brewer and pub retailer Greene King became the first business to obtain a self-supply licence. It has 1,757 locations in England. AUGUST 2017 – The UK's largest hotel, restaurant and coffee shop operator Whit- bread was granted its licence. The group has 1,081 supply points in England. NOVEMBER 2017 – Brewery and pub retailer Marston's, which operates more than 1,600 pubs, bars and lodges was granted a licence. MARCH 2018 – So drinks manufacturer Coca-Cola European Partners became the fourth company to be granted its licence. SELF-SUPPLY TIMELINE Blackpool Council granted self-supply licence Blackpool Council has been granted a self-supply licence for the water retail market. The licence will allow it to buy water supply and wastewa- ter services directly from United Utilities for its buildings and associated premises. The local authority will also manage its own retail services for more than 120 sites across the borough. The move is expected to save up to £194,000 over three years. In the first year, antici- pated savings are expected to be in the region of £50,000, with the potential for further savings through further cost and consumption efficiency projects. All the insight and intelligence you need on the competitive water retail market To subscribe visit: http://utility-week.co.uk/water-retail/

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