For twenty years, pricing in the domestic and SME energy market has been built on an averaged view of the customer. Known consumption profiles, defined by the industry, made building the sizeable time-based peaks in the cost stack into a simple volume weighted average, so the quote engine never had to reckon with what a site actually did at five in the afternoon on a Tuesday. Market wide Half Hourly Settlement changes that and suppliers who treat it as a compliance deadline rather than a pricing opportunity are going to see a significant impact on their business operations.
Most of the industry conversation now is around migration – getting meters across to the new system: Milestone 14, the point at which all suppliers must be MHHS qualified and service active, is fast looming at the end of October 2026, and current programme reporting indicates that roughly 80 per cent of meters will have migrated by that point, with full completion aligned to Milestone 15 in May 2027 and cutover to the new four month settlement timetable at Milestone 16 in July 2027
Progress on migration is going well – but conversations focusing on migration as simply a task to be completed rather miss the point – suppliers are about to see their cost positions determined by a customer’s actual usage pattern for the first time, rather than a known average built on a tiny sample. As Elexon’s Helen Buckingham put it in her Utility Week remarks, settlement has historically relied on around 2,000 meters to determine the shape of a load profile; MHHS replaces that with granular, actual, half hourly data across the market That’s a very different data foundation, and it significantly changes what “knowing your customer” means at the point of quote.
The challenge for anyone leading pricing or operations right now is that the risk around MHHS isn’t necessarily about the settlement mechanics; Elexon and the DNOs have spent years building the central systems to process it, and by May 2027 the market will be comfortably handling up to 500 billion half hourly meter readings a year. The real risk is around the pricing calculation itself.
Three things tend to break at once when suppliers try to price against half hourly exposure using legacy systems that may struggle to handle the complexity in MHHS:
- Spreadsheet based quoting tools that were never designed to ingest, let alone process, half hourly volumes without crashing.
- Pricing systems slow enough that they introduce significant delays into competitive tender situations. In an I&C market where quotes are compared within hours, that delay can mean a lost deal, not just an inconvenience.
- Margin risk that compounds, because a quoted cost component that doesn’t reflect a customer’s actual half hourly exposure isn’t just imprecise, it’s a mispriced contract sitting on the book for the full term.
None of these are new problems in isolation; every pricing team has lived with legacy tooling constraints before – what’s new is the scale of the exposure. Once a customer’s actual HH usage replaces a known, averaged profile, the range of cost outcomes across a portfolio widens dramatically. A pricing engine that can’t resolve that range in real time isn’t just slower, it’s potentially wrong in ways that only show up on the P&L months later.
This is where a lot of the market commentary is currently underestimating the potential problem. Getting pricing right from day one is important because MHHS isn’t waiting for suppliers to modernise when they are ready. The MHHS milestones are fixed, and from Milestone 14 onwards, MPANs can no longer be moved back into the Non-Half-Hourly regime on change of supplier, and reverse migration is no longer possible. There is no soft landing where a supplier can retreat to the old averaged model for a difficult account.
The calculation has to be both fast and precise at the point of quote as getting it wrong in either direction carries a cost. Price too conservatively against an estimated half hourly profile and a competitor with sharper tooling that uses the real half hourly data wins the profitable site instead. Price too aggressively without full visibility of half hourly shape and the supplier wins the expensive sites, at a low or even negative margin that only becomes visible once the site is live.
It’s not just about the risk however – there is a significant opportunity on the other side of this transition. Ofgem’s original business case for MHHS estimated net consumer benefit in the range of roughly £1.6 billion to £4.5 billion through 2045, depending on the scenario used. That value will only be realised by the suppliers who can act on the improved data foundation, and turn it into value. More accurate settlement and granular usage data is the foundation the industry needs to unlock the innovative time of use tariffs and flexibility services we’ve been talking about for some time, but have been unable to realise because of the previous data averaging.
All this means that the suppliers who have the pricing infrastructure that can consume half hourly granularity natively, rather than bolting it onto a system designed for averaged profiles, are the ones positioned to price more competitively and innovatively on the sites that can deliver value, while ensuring that margin is protected on the sites with a higher cost base.
If you’re leading pricing or operations inside a GB energy retailer, it’s not whether MHHS will affect your quoting process – the looming Milestone 14 in October this year makes that non-negotiable. The question is rather whether your systems can turn half hourly granularity into a pricing advantage, or whether they’ll force a compromise between speed and accuracy.
Legacy systems can mean that either the pricing team slows down to protect accuracy, and loses deals in a sales environment that can’t wait for long-winded quoting processes, or resource gets thrown at manual workarounds to keep pace, and accuracy erodes under the pressure. Both are symptoms of the same underlying issue: legacy and spreadsheet based pricing infrastructure that was never designed for the volume or the granularity that MHHS now requires as standard.
The suppliers who get ahead of this won’t be the ones who treat MHHS compliance as the finish line. They’re the ones who have been looking to realise the benefits that MHHS brings for some time – and are partnering with their technology suppliers to unlock pricing applications that deliver responsive, accurate quotes, no matter the site complexity.