25 June 2015: Update call 8
Update call for stakeholders
This document summarises the key issues discussed during the eighth Open Water update call. These are regular calls that are open to stakeholders in the Open Water Programme[1]. The call was held on 25th June 2015 and was chaired by Adam Cooper, Ofwat. Also on the call were Peter Bucks (OWML) and Ben Jeffs (MOSL).
Overall progress and transition (Peter Bucks) – OWML Update
· OWML is still in the process of transitioning to MOSL and is on track against agreed plan. This should be completed shortly after the publication of the pre-vendor recommendations in the middle of July.
· OWML plans to publish a pre-vendor recommendations document on the 14th July. This is a technical document that updates the MAP3 Appendices from May. This takes into account the outputs from the page turning workshops.
· A stakeholder update document is planned for the end of July. This will contain headline key messages for CEOs and Boards and an update on programme matters more generally. This document will coincide with the CEO update session.
· The New Legal Partner, DLA Piper, has now taken over fully from Shepherd and Wedderburn. There has been an effective knowledge transfer process and it is running smoothly.
· A credit terms workshop was held on 15th June. This ended up in a consensus on a model of a codified “menu of options” approach to provide security. Work is continuing to work up a detailed menu.
· The Market Transition & Company Readiness engagement is primarily through the workplan review group, which has been recently concentrating on clarifying and validating assumptions and key risks. Some work is in progress to establish principles which will underpin the detailed plan. Also, the data pilot will be published by end of June
· The Assurance Framework remains under discussion between Ofwat, Defra, MOSL and other stakeholders, including the terms of reference for the High Level Assurance Group and drafts of the formal letters of assurance which will need to be exchanged.
· OWML are looking to provide assurance of the algebra within the codes and have identified candidates. An update will be provided on the next call.
Update from MOSL (Ben Jeffs)
· Lesley Harford has started as head of communications for MOSL and has experience of regulator utilities from the Canadian energy market. She will build the community and engagement plan going forward.
· MOSL have reached a verbal agreement with PA to continue their market design work and PA will work on the Post Vendor MAP. MOSL will be formalizing contract with PA over the coming week.
· Jim Rickleton COO of OWML has agreed to transition over to MOSL after his work has completed at OWML. Jim is a qualified accountant and will bring a wealth of experience from OWML. Ahead of Jim moving across, MOSL have secured a dedicated support from Dawn Jefferson from Anglian Water who will start the work on Business Plan over the next 6 weeks.
· Invoices for members’ fees should be received on the 30th June. Ben would request that finance departments are notified to ensure speedy payments.
· On systems procurement, legal discussions have taken place as well as a review of mobilisation and delivery plans of all partners. Going forward, there will be reviews with each vendor to look at technical details and commercial discussions. Interviews have been planned for 15th + 16th July with the programme leads from each Vendor.
· Due to an ongoing development of the MOSL website, it has been requested that, over the next few weeks, as content evolves, any ideas and thoughts would be well received by Tim Burfoot (MOSL) and Lesley Halford (MOSL).
· MOSL will work over the summer to turn market design requirements into a system design. MOSL would be interested in industry participation to to build on previous MOSL work on the market design.
· Ben Jeff’s has received request to talk at Water UK board on 16th July and will be preparing presentation to show MOSL’s plans and these will be posted on the website.
Update from Ofwat (Adam Cooper)
· Ofwat published the licence consultation document on Tuesday. This is a significant piece of the market architecture and Ofwat are taking an open approach to get agreement on what is necessary for delivering on retail market opening. The consultation will run for four weeks, and Ofwat are planning workshop on 7 July to support further discussion.
· As in the consultation document, Ofwat will be establishing working groups to help take forward the work on the detailed drafting of the licence and appointment conditions. Ofwat’s intention is that this workshop will focus on the principles and main steps, rather than the precise legal drafting.
· The Baseline Review response is still in production - and the respective parties have responded to many of the Recommendations as we progress the transition from OWML and consider the Programme governance arrangements.
· The Budget note is still scheduled for release at the end of the month and we hope that this provides greater transparency around costs and will be a reasonable baseline that will be iterated over the coming months as more evidence emerges.
· Our Delivery Partner, PA Consulting, is now in place which has added to our capabilities and we expect them to be actively engaged across the sector.
· A note from the Credit meeting is being finalised and it will capture the consensus that emerged around a codified menu of options, including pre-payment. We are considering the next steps and this will be outlined in the note.
· Ofwat is working with MOSL on the Interim Code Panel to agree change control governance from the pre-vendor MAP3 conclusions through until September – and post that through to market opening.
Asked Questions
Can you make the participant letters referred to in the Assurance Framework available?
OWML has been considering with Defra, Ofwat and MOSL the arrangements for implementing the Assurance Framework, including the arrangements for governance and the form of the letters that are required under the Framework. These discussions are not concluded. It is intended that the Retail Market Opening Management Group will consider the form of the letters at its meeting on 20th July. We would expect to be able to make pro forma letters available to stakeholders in draft following this meeting.
Will the codes peer review of the settlement algebra extend to the company’s tariff calculations?
MOSL, working with OWML, is currently in the process of finalising the scope of assurance work of the settlement algebra. There may be more than one piece of work including one review to examine the algebra which is specified in the CSD's, in particular CSD0207. However, we are also considering an approach of validating whether that all Company’s tariffs are configurable using the charging structures that have been included in the CSDs. It is expected that any work of this type would take place after the issue of the MAP Pre Vendor Recommendations.
Chair's summary
Adam Cooper thanked everybody for their participation and invited feedback on any aspect of the Update Call.
Join the next call
Future update calls will continue to be held on a fortnightly basis. The next call will be held on 9 July 2015 at 9.30am.
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[1] At the current stage of the programme, these calls are intended for current suppliers, potential entrants and relevant public bodies (for example, statutory representatives or regulators). We will make the notes from the calls accessible to all on our website and will consider requests from other interested parties to join the call, but please note these may not always be accommodated depending on the number of participants and the subject of discussion.