Retail water sector market operator MOSL is flagging up “worryingly low levels of customer awareness”, particularly for small and micro businesses in its Annual Market Performance Report for 2018/19 published this week.

MOSL’s focus over the past year has been to work with trading parties to drive a programme of work to challenge and highlight areas requiring the most improvement in the market. MOSL’s market improvement activities aim to identify the root causes of key market issues and potential routes to resolution.

The report, which monitors performance against standards under the Market Performance Framework (MPF), says that changes during the course of the year and the workstreams that sit beneath them have been delivered against the backdrop of a steady market. However, to date, “we are seeing the healthy rate of switching overshadowed by worryingly low levels of customer awareness.”

CCWater - "Ofwat may need to step in to tackle poor performers

In the light of the report, the Consumer Council for Water (CCWater) is now warning that water sector regulator Ofwat may need to step in to tackle poor water market performers. The Water Watchdog says poor performing retailers and wholesalers may need to face tougher sanctions after experiencing another increase in complaints from disgruntled businesses and other non-household customers during the final quarter of 2018/19.

Regulatory action may be needed to tackle the root causes of rising complaints from business customers about their water and sewerage services.

Dr Mike Keil, Head of Policy and Research at CCWater, said:

“Retailers and wholesalers have had enough time to address many of the same problems that continue to impact the service customers receive.”

“We’re rapidly approaching a point where we may need Ofwat to step in and take action if there is evidence that companies have breached market codes or not met their obligations to customers.”

The low awareness levels were separately outlined in Ofwat’s State of the Market Report 2018  which flagged up untapped potential and poor performance by wholesalers and in CCWater’s recent Testing the Waters report, published this April which suggested that levels of customer complaints were continuing to increase, with a substantial rise in complaints in 2018 compared with 2016.

According to MOSL, billing issues are cited as the most common grievance, while the the biggest issues it is seeing in the market are also those having the greatest impact on customers.

The report says:

“At year end, for example, our data showed 15 per cent of meters have not had a meter read submitted for more than a year, and the number of premises flagged as vacant has risen by over 50 per cent through the course of 2018, which equates to nearly one in six premises.

“Coupled with this, there are ongoing concerns regarding data quality and compliant delivery of services which, from the submission of inaccurate data in the central system (CMOS), causes a chain reaction, potentially resulting in inaccurate bills for customers and levels of service, in some cases, falling below customer expectations.”

Despite entering the third year of the market, a number of the market issues have escalated rather than subsided. The market operator is therefore increasing its focus on data cleansing activities and programmes of work which require joint working between wholesalers and retailers. Moving away from the pretext of a ‘new market’, the pace of this work needs to accelerate if customers and the wider market are to see the benefits, MOSL said.

Meter read submissions “continued to decline at a concerning rate”

Commenting on metering at a more detailed level, levels of meter read submissions have “continued to decline at a concerning rate” since market opening.

“Throughout the 2018/19 Market Performance Operating Plan (MPOP), we identified deep-rooted and widespread market issues preventing the completeness of meter reading information in CMOS,” the report says.

The number of premises being shown as vacant in the market had also significantly increased in 2018/19 – up from 11 per cent of premises in April 2018 to 16 per cent in April 2019.

This impacts the charging of services by wholesalers to retailers, as well as wholesalers’ ability to accurately monitor and report on leakage, according to the market operator..

Other meter-related issues have included meters not being scheduled for a cyclic read, and meters not able to be found, accessed or read due to problems with asset data or access to premises.

In addition to confirming the problems of asset location, accessibility and condition, the draft market audit findings on meter reading also flag significant concerns relating to the capacity and performance of meter reading providers across the market.

The issues are being exacerbated where a retailer is looking to serve a customer base spread across multiple geographic areas.

The report says that at market level, progress against Data Improvement Plans, which set out month-bymonth forecasts for reducing the number of meters, has not matched the level of ambition. The Plans which were received from 18 retailers cover 99 per cent of supply points in the market. ,

"Looking forward two years into the market, we see the risks and issues are starting to become clear, as are the root causes, and the impact on customer experiences. The scale of some of the necessary rectification work is also becoming apparent, and the vital need for collaborative working between stakeholders at an accelerated pace." the report says.

Commenting on the report, MOSL’s Director of Market Performance, Steve Arthur, said:

“The MPF supports MOSL’s commitment to putting in place robust and consistent tools and measures, to ensure the market continues to improve and deliver better outcomes for customers. This report holds trading parties to account and provides clarity and transparency to the market in the areas we are seeing wholesaler and retailer poor performance. It also calls out the benefits being seen from joint working between parties.

“We are confident that this is part of the step change needed in how we report on trading party performance and publish meaningful and timely data to the market.

"We are working closely with trading parties, the Panel and its committees, Ofwat and other stakeholders to ensure that the market starts seeing the levels of improvement needed to deliver on our commitment to business customers.”

MOSL is due to publish its updated and targeted approach for the 2019/20 Market Performance Operating Plan (MPOP) later this month.

The best and worst performing retailers will be highlighted when CCWater publishes a league table in July. This will feature all the customer complaints raised with retailers and those handled by the watchdog.

Click here to download MOSL's Annual Market Performance Report for 2018/19