We organised a series of workshops on what we did in implementing retail competition in Scotland, why we did what we did and how we went about the task. These workshops were well attended and I was pleased with both the number and quality of the questions that participants asked.
Perhaps the most important message was that, even if market opening happens only in April 2017 – much later than has been suggested – there is a very tight timeline that will have to be met.
In essence this critical path divides into two halves:
- the period up to the setting of the wholesale revenue requirement of the incumbent businesses; and
- the period after the determination of charges is complete.
Once the industry knows the wholesale revenue within which it will have to operate, it needs to develop – for the first time – a series of wholesale tariffs. This is no easy task. It involves an improved understanding of the actual cost of serving different classes of customer.
The other big task is the creation and testing of central market systems – the registration of who supplies what customer and the settlement of wholesale charges. Ideally, more progress should be made in improving customer information than had been done in Scotland by market opening. But central system development cannot begin until definitive decisions have been taken about how the market will work and cannot be completed until the structure of wholesale charges and the market code have been finalised.
In Scotland we agreed a deadline for the opening of the market and were able to stick to this plan even when things got a bit rocky. It seems to me that a similar deadline is now needed for the opening of an Anglo-Scottish market. This would help focus all our minds on the most important issues.