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 05.10.2018 1 Issue 039 www.water-retail.com / UtilityWeek Intelligence ate with lower costs and higher quality, which can only benefit customers in the long run." Wave chief executive Lucy Darch said the role of retailers is to make the water market seam- less for customers in England and Scotland, but behind the scenes there are some differences: • Two regulators – meaning two licences and two regulator relationships; • Two central administration systems – meaning two separate systems to interface with, each with different data protocols; Retailers have expressed concern that the English and Scottish markets are not aligned. Speaking to Water.Retail's sister title Utility Week, Castle Water chief executive John Rey- nolds said having two regulators regulating "effectively the same market" in two parts of the UK with "diametrically opposed views" is "very uncomfortable". "I think there is a major ques- tion to answer. Wics have put a moratorium on granting of self- supply licences at the same time as Ofwat, in their annual review, have cited the success of self- supply." At the time of going to press, Wics had not responded to a request for comment. "There isn't a proper explana- tion from Ofwat and Wics as to why they have been able to take diametrically opposed views on self-supply," said Reynolds. "Wics has questioned the commitment of self-supply licensees to meeting all the regulatory obligations and also to not building in unfair pricing practices into the market. "I don't understand BEHIND THE HEADLINES Renewed calls for market alignment Confusion for retailers in the English and Scottish markets as Wics puts a moratorium on the granting of self-supply licences at the same time as Ofwat cites the success of self-supply all the evidence based behind that, but I think as I say it's something that from a retailer and customer perspective there needs to be more explanation both from Wics and Ofwat behind this. It's a serious concern. "Wics regulates the water market in Scotland and has taken a diametrically opposed view to Ofwat without either party giving a proper explana- tion and I think customers deserve a much fuller explana- tion of this difference in view." He added: "Codes are virtu- ally identical, so it shouldn't be possible for that difference to exist – but it does and it is a major worry." Giuseppe Di Vita, managing director of SES Business Water, agreed that the two markets should converge. "If the Scottish and English markets both cur- rently operated in the same way, it would be hard to see what the argument for creating divergent regimes would be," he said. "It must be true that similar or identical rules and processes between and England and Scot- land can only help retailers oper- W AT E R M A R K E T V I E W L O I S V A L L E LY Should the Scottish and English markets converge? It's some- thing Castle Water CEO John Reynolds mentioned to our sister title Utility Week last month. He was relation to self- supply, and how the two regulators – Ofwat and Wics – appear to have diametrically opposed views on the option (apparently Wics has put a moratorium on Having to adhere to the misaligned rules of two different markets must be a headache for retailers but, as Wave CEO Lucy Darch suggests, maybe that's not a sur- prise given that these two markets are in two different countries. And this is certainly not the problem of the Speaking of concerning problems, Ofwat has written to wholesalers and retail- ers insisting they sort out their interaction issues. In particular, it wants wholesalers to be clearer about their meter reading process. But it also wants whole- salers and retailers to collaborate more effec- of customers. There have been numerous incidents where poor interaction has led to customers not being correctly served. This is something wholesalers and retail- ers must start to get right, because Ofwat has threatened to use "regulatory tools" if it detects any anti- "Ofwat and Wics seem to have diametrically opposed views" H E A DAC H E F O R R E TA I L E R S Wholesalers chastised over meter reading Ofwat has insisted wholesalers make their meter reading services more transparent to all market participants and customers. The regulator has written to all water wholesalers and retailers with a series of recommendations for how to address numerous issues in order to help reinforce trust and confidence in the market. The recommendations focus on improving transparency from wholesalers who offer meter reading services and addressing issues that stem from poor interaction between wholesalers and retailers on standards and terms for meter reading services. Ofwat senior director for customers and casework, Emma Kelso, said: "We expect to see significant improvement and if necessary, we will use regulatory tools if we believe there has been anti-competitive behaviour." • Customer savings of up to 30 per cent in the Scottish market, but very limited savings available for English customers. However, Darch said, while the differences have been "challeng- ing" during the setting up stage in the non-household water markets, "it's not necessarily something you wouldn't expect from operating in two different countries". Charley Maher, managing director of water2business, said that while she sees some of the benefits of an aligned market with Scotland given its gross margin growth since the market opened in 2008, "it can't happen overnight". "It needs careful consideration and a long-term plan," she said. "Merging the markets instantly could cause more issues than it solves. The English market needs to catch up in terms of its systems and the quality of its data." Tor Water director Jiro Wilson said: "Personally, I'd leave it alone and put the resource and effort into delivering a better English market, because it is so terribly broken." 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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