Competition

Competition and market separation present major opportunities but at the same time present the greatest challenge for many years. The industry must develop new models of operation to handle the transfer of non-household customers and the individual companies must develop new services to attract and retain the valuable customers. The newly separated water companies must develop the means to operate their core functions in the most efficient way and the greater potential for mergers and acquisition could change the map of the industry completely.

Logica has great experience of competitive utility markets, from its work at the heart of those markets over the last decade:

• Competition was introduced into the water market in Scotland in April 2008. Logica currently provides  the IT and systems for the independent Market Operator in Scotland. These systems underpin the competitive market in Scotland and enable the efficient transfer of customers from one service provider to another and the settlement of funds between the market participants
• Logica has a long history of enabling competition in the electricity and gas industries in the UK and overseas. During the late 1990’s Logica worked with 90% of the electricity retailers to assist them in participating as competition was introduced to the industry. Logica was chosen to implement the New Electricity Trading Arrangements (NETA) and for many years we have provided the settlement service (as a BPO for our client Elexon) for the electricity  industry in England and Wales
• Logica has considerable experience in implementing different utility market models and a deep  understanding of the systems/data considerations which come with the different market models.  Following the publication of the Cave Review, we are active in working with the industry to assist the understanding of various alternative market approaches. We will also be discussing with various industry participants their readiness for competition, and sharing some of our experiences regarding market opening and business separation.
• As early as 2000, Logica worked with a number of key water market players and prepared a model for those competitive markets. The results of this were published in a Logica paper ‘Water Competition: a way forward’.

We have translated our experience into a vision on how a separated water industry may look, and into a proposition ‘preparing for competition’.  Please contact your account manager or Graham Hainsworth for further information.