Committee gives the green light for market performance reform code changes

The Code Change Committee (CCC) has unanimously recommended that Ofwat approve all remaining code changes to reform the Market Performance Framework (MPF).

MOSL explained in its Market Focus newsletter that the MPF programme is being delivered in five parts, A to E. Parts A and B – the MPF’s governance arrangements and non-financial tools – were approved by Ofwat last year.

Eight new key performance indicators (KPIs) have been developed as part of the reformed MPF. The first three KPIs, which Ofwat now uses as part of its new BR-Mex service metric, went live in April. The remaining code changes include three cyclic meter read KPIs, two transfer meter read KPIs, and code amendments for other provisions, such as the Performance Assurance Committee’s (PAC) ability to adjust each KPI’s performance standard by up to five percentage points in a 12-month period.

A unanimous decision is unusual, and a final decision from Ofwat is expected in November. Implementation would be quick because the new KPIs are already operational in a shadow environment.

MOSL programme manager Miles Robinson commented: “The proposed changes focus the reformed MPF on key aspects of trading parties’ performances that affect the quality of service customers receive, and simplifies the framework from 33 key performance indicators to just eight. We are delighted that the CCC agrees the proposed changes represent an improvement on the current MPF and supports the flexibility that the PAC’s ability to adjust future performance standards will provide.”

Following go-live MOSL said it will deliver two new ‘additional metrics’, which provide company-level insights for the PAC, and ‘market Iindicators’, which provide market-level data as the final Part E of the programme.