Utility Week

26 | 30TH NOVEMBER - 6TH DECEMBER 2018 | UTILITY WEEK Customers Analysis I t cannot be denied that the energy sector – in particular, energy retail – has been hogging the limelight recently. But there has also been activity in the water retail sec- tor over the past few months, albeit in the background. Switching continues at a steady rate, and problems and issues encountered by the market continue to be fixed. The most recent big development is that Chris Scoggins, who headed MOSL (Market Operator Services Limited), is "no longer the CEO". In a sparse email seen by Utility Week which was sent to members on 19 November, MOSL chairman Jim Keohane said: "It is with regret that I must inform you that Chris Scog- gins is no longer acting in his capacity of CEO of MOSL." He had been in the post for just six months. No reason was given for this sudden departure, but Keohane gave his assurance that the board was "actively engaged" in securing a successor as "soon as possible", and that in the meantime chief financial officer Steve Lyon would be taking care of operational issues normally handled by the chief executive. Here, Utility Week looks at what else has been going on in the market over the past few months. Switching and awareness There have been 184,017 switches as at the end of October, representing 6.9 per cent of the 2,672,477 supply points in the market. There are varying opinions on whether this amount of switching constitutes success. According to MOSL figures, the number of supply point switches decreased during October aer three months of high activity driven by large multi-site switches. Although overall switching numbers were lower during the month, October continued to see switch- ing across a "diverse range of customers". Switching among customers with a small number of supply points remained relatively stable, there was strong activity from multi- ple sources in the public sector and, despite multi-site switching being lower overall in October, there was still a significant num- ber of supply points switched by a FTSE 100 company and several FTSE 250 companies. There are concerns that not enough cus- tomers – especially those at the smaller end of the market – are aware of the changes. In September, the Consumer Council for Water (CCWater) said awareness of the market had "hit a brick wall" and retailers must do more to help raise it. The latest wave of research carried out by the council found only two out of five (41 per cent) non-household cus- tomers realised they could switch water pro- vider. This compared with 43 per cent which said they were aware in July 2017 and 38 per cent in January 2018. This drop in awareness could be what has driven a slowdown in switching of late, and CCWater is concerned. Chief executive Tony Smith said: "Customer awareness increased significantly ahead of the market opening but in the past year it appears to have hit a brick wall and that really concerns us. We know that once small businesses are aware they have a choice they are interested in exploring their options but too many are being sold short by a lack of awareness and information." Market performance In July, CCWater published its customer com- plaints league table for water retailers. The report revealed that complaints about retail- ers received by the organisation were up a whopping 237 per cent on the year, sparking a dire warning from the watchdog that retail- ers must "get their act together". As if that wasn't bad enough, non-house- hold written complaints received by com- panies between market opening and March 2018 rocketed 26.4 per cent on the previous year, reaching 14,885. Both increases were driven by a small number of poor-performing retailers, namely Castle Water, Wave and Water Plus, which were responsible for a dis- proportionate share of the rise in complaints. Asked what was driving this hike in com- plaints, some retailers put it down to teeth- ing issues with both the central market data, and their own systems and processes. Castle Water chief executive John Reyn- olds told Utility Week at the time that the problems hail from when customers affected by data inconsistencies in the central market operating system (CMOS) were first invoiced. He insists that since September 2017 the company has seen a "significant reduction" in complaints. Bilateral communication Poor interaction between wholesalers and retailers is still an issue, but it is one MOSL is on top of. As of 1 June 2018, there were 747 active contracts between wholesalers and retailers. However, there is no standardised method by which retailers and wholesal- ers communicate. This adds complexity for retailers, which find they must deal with 20 different wholesalers all using different methods. As it stands, market forms and communications are delivered through bespoke wholesaler "bilateral solutions", meaning retailers must work with a lot of dif- ferent forms. This not only takes up time and staff resources, it also costs them money. A "bilateral solution" to these commu- nication issues was originally in scope for market opening but was removed late on, and this le wholesalers to make their own arrangements for how to engage and interact with retailers. MOSL's digital strategy committee – headed by Bristol Water programme direc- tor Nick Rutherford – has been working on a new vision for how technology can help the market, with a new common solution for all trading parties to use in relation to bilaterals. This could take the form of a centralised and standardised portal or "bilateral hub". MOSL is looking at "a number of potential technol- ogy solutions" to understand how it could remove existing problems, create new effi- ciencies and improve service between whole- salers and retailers. "Both process and technology improve- ments are being considered to support Water retail watch: 20 months in Water.Retail editor Lois Vallely rounds up the developments in the competitive non‑household water retail market since June 2018.

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