As a former student of the Soviet planned economy, I am deeply sceptical of too much planning and too much rigidity. The retail water and sewerage markets in Scotland are quite different today compared with market opening in April 2008.
There are many examples of just how different the markets are today:
- We have just finished an extensive review, including all market participants (retailers, customers, third party suppliers and Scottish Water) about how best to handle trade effluent, metering and new connections. The result is a market-based process where retailers and customers can choose between a variety of options.
- Customer information, such as names and addresses, is now available within the Central Market settlement systems.
- New retailers can now opt in or opt out of taking customers through the provider of last resort and ‘no longer void’ customers.
- New retailers no longer have to accept a customer anywhere in Scotland until they reach a reasonable market share.
- Incentives have been created for licensed providers to seek out and identify properties no longer vacant.
- The performance measures for submitting information and transactions to the CMA have been refined to better drive desirable market behaviours.
- New arrangements have been introduced to give customers a much greater choice of data logging providers than there was when the market opened.
- A reassessment process for customers unable to have a meter installed has been introduced as an alternative to RV-based charging.
The key is that the framework needs to be flexible such that the demands of customers and participants can be addressed. Markets are about reducing bureaucracy and barriers to providing better service or innovating. Too much planning can only detract from achieving better outcomes because retailers – concerned as they are about doing the best for their customers – want to build stable and loyal customer bases. Maintaining customer loyalty is much cheaper than meeting the costs of avoidable customer churn. It should also result in much better service for customers!