Bilateral Transactions Programme
The way in which two-way 'bilateral' transactions were managed between water wholesalers and retailers has been the cause of considerable friction since the market opened in 2017.
The lack of standardisation and consistency of each process meant that retailers had to follow different processes for each wholesaler. This created inefficiencies and delays, increasing trading parties' costs to operate in the market and impacting the service that customers receive.
Addressing these frictions was therefore identified as one of MOSL's priority programmes, and at the heart of its aim to make the non-household water market an 'easier place in which to do business'.
The Bilateral hub
In September 2021 MOSL launched a centralised bilateral transactions 'hub', which all trading parties use to initiate and manage bilateral transactions. At the same time the first standardised bilateral process was launched; the 'meter verification and supply arrangements' process or 'C1s'.
Trading parties can access the hub via a web portal for low volumes of transactions, or system-to-system integration for high volumes.
Sixteen bilateral processes were reviewed and standardised and added to the bilateral hub between September 2021 and November 2022, which marked the end of the Ofwat-mandated phase of the programme.
As part of the MOSL Business Plan 2023-26, trading parties approved a programme to deliver the remaining lower priority/lower volume processes into the hub in a series of six phases over a further two years.
Overview of the programme
There are more than 60 processes that need retailers and wholesalers to work together (bilaterally) to deliver a service to a customer, such as replacing a water meter. The processes were first prioritised based on how often they were used and their impact on the service customers receive.
Each one is then reviewed by a team of subject matter experts from retailers and wholesalers to make any refinements and agree a standardised approach. The process changes are then put forward in the form of changes to the market codes, which must be approved by the Code Change Committee and Ofwat.
Once approved, the new process is added to the central bilateral 'hub', which all retailers and wholesalers use to raise service requests and manage any that are already underway. Once all bilateral processes have been added to the hub, trading parties will be able to decommission their legacy systems.
The animation to the left demonstrates why the programme was launched and what it aims to achieve.