Market-wide Half Hourly Settlement (MHHS) is making meter faults more visible and expensive.
Non-communicating smart meters are now an increased financial and operational risk. A risk that’s as much of an issue for the CFO as it is for the Head of Metering.
While MHHS may draw more board attention to the problems, it also creates new opportunities; opportunities which were a focus for senior industry experts in metering and field ops during our recent roundtable and webinar. The key opportunity comes from increased visibility, highlighting both operational gaps and potential value, something which was previously harder to pinpoint.
Many suppliers’ operating models still can’t address the gaps and make the most of the opportunities MHHS highlights. Organisations that develop more dynamic operating models therefore have the potential to pull ahead.
From hidden issues to visible costs
Until now, settlement rules have disguised the impact of metering issues. With MHHS that’s gone. Meter performance is highly visible and suppliers face costly consequences if performance isn’t good enough. GSOP penalties, 30-day fix penalties and live settlement now directly affect the bottom line, making metering a board-level priority.
While some frame this visibility as a negative, it’s also a benefit. The data it provides can provide insight that identifies gaps, maps trends, improves efficiencies, and targets action where it’s needed. It can also help organisations understand the value each customer creates.
Unfortunately, not everyone has the capability yet. Grant Qualey, Operations Director at Calisen says: “A lot of organisations still don’t have a single clear view of the portfolio performance. What is working, what’s not working, how do you intervene? Without that, you tend to be more reactive rather than proactive, which holds back performance.”
Traditional, reactive and siloed operating models aren’t set up to manage this complexity. To understand where issues (or potential issues) arise and be able to address them, you need an end-to-end, proactive operating model. Organisations can then manage their portfolios more actively and use metering data as a commercial lever.
What market leaders are doing differently
Leading organisations are already adapting. They’re moving beyond assessing MHHS as a compliance requirement and to using data to better identify which customers add value and which destroy it. They’re looking for the insight in metering data to see where problems already exist or may occur. They’re proactively working with partners to intervene before those problems reach the customer and with innovative commercial models, they can prioritise activity by value and share risk, costs and benefits with those with the power to fix things.
Addressing operational inefficiencies
As we move from rollout to performance, it’s important for industry, consumers and suppliers that meters are on the wall and stay connected. Only then can we all benefit from the efficiencies MHHS is designed for, as part of the energy transition.
To continue installing and keep meters working consistently, instead of pushing costs into parts of the business that aren’t working, suppliers’ focus needs to be on getting their operational foundations in place. The data made visible by MHHS offers huge potential to help assess which processes are working or not. Tania Ramsewaran Senior Manager at BFY Group says: “Organisations should step back, look at what they have and ask themselves ‘what do we need to do to fine-tune various parts?’”
Several firms are already beginning to embrace this and have begun identifying:
Risks, inconsistencies and control gaps in existing processes.
Patterns and root causes of aborts or failures.
Misreported outcomes, lack of segmentation, variability in engineer processes, and inconsistent customer journeys.
The biggest operational drivers through regression analysis.
Strategic prioritisation
There may be a lot to do, but consider the advice from Adam Downing, Head of Metering Services at SSE Energy Solutions. “If you can’t do everything on your list of priorities, quickly work out what’s going to deliver the biggest impact and most value for you.”
For example, a meter operator used our rapid diagnostic for operational improvements. The data revealed:
Operational inefficiencies and process waste.
Hidden backlogs.
Manual workarounds and system limitations hindering end-to-end processes.
Gaps in roles, responsibilities, and complexity in target operating model.
Risks in offshore operations.
With targeted operational improvements, they saved £5m. Another large meter operator and data collector improved field operations to save ~£2m. Reducing their abort rates by 28% (1,000 aborts per month).
- Can you plug gaps in your customer journey?
- Are your metrics customer focused to drive end-to-end development?
- Is your strategy and process for dealing with inherited failing meters as good as it can be?
- Does your process design address settlement risk – e.g. flag when meters struggle or stop communicating?
- Do you have a strategy for fixing inherited meters that aren’t correctly commissioned?
- Can you enhance your field teams or partners?
- Can you optimise your entire value chain for greater efficiency?
Setting up partnerships for growth
Leading organisations are also teaming up with partners across the ecosystem and value chain to improve performance. A focus on meter health, AI-enabled customer journeys and shared data infrastructure is already delivering better outcomes. With shared accountability and clearer definitions of success, everyone across the customer journey can intervene before customers even realise there’s a problem.
We’re also seeing organisations moving away from transactional metering relationships toward shared risk and reward models between suppliers, MOPs, MAPs and DNOs. With many recognising that proactive, data-driven partnerships will be key to the commercial success in the next phase. As a commercial arrangement between willing parties, the partnerships don’t need regulatory sign-off.
The commercial potential
MHHS data can reveal commercial opportunities and leading organisations are already making the most of it. The best performers are the ones that are able to take a portfolio view, and then use the data and insight they’re getting from the meter assets to work out where the highest risk and highest value interventions are.
They’re also using data to identify customers with the most commercial potential. Suppliers can then shape new propositions or targeted sales to retain and attract high-value customers. All supported with efficient operations to serve customers efficiently once they’ve been won, and avoid losing them to the competition at renewal time.
Illuminating data
MHHS reveals individual meter data, issues and potential value that was considerably harder to spot. Yes, there’s direct financial risk from settlement exposure, bigger for organisations still working reactively. But there’s an opportunity for those ready to act on what the data shows them.
The suppliers who move fastest from reactive to proactive will be the ones who fix operational inefficiencies, turn metering data into commercial insight, and build the partnerships needed to act on it.
Those who are slow to seize the opportunity risk losing out strategically and commercially without adapting their operating models to make the most of the data. Not just for service efficiency, but for shaping decision making, market strategy and growth. Targeting action where it’s required to build the biggest value across the entire metering journey.
If it would help to talk through where your meter data could make the biggest difference, get in touch.
