8 February 2018
Making the switch: energy to water
By Rebecca Mottram, Market Design Lead, MOSL
Last week I was excited to have the chance to speak at The Institute of Water’s retail competition event in Portsmouth. The event marked the first 10 months of the English non-household retail water market, which opened in April last year. I talked at the event about some of the trends we have been seeing 10 months in – a range of new business models, switching up and down the country and a wide range of changes considered by the industry Code Panel, to name but a few.
It wasn’t the only significant milestone however; from a personal perspective it also marked my one-year anniversary at MOSL. It has been a whirlwind of a year, and I thought it would be timely opportunity to reflect on the last 12 months in this, my very first blog.
The three C’s: Codes, Committees and Change
Before joining MOSL, I worked in the energy market managing the change management processes on a number of the electricity and gas industry codes. You’d probably expect, as did I, that this would have prepared me for my role at MOSL, working as the Market Design Lead, to support the industry Code Panel, its Committees and the codes change process.
This is true in part – in energy and water, the market codes and their governance are principally the same. Codes are the rule books for the industries they govern, and the foundations for operating a successful market. That said, the rule books themselves are very different, and it’s been a steep learning curve. One year in, I still have plenty to learn!
There is no escaping the acronyms…
I joined MOSL during shadow market operations, three months before we, as an industry, opened the largest competitive retail market in the world. Not only did I have to get my head around new terminology, new ways of working and a brand-new set of TLAs (three letter acronyms), but I also had to hit the ground running to get up to speed with new processes and market participants, all of which by their nature operate differently to the energy market.
Shadow operations was one of, if not, the busiest times for MOSL, and all parties involved, preparing our systems, processes and people for market opening. My role primarily focused on setting up the Panel, its Committees and their intended outcomes and work flows. Only retrospectively can I see quite how much the energy market helped me understand how successful markets can and should operate, which was a great help when it came to establishing new Committees and an effective code change process in the retail water market.
Before leaving energy, one of the last pieces of work I was involved in, was reviewing the Competition and Markets Authority’s (CMA) findings on the energy market investigation, with a specific focus on industry code governance. This helped me appreciate the best place to start with any new market is to establish a market of self-governance, without undue bureaucracy. By this I mean, a market that allows participants to evolve the rules if they are not working or can be improved. MOSL supports this process by facilitating industry discussions and supporting the development and progression of changes identified
Where we stand
So, to echo the reflections from my presentation at the Institute of Water, 10 months in, where do we stand? So far, the Code Panel has considered 32 changes, and we are seeing retailers and wholesalers using the market governance arrangements to affect positive change in the Codes – which inevitably drives the market forward while ensuring stability, awareness and access for all parties. There is always room for Code improvement, but we now have strong foundations in place to allow them to evolve through the continued hard work of MOSL and our members – the retailers and wholesalers operating in the market.
The water and energy markets are very different, but aside from the level of market maturity, the energy market having 20 years on water, and their operating processes, there are similarities. The key being, they both have the same end customer, and those customers need to be at the heart of any market and the way it is designed.
I’m in the privileged position as Market Design Lead at MOSL of playing a key role in that process together with my colleagues, our members and the Panel by supporting the change process and future code evolution. With further developments on the horizon, multi-utility offerings, self-service options, and more, I think it’s a pretty exciting place to be!