Click to edit Master title

Non-household retail competitionPresentation to IoW Eastern Area

8th May 2014

Paul Fry, OpenWater

Click to edit Master titleThe story so far …

Department for Environment, Food and Rural Affairs (DEFRA)Water for Life (published 2011), Draft Water Bill (published 2012), Water Bill (published 2013)

DEFRA, Welsh and Scottish Government, Ofwat, WICs, Industry CEOs and customer representative

Programme reporting to the HLG and responsible for market design and implementation

Open Waters first version of a recommended market design published

Full industry consultation on the Market Blueprint v1OpenWater led industry working groups to help shape the recommendations

More to do!

OpenWater led industry working groups to help shape the recommendations

2012

2011

2013

2013/2014

Jan 2014

Jan-Apr 2014

May 2014

Click to edit Master titleWhat is retail competition?

Present Market

SewerageSupply Chain Retail

Collection & Transportation

Treatment (Sewage & Sludge)Disposal

Business Customers

WaterSupply Chain RetailDistribution

Storage & TreatmentAbstraction

Business Customers

Incumbent Monopoly Companies

Future MarketBusiness

Customers

Wholesalers Retailers

The incumbent companies who presently manage all parts of the supply chain for most customers will continue to provide wholesale services and retail services. New entrant companies will be allowed to enter the retail market

All non-household customers will be able to choose the retailer from whom they buy their water and sewerage services

Click to edit Master title

Wholesalers Retailers

RegulatorsGovernmentCustomersFacilitators& operators

Market operator

Market Participants

Click to edit Master titleWhat choices should customers have?

Customers should be able to choose their retailer for each separately delivered and measured service type at a premises

If service types are not separately delivered customers should be able to choose separate retailers at the grouped services level

We expect a range of specialist and bundled retailer offerings to emerge

Click to edit Master titleKey interactions in the water and sewerage markets

Service flows

Contracts

Data/communication flows

Financial flows

Licence and code obligations

Wholesalers

Retailers

Wholesalers will be responsible for water and sewerage infrastructure and ensuring physical services are available for customers. Retailers will provide customer service

Customers will contract with retailers, who in turn will contract with wholesalers

Market operator

A customer’s primary point of contact will be with their chosen retailer(s). A new market operator (MO) should provide services which help make the market effective. This includes managing most data exchange between participants

Customer will make payment to retailers, who in turn will pay the wholesalers, based on payments calculated by the MO

Regulator

Retailers and wholesalers will continue to have licences and will be required to sign up to market codes, as will the MO

CustomersPremises and meters

Click to edit Master titleRegistration and switching strategy

New retailer

CustomersPremises and meters

Customers should be able to choose their retailer for each service type at each premises. If they choose to switch they should apply to their new retailer, either directly or through an appointed intermediary, and enter into a contract with the retailer

The new retailer should initiate a switch request. Industry standard processes should manage objections from the current retailer and necessary customer protections. The MO should manage most data exchange

Market operator

Current retailer

Wholesalers

When the switch is complete the MO should update a central register of service points which it maintains, and inform wholesalers if necessary. The central register will be developed top-down to produce a single record of the constable premises and service points

The new retailer should be responsible for obtaining a switching meter read, which is communicated to the current retailer through industry processes. The current retailer should then issue a final bill which the customer then paysContracts

Data/communication flows

Financial flows

Click to edit Master titleFinancial settlement strategy

Retailers

CustomersPremises and meters

Market operator

Retailers should read meters and inform the MO of meter readings

The retailer should then make payment. Credit or cash should be posted to mitigate liabilities

Once a month the MO should determine charges due for each daily settlement period, including estimating consumption in the absence of meter readings

Wholesalers

Wholesalers should inform the MO of operational services they have provided

The MO should advise the wholesaler of charges due. The wholesaler should then invoice the retailer

The whole process should be repeated after 2, 8 and 13 months to resettle for each settlement periodData/communication flows

Financial flows

Click to edit Master titleOperational services strategy

Wholesalers

CustomersPremises and meters

A catalogue of operational services provided across England should be created, and we will seek to make consistent the definition of services

Retailers

Market operator

Operational services requests and notifications should be communicated between market participants through the MO as far as possible. Some non-standard communications may be bilateral

Retailers will be responsible for communications with customers. Wholesalers when on site will be able communicate directly to customers

Data/communication flows

Service flows

Click to edit Master titleKey interactions in the water and sewerage markets

Service flows

Contracts

Data/communication flows

Financial flows

Licence and code obligations

Wholesalers

Retailers

Wholesalers will be responsible for water and sewerage infrastructure and ensuring physical services are available for customers. Retailers will provide customer service

Customers will contract with retailers, who in turn will contract with wholesalers

Market operator

A customer’s primary point of contact will be with their chosen retailer(s). A new market operator (MO) should provide services which help make the market effective. This includes managing most data exchange between participants

Customer will make payment to retailers, who in turn will pay the wholesalers, based on payments calculated by the MO

Regulator

Retailers and wholesalers will continue to have licences and will be required to sign up to market codes, as will the MO

CustomersPremises and meters

Click to edit Master titleSystems architecture and data model

Systems Architecture: To enable the MO to deliver its defined services IT systems will be required, e.g. a registration system and database; and a charge calculation system

Data model: The data model for the market, and for the MO in particular, includes centrally held records of: premises, service points, and associated meters and market participants; service requests and notifications; and meter readings, wholesale charging schemes, and derived wholesale charges. The central data model will not hold customer-level data.

Retailer / Wholesaler

Industry data exchange hub interface approach: three tiers of interface

Market operator

Functional Systems

IDEX Interface

Data Preparation Systems

Automated IDEX Interfaces

Machine-to-machine interface:for high volumes

Manual IDEX Interfaces

Manual webforms:for very low volumes and/or as contingency

Semi-Manual IDEX Interfaces

Manual file up/download:for low volumes and/or as contingency

Click to edit Master title

Inter Company Data Exchange

Usage Data

Premise Details

Supply Point Details

Meter Details

Market Operator

Reports

Meter Readings

Retail Providers

Wholesale Providers

Wholesaler

WholesalerRetailer Retailer

DATA

DATA

DATADATA

££

CUSTOMER

CUSTOMER

RetailProviders

Who the retailservice providers arefor each supply point

Meter ReadingPeriodic ReadingsSwitching Reads

Move In/Out Readings

Financial Settlement

Invoicing, payments and collections

CustomerSwitching

The customer choosingto change retailer

Meter Asset Details

Serial NumberAsset Attributes

Location

PremiseDetailsAddress

Rateable Value (RV)Classification

etc

WholesaleProviders

Who the wholesaleservice providers arefor each supply point

Supply Point Details

Water services Waste Water services

Market facilitation

Customer Switching

Financial Settlement

Produce wholesale chargingreports for retailers and

wholesalers

RegistrationFinancial Settlement

Click to edit Master title

Questions