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Open Water
Workshop 29 and 30 January 2015
Review of market framework documentation in
MAP2
Purpose
workshop
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Master title
•
Provide overview of the structure of the codes and
agreements and how they fit together
•
Highlight new material compared to what was reviewed at
previous workshops
•
To assist companies in preparing their responses to the
consultation
Agenda
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• Overview of documents and how they fit together
• Business terms and wholesale retail contract
• Market terms
• Market arrangements code
• Market terms code subsidiary documents
• Operational terms and forms
Overview
documents
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Masterand
title
how they fit together
•
MAP2 sets out a structure for the agreements and codes needed
•
Based on the legal tools available – primarily 1991/2014 Acts and the
Competition Act 1998
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Needs also to dovetail with the licensing framework – under development by
Ofwat
•
Appendix 2 – plain English description of the approach taken
Note: There are still a number of moving parts
Legal
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Appointment
Acts
Exit
Regs
CMA
Regs
Charging
Guidance
Wholesale-Retail
Code
Charging
Rules
Other
P&Ds
BT
OT
MT
CSDs
Forms
Wholesale
Tariff
Document
Interim Supply
Code
Wholesale
Undertaker
MO
Wholesale
Contract
Licence
Retail
C
C
Licensed Retailer
C
IS
T&Cs
Legal
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Key
People and companies
Legislation (primary and secondary)
Licences and appointments
Statutory codes and contracts
Documents relating to wholesale charges
Multi-lateral contract
Legal
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Undertaker
C
C
Licensed Retailer
C
Legal
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Undertaker
MO
C
C
Licensed Retailer
C
Legal
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Acts
Exit
Regs
CMA
Regs
Other
Undertaker
MO
C
C
Licensed Retailer
C
Legal
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Appointment
Acts
Exit
Regs
CMA
Regs
Other
Undertaker
MO
C
C
Licensed Retailer
C
Legal
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Appointment
Acts
Exit
Regs
CMA
Regs
Other
Wholesale
Undertaker
MO
Retail
C
C
Licensed Retailer
C
Legal
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Appointment
Acts
Exit
Regs
CMA
Regs
Other
Wholesale
Undertaker
MO
Retail
Licence
C
C
Licensed Retailer
C
Legal
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to edit Master title
Appointment
Acts
Exit
Regs
CMA
Regs
Other
Wholesale
Undertaker
MO
Wholesale
Contract
Licence
Retail
C
C
Licensed Retailer
C
Legal
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to edit Master title
Appointment
Acts
Exit
Regs
CMA
Regs
Wholesale-Retail
Code
Other
Wholesale
Undertaker
MO
Wholesale
Contract
Licence
Retail
C
C
Licensed Retailer
C
Legal
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to edit Master title
Appointment
Acts
Exit
Regs
CMA
Regs
Wholesale-Retail
Code
Other
P&Ds
BT
OT
MT
CSDs
Forms
Wholesale
Undertaker
MO
Wholesale
Contract
Licence
Retail
C
C
Licensed Retailer
C
Legal
Clickoverview
to edit Master title
Appointment
Acts
Exit
Regs
CMA
Regs
Wholesale-Retail
Code
Other
P&Ds
BT
OT
MT
CSDs
Forms
Wholesale
Undertaker
MO
Wholesale
Contract
Licence
Retail
C
C
Licensed Retailer
C
Legal
Clickoverview
to edit Master title
Appointment
Acts
Exit
Regs
CMA
Regs
Charging
Guidance
Wholesale-Retail
Code
Charging
Rules
Other
P&Ds
BT
OT
MT
CSDs
Forms
Wholesale
Tariff
Document
Wholesale
Undertaker
MO
Wholesale
Contract
Licence
Retail
C
C
Licensed Retailer
C
Legal
Clickoverview
to edit Master title
Appointment
Acts
Exit
Regs
CMA
Regs
Charging
Guidance
Wholesale-Retail
Code
Charging
Rules
Other
P&Ds
BT
OT
MT
CSDs
Forms
Wholesale
Tariff
Document
Wholesale
Undertaker
MO
Wholesale
Contract
Licence
Retail
C
C
Licensed Retailer
C
Legal
Clickoverview
to edit Master title
Appointment
Acts
Exit
Regs
CMA
Regs
Charging
Guidance
Wholesale-Retail
Code
Charging
Rules
Other
P&Ds
BT
OT
MT
CSDs
Forms
Wholesale
Tariff
Document
Interim Supply
Code
Wholesale
Undertaker
MO
Wholesale
Contract
Licence
Retail
C
C
Licensed Retailer
C
IS
T&Cs
Legal
Clickoverview
to edit Master title
Appointment
Acts
Exit
Regs
CMA
Regs
Charging
Guidance
Wholesale-Retail
Code
Charging
Rules
Other
P&Ds
BT
OT
MT
CSDs
Forms
Wholesale
Tariff
Document
Interim Supply
Code
Wholesale
Undertaker
MO
Wholesale
Contract
Licence
Retail
C
C
Licensed Retailer
C
IS
T&Cs
Overview
documents
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Master title
Wholesale Contract
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Glue that binds things together
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Made under S66D/S117E of 1991 Act
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Short and simple bilateral contract: incorporates terms and conditions set out
in the Wholesale-Retail Code
Wholesale-Retail Code
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Part 1 – Objectives, Definitions, Principles
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Part 2 – Business terms
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Part 3 – Operational terms
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Part 4 – Market terms
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Part 5 – Code Subsidiary Documents (CSDs)
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Part 6 – Operational forms
Market Arrangements Code
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MO membership and board/constitution
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Panel set up and membership, and change process
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MO budget and cost sharing
Related
work
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DEFRA
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Commencement
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Charging guidance
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Exit regulations
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CMA appeal rights
Ofwat
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Eligibility
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In-area trading ban
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Interim governance
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Licence design and transition
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Interim supplier code, GSS and deemed contracts
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Charging rules
Definitions
– some
useful title
terms
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Master
Wholesaler – any undertaker appointed under section 6 of 1991 Act
Retailer – any licensee
Contracting Wholesaler – the specific Wholesaler signed up to the specific
Wholesale Contract
Contracting Retailer – the specific Retailer signed up to the specific Wholesale
Contract
Trading Party – all Wholesalers and Retailers (including the specific Contracting
Wholesaler and Retailer)
Other Wholesaler – either
the Wholesaler for the other Service Category (i.e.
water or sewerage); and/or
where there are two Wholesalers for a Service
Category at the Premises, the other Wholesaler for the
same Service Category
Other Retailer – as above but for retail
Wholesale
Contract
– Overview
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Master
title
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Bilateral Contract
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Parties:
Contracting Wholesaler
Contracting Retailer
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Services:
Water OR
Sewerage OR
Water and Sewerage
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Effective once conditions precedent are satisfied
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Incorporates Wholesale-Retail Code, i.e. Market Terms, Operational Terms
and Business Terms
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Incorporates payment obligations
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Gives the Market Operator the ability to enforce its rights under the
Wholesale-Retail Code
Wholesale
Contract
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Outstanding areas for further development
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Administrative process for signing
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Process for satisfaction of conditions precedent
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Incorporation of any additional bilateral terms
Business
Introduction
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title
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Part 2 of the Wholesale-Retail Code
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Rights and obligations of Contracting Wholesaler and Contracting Retailer
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Purpose – why it is needed in addition to the Contract
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Consists of 11 Parts
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Part A – Introduction
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Part B – Supply
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Part C – Warranties and Compliance with Laws
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Part D – Charges
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Part E – Default and Termination
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Part F – Force Majeure
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Part G – Indemnity and Liability
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Part H – Confidentiality
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Part I – Disputes
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Part J – General
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Part K – Data Protection
Business
Overview
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Part B – Supply
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Obligation to supply
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Work required to develop process for requests for work
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Water Quality
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Risk and title – from Common Access Contract
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Meters – maintenance, size, tampering, ownership and care
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Service Standards – sums payable
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Network and Metering – includes access requirements
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Supply Interruptions – planned and unplanned
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Public Health Information
Business
Overview
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Part C – Warranties and Compliance with Laws
•
Contracting Retailer warrants use of water for the purpose of supplying NHH
customers at the Supply Points to which Retailer is registered
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Each warrants compliance with Laws and Appointment/Licence
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Nothing prevents compliance with other laws
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Water Fitting Regulations
Business
Overview
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Part D – Charges
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Billing timetable and standardisation
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Invoicing and Payment
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75 days’ escrow cover for Primary Charges
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Reconciliation process for Primary Charges
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Payment – 30 days from end of month or 15 days after invoice received
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Credit, guarantee, escrow
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Invoicing and Payment of Non-Primary Charges
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de minimis billing
Business
Overview
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Part E – Default and Termination
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Default
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Late or persistent payment failure – 5 Business Days’ grace
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Remediable breach – 10 Business Days’ grace
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Irremediable breach – includes notice from Market Operator
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Insolvency
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Revocation of Licence in England or in Scotland
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Breach of another English or Scottish wholesale services contract
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Force majeure continuing for six months
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Breach of Escrow Agreement
Termination
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On application
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For Retailer default
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If Wholesale-Retail Code ends
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Requirement for disclosure to Authority and Market Operator
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Remain liable for charges
Business
Overview
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Part F – Force Majeure
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Notify and report
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Relief – but not from indemnity or payment
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Premises by premises
Part G – Indemnity and Liability
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Cross indemnity for damage to equipment
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Otherwise, direct losses only
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Cap – annual cap equal to aggregate Wholesale Charges in preceding year
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Breach of Market Terms – under development
Business
Overview
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Part H – Confidentiality
•
Mutual obligations that survive for 5 years after a party ceases to be bound by
the Wholesale-Retail Code
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Standard exceptions
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EIRs
Part I – Disputes
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‘Vertical’ one to one disputes
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Related disputes
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Role of Market Operator
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Initial discussion, escalation and Expert determination
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Disputes wording and process to be discussed and developed
Business
Overview
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Part J – General
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Notices
•
Announcements
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Third Party Rights – Market Operator and section 205 of 1991 Act
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Rights Cumulative
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Sub-Contracting – permitted but note that test and assurance processes to be
developed
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Use of other Party’s name
Part K – Data Protection
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To be developed
Schedule 1 – Use of Accredited Entities
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To be developed
Schedule 2 – Key Escrow Terms
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75 days’ cover
Market
Terms
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Parts A-C and E
•
Parts A-C contain MO, Retailer and Wholesaler Duties – previously Parts 2-4
of the draft market rules
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Clarified that sub-contractors may submit data via their own systems
once they have satisfied any market tests
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Market entry process will still apply to Wholesaler/Retailer who remain
responsible for performance of any sub-contractor
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Outstanding point on offshoring
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Part E – Performance Standards, Monitoring and Issues Resolution – under
development
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Disputes and general boilerplate – moved to Business Terms
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Governance – moved to Market Arrangements Code
Market
Terms
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Part D
•
Various changes in language, refinements and clarification
•
4.2 Introductory – language on registration, Supply Points and data
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4.3.5 – 4.3.8 Volume transfer of Supply Points – drafting further developed
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4.3.9 Interim Supplier – allocation and transfer process further developed
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4.4 Registration of New Supply Points – clarification of effective dates
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4.4.11 Gap sites – allocation process developed
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4.14 Settlement timetable and reporting – RF proposed as monthly rolling 16
months from invoice period to which it relates
Market
Arrangements
Code
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•
Covers MO constitution, board election and funding
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Panel election and change process
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•
•
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Note: Timing of becoming a party to the MA Code, member of the MO
and meeting Trading Conditions under development
Board
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Chair proposed as an individual with the confidence of industry
stakeholders
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Provisions added to enable alternates in an orderly manner (clause 4.5)
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Role of board in context of retailer default under review
Panel
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No change to balance of members but reviewing overall size to ensure
breadth of expertise
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Panel scope: changes to the Wholesale-Retail Code, the Market
Arrangements Code (clause 7.4)
MO funding – considering how Wholesalers share MO costs between MA
Code/W-R Code taking effect and market opening (clause 10.3.1)
Code
Documents
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title
CSD 0003: Volume Transfer Planned
•
New CSD, applies where
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A retailer intends to sell or transfers ownership of all or part of its
business or retailer change of name
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A wholesaler is to sell/exit or cease to hold an Appointment for all or
part of its area or wholesaler change of name
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Essentially a planned event where the identity of the recipient is known
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Market terms set out the requirements/ preconditions
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CSD contains the process for planning the transfer of SPIDs and final
allocation
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Role of the MO set out – Note: need to reflect on appropriate data exchange
mechanism for bulk notifications
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Up to two month window for transfer meter reads, depending on scale of the
exercise
Code
Documents
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CSD 0004: Interim Supplier Allocation Process
•
Process envisages coordination with the Authority – needs to be reviewed
further
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Sets out the process for a Retailer to confirm to the MO that it wishes to be an
opted in Retailer for purposes of Interim Duty Code
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Sets out process for MO to follow in undertaking the allocation process
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Retailer that elects to be opted in has to notify the MO annually prior to the
start of the year – note provision for temporary suspension
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MO to publish and keep updated a list of opted in retailers
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Description of methodology
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Pending transfers in will be cancelled and pending transfers out accelerated
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Registration and notification of all information to the new Retailer
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Up to two month window for transfer reads, depending on scale of the
exercise
Code
Documents
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CSD 0005: Gap Site Allocation Process
• Applies to wholesaler-found gap sites
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Note: Retailer found gap sites allocated to the finding retailer by the
relevant wholesaler
• Sets out the process for the MO to establish and publish a list of retailers who
are automatically opted in by area
• Process for other retailers voluntarily to opt in
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The opt in criteria set out in the CSD
• Methodology for allocation of sites by service category
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Principles set out in the CSD
Code
Documents
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CSD 0101 Registration: New Supply Points
• Refinement of the registration effective dates
CSD 0102 Registration: Transfers
• Removed requirement for a read when reversing an erroneous transfer
• Clarified arrangements for sewerage retailer to read meter reads on transfer
• Clarified meter reading arrangements for meter networks – need for a
notification
• Introduced new provision to allow for an estimated transfer read in certain
circumstances - in line with recent change agreed in Scotland
Code
Documents
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title
CSD 0104 Maintain SPID Data
• Significant restructuring of the CSD to make more logical linked to the SPID
data structure
• New overview table at page 7 describing the structure of the CSD
• New generic process and transaction table references
• New process areas include:
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RV/ legacy RV
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Billing contact and decision maker contact details
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Multiple wholesalers at the same SPID
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Moving meter between SPID and service component
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Area of premises and % draining
Code
Documents
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title
CSD 0105: Error Rectification and Retrospective Amendments
• New material setting out the principles of the approach – the detail will require
further development
• Sets out the controlled process for dealing with errors in data items held on the
central systems, i.e. provides a mechanism for making data corrections
• Assumes the policy dealing with data changes is set out elsewhere, e.g. the
approach to changes having retrospective effect
• Sets out general principles – only the data owner for the relevant period of time
can make data corrections
• Distinguishes between corrections with no impact on charging and those which
have, the latter requiring levels of authorisation
• Provides for particular circumstances having a specific process, e.g.
applications to change data under the vacancy scheme
• CSD sets out the process steps
Code
Documents
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title
CSD 0106: Non market meters
• Drafting alignment
• Data owner of sub meter to take transfer read
CSD 0201: Settlement timetable and reporting
• Proposed RF as a monthly rolling RF, 16 months following the invoice period to
which it relates
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Note: Still in discussion with companies on questions posed following
last workshop and will review further when charges are published
• Settlement reports to be developed when charges and settlement
requirements confirmed
CSD 0202 and CSD 0203: Meter Read Submission Process and
Validation
• Estimated transfer read where relevant and removal of read to reverse an
erroneous transfer
• Taking advice on some meter reading points
Code
Documents
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title
CSD 0206: Trade Effluent Processes
• Allows for wholesaler provided volumetric allowances, i.e. as for water and
sewerage
• Allows for retailer provided volumes in the case of certain private ‘meter’ types,
e.g. leachate measurement meter read equivalent
CSD 0207: Charge Calculation, Allocation and Aggregation
• Substantial drafting changes, consistent with the approach set out in the slides
in previous workshops
• Sets out the wholesale charges components
• Process for each category of charges
• Caters for non-standard agreements, Schedule 66EA departures, government
contribution
• Will review company charges schemes following publication
• Questions outstanding in relation to treatment of vacancy and temporary
disconnection
• Next step is to develop drafting to reflect the detailed algebra required to
undertake the calculations
Code
Documents
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title
CSD 0208 Submission and Validation of Wholesaler Tariff Data
• New CSD and will need further update following publication of wholesale
charges
• Sets out the process for the submission, maintenance and update of
wholesaler tariff data where there is a change to the values
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Note: A new charging methodology will need impact assessment and
any Code changes will need to be consistent with Code governance
• Timetable for any annual tariff changes and assumes changes made within a
window
• Sets out approach to verification and confirmation
• Appendix 1 contains the data required for each tariff
• Appendix 2 contains tariff standing data
Code
Documents
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title
CSD 0301: Data Transaction Catalogue
• Contains updated material on all data items and transactions referenced in all
the CSDs as published
• Will continue to be updated as new data items or transactions are identified
• Currently looking at the structure of the data items
• Also planning to produce an excel version for providing to companies
Operational
Terms
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Master title
•
Limited changes to the processes following the workshop held in November
•
H1 Application for an allowance includes change to % area draining
•
H2 Review of unmeasured supply points or assessed charges – process
refined and less specific to the relevant scheme
•
H4 and H5 processes allow for gaps site and vacant premises incentive
schemes – do not include the rules of the schemes
•
Working on:
-
Part E, Unplanned and will update that section following review with DWI
and Defra
-
Mapping all processes
Operational
Terms
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Master title
Forms
• All forms reformatted and new data items added /amended based on previous
workshops and actions and comments arising
• Will review the need for further forms, including for
-
Process I7, gaining entry using wholesaler’s power of entry at retailer
request
• Will also review what data is mandatory/ optional for the relevant stage of the
process and clarify
-
Presumption that data is mandatory within the relevant context
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Need to review data end-to-end aligned with CSD 0301 to ensure all
market data items are catered for