Workshop finds "no fundamental barriers" to market opening but scopes out risks

Contingency planning workshop finds "no fundamental barriers" to market opening but scopes out risks.

A joint MOSL/Water UK workshop held last month to identify what MOSL chief executive Ben Jeffs (pictured) described as “potential bear traps” to on-time market opening “was unanimous in confirming that there were no fundamental barriers to either the live or shadow markets opening on time”.

However a note of the workshop, which involved 18 wholesalers as well as MOSL and Water UK, records the discussion of worst case scenario risks. The plan was for these to be further discussed at the next Retail Market Opening Management Group meeting “with a view to determining what actions, if any, may be required to mitigate the identified risks”.

The top risks identified were:

  • Water quality incidents: When it is published, the DWI’s report into last year’s water quality incident in the United Utilities region could necessitate system changes. Moreover, should there be another significant water quality incident in the run up to market opening “the DWI may lose confidence in the ability of the industry as a whole to manage an incident under the future arrangements as they currently stand”. Either could delay go live.

  • Volume switching on day one: A high volume of switching as soon as the market opens, and/or bulk switching as a result of mass customer transfer following a retail exit, could render systems and processes unable to cope. According to the workshop note: “Attendees were particularly concerned about this given that there is currently no plan to test large scale switching prior to live operations.”

  • Settlement testing: Some attendees were also concerned about the limited number of cycles available to test the settlement process ahead of companies needing to sign-off their final assurance letters for DEFRA in February. The note reported though: “However, a number of attendees who have already completed a settlement run reported good results and were much less concerned that settlement would be a significant issue going forward.”