Utilities software specialists, Gentrack, have warned businesses are risking their financial futures if they fail to put systems in place to protect themselves against errors by the new water industry Market Operator when the retail market opens in April 2017.

 In a new white paper entitled: “Open Water, the Market Operator and Revenue Assurance – all you need to know to protect your business” Gentrack share insight from their extensive experience of market deregulation in Australia and New Zealand.

 They warn that errors affecting billing happened in both countries and similar challenges by the new England and Wales Market Operator are virtually inevitable.

 Something as simple as an incorrect data entry, as well as more fundamental system errors, could cause calculations to go awry, the paper says. Even the smallest of incorrect calculations by the MO could have enormous repercussions for a business. From the smallest of data entry errors – a percentage point here or there – to more fundamental mistakes; they could ultimately affect what retailers pay to wholesalers and what wholesalers receive. Within the non-household retail water market that could mean hundreds of thousands or even millions of pounds.

Company systems must include reconciliation, data validation and tariff management tools – all available off the shelf from software specialists –to stand any chance of picking up on and challenging any potentially costly errors that occur, the paper concludes.

David Brown, Vice President for Europe at Gentrack, said:

“The key learning point for companies is that Revenue Assurance is vital in a Market Operator based system. That’s no slight on the Market Operator; we’re simply saying that it’s vital their calculations are checked and audited.”

 “It seems a simple point but we’ve been surprised to find that some companies have been quite slow to recognise this and account for it in their software systems and transition planning."

 “There has to be some form of protection in place or companies are effectively putting their financial futures in the hands of a third party.”

According to Gentrack, one core lesson learned from operating in competitive energy markets in New Zealand and Australia with a central Market Operator is that they don’t get it right all of the time. Companies who simply trust a third party to do so, are taking a huge risk.

Market Operator Services Limited - MOSL – the private company owned and funded by the water companies is currently in the process of procuring, building and testing the core systems – the ‘central management operating system’ (CMOS) – that will enable customers to switch when the new market opens in April 2017.

While it has yet to be confirmed whether MOSL will continue to be the ‘market operator’ after April 2017, MOSL is working on the assumption that it will become the ‘enduring market operator’. Water sector regulator Ofwat has previously stated that it ‘anticipates that in all likelihood’ that this will be the case.

Click here to download Open Water, the Market Operator and Revenue Assurance – all you need to know to protect your business”