CPM058 & CPW149a decision

Market Arrangements Code and Wholesale Retail Code Change Proposal – Ref CPM058a and CPW149a

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Published

23rd May, 2024

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Publication

Type

Determinations and decisions

Detail

This change is the first in a series of planned changes that are designed to reform the Market Performance Framework (MPF), the mechanisms designed to monitor, govern, and incentivise Trading Parties to deliver their obligations. CPM058a & CPW149a establishes new governance arrangements for the MPF, including the creation of a new Performance Assurance Committee (PAC) to replace the existing Market Performance Committee (MPC), a more flexible approach to reviewing the MPF, and clarification around MOSL being subject to external audits. We are fully supportive of MPF reform and think that, designed appropriately, a reformed MPF could result in more effective incentives being placed on Trading Parties to drive improved market performance and better customer outcomes. We therefore welcome that this change establishes a framework to facilitate MPF reform. We think the governance arrangements proposed in this change are balanced and encourage a focus on the customer interest in MPF decision-making, particularly because of the composition of the PAC (which includes a significant independent/customer representative membership) and its quoracy and voting rules. We think a more agile approach to MPF reviews will enable them to be timely and targeted, improving their effectiveness. This could result in a more effective MPF which would benefit customers. We recognise that much of the detail of MPF reform, including the PAC's remit, is still in development, and that the outcome of this work could influence our assessment of the appropriateness of the governance arrangements. If future MPF reform code changes indicate a need to review the governance arrangements, we will pursue this without delay. Additionally, should we become aware that PAC meetings and decision-making do not facilitate the prioritisation of customer interests , we will take action to correct this.