2020/21 Market Performance Operating Plan Review

Introduction

In June 2020, we published our third Market Performance Operating Plan (MPOP) for 2020/21. The MPOP detailed how we would use the tools within the Market Performance Framework (MPF) to drive market performance improvement. It set out the areas of focus for addressing key issues impacting the delivery of:

Improved customer outcomes
Improved trading party performance and accountability.

The activities within the MPOP 2020/21 were prioritised based on the findings from several market sources, including the PwC Audit and feedback from the CEO Forum and Trading Party Survey. These sources identified the following areas as market priorities:

Legacy data issues
The maintenance and ownership of data
The effectiveness of the MPF.

Two workstreams were developed to address these issues:

A. High quality customer, premises and asset data:
Addressed current and legacy issues with poor data quality, including the completeness and accuracy of market data. These were limiting the ability of wholesalers and retailers to provide an excellent customer experience and caused operational friction between trading parties
B. Timely and robust consumption data:
Addressed challenges with the maintenance and management of consumption data, which impacted customer billing, efficient switching and settlement accuracy. This also supported the delivery of insight for wider water efficiency and leakage initiatives.

The MPOP priorities also took account of COVID-19, incorporating a high-level market impact assessment. This led to the formation of a third workstream to manage and mitigate the risks to performance due to COVID-19:

C. COVID-19 remediation activity:
Monitored and mitigated COVID-19 impacts on market performance, particularly on meter reading and vacancy. Support, intervention and guidance provided to facilitate a timely and smooth transition out of COVID-19.

Delivery against objectives

There were three phases of delivery of MPOP 2020/21.

Delivery phases of MPOP

The 12-month MPOP cycle for 2020/21 was primarily focused on Phase I activity of understanding issues and developing solutions.

Key highlights from each of the workstreams include:

Workstream A:

Phase I delivery has incorporated the publication of a Core Market Data Improvement Plan, development of a code change for addressing long-term vacancy (CPW106: ‘Management of Long-Term Vacant Supply Points’), and a proposal for streamlining new connections. Consideration of the Vacancy Change Application (VCA) process highlighted the complexity of both the existing codified process and options for the way forward. Further consultation with trading parties is required to progress VCA process improvements in 2021/22.
Workstream B:

Commitments from this workstream were largely transferred to the Strategic Metering Review early in 2020/21 to address metering issues. This has led to work being progressed through engagement with the market at a strategic level. It has meant that the delivery of more tactical improvements to be delivered within MPOP 2020/21 was limited. A review of Yearly Volume Estimates (YVE) methodology was completed, along with detailed work to reduce the volume of rejected meter read submissions.
Workstream C:

We published a monitoring and intervention framework and guidance document and a temporary vacancy document. The majority of these activities have since been transitioned to business-as-usual. A review of Workstream C activity undertaken by MOSL and the Market Performance Committee confirmed that no additional activities were required to mitigate risks to performance arising from COVID-19.

A more detailed review of progress is shown below.

Market Performance Operating Plan (MPOP) 2020/21

Strategic Market Outcomes

Improved customer outcomes

Improved trading parties performance and accountability

MPOP Workstreams

COVID-19 impact assessment and consultation responses

A: High quality customer, premises and asset data

B: Timely and robust consumption data

C: COVID-19 remediation activity

MPOP Focus Areas

A1: Improving the quality and completeness of core customer and asset data

A2: Streamline customer and asset data management processes

A3: Manage and monitor market vacancy against targets

B1: Refine accountabilities for optimising meter reading

B2: Streamline Meter Read Capture and Submission Process

B3: Manage and monitor meter reading performance against targets

B4: Build strategic plan for improved meter reading service provision

C1: Manage and monitor Covid-19 risk and transition

C2: Develop new workstreams & activity in response to emerging Covid-19 risks

Objective	Outputs	Next steps and recommendations
A1.1 Improve core customer and asset data	Publication of Core Market Data Improvement Plan Detailed analysis of methodology and underlying issues of poor-quality core customer and asset data Input obtained from subject-matter experts and industry consultation	Next steps are the implementation of the Market Improvement Plan, including performance monitoring, data sharing, and developing routes for user-verification of data accuracy Recommend the maintenance of on-going market dialogue on data quality and performance via industry forums such as Retailer Wholesaler Group (RWG), MPC and User Forum MOSL will also review the market strategy for managing and governing data and consider other options for maintaining and enriching data
A1.2 Incentivise high standards for data quality	Agreement and publication of Additional Performance Indicators (APIs) covering key data items (namely, UPRN and VOA completeness and GIS issues) Assessment of the need for measures and incentives to maintain high standards of data quality Publication of dashboards to monitor and support data quality initiative and improved trading party performance	Prioritise performance monitoring and rectification against key APIs Review effectiveness of the APIs and consider the need for additional incentives as part of the Roadmap for the Market Performance Framework (MPF) developed by MOSL and the MPC
A1.3 Enrich core customer data	Enhanced view of consumption through the collation of ‘best available’ data using the average consumption over multiple settlement runs Developed an improved profile of customers within CMOS using matching, cleansing and enrichment techniques to identify industry segments for approximately 75 per cent of premises Spatial analysis of meters and Water Resource Zones and Environmental Agency Water Bodies has provided insight into geographic context of water usage, availability and scarcity, as well as impacts of regional lockdowns due to COVID-19 Creation of carbon model to estimate NHH operational carbon emissions by combining settlement data with operational carbon emissions data published by water companies	Share findings and identify further work in collaboration with trading parties and other stakeholder groups, such as regional Water Resource Management Planning groups Consider options for wider access for enriched data and collated regional datasets Scope approach for further improving the identification and segmentation of customers in conjunction with market data cleanse activities

Objective	Outputs	Next steps and recommendations
A2.1 Streamline New Connections	Evaluation of the ownership model of supply point registration process and options for ensuring accurate data into CMOS and improved occupancy rates for new premises. Commencement of eligibility review of Temporary Building Supply (TBS). Working with RWG Eligibility Review Group to make recommendation to Ofwat Refined proposal for streamlining and improving the new connections process based on responses to Request for Information (RFI)	Next steps are to submit a code change for the proposed changes and develop a consultation document Recommend continuing engagement with Ofwat and the RWG regarding the review of eligibility of TBS
A2.2.1 Refine the Vacancy Change Application (VCA) Process	Workshops and analyses of possible options to expedite the VCA process, detailing minimum data/evidence requirements needed to demonstrate occupancy Review of potential tools or technology to facilitate data sharing between trading parties	Unable to deliver outputs in line with expectations for 2020/21 and further work still needs to be done Recommend consultation with trading parties to refine options and determine the best route for improving the VCA
A2.3 Facilitate the use of deregistration or disconnection of long-term vacant premises	Code change CPW106: Deregistration of long-term vacant premises raised with analysis and evidence for the need to address long-term vacant premises in the market Completed initial consultation on CPW106: Deregistration of long-term vacant Supply Points	Next steps are to complete a second consultation due to the need to refine the original proposal following feedback from the first consultation A Draft Recommendation Report can then be finalised

Objective	Outputs	Next steps and recommendations
A3.1 Establish new vacancy target	Evidenced a new target for vacancy Approach to Paired Improvement Plans (PIPs) developed to facilitate collaboration between wholesalers and retailers on reducing levels of vacancy Publication of overall vacancy targets has been delayed due to the impact of COVID-19 and instead collaboration via PIPs has been promoted to allow for more effective prioritisation and more flexibility for constrained trading party resources	Publish analysis and final target for vacancy alongside vacancy dashboards and API Continue to work with trading parties and promote collaboration through PIPs
A3.2 Review vacancy incentivisation	Evaluated options for incentivising effective vacancy management	Publish analysis and final target for vacancy alongside vacancy dashboards and API

Objective	Outputs	Next steps and recommendations
B1.1 Evaluate the options to facilitate greater sharing of consumption data	Incorporated into the Strategic Metering Review	This is now quick-start project 1 and an initial paper has been prepared In addition, collaboration held with the RWG Task and Finish group on Headline Action 2 on water efficiency. The Joint Industry Action Plan for Water Efficiency can be found online.

Objective	Outputs	Next steps and recommendations
B2.1 Reduce the number of rejected reads from CMOS	Detailed analysis has been implemented by CGI to provide evidence for the number of read rejections Detailed dialogue with relevant trading parties regarding performance and identified issues	There are two non-code changes proposed and work on reviewing volume validation is underway as part of the Strategic Metering Review MOSL is working with CGI to develop dashboards to help monitor read rejections and resolve issues
B2.2 Develop an approach to agreeing transfer reads between Retailers	Incorporated into the Strategic Metering Review	Retailers to be included in the work developed for the new Metering Committee
B2.3 Review YVE methodology and guidance	Reviewed impact of estimation methods on settlement charges, including identification of areas of concern and recommended performance measures Agreed Additional Performance Indicator (API) for YVE performance with MPC	Included in the list of projects for the SMR and will be included in the Metering Committee review of future projects Next steps include publishing findings for analysis of impact of estimation on settlement and details of API Implementation of API for YVE performance Developing reporting tools and dashboards for settlement and estimation accuracy to support improved YVE performance.

Objective	Outputs	Next steps and recommendations
B3.1 Establish new long unread meter target	Approach to Performance Improvement Plans (PIPs) developed to facilitate collaboration between wholesalers and retailers on reducing long unread meters An explicit target for long unread meters was not set due to the impact of COVID-19 and instead collaboration via PIPs has been promoted to allow for more effective prioritisation and more flexibility for constrained trading party resources	Review the use of skip codes to understand why meters are not able to be read in the market. Consider ‘hard to read meters’ and defining potential solutions including the existing operational approach, improved operational solution and the use of technology to provide a sustainable solution.

Objective	Outputs	Next steps and recommendations
B4.1 Strategic Review of Metering	The Strategic Metering Review has been established and a high-level plan prepared. A series of quick start projects have been implemented before the enduring governance approach is in place.	Now that the new Metering Committee has been formed it will review and shape the plan initially for the next six-nine months and thereafter for a period of approximately three years

Objective	Outputs	Next steps and recommendations
C1.1 COVID-19 vacancy and meter reading monitoring and intervention framework	Assessed the level of vacancy reported by the market, identified outliers versus expected rates of vacancy, highlighted positive and negative trading party behaviour, facilitated peer-to-peer comparison, and led to insight and lessons learnt for transitioning beyond COVID-19 Published a Monitoring, Reporting and Intervention Framework for Transitioning Beyond COVID-19 Reviewed effectiveness of the occupancy update transaction (T112.R), including analysis of the rejection rates	Activity has largely been transitioned into BAU Recommend launching a Request For Information (RFI) to gain insight into challenges of the T112 transaction and work with CGI to review rejections processes; and working with industry groups such, as the RWG, to develop guidance to improve understanding of the process.
C1.2 Provide guidance for the transition beyond COVID-19	Provided guidance to trading parties for transitioning the temporary vacancy measures beyond COVID-19 Proposed approach for supporting the transition of the market beyond COVID-19	Activity has largely been transitioned into BAU and no further MPOP activities in this area are currently required

Objective	Outputs	Next steps and recommendations
C2.1 MPOP activity review	Assessed whether the MPOP market improvement and risk remediation activity still appropriately address COVID-19 risks. Agreed with the MPC that the current activities were appropriate to address known COVID-19 risks to performance.	Recommend regular reviews of the impacts of COVID-19 on risks to performance to assess need for further activities