Market operator services limited (MOSL) became the operator of the world’s largest competitive water market today, just 21 months after it assumed responsibility for preparing the market for launch.
More than 1.2 million businesses, charities and public sector customers in England, from micro businesses and SMEs to large corporates and the public sector, can now choose their water retailer for the first time.
The launch marks the successful delivery of one of the largest and most complicated industry-wide change programmes ever undertaken by the water sector in England and creates a market that generates revenues of £2.4 billion per year.
The ‘Open Water’ programme, which has been led by the Department for the Environment, Food and Rural Affairs (Defra), the water industry regulator Ofwat and MOSL, is likely to drive the next phase of efficiency improvements in the sector, reducing customers’ bills and improving service levels.
MOSL was established in July 2015 by the water industry to work with Defra and Ofwat, to build the central market capability and to procure, build and test the central IT system (Central Market Operating System or ‘CMOS’) at the heart of the new market, which enables customers to switch between suppliers.
The CMOS also acts as a central market settlement system, calculating usage charges between wholesalers and retailers, enabling retailers to charge customers and wholesalers to recover their regulatory income. The CMOS has been developed and delivered by CGI, based on a similar system developed for the electricity markets in Denmark and Holland.
The opening of the non-household market is transformational for the water sector, affecting virtually every customer-related system and process. The implementation of the CMOS is just part of the equation, with water companies having to re-engineer their in-house systems and processes to interface to MOSL, whilst implementing major operational and culture change programmes.
MOSL has led the implementation of the new market, working with its programme partners and market participants to ensure that the market opens on time.
A key component has been the establishment of a new industry panel chaired by the MOSL Board Chairman, comprising nine industry representatives and three independent members, to oversee and govern the new market to a set of market codes. These codes are a suite of contracts between market participants and run to more than 4,000 pages. MOSL operates the market to these rules and supports the panel in its deliberations on how best to apply and evolve the codes over time.
Commenting on the launch, MOSL Chief Executive Ben Jeffs said: “Delivering a programme of this scale and complexity on time and on budget has required a huge team effort across the entire industry; from our Open Water partners to our water company members and, of course, CGI.
“We would like to thank all of our members, both old and new, for the positive and cooperative way in which they have worked with us, and each other, to overcome the many challenges we have faced together. As I have said many times, their support has been exemplary.
“We very much hope that spirit of cooperation will continue so that customers’ experiences in the new market are as positive as possible and any issues are identified and addressed quickly. We look forward to supporting the industry as it evolves and adapts to the realities of competition.”
Speaking on behalf of CGI, Tara McGeehan, Senior Vice President, UK Energy, Utilities & Telecoms, added: “Since confirming our contract with MOSL two years ago, we have worked hard to deliver its new core operating system on time and on budget.”
“We are proud to support the largest competitive water market in the world, and anticipate customers throughout the UK will see many benefits from the new system, not the least of which will be lower costs and improved bill management.”
For more information please contact Adrian.Smith@mosl.co.uk, 07702 089713