Ahead of the opening of the retail water market to competition on 1^st April, Ben Jeffs, Director and CEO at Market Operator Services Limited (MOSL), is sanguine about the prospects for the new market.

In an interview with Waterbriefing, Ben Jeffs radiates cheerful optimism talking about the opening of the market, what it will deliver to customers and his thoughts on what lies ahead for the UK water sector.

During the last year MOSL and the other key players have had to rise to the challenge of the considerable workload involved in bringing the new market to fruition.

Describing it as “a very intense period for both MOSL and its members”, Jeffs said:

“For the water companies to go through a process like this with all the volatility it entails and the urgency that been required, we’ve found companies’ engagement and support absolutely exemplary; there has been a real desire to make it work.”

Data quality has clearly occupied much of Jeffs’ time. He explains that MOSL now has a system that is largely built and has been tested by most of its members - the final release of software that the market will open on has now been dropped into production.

“The quality of what’s being delivered has broadly been agreed and sanctioned by the whole market. There should be no surprises.” Jeffs says.

MOSL has now loaded a total of 2.8 million supply point IDs (SPIDs) into the system, the data that customers will need if they want to switch suppliers. All retailers in the new market will get a market data set report on a daily basis from the central market which includes every SPID in England.

Going forward, once the market is open Jeffs said MOSL is aiming to both support it and try to get it to focus on tackling issues that might get in the way of it being effective and efficient. For MOSL’s part, “we have a role to help the market stay on course for the market opening and then to find ways to de-risk the market for all participants and improve outcomes for end-consumers.”

“The first year of a new market inevitably carries a greater level of risk, which will reduce as we go through a two to three year ‘commissioning’ phase while the market settles.” he says.“Ultimately the test for the competitive market will be whether it’s providing customers with access to a better price for a better service.”

MOSL intends to be proactive in trying to encourage dialogue, discussion and debate around the issues of interest to end consumers, bearing in mind its remit which is very much to be “neutral across the piste,” he adds.

In Jeffs’ opinion, the industry will take a while to work out what the most appropriate operating model will be. MOSL is expecting a range of operating models to begin with - but its role will be to treat everyone equally on merit according to its ‘level playing field’ obligations.

Switching will be a key driver for improving data quality

Jeffs talked at some length about the data which underpins the market, saying “from a systems and a market operator perspective, we’re on track for market opening and looking ahead to what comes next.”

In his view switching will be a key driver for improving data quality. For some 11,000 customers this process has already begun as MOSL carries out ‘pre-switching’ to ensure that customers are on supply with their elected retailer on the first day of the market.

“In many cases, issues will become obvious as switches happen and first bills are issued. It’s not surprising - you have a more engaged customer who has actively chosen to switch their retailer looking at their bill or their first letter from their new retailerand in some cases thinking “I don’t recognise that,” either because it’s wrong, unfamiliar or simply because it’s the first time they’ve looked at it properly.

“So the real test for the whole market from the service perspective is reducing the cycle time from switching to the customer being happy to pay the bill that’s been presented. That’s when we will truly see what the data quality is like.”

MOSL will be monitoring the market daily and Jeffs thinks any issues will be obvious as soon as switches happen.

He also highlights the immense complexities of the layers of systems being put in place, in addition to the Central Market Operator System itself. Many companies – retailers and wholesalers – are using middleware to interface from their systems to MOSL’s systems, on top of which they have IT legacy estates that have been heavily customised to deal with retail competition.

MOSL’s business plan is predicated on first year 2017-18 being quite a heavy year of commissioning, anticipation that year 2 will require less commissioning and the assumption that it reaches steady state in year 3.

Data visualisation tools will help create insights into how competition is emerging in marketplace

Looking further ahead, Jeffs is confident that MOSL will be able to accelerate through from a good starting point to a stage that it can be a lot more responsive in terms of anticipating types of issues and tracking trends.

The market operator is also in the process of putting some interesting data visualisation tools in place, bringing a new dimension to the way in which data is presented to show activity within the market over time. The data will initially be made available to the market participants themselves.

He talks enthusiastically about the work MOSL is doing entirely in-house to plot all supply points IDs on maps. ”We’re looking at segmenting them so you can see different market segments and we’re breaking it down using Standard Industry Classifications to profile certain types of customers.”

According to Jeffs, this will allow MOSL to map the market, different segments of the market and to take a wholesaler view and a retailer view. It will also be able to take a single wholesaler area, a County level view and even a postcode level view.

Data visualisation will be managed by MOSL’s market performance team, which is responsible for creating insights into how competition is emerging in the marketplace.

MOSL also has some interesting plans to capitalise on the data, including marrying up the data with other ‘big data’ sources e.g. the valuation office or the post code address finder - to reveal more about what’s happening in the marketplace.

Meanwhile, Jeffs says his focus is to build acceleration through early commissioning issues and making real time information available to all participants to deliver a successful and effective retail market.

Looking ahead, Jeffs believes the water market and the water industry will look different in even five years’ time from the way it looks today.

“We’re very much at the beginning of a new market and one that’s going to evolve quickly. It’s going to be fascinating to see what shape the market takes over the coming weeks and months.”