Workplan Review Group 21 December 2016

Agenda Tea and coffee All 09:30-10:00 Welcome and actions from previous meetings November WRG Other outstanding actions Tom Notman 10:00-10:10 Ofwat programme update Adam Cooper 10:10-10:30 Defra programme update Sam Jackson 10:30-10:50 MOSL programme update Review of key risks Steve Lyon 10:50-11:10 Break 11:10-11:30 Markets update Interim Codes Panel Day 1 switching Volume transfers Update on other activities Martin Silcock 11:30-12:30

Agenda Lunch All 12:30-13:00 Systems update Level of quality expected in CMOS following R2.26 and R2.3 Stephen Winnie 13:00-14:00 Settlement workshop Top 10 settlement issues Liz D’Arcy Tom Notman 14:00-15:00 Future WRG proposals in the live market 15:00-15:15 AOB Update from trade effluent Workshop Wrap up and close 15:15-15:30

Welcome and actions from previous meetings Tom Notman

November WRG actions Action Update MPs to provide feedback on level one plan to Amanda Rooney Covered in Ofwat’s update Defra to clarify in LoA3 that section 2 components 1 and 3 don't need to be filled out Completed Defra to change wording in LoA3 to allow contract to be signed in the future MOSL to canvass opinions on plan for settlement reports which will be published during the live market but refer to pre-live data Communication requesting feedback will be sent shortly MOSL to issue programme note on processes (posting credit, etc) ahead of the market opening To be issued in January MOSL to publish the full risk register to website MOSL to publish statistics on how complete the current Market Data Set is MOSL currently discussing

November WRG actions Action Update MOSL to hold workshop on Trade Effluent charging in December Workshop took place 20/12 MOSL to share water quality incident scenarios Completed 30/11/16 MPs to feedback changes/additions to Operational Process plan by 2 Dec Comms sent 20 December MOSL to set up measuring performance working group Has now been established MOSL to set up a call for 'lessons learnt' not covered at the November WRG Lessons learnt calls will begin in Jan MOSL to confirm date of December WRG

Ofwat programme update Adam Cooper

Information for WRG members Programme update Information for WRG members

Key tasks delivered Task Date Competition Act guidance relaunch 5 December Transition conclusions 14 December MAC-WRC consultations closed 16 December Panel elections- wholesaler and new entrant 15 December

Key tasks to be delivered next month Date CEO workshop 24 January Market monitoring framework consultation Mid January WRC and MAC conclusions January Statutory consultation on transition scheme February Customer awareness survey results published Transition information note Derogations final position

Statutory Transition Scheme Responses to earlier consultation were all broadly supportive of the proposed scheme Published response document on 14 December, which confirmed: Ofwat will use statutory transition scheme to revoke WSLs and confirm compensation shall be nil; and Defra will address the issue of existing section 66D agreements in its 8th Commencement Order http://www.ofwat.gov.uk/publication/statutory-transition-scheme-for-retail-market-opening-response-document/

Programme update on wider transition arrangements We plan to publish a further Programme Update in January to provide an update on the wider transition issues, including: Confirming a 30 working day ‘freeze’ on processing WSL customer switches under the Customer Transfer Protocol (CTP); and Arrangements for the signing the MAC framework agreement – planned for Monday 6 March to align with SoS process Note: we propose to implement the freeze on CTP switching ahead of market opening by confirming that Ofwat will not view any refusal to process a switch to a WSL during that short, defined period as a breach of licence obligations. It will not affect the separate preparations for possible Day One switching by WSSLs under the new framework.

Integrated Market Opening Plan – October 2016 Repeat activity All trading parties Trial trading parties MOSL and all TPs Defra MOSL Open Water Ofwat KEY HoP = Houses of Parliament TP = trading party Critical milestone Milestone System design, build and test Governance Assurance letter – final MO info. for HMT TP data for phase 1 build System design – Phase 1, TP functionality System design – Phase 2, MOSL functionality Security penetration testing Run full service desk operation System integration test, phase 2 build Live service desk operation Assurance letter – interim Assurance letter – planning MCR published System requirements sign-off Codes baselined SoS decision Go Live Checkpoint on progress to baseline Shadow market operations Review │ Refine │ Implement market opening plan Release planning Website finalised Collaboration tool training Final data load Remedial data load and assurance Market readiness Sector test system cycle 1 Sector test system cycle 2 Pre go-live comms If fail UAT reports on MOSL website TP training needs analysis Formal market entry assurance testing MCR Planning Readiness self assessment Readiness assessment Market report to Ofwat / Defra Market entry reassurance testing TP market entry assurance certification confirmed & complete issued to all TPs Retail Exits allowed Publication of charging guidance Charging guidance to Ofwat in HoP Shadow market workshop comms event New entrant comms event Update system 1 Update system 2 Update system 3 MOSL system sign-off UAT 2.0 Service acceptance testing UAT 1 Commencement work for Retail complete Shadow market opens System build – Phase 2, MOSL functionality System build – Phase 1, TP functionality System integration test, phase 1 build Run initial service desk operation Training delivery – Phase 1 Data load 3 Data load 2 Test environments Data load 1 Market scenario testing Data test environment Independent review Market entry business solution assessment Design phase 1 Design phase 2 Build phase 1 Build phase 2 User acceptance testing 1 User acceptance testing 2 Market entrant readiness complete Design and build Test Shadow Go live Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 TP engage- ment survey TP engage- ment survey TP engage- ment survey TP engage- ment survey TP engage- ment survey TP engage- ment survey Training delivery – Phase 2 UAT 2.1

Integrated Market Opening Plan – December 2016 Repeat activity All trading parties Trial trading parties MOSL and all TPs Defra MOSL Open Water Ofwat KEY HoP = Houses of Parliament TP = trading party Critical milestone Milestone Shadow Go live Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 May June Enduring panel elections Set up enduring panel Enduring panel goes live Assurance letter – interim Assurance letter – final SoS response to final Assurance letter Governance Shadow market opens Programme update on transition Retail Exits allowed Consultation transition scheme Statutory transition scheme issued and takes effect MO to be appointed by wholesalers and retailers Scoping work for final retail market commencement order complete Commencement Order is made Commencement order provisions come into force TP engage- ment survey Market report to Ofwat / Defra Market report to Ofwat / Defra Readiness assessment Readiness assessment Market entry reassurance testing UAT reports on MOSL website Pre go-live comms Market readiness Formal market entry assurance testing TP market entry assurance certification confirmed & complete TP market entry assurance certification issued to all TPs If fail If fail Final data load Remedial data load and assurance Test environments 20 Switching process Run full service desk operation Live service desk operation Shadow market operations System design, build and test Review │ Refine │ Implement market opening plan Release planning System release 2.26 – 9 Jan System release 2.3 – 30 Jan

Licensing Retail exits Interim Supply Customer Protection SoS decision on retail exit applications GSS consultation responses Finalised WSSL licence Consultation responses Deemed contracts and ISC Ofwat open application process and handle applications Ofwat consult on application process and hold industry workshops Consult on ISC policy Cross-border regulations in HoP Parliamentary process GSS recommend to Defra and Welsh govt. Consult on deemed contracts Consult on draft retail exit code Draft appeals regime for the codes Consult on appeals regs Appeals regulations in HoP  Interim Supply Customer Protection Statutory Codes Retail exits Consult on ISC legal text Publish Interim Supply Code Appeals system in place Ofwat finalise WSSL WSSL handover to Defra Draft provisions for transition from old to new WSL arrangements Consult on draft WSSL licence Prepare SoS WSSL authorisation to Ofwat & consult Welsh Ministers Changes to Instrument of Appointment Commence Retail Sections 1 & 4 and Schedules 2 & 4 Procedure for granting WSSL licences (s.25) Licensing Approval of new WSSL and priority changes to WSL and IoA Publish WSSL licence Consult on draft code of practice & customer protection licence condition Publish CP code of practice Develop draft Retail Exits Code Issue Interim Supply Code Election of enduring Code Panel Develop draft Interim Supply Code Run application process GSS regulations in HoP GSS regs in force Stat con on MAC and WRC SoS 28 day veto period Publish retail exit code Consult on wider customer protection policy issues Ofwat develop application details SoS WSSL authorisation to Ofwat WSSL application opens WSSL application deadline for market opening (for simple, complete, self-certification MEAC only) Engage Stakeholders & Parliamentarians’ Retail exit regulations in HoP Retail Exit application process opens Retail Exit application deadline for exit at market opening (standard MEAC) Issue Retail Exits Code Deadline for WSSL applications to meet opening of Defra exit process Run Retail Exit application process SoS decision on MAC and WRC Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 Design and build Test Shadow Go live WSSL application deadline for market opening (for non simple applications eg enhanced MEAC) Retail Exit appl deadline for exit at market opening (remedial MEAC) Repeat activity All trading parties Trial trading parties MOSL and all TPs Defra MOSL Open Water Ofwat KEY HoP = Houses of Parliament TP = trading party Critical milestone Milestone

Licensing Retail exits Interim Supply Customer Protection SoS decision on retail exit applications Consult on appeals regs Appeals regulations in HoP  Interim Supply Customer Protection Statutory Codes Retail exits Appeals system in place Licensing Issue Interim Supply Code Election of enduring Code Panel Run application process GSS regulations in HoP GSS regs in force Stat con on MAC and WRC SoS 28 day veto period WSSL application deadline for market opening (for simple, complete, self-certification MEAC only) Retail Exit application process opens Retail Exit application deadline for exit at market opening (standard MEAC) Issue Retail Exits Code Run Retail Exit application process Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 May June Shadow Go live Freeze on WSL switching under customer transfer protocol IoA modifications take effect WSSLs take effect WSLs revoked CPCoP take effect Signing of MAC framework agreement and possible signing of the wholesale contracts between wholesalers and retailers MAC, WRC, ISC, REC take effect Repeat activity All trading parties Trial trading parties MOSL and all TPs Defra MOSL Open Water Ofwat KEY HoP = Houses of Parliament TP = trading party Critical milestone Milestone

Defra programme update Sam Jackson

Sam Jackson Workplan Review Group 21 December 2016 Defra update Sam Jackson Workplan Review Group 21 December 2016

Recent progress in the Defra programme Assurance pro-forma letter 3, amended advice and updated FAQ published 9 December – also see notes in this MOSL email Exits decisions published 12 December – 3 weeks ahead of schedule. See our programme note for further info. 5th meeting of the Assurance Group on 12 December – agreed to meet again end Jan to consider final advice. Previous advice to Defra published (here and updated here). Consultation on code appeals for the water supply and sewerage licensing regime closed 13 December 19

Assurance phase 3 – ‘that’ recap again Letter 3 is all about readiness for market opening Remember this has been a framework of continuous assurance – there shouldn’t be any surprises by this stage Key dates MP letter: 3 Feb MOSL letter: 10 Feb Ofwat letter: 10 Feb Defra letter: 17 Feb Requires confirmation that work plans are materially completed (or will be completed) for market opening New entrant retailers and associate licensees (i.e. market participants who will be operating under a WSSL) are required to submit a letter at phase 3 20

Summary of changes made ‘Has completed’ – now ‘or will complete by market opening’ ‘Has signed a contract /framework agreement’ – now ‘or confirms will have signed by market opening’ ‘High quality’ data – replaced by wording from licence condition Language inconsistencies between statements and table corrected New entrants now asked to consider 4 of the statements in the ‘Systems, Data, Security and Processes’ section of the ‘Company Readiness Component’ – based on participant feedback, partner discussions and consultation with 3 new entrant WSSLs To note that as a result of this change, the statements have been re-lettered in that section 21

Using the pro-forma for phase 3 The basics: It’s an editable pdf designed for downloading/ saving, completing electronically and printing for signature – LETTERS MUST BE SIGNED You can paste in your company logo at the top right of the page if you wish (though this is not required) To note – different this time: Company name still populates throughout but not in the sections you are not asked to complete. Retailers and new entrants may have to re-type their names in some places. Please check you have completed all relevant sections. 22

Next steps and contacts List of phase 3 letters expected – your MOSL portfolio managers may be in touch Support for new entrants completing a letter for the first time If in any doubt, please get in touch: Jess Keedy Sam Jackson 020 802 63350 020 802 64009 jess.keedy@defra.gsi.gov.uk sam.jackson@defra.gsi.gov.uk 23

MOSL programme update Steve Lyon

Risks

Risks

Markets update Martin Silcock

Background A number of options were discussed for dealing with large numbers of switches which may be initiated at market opening (October & November WRG). At the WRG meeting in November, MOSL outlined the Programme’s preference for Option 2, as below: While there was reasonable consensus for option 2, a number of potential issues and implications were raised by WRG members and a further opportunity to comment given Option 2 Transfer Registration Applications to commence between 6 and 20 days ahead of day 1, enabling the Registration Start Date of the transfer to be day 1

Transfer registration applications not allowed Reminder - option 2 Transfer Registration Applications will be processed to enable Registration Start Date on Day 1 (i.e. 1 April 2017) Day 1 Retail Exit RSD Deadline to exercise customer choice as part of Retail Exit 01/04/2017 30/03/2017 23/03/2017 6BDs before RSD Last day to submit transfer applications for Day 1 RSD 06/03/2017 20BDs before Registration Start Date (RSD) First day to submit transfer applications for Day 1 RSD Time interval allowed for Day 1 switching Transfer registration applications not allowed Transfer applications up to 2 days before Day 1 due to customer choice in an area which is subject to Retail Exit will be transferred with the RSD of the Retail Exit i.e. Day 1 (to avoid double switching)

Some considerations A huge majority of SPIDS will be subject to an exit: c70% to an associate c25% to a 3rd party c5% not subject to exit Retail exits are governed by separate process designed to achieve exit with effect from Day 1 with option for customers to opt out Switching under the market codes allows for cancellation by an outgoing retailer for debt. This risk is assumed priced in at retail exit Competitive activity is already taking place

Responses 13 further responses received: 4 prefer Option 1 1 didn’t express a preference Overall balance in favour of Option 2 Useful detailed questions and concerns were helpful Programme partners have considered the responses and the issues raised RMOMG determined at its meeting 19 December that Option 2 remains preferred approach. The programme will look at ways of mitigating risks raised

Key themes from responses Need detailed guidance to understand the approach and impact Interlinking between retail exit options and early switching Protection for customers ahead of go-live against poor behaviour by retailers or risk of error Protections for market participants ahead of go-live; e.g. will cancellation be an option and enforceable? Impact on customers experience and perceptions of the market if there is double-switching Interaction with other processes needed for market opening: go-live decision, contract signing, need to post credit, etc

Next steps Programme Note on Transition will be published January MOSL will aim to publish draft detailed explanation and guidance note in January 2017, covering: early switching retail exit volume transfers (including how the options previously discussed will be implemented Industry group/call to discuss Performance testing

Inflight changes WRC Change Proposals (CPs) “in flight”: 5 CPs have been recommended and Ofwat approval letters will be dated 1 April 2017 WRC051 – Performance Change Alignment with Interim Supply WRC053 - CSD0301/0101 - SPID pairing WRC055 - Trade Effluent Updates - SVAM Subtract and Calculated Discharge Frequency WRC059 - Settlement updates WRC062 - Error Codes 2 CPs not yet published – will be published early January WRC054 - CSD 0400 series updates WRC056 - Trade Effluent Update - Form G/01

Inflight changes WRC Change Proposals (CPs) “in flight” (continued): 2 CPs in development WRC039 – Self-Supply WRC061 – Emergency Contact Details 2 MAC Change Proposals (CPs) “in flight” 2 CP’s in development for Recommendation MAC004 - Code Change Proposal Form MAC005 - Data Protection Updates

Inflight changes WRC Title Proposer ICP status CMOS impact Release ICP/ Panel? Pre Go Live? tbc 1 CSD 0400/0406 updates Align CSD to Service Desk processes MOSL Not proposed N   Panel tbc 2 CSD 0001 updates Potential revision to Market Entry processes to align to pre-go live tbc 3 D3010 Meter Read Type Add a value of ‘O – Observation Read’ to the valid set for D3010 Meter Read Type and enable it to be used for meter reads relating to Market Meters by wholesaler or retailer Bristol Water Y TBC tbc 4 D1 Settlement report Add flags to the D1 Disaggregated Settlement Report to assist understanding of volume estimation tbc 5 CSD 0301 Align CSD to CMOS functionality tbc 6 CSD 0104 Align CSD to CMOS functionality tbc 7 CSD 0105 Align CSD to CMOS functionality

Inflight changes tbc 8 CSD 0101 Align CSD to CMOS functionality MOSL WRC Title Proposer ICP status CMOS impact Release ICP/ Panel? Pre Go Live? tbc 8 CSD 0101 Align CSD to CMOS functionality MOSL Not proposed N   Panel tbc 9 Leakage and Drought Payments Updates to reflect policy Ofwat tbc 10 Combined Supply Licences To include functionality in CMOS y TBC tbc 11 Housekeeping Grammatical errors tbc 12 Notifications - CSD 0102/103/0003 Enhance CMOS to include further notifications Y tbc 13 Inconsistencies CSD 0102/0002/0005 Inconsistencies across CSDs tbc 14 CSD 0203 updates Align CSD to CMOS functionality tbc 15 Unsecured Credit Align to Ofwat policy tbc 16 Meter Reads Enhance validation of meter reads Northumbrian Water

Pipeline of changes - MAC Title Proposer ICP status CMOS impact Release ICP/Panel? Pre Go Live? tbc 1 Removal of square brackets Updates to dates Ofwat Not proposed N N/A   Y Please note: There may be further changes following Ofwat’s review of the MAC and WRC and feedback received from the Consultations;

ICP plan for 17 January meeting Proposals for Recommendation WRC039 – Self-Supply (From Market Participant) MAC005 – Data Protection Updates (From MOSL) Two Change Proposals for assessment WRC054 - CSD 0400 series updates (From MOSL) WRC056 - Trade Effluent Update - Form G/01 (From Market Participant)

ICP plan for 17 January meeting Ten new Change Proposals for Assessment From Market Participants D3010 Meter Read Type - Add a value of ‘O – Observation Read’ to D3010 D1 Settlement report - Add flags to the D1 Disaggregated Settlement Report for volume estimation Meter Reads - Enhance validation of meter reads From Ofwat Unsecured Credit - Align to Ofwat policy From MOSL CSD 0001 updates - Potential revision to Market Entry processes CSD 0301 - Align CSD to CMOS functionality CSD 0104 - Align CSD to CMOS functionality CSD 0105 - Align CSD to CMOS functionality CSD 0101 - Align CSD to CMOS functionality Housekeeping - Grammatical errors

Lunch

Systems update Stephen Winnie

Release management 2.1 deployed 2.3 2.25 deployed Tariff Change (2.26) Deployed to UAT 4 December 2016 Deployed to MPS 12 December 2016 Deploy to PRD 9 January 2017 2.3 Scope baselined on 19 October XSD and WRC Guidance released 11 November Initial Release note issued 2 December Deploy to MOSL UAT 2 January 2017 Deploy to MPS_2 January 2017 Deploy to PRD 30 January 2017 CMOS Release and test Update document published 15/12/2016 Releases, timelines, environments, data uploads

Release management - 2.26 & 2.3 Tariff Change (2.26) Tariff upload and amendments Tariff guidance published 09/12/2016 XML format as previously EFD 2017-04-01 Status ‘draft’ 77 defects 40 workarounds 2.3 17 WRCs 51 defects in candidate list 31 workarounds resolved

Release management – 2.26 & 2.3 Tariff change (2.26) MP testing has commenced with mixed feedback on level of defects and quality 2.3 SIT has commenced MOSL tracking development and defects on a daily basis

NRO candidates SPID load, YVE, RTS, RV Porting the DM Loader into current version of CMOS and developing scripts to load the YVE, RTS, RV. 19 candidate activities to date 13 individual MPs identified to date SPIDs 13 declared (c23,000), 10 completed, 3 TBC RTS 2 declared (c101,000) RV 3 declared (19,000) YVE 7 declared (c198,000), 1 completed Tariffs 4 completed Next available SPID load, Saturday 14 January Dates for NRO script updates to MPS and PRD will be discussed with MPs and targeting conclusion by 22/01/2017

Settlement Workshop Tom Notman and Liz D’Arcy

Update and lessons from one type of collaboration Break-out session Collaboration update MP collaboration Update and lessons from one type of collaboration Break-out session

Collaboration Groups How to effectively work together to: Identify and prioritise industry themes Share best practice Learn lessons Work on resolutions Considerations: Size of group for effective working F2F meetings: regional vs central meetings v conference calls Channels e.g. Forums/Yammer Ensuring everyone’s voice is heard Sharing with wider industry

Northern Wholesale Collaboration – feedback on one approach Regional collaboration Smaller working groups Wholesalers UU, NWL, YW and STW Facilitated by MP, MOSL invited Focused on specific topics Local meetings TOR Collaboration and self help Sharing experiences and lessons Identifying themes and prioritising Working on resolutions Feedback to wider industry First topic – Settlement and Data Face to face meeting in Leeds on 30 November Followed by teleconference on 12 December Attended by settlement and data experts from each MP Talked through experience to date Identified top ten issues

Top 10 issues - benefits Articulate industry themes Each MP ID top 10 issues Agreement on top 4 most important Clarification for escalation MP Awareness MPs watching brief and check Share resolutions Eg MDS and Jaspersoft Learn lessons Identify and mitigate risks Work through possible resolutions Good size and make up of working group Propose resolutions

Top 10 issues – approach and results 12 December

Limited window to transact data, following resolution of CMOS defects Proposed Resolution – ad-hoc settlement runs Settlement issue timeline Request for three additional ‘ad-hoc’ mid month settlement runs for Jan – Mar (Production Environment) January February March P1 Settlement cut off 4 March CMOS 2.3 release 30 January P1 Settlement run 10 January P1 Settlement cut off 4 February Go live 1 April Limited window to transact data, following resolution of CMOS defects If February settlement cut off is missed we only have the March settlement run left before go live Proposed mitigations are: MOSL support MP’s data planning Assumptions: CMOS 2.3 resolves defects

Touchpoints – facilitating collaboration by capability

WRG working group Feedback on Northern Collaboration top ten issues Interest in regional collaboration Future topics for collaboration

Future WRG proposals in live market Tom Notman

AOB Tom Notman

Update from Trade Effluent Workshop Coming up: Open Water Update call 22 December CIO Forum 6 January Water Industry Workshop 11 January Operations and Release Working Group 17 January ICP Meeting 17 January Open Water Update call 19 January Open Water Communications Forum 19 January CIO Forum 20 January January WRG 25 January