Workplan Review Group (WRG)

Workplan Review Group (WRG)
22 November 2016

Today’s agenda Item Description Who Time 1. Tea and coffee All
09:30-10:00 2. Welcome and actions from previous meetings Tom Notman 10:00-10:10 3. Open Water programme update Accession Adam Cooper 10:10-10:30 4. Defra programme update Jess Keedy 10:30-11:00 5. Market Design ICP update Working towards the enduring panel Martin Silcock 11:00-11:45 6. Break 11:45-12:00 7. Market Operation Settlement reports via FTP Monthly performance reports Day 1 switching/Pre-registration MOSL plan for operational terms readiness Zainab Mohammed 12:00-12:45

Today’s agenda Item Description Who Time 8. Lunch All 12:45-13:15 9.
MOSL programme update and transition planning Steve Lyon 13:15-13:40 10. Market and Company Readiness feedback Lauren Mulholland 13:40-13:50 11. CIO Forum updates Samir Rahim 13:50-14:50 12. Lessons learned workshop Data Visualisation Data lessons Boyai Pukhrambam Mike Robertson Tom Notman 14:50-15:50 13. Close 15:50-16:00

Welcome and introduction
Welcome to the November WRG! – The first WRG since Andy Murray became World No 1! Housekeeping Today’s objectives

Actions from previous meeting
Tom Notman

Update MPs have requested that MOSL works to its commitment to publish a weekly defect list defect list showing those resolved/added etc. MOSL can not commit to updating the defect list on a weekly basis however work to publish updates on a timely basis Next WRG Defra should include a section on the third letter of assurance in their update, including a walk-through of the pro-forma. Covered in today’s agenda MPs have been invited to Defra with their reasoning and preference for either 1 or 3 of April as a date for market open. Thank you to the several participants ed us with their preference. Feedback will be covered in today’s agenda Add ‘next- step in bilaterals’ back onto the CIO forum. Next step in bilaterals’ will be added to a future CIO forum call agenda

Update MPs have requested a note describing how often the Portal content is updated and specifically when FAQs will be added. Tom Notman to update MOSL to initiate a surgery based approach to settlement allowing different attendees to talk to MOSL. MOSL to publish detail of how this will be done. Completed MPs have requested information on the process for non-code affecting code change requests. Once established, this might be used by participants to request access through the portal to information (e.g. meter reads) currently available via the MDS report. A process has been finalised. Information around this will be distributed to participants shortly once it has been signed off internally MOSL to ask retailers to provide information in confidence about expected numbers of day 1 switches. MOSL to investigate system capacity constraints for Day 1 processes. Covered in today’s agenda

Information for WRG members 22 November 2016
Programme update Information for WRG members 22 November 2016

Key tasks delivered Task Date Monitoring Stakeholder workshop
11 October Statutory consultation on wholesale retail code and consultation on market arrangements code Published 7 November Transition Information Note 21 November Panel Election notices

Key tasks to be delivered next month
Date Transfer Scheme Information Note 28 November Derogations response document and Guidance 9 December Monitoring consultation January 2017 Transition Statutory consultation Early December WRC and MAC consultation response document Late December

Timeline of readiness information
WSSL application deadline for market opening (for simple, complete, self-certification MEAC only) Exit decision due Issue Retail exit code Company assurance Issue Interim Supply Code Partner assurance Pre go live comms Service desk and shadow operations running GSS regs in force Defra assurance Settlement run Settlement run Settlement run Settlement run Nov Dec Jan Feb Mar APR 07 14 21 28 05 12 19 26 02 09 16 23 30 06 13 20 27 03 Settlement run Consult on WRC and MAC Market opening decision SoS decision on WRC and MAC Key GSS regs HoP Transfer scheme submitted Company readiness Consult on appeals regs MOSL readiness Transfer schemes approved Ofwat readiness WRC and MAC to be ready for signing Defra readiness

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 engagement survey TP engagement survey TP engagement survey TP engagement survey TP engagement survey TP engagement 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 System design, build and test Governance Assurance letter – final Run full service desk operation Live service desk operation Assurance letter – interim SoS decision Go Live Shadow market operations Review │ Refine │ Implement market opening plan Release planning Final data load Remedial data load and assurance Market readiness Pre go-live comms If fail UAT reports on MOSL website Formal market entry assurance testing Readiness assessment Market entry reassurance testing Market report to Ofwat / Defra TP market entry assurance certification confirmed & complete issued to all TPs Retail Exits allowed Commencement work for Retail complete Shadow market opens Test environments TP engagement survey

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) at market opening deadline for exit Retail Exit appl (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 SoS decision on MAC and WRC Oct 16 Nov 16 Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 May June Shadow Go live 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

Jess Keedy Work-plan Review Group 22 November 2016
Defra update Jess Keedy Work-plan Review Group 22 November 2016

Recent progress in the Defra programme
Exits applications received by 1 Nov deadline - on track for decisions in December Consultation on code appeals for the water supply and sewerage licensing regime – published 15 Nov, runs ‘til 13 Dec Outcome note of phase two of the assurance framework published 17 Nov Informal ‘consultation’ on market opening date – majority of views put forward expressed a preference for a 1 April opening 17

Assurance phase 2 – the headlines
This phase has given us confidence that work is on track for market opening in April Progress made against plans across the board, including by smaller companies Appropriate plans are in place to deliver against remaining milestones, with mitigating measures underway for the risks identified External assurance group have not noted any issues that would act as a barrier to market opening Significant progress made on the implementation of central IT systems; nonetheless, important functionality is still to be included and tested There is still work to do… and very limited contingency time for any unexpected delays. 18

Assurance phase 3 – recap
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 19

Letter of assurance 3 – a brief walk-through
Same 5 sections as previously: 1 – company readiness statement; 2 – components of the assurance framework; 3 – sources of assurance /evidence table; 4 – risks /issues / associated plans; 5 – authorisation. Section 2 is the most different – at phase 3, the components of the framework that apply to market participants are: Component 2: programme assurance & risk management Component 4: company readiness See summary on next slide. Section 4 will, as in phase 2, be split into market participant specific risks and programme wide risks. There will be a new pro forma. 20

Summary of components Component Component name What’s this about?
Statements* 2 Programme Assurance & Risk Management Completion of programmes a, b, c, d – for all market participants 4 Company readiness Regulation, Licences and Compliance a, b (i – iii), c – for all market participants d - for incumbent retailers and new entrant retailers Systems, Processes, Data & Security a – h - for wholesalers and incumbent retailers Market Entry *NB there are some differences in who needs to complete each section. The template letter highlights these. 21

Concerns you have flagged
Part of the letter/ concern Concern Our view / proposed change 1 In the assurance statement: “[market participant] has completed its programme…” Feb 2017 (or Jan, when your Boards see your letters) was too early to be able to say you’ve completed your programme. Agree – and we amended our advice ahead of phase 2 to reflect this. We will amend the statement with wording e.g. “on track to materially complete… all the interim milestones… either have been achieved; or are on track to be achieved when the market opens.” 2 In company readiness, regulation, licences and compliance: “[MP] has entered into a Wholesale Contract(s) in relation to the Area(s) in which it intends to trade.” According to the plan, wholesale contracts are signed in March Partners are discussing when the signing will take place. If it’s not possible to bring forward, we’ll amend the wording to e.g. “has entered into, or confirms it has a plan in place to enter into…” 3 In company readiness, market entry: “ [MP] has entered into an Accession Agreement to be admitted as a party to the Market Arrangements Code.” Same as 2 – ability to sign this off depends on when the signing day is As above 4 In company readiness, systems, processes, data and security: “[MP] data held on MOSL systems is of a high quality” How to define ‘high quality’? Completeness can be checked, ‘quality’ is a bit different Understand the concerns here, partners to review 5 In company readiness, market entry: “[MP] has become a member of MOSL” Some company structures make this difficult; is this a code requirement? To check with MOSL 6 Some inconsistencies spotted between statements between sections 2 and 3 in the template letter previously published Will these be corrected in pro-forma? Yes! - apologies 22

Next steps and contacts
Pro-forma to finalise and publish Amended advice & FAQ to publish Another chance to discuss at WRG? As always, if you have any queries, please get in touch: Jess Keedy Sam Jackson 23

Market design Martin Silcock

Interim Codes Panel and the Panel
Martin Silcock

Update on November ICP There were five change proposals recommended for approval by Ofwat at the 8 November ICP meeting. These were: WRC051 - CSD 0002 updates; WRC053 - SPID Pairing; WRC055 - Fixed Trade Effluent Volume frequencies & Adjustment to SVAM; WRC059 – Settlement Updates; and WRC062 – Error Codes Update. We have also arranged working group meetings (21 November) for the following change proposals which are in the “assessment” stage: WRC039 – Self Supply - review the proposed drafting; WRC058 – Meter Serial Number - to obtain other wholesalers’ views and any other possible options; WRC061 – Emergency Contacts – to obtain retailer views on the change and likely impacts

December ICP Ongoing consideration of change proposals
Dealing with in flight code change proposals Alternative code governance arrangements Release Plan Working with Enduring Panel

Market Codes and the Ofwat Consultations
Ofwat consultations are now open for the Wholesale-Retail Code (WRC) and the Market Arrangements Code (MAC), due to close on 16 December 2016. How/when will changes from November ICP approvals be updated in the Market Codes? Ofwat will confirm the timing of implementation in the approval letters for the 5 changes from November ICP. How will Ofwat deal with any changes required as a result of the consultation? Ofwat will consider whether changes are critical for market opening and if so, make them. Changes not critical for market opening will be proposed to the Panel What is remit of the ICP beyond the conclusion of the statutory consultation? ICP will continue considering changes until the Panel operating effectively How will “inflight” changes be dealt with?

Dealing with “in-flight” changes
WRC MAC Expected 3 Assessment/Deferred 10 2 Recommended 5 For any changes to be implemented in the code documents before go-live to take effect on Day 1, they would need to meet specified criteria Is it legal? Is it material/desirable - i.e. it must be important enough Is it achievable? Is it non-controversial? – its likely to be agreed in the short period before go-live? Ofwat would judge whether such criteria are met and if so would instruct that such market opening critical changes will be made to the market codes ahead of go live. RMOMG would be informed of such changes as appropriate Changes not meeting these criteria may continue to be considered by the ICP up to go live – or may be deferred for consideration by the Panel. Following any ICP recommendation, Ofwat would consider them on a minded-to basis ahead of market opening. It may ask that the Panel also looks at the change

Interim Codes Panel vs the Panel
Interim Codes Panel (ICP) The ICP was established by Ofwat to enable industry governance of code changes during the period of implementation it has no formal remit or legal status has been operating since July 2015 has considered 59 WRC and 13 MAC changes The ICP does not carry out all of the functions of the enduring Codes Panel but conducts its business as far as possible in line with the relevant MAC provisions The core remit is to make recommendations to either accept or reject all proposed changes to the Wholesale Retail Code and the MAC. Ofwat decides whether or not proposed code changes are to be implemented The Panel Keep the contents of the Wholesale-Retail Code and the MAC under review; Work with the Market Operator (MO) to develop the scope and audit plan for each market audit; and review /comment on Market Audit Reports; Provide advice, recommendations and support to the MO on request to assist a Trading Party (TP) in carrying out and completing Market Entry Assurance or the Market Re-assurance processes; Comment or provide advice to MO on request on Market Entry Assurance Plan or Re-assurance Plan; Consider and comment on the draft MO Budget and Charges, Receive and consider Reports from the MO on performance by TP’s; Establish a Trading Disputes Committee to investigate and resolve Trading Disputes; Establish a Market Performance Committee on a standing basis Establish the Market Incident Management Plan Committee

Key milestones for the Panel from December 16
14 Dec 16 - Panel Nominations meeting held, Panel Members confirmed 14 Feb 17 – Panel & ICP meetings held Apr 17 – Go live. Possible Day 1 Panel Meeting Panel member induction DEC JAN FEB MAR APR MAY 24 Jan 16 - Initial Panel meeting held - agree ToR, meeting schedule, ways of working etc. 14 Mar 17 - Panel & ICP meetings held Beg Mar 17 - Establish Trading Disputes Committee Market Performance Committee Market Incident Management Plan Committee

Break (15 mins)

Market operation Martin Silcock

Day 1 switching Martin Silcock

Day 1 switching - Background
A number of options were discussed for dealing with large numbers of switches which may be initiated at market opening. Three options were then proposed to Market Participants, as below: MOSL asked: Retailers to provide information on the expected number of day 1 switches by 7 November; and All Market Participants to express any views in relation to the three options. Option 1 Only allowing for Transfer Registration Applications to commence from day 1 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 Option 3 Allowing for Transfer Registration Applications to commence even further ahead of day 1

Day 1 switching - responses
7 responses were received. Preferences were mixed Two incumbent retailers preferred Option 1 Two new entrant retailers preferred Option 2 One new entrant retailer preferred Option 3, with Option 2 also acceptable Two respondents didn’t express a preference 3 retailers provided expected numbers of Day 1 switches (~15,000 SPIDs) A performance test is currently being designed to help evaluate system capacity

Day 1 switching – comments from respondents
Potential advantages Potential disadvantages Option 1 Market will develop naturally from Day 1 onwards. No ability to spread the volume of transaction – will have high impact on system capacity; Poor customer experience; Anti-competitive – delayed market opening for new entrant Retailers; Could cause significant delays and confusion. Option 2 Logistically sensible and operationally practical; Supported bu customers - a retailer has said that 5 major customers preferred Option 2 New switching processes / thresholds will essentially be “live” before market opening; Competition will start before market opening. Option 3 Transparency issues and anti-competitive behaviour; High risk for market participants; Competition will start before market opening; Data maintenance work will be required in CMOS.

Other considerations Discussions with Programme Partners indicate no in principle or legal impediment to making transfers effective on Day 1 of the market Enabling switching to take effect on Day 1 appears in line with customer expectations and strongly in line with new entrant preferences Competition has already started Enabling Day 1 switching can create a more compelling market story if activity is immediate Concerns over the level of legal protection (for customers and participants) ahead of go-live are recognised and have been discussed by programme partners. Expected that participants will behave as if codes were live and that existing regulatory oversight measures sufficient Option 3 would require arrangements to be in place between incumbent and new retailers in relation to maintaining data. This is being achieved for retail exits but that is in the context of a controlled exit transaction Option 2 does spread and bring forward processing load. If necessary that activity could be scheduled There are some potentially complex interdependencies with the retail exit process which MOSL will resolve

Transfer registration applications not allowed
Option 2 is preferred The Open Water Programme partners consider Option 2 as the preferred option 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 ie Day 1 (to avoid double switching)

Lunch (30 mins)

Transition planning Steve Lyon

Market Operator year one (FY2017/18) proposed budget

Principles Builds on 2015/16 plan and 2016/17 principles
Enduring market operator New responsibilities Transitional first (and second) year Unknown unknowns De-risk market for all MOSL Board

Reminders Membership-based Not for profit
Track record of success against: Fixed budget  Fixed scope  Fixed timescale  Open and transparent Going above and beyond Duty to all ‘Year one’ cost estimate of market operator in 2015/16 business estimate came with a clear health warning!

Feedback to business plan consultation
Strong support for principles Widespread recognition of what’s been achieved Keen to understand: Reconciliation to 2015/16 business plan view Organisational structure and resourcing Cost of the panel Market audit Change and contingency Wholesalers – PR funding Retailers – Treatment of commissioning costs

2015/16 to 2017/18 reconciliation 2015/16 plan estimated year one cost range of £7.6 - £9.2m 50-60 per head £0.5m difference in overhead costs £200k efficiency saving on £1.8m CGI service costs 2017/18 business plan draft: £11m Similar headcount to high for employed staff Employee mix changed to retain IT contract staff £260k Additional director due to splitting Market Services into two directorates, i.e. Market Design and Market Performance £160k Additional MOSL test and data environment £500k Un-forecasted code panel costs £380k Y2 employee costs (incl. CPD, Salary Uplifts, Performance) £500k Total (delta between 2015/16 and 2017/18 base): £1,800k

2017/18 budget (post MOSL Board challenge)
Consultation Post-board Change Base budget adjustments: £11.0m Additional environment (£0.5m) Employee efficiencies (£0.2m) Reduction in panel costs (£0.1m) Base budget £10.2m ↓ £0.8m Contingency £2.0m - Change* £0.0m ↓ £2.0m Market Audit cap £2.5m £1.5m ↓ £1.0m Total £17.5m £13.7m ↓ £3.8m * To be funded ‘pay as you go’ on similar basis to now (i.e funded from contingency until agreed threshold is reached, then topped up)

Organisation and resourcing

Panel costs (overview)
MOSL will fund the Panel and sub panels: The Panel (incl. 3 independent non-execs) Performance sub panel (incl. 1 non-exec) Disputes sub panel (incl. 1 non-exec) IT sub panel (incl. 1 non-exec) Market Incident Management Plan (incl. 1 non-exec) Up to 13 members per meeting Additional costs include preparation time and attendance for independent members, travel and sustenance for all members and meeting room costs

Market audit £1.5m cap (reduction of £1.0m) Market warm up
Competitive tender (multiple) 2017/18 scope – to be agreed with Panel Y1 to include ‘deep dive’ into Ops Terms reporting Budget adjusted downwards to reflect actuals

Change and contingency
Market Opening (Current) £2m contingency Change funded from contingency (until threshold reached) MOSL has absorbed the cost of change with no recourse to members 2017/18 contingency First year accompanied with higher level of uncertainty and risk No trading record on which to build a debt financing facility Board considers £2m an appropriate contingency Contingency subject to tight Board governance (unused funds returned to members) 2017/18 change Level of change is unknown and IT change comes at a cost Changes are impact assessed by CGI, prior to approval by Panel MOSL proposes PAYG mechanism, until Panel advises requirement As today, MOSL will seek to absorb and fund change from contingency

Three-year forecast outlook: reducing profile (£k)

Questions

3 9 4 12 2 8 Inherent risk score Current risk score 12 9 Apr -17
Impact Details Inherent Score Market dataset incomplete with companies only focusing on identifying these eligible premises and meters within their systems that they are currently billing. The incentives for companies to address this risk appear weak. Incomplete data may create substantial dissatisfaction amongst customers, market participants and observers that the market does not service the interests of customers or segments of the customer base. Despite MOSL having no formal role in policing eligibility or readiness this would likely create adverse perception of MOSL by association. 12 CGI are unable to build sufficient confidence in the operation and performance of the system; or build the necessary confidence in their ability to develop and evolve the system in response to the demands of the market, undermining confidence and trust in MOSL and constraining the development of the market going forwards. • Reputational damage • Operational Impact on both industry and MOSL • Increased costs due to number of manual workarounds • Increased cost of MOSL resources managing service delivery Loss of confidence in CMOS due to misuse by users lack of system and code knowledge, leading to a high volume of perceived settlement errors or customer complaints. Potential to delay market opening if escalates. 9 Inaccurate settlement results in the wrong amounts being charged/collected from the wrong parties, undermining confidence in the market. • Market opening delayed • High level market operator disputes • Companies qualified audit report impacting investor confidence in the new market Current risk score Mitigation action plan Target resolution date Probability Score prev. Score now Trend Progress • Raise with Defra and Ofwat • Assess market impact and implement on going reporting • Monitoring completeness of data uploads against prior expectation provided by companies • NRO process (4 processes) Apr -17 3 9 NRO process (YVE, RTS, RV, SPID) • Reputational damage • Operational Impact on both industry and MOSL • Increased costs due to number of manual workarounds • Increased cost of MOSL resources managing service delivery Jan-17 4 12 Increase LVI CPU memory Published release plan up to 3.0 Potential to delay market opening if escalates. Ongoing Weekly surgeries Settlement checker output shared • Market opening delayed • High level market operator disputes • Companies qualified audit report impacting investor confidence in the new market Mar-17 2 8 Lessons learnt shared

Assuring Operational Processes
Zainab Mohammed

Assuring Operational Processes
Water Quality Incidents Scenarios Workshop Trade Effluent Materials Questions Workshop Planned\ Unplanned Questions Workshop Measuring performance WG WRG TBC TBC Accredited Entity Scheme Workshop TBC TBC November December January February

Market and Company Readiness report
Lauren Mulholland

Recap on MCR Graphics Graphs display scores from July and from October. Faded colours represent earlier scores, darker colours represent recent scores All scores are non-weighted average scores, with the exception of the level 1 graph which is weighted by market share The lowest possible score in all categories is 25%

Level 1 Level 1: A ‘heat map’ of readiness for each market participant type and MOSL Level 2: A ‘heat map’ of readiness of individual companies Level 3: Comparison of readiness for each element (e.g. planning) Level 4: Comparison of readiness for each evidence criteria (e.g. robust plan)

Level 1

Wholesaler market readiness

Retailer market readiness

Element Scores

Key Trends Wholesalers are scoring themselves slightly higher than Retailers 93% of the wholesale market is reporting confidence in all elements (Scores are 3 or 4) 77% of the retail market is reporting confidence in all elements (Scores are 3 or 4) The lowest scoring companies represent a small percentage of the market Major progress has been reported in Company Readiness

Feedback on programmes and risks
Market Participants: Have mostly defined their Strategies and TOMs Understand resource demands and some have completed recruitment Report full engagement of their respective boards Have started communicating Market Reform initiatives to staff

Feedback on readiness Market Participants:
Have completed or are close to completing system delivery Are continuing internal testing, including testing of new CMOS releases Have mapped and documented processes Completed the data load to CMOS and are working on improving outstanding discrepancies Are at various stages of completing their Security and Continuity arrangements Are in various stages of training Have completed Market Entry Assurance

CIO Forum update Samir Rahim

Key Topics from CIO Forum
Will Hewish is now Chair of CIO Forum Release Plan to enable Go-Live Meter Read Rejections - Industry Group to recommend options Inclusion of Retailers to support a representative view Test Environment Framework moving forward Release Planning & Strategy for Live + 18 months

Executive Summary MOSL has listened to the feedback underpinning Market Participant need for reliable releases given most participants are running a live service. As we move out of programme ways of working into service we have the same aspiration and requirement. Having debated and discussed the options for release management to enable market opening MOSL has taken a position on releases that we believe supports the whole market requirement. To give certainty and predictability the following two slides set out the high level scope and dates for Releases 2.26 and The publication date of release notes is also shown. The test window availability shows the date range when the releases will be available in MPS for market participant testing. This is subject to discussion and feedback following Participant review of the R2.3 XSD and Guidance document. MPS will be upgraded and performance tuned by end of 2016 to enable Market Participant Testing for R2.26 and R The testing performance is also predicated on a representative test dataset being used for testing of no more than 20,000 SPIDS per participant. This has been agreed at ORWG.

CMOS Release 2.26 Into MPS R2.26 Monday, 12 December
High Level Scope of R2.26 75 Defect Fixes 16 Workarounds 2 Critical Tariff Maintenance Fixes (that enable MPs to make Tariff Changes via LVI) Tariff Annual Price Change Upload Capability Initial Release Note Published: Friday, 25 November Final Release Note Published: Friday 9 December Availability in MPS for MP Testing: 12 December - 5pm, 6 January 2017 Expected Deployment Weekend (into Production): 7 / 8 January 2017 Live in Production: Monday 9 January

CMOS Release 2.3 R2.3 Into MPS Monday 9 January 2017 High Level Scope of R2.3 17 WRCs TBC through Defect & Workaround Log on 22 Initial Release Note Published: Friday, 2 December Final Release Note Published: Friday 6 January 2017 Availability in MPS for MP Testing: 9 January pm 27 January 2017 (Issue) Expected Deployment Weekend (into Production): 28 / 29 January 2017 Live in Production: Monday 30 January 2017 There is no intention to publish any further revisions to the already published R2.3 XSD, subject to any major changes identified post participant review

Defect Resolution Methodology & Future Releases
In order to maintain a known baseline for participants; MOSL only plans to deploy fixes to defects identified in either R2.26 or R2.3 that are proven to be business operation or market opening critical. In response to your feedback on a R2.4 deployment immediately prior to market opening I can confirm that the only other releases beyond R2.3 will be to fix market critical defects or changes that are mandated by OFWAT before Market Opening. We will continue to discuss with you the scope and timing for Release 2.4 and would welcome your input and suggestions ahead of us publishing a full release schedule for 2017 before Christmas. This will include details of the minor release in July (currently planned as R2.5) and the first major release in the live market (currently planned as R3.0). Alongside this plan we are looking at ways to provide you real-time access to our live release schedule and associated documentation. This will mean you will have the same access to information as we do at any given time.

Lessons learned workshop
Tom Notman Boyai Pukhrambam Mike Robertson

Lessons learned workshop
New regular part of WRG Sharing lessons learned from both a MOSL perspective and a Market participant perspective Everyone is invited to present their learnings at future WRG meetings

Any other business Tom Notman

AOB Coming up: Open Water Update Call (24 November)
CIO Forum (2 December) Open Water Update Call (8 December) CIO Forum (9 December) Operations and Release Working Group (13 December) ICP meeting (13 December) Business Plan review (15 December) CIO Forum (16 December) December WRG (21 December) Wrap up and close

Thank you… Safe journey home! DRAFT

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