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Utility Week 30th September 2016

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UTILITY WEEK | 30TH SEPTEMBER - 6TH OCTOBER 2016 | 25 Customers The shadow market is a crucial part of the prepara- tions for English market opening. It goes without saying that we need to trial the market processes and systems for a successful competitive environment, but we also need to test the capabilities of all participants and their readiness to participate from a retail and a wholesale perspective. "The plan isn't to test all the elements of a live competitive market during shadow market, but it is important that we test 'real life' conditions as far as possible. Following recent acquisitions and mergers, it would be useful to assess how the market infrastructure will cope with large-scale transfers of customers, which is unlikely to be stress-tested during shadow market. "So the first indication we'll have is immediately the market opens, when we are likely to see large volumes of customers switch- ing, if not through organic transfers then through the retail exit process, which will put considerable pressure on the system from the outset. "It is also crucial that we don't lose sight of the customer during the next six months. If customers are not aware of the choices on offer, we risk leaving them behind, and many could fail to gain from the changes. There is still much work to be done to ensure that customers fully understand the choices available to them – and the benefits to be had. We must engage with these busi- nesses now, and create the demand which will motivate suppliers to innovate and improve services for all customers – not just the large users. This in turn will help to ensure the long- term success of an open market. Successful shadow market opening is a testament to the efforts of the whole sector. T o most people the single most important date in the opening of the non-household water market is April 2017. Of course this date is important – it's what we're all aiming for – but for MOSL the start of the shadow market on 3 October 2016 is far more significant. Overnight the programme and everyone in it cease to be working on a "project" and start operating in an as-live environment. The shadow market allows MOSL and existing market participants six months to commission the central mar- ket operating system and stabilise the dataset on which the market will be opened, to the benefit of all partici- pants in the live market. If everything goes to plan, there will be no major cutover in April – the market will open, customers will be able to switch and money will flow. The transition should be seamless. There is still a lot of work to be done, but the indus- try can take enormous comfort from the fact that the shadow market has opened on time, with all companies participating in it, from the smallest inset to the largest water and sewerage company. To use Cathryn Ross's words, we are confident but not complacent. Reaching this milestone has required a herculean effort by participants, partners and MOSL alike. The sup- port we have had from companies has been exemplary and we recognise and appreciate the trust that they have placed in us. Just over a year ago, MOSL didn't exist. The vision and commitment of the three founding chief executives of United Utilities, Northumbrian Water and Anglian Water – Steve Mogford, Heidi Mottram and Peter Simp- son – gave us a great start. The close working relationship with Defra and Ofwat, combined with advice and support from north of the border in the shape of the Scottish government, Wics and the Central Markets Agency, has been instrumental in keeping us on course and honest to the challenge. At MOSL we are fortunate to have an extremely sup- portive board and a talented team working alongside the CGI delivery team. The pace has been relentless from the beginning. Despite all the challenges, we are all a week away from having delivered the shadow market on time, albeit with a few things le to conclude early in the shadow market. This is a fantastic achievement by the industry. The opening of the non-household water market is truly transformational and signals the start of an exciting new era for the sector as a whole. Over the next six months we will continue to work together, and learn as much as possible, so that customers have the best possible experience when the market finally opens. Opinion Ben Jeffs Chief executive, MOSL Castle Water is unique in being the only independent retailer who will be active in the shadow market from the start, acting as the retailer in the shadow market for customers of both Portsmouth Water and Thames Water, collectively over 16 per cent of the English market. "Castle Water is one of the largest suppliers active in the Scottish market and our experience with systems in Scotland for managing customer details and switching is an important part of our readiness for the English shadow market. "We made the conscious choice when deciding on our systems strategy to partner a developer from 2015 onwards able to support us across both England and Scotland. Consequently, we are already using the market and invoicing systems which we will be using in the shadow market: for example, since April we have been invoicing customers in Portsmouth using the same systems we will use when the market opens. "Castle Water has taken an active role in working with MOSL to be ready for the market, and benefitted from participating in user acceptance testing at an early stage which has ensured we are familiar with the CMOS (MOSL's market systems) and in carrying out trans- actions. John Reynolds, chief executive, Castle Water " " " " Johanna Dow, chief executive, Business Stream

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