1. Registration and Switching Working Group [02] 7 th March 2014

2. Agenda 1. Welcome and Introductions 2. Overview of Registration and Switching Strategy paper v1.0 3. Update on consultation 4. Review of redacted Registration and Switching consultation responses 5. Lunch 6. Focussed discussion Group 1 o Customer awareness o Service type switching o Identification of the contestable market Group 2 o Ability to switch o Registration and switching scenarios o Switching process 7. Group feedback 8. Registration and Switching v2.0 approach and additional content 9. Next steps and future working groups 10. Close

3. Welcome and Introductions

4. Introductions NamesCompanyIn what capacity they attend Paul Fry OpenWaterOpenWater Programme Workstream Leader Stephen Beddoes OpenWaterOpenWater Programme PMO Ian Hopkins OfwatRegulator Bob Stear DefraGovernment Christine Blackwell Consumer Council for WaterCustomer representative Gary Craig Central Market Agency (Scotland)Market Operator Jeremy Downer Sutton and East Surrey WaterWOC John Vinson Bristol Wessex BillingWOC Tim Orange South Staff WatersWOC David Seymour Business StreamRetailer Richard Masterson Severn Trent Costain Retailer Katy Spackman Northumbrian WaterWASC Kulwinder Johal Severn Trent WaterWASC Ned Coleman South West WaterWASC Paul Graham Southern WaterWASC Julian Tranter Thames WaterWASC Jonathan Clarke Anglian WaterWASC Darren Thresh Yorkshire WaterWASC Paul Gill Yorkshire WaterWASC

5. Success Criteria All non-household customers in a position to negotiate better targeted, more efficient and cost-effective services Overall, the changes will benefit the majority of non-household customers New competitive markets are fair, transparent and efficient Seamless experience for customers in England and Scotland Reform incentivises innovation Upstream reforms drive sustainable and efficient use of resources Source: Market Reform Programme Framework Document Open Water Vision The vision of the reform is to drive more sustainable use of resources and keener pricing and services for customers.

6. What we are looking for from you Understand Challenge Endorse Does it make sense and has everyone taken what has been written to mean the same thing? Are there elements of the proposal that you feel should be challenged or require further analysis or discussion? Having understood and discussed the content are you happy to endorse the proposal? If not, have we captured your concerns in the challenge section

7. Overview of Registration and Switching v1.0

8. Identification of the contestable market National Data Company Data

9. Switch requests Customer Portfolio Premises Grouped Water Services Grouped Sewerage Services Grouped Potable Water Grouped Raw Water Grouped Surface Water Grouped Foul Sewerage Grouped Trade Effluent        Customer to Retailer Retailer to MO MO Updates 12 3 2.12.2 2.1.12.1.22.2.12.2.22.2.3

10. Registration and switching scenarios There are a range of scenarios that the central register will need updating: Customer-led switches – arising from an active customer choice Assigned switches – arising from the need to assign a service point to a new retailer due to either exit of a market participant or the service point no longer being part of the contestable market due to eligibility (all result in a change in retailer) Registration of change in the contestable market – registering a change in the market due to physical exit of a service point or entry due to eligibility (this arises from a customer-side change, may not result in retailer change) Correction switches- to correct a wrongly switched or registered service point

11. Standard switching process Customer contacts new retailer and agrees to switch to them, entering into a new contract with them for their future retail services Cooling off period for new customer contract New retailer submits customer’s switch request to the market operator for the SP(s) and service(s) it will be serving, providing a date the switch will take effect Market operator validates the request against the central register, the new retailer’s licence and pending switches; accepts the request; and notifies the relevant parties of the request and the future date the switch will take effect New retailer submits meter reading to the market operator within an agreed window of the date the switch will take effect Market operator communicates meter reading to existing retailer and wholesaler Switch takes effect, with the new retailer now responsible for the SP in terms of customer billing and for meeting wholesale charges Existing retailer issues final bill to customer Opportunity for existing retailer to object to customer’s switch request due to one of a defined set of justifiable reasons Window of opportunity for new retailer to cancel switch request

12. Customer’s ability to switch Able to switch CustomerUseLocation Ability to switch dependent upon: The use and location of the premises in which the service point is located (non-households; customers supplied by the system of a water undertaker whose area is wholly or mainly in England) Them being the customer currently being directly served and hence billed by the retailer for that service point (different end-users under bulk meter or common billing arrangements are not able to initiate switch – the customer has the direct relationship with the retailer)

13. Customer market awareness Delivering best outcomes for customers will need retailer visibility of the contestable market and strong customer awareness of their ability to switch Details of eligible premises / service points will be make available to licensees, but not directly to customers who will need to go via a licensee. Consideration of third party access to central register Further service point data will be available to the existing retailer There will be a centralised marketing campaign to raise customer awareness of ability to switch – complemented by retailers’ own marketing activities and potential requirements to inform customers in certain scenarios Market operator will host a public record of licensees, potentially combined with Scotland on Tap website Market operator will not provide tariff / service comparison service

14. Time for a break!

15. Market Blueprint V1 Consultation Responses

16. Consultation responses 33 responses received 10 Water and Sewerage companies (all) 7 Water only companies (not DVW or CHL) 2 NAVs /insets(ALB & PWN) 4 other water providers (Scottish Water, Business Stream, Clear Business Water, TWCL) 2 from Gvt/other regulators (EA, CCW) 7 other respondents (Gemserve, Prologis, C & C Group, CGI, Electralink, Fair Water Connections, WRAS, Sybex) Over 2000 individual responses to questions

17. Consultation responses

18. Responses by segment Responses were generally positive Where respondents stated either yes or no, 88% of responses were yes (although a lot of these are qualified by detailed comments) No question got less than 50% positive responses Wocs were most positive overall (95% yes on average) ‘Other’ respondents were least positive (79%) – perhaps an indication of the relatively lower level of engagement with this segment

19. Responses by segment Generally more variation within sectors than between sectors, and within topics than between topics – although: Incumbents are more in favour of dispensations from the MO than other water providers Wascs were less in favour of service type switching than any other group Wascs were less supportive of the MO collecting and publishing performance data than any other group

20. Next steps Use of ‘standard‘ and ‘non-standard’ needs to be rationalised and consistent Developer services likely to have its own strategy paper Trade effluent likely to have its own strategy paper Most recommendations had a positive reception, but messaging needs to be strengthened in v2 to clarify concerns and misunderstanding (e.g. wholesaler communication with the customer) Responses will feed into material for the working groups and drafting of V2 20

21. Review of Registration and Switching consultation responses

29. Focussed discussion Group 1 o Customer awareness o Service type switching o Identification of the contestable market Group 2 o Ability to switch o Registration and switching scenarios o Switching process NamesCompanyGroup Paul Fry OpenWater 1 Bob Stear Defra Christine Blackwell Consumer Council for Water Gary Craig Central Market Agency (Scotland) John Vinson Bristol Wessex Billing David Seymour Business Stream Kulwinder Johal Severn Trent Water Paul Graham Southern Water Julian Tranter Thames Water Paul Gill Yorkshire Water Ian Hopkins Ofwat 2 Stephen Beddoes OpenWater Jeremy Downer Sutton and East Surrey Water Tim Orange South Staff Waters Richard Masterson Severn Trent Costain Katy Spackman Northumbrian Water Ned Coleman South West Water Jonathan Clarke Anglian Water Darren Thresh Yorkshire Water

30. Breakout sessions

31. Feedback Group 1 o Customer awareness o Service type switching o Identification of the contestable market Group 2 o Ability to switch o Registration and switching scenarios o Switching process NamesCompanyGroup Paul Fry OpenWater 1 Bob Stear Defra Christine Blackwell Consumer Council for Water Gary Craig Central Market Agency (Scotland) John Vinson Bristol Wessex Billing David Seymour Business Stream Kulwinder Johal Severn Trent Water Paul Graham Southern Water Julian Tranter Thames Water Paul Gill Yorkshire Water Ian Hopkins Ofwat 2 Stephen Beddoes OpenWater Jeremy Doner Sutton and East Surrey Water Tim Orange South Staff Waters Richard Masterson Severn Trent Costain Katy Spackman Northumbrian Water Ned Coleman South West Water Jonathan Clarke Anglian Water Darren Thresh Yorkshire Water

32. Registration and Switching v2.0 Approach and additional content

33. Next steps and future working groups

34. Close Have a safe journey and a good weekend