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UTILITY Week 9th September 2016

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UTILITY WEEK | 9TH - 15TH SEPTEMBER 2016 | 27 Markets & Trading Analysis T he final preparations are being made as the English water industry prepares to raise the curtain on non-domestic retail competition. On 3 October, a dress rehearsal will begin for this significant moment in the sector's history. In preparation for this almost- live performance, market structures have been finalised, codes completed, deals struck and exits earmarked. However, concerns remain about the sector's ability to meet the pressing deadlines of the Open Water programme. Market preparations The progress made by the Open Water pro- gramme has been anything but smooth. MOSL chief executive Ben Jeffs stated early on that its timescale is a condensed one, and a difficult one to achieve. In June, project trackers allocated a 'red' status to the programme's progress, indicat- ing that it was in imminent danger of fall- ing behind. In July, this was downgraded to amber, but still there is little room for error as the finishing touches are applied to market systems. This small margin for error has raised con- cerns at Ofwat, which published a delivery confidence assessment in July saying that "suc- cessful delivery of the programme is in doubt with major risks or issues apparent in a num- ber of key areas". While the report acknowl- edged that "significant progress has been made", it raised concerns that the challenge of meeting the 3 October deadline for shadow market opening is "exacting in the extreme". MOSL and CGI say that many of the issues raised in the delivery confidence assessment have been addressed or are being managed. They report that the central market operating system is now ready to run and just requires the companies to begin uploading and testing the quality of their data. With the readiness of systems moving for- ward, attention has turned to the readiness of retailers. Again, Ofwat's delivery confidence report identified that there is "still much to be done in this area", although it also allows that "stakeholders appear well aware of the level of challenge they face and are preparing seriously to address it". Water Market Quarterly Utility Week presents an executive summary of the latest quarterly report from its premium information service, Utility Week Intelligence, on developments in the UK water market. Key milestones • 9 September: Deadline for applicants undergoing market entry assurance (MEA) self-certification • 23 September: Deadline for applicants under- going enhanced MEA certification (MEAC) • 30 September: Latest date at which MOSL will issue MEAC for applicants who applied in April-June 2016 • 3 October: Shadow market operation begins • 14 October: Last date Ofwat will grant WSSL for those who achieved standard MEAC • 28 October: Applicants who failed MEA testing must complete remedial MEA testing by this date • 1 November: Latest exit application date for those who achieved standard MEAC PROFILES The following are extracts from full profiles, which are available to Utility Week Intelligence subscribers. Wessex Water Wessex Water is eager to participate in the new water retail market and hopes to main- tain its "industry-leading" customer service record. It has teamed up with water-only company Bristol Water to launch the retailer Water2Business, which is dedicated to help- ing companies across their regions manage their water supply better and tackle the fundamental changes that will come about when the market opens. Earlier this year, Wessex took a 51 per cent stake in Albion Water, in a pioneering venture aimed at supporting sustainable housing. Cobalt Water Cobalt Water began trading in July 2013 to supply water and sewerage services to about 2,000 customers in Scotland. The company applied to Ofwat for a water supply and sewerage licence in May 2016. The licence would allow it to integrate retail operations in the English and Welsh water markets into its current operations as a licensed provider of Scottish water. In its application, the firm said: "By main- taining our current high levels of customer service, operational expertise and a finan- cially prudent business model, we will trade successfully in these new markets." MOSL boss Jeffs backs up this view, saying that retailers have reported they are ready. He did warn, however, that "the next two months are set to be exceptionally busy as we and participants prepare to operate in 'as-live' mode in the shadow market from 3 October". This article provides a snapshot of the most recent report. To access Water Market Quarterly in full, simply log in to your Utility Week Intelligence account. For information on Utility Week Intelligence, including a free trial promotion, contact Peter Bissell, Utility Week Membership, on +44 (0)1342 332057 or email peter.bissell@utilityweek.co.uk.

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