Code Manager Procurement Strategy
The Board reviewed and approved the Strategy to be used for the procurement of the Code Manager services.
The Procurement Strategy draws from several foundational elements including the original Code Manager procurement in 2020, the 2023 Code Manager business case development, market and stakeholder engagement during 2023 and 2024, the RECCo data and digital strategy, and learnings drawn from the expected Code Manager Licence. Our 2023 Business Case identified the benefits of consolidation of the digital components of the Code Manager services in a single Digital Services package, enabling us to take advantage of evolution in technology and delivery models over the last 4 years. It also affords us the opportunity to procure the remaining non-digital elements in a straight-forward manner.
The Strategy, then, will involve a competitive open market procurement for the Digital Services in 2024 (Lot 1) followed by the approach for the non-digital Code Manager service packages (Lots 2&3) in 2025. The procurement approach for Lots 2&3 will be agreed with the Board in due course.
All procurement activity will be carried out in full compliance with the agreed RECCo Procurement Principles. We will establish a Procurement Evaluation Panel of suitably qualified members to enable an informed evaluation of bidder proposals. Re-procuring the non-digital elements alongside the Digital Services would create additional risk, uncertainty and significant costs and therefore we plan to adopt a staged approach where, in 2025, we determine the approach for the non-digital Code Manager service packages.
Central Registration Service Update
The Board received an update on the Centralised Registration Service (CRS).
On Tuesday 21 May 2024, Ofgem published its consultation on the DCC Review Phase 2, part of which concerns the future of the Centralised Registration Service (CRS). In its consultation document, Ofgem asks the following question:
“Do you agree with our proposal that it would be appropriate to remove the provision of the Centralised Registration Service (CRS) from the DCC Licence and transfer the obligation to the Retail Energy Code (REC) to be delivered by RECCo?”
The REC Board fully support this proposal and believes that transferring responsibility for managing the CRS from DCC to RECCo would deliver significant benefits to consumers and the industry.
RECCo is building a transition plan which details how we would transfer the service from DCC into RECCo ownership if Ofgem decides to progress the transfer. Our key transition principles are that users will experience minimum impact to the service on the day of transfer and the existing CRS Service Provider contracts will be transferred to RECCo to operate with minimum impact on users on the day of transfer. The transition plan will ensure that, if required, we are ready to operate the service from September 2025.
We will be including more detail about the benefits case for the change, the transition plan and our proposed delivery model in our response to Ofgem’s consultation in the middle of July
Improvements to RECCo’s Annual Budget process
The Executive Team outlined improvements to the annual budgeting setting and consultation process.
RECCo plays an important role in the energy sector by working closely with REC Parties and other stakeholders to ensure the retail energy market runs efficiently and effectively. We are transparent in our budgeting process to achieve this goal, allowing stakeholders to understand RECCo’s activities and expenditures. We are continuously striving to improve this process to ensure that stakeholders can see that they, and ultimately consumers, are receiving value for their money.
REC Parties are given the opportunities to review the Budget. Following the budget-setting process for the 2024/25 financial year, and feedback from Parties on how we can enhance our future budget development and consultation process, we are committing to making a range of improvements to further increase transparency in the future. The REC Board is fully supportive of these suggestions, and we are dedicated to implementing them in the upcoming 2025/26 budget cycle.
Much of the feedback we received aligned with key themes that are likely to be adopted into future Code Manager licence arrangements, and we are pleased to move towards early adoption of key budget process principles. Our enhancements will provide information to support and justify planned activities and expenditures and demonstrate the use of effective bid processes to secure value throughout the supply chain and delivering economic benefits for all consumers.
The full details of our proposed improvements are on our website.
Annual Report
The Board reviewed and approved the Annual Report for the financial year 2023/24.
Each year, as governed by the Retail Energy Code (REC), the REC Board is required to publish an Annual Report that highlights RECCo activities for the previous financial year. During the June meeting, the Board reviewed the Annual Report for 2023/24, which includes a summary of the operational performance delivered by RECCo, its Code Manager, and other service providers.
Key highlights of the report include the successful launch of the prepayment levelisation scheme and the retirement of the Market Stabilisation Charge. Additionally, the report emphasises RECCo’s enhanced engagement efforts, a primary focus achieved through the introduction of several new groups and committees; these now form part of the ‘institutions’ that facilitate valuable expert stakeholder input and serve to improve transparency across RECCo activities.
This year’s Annual Report provides an overview of:
- Progress against the Forward Work Plan 2023 to 2027, with all commitments completed or on track.
- Code Manager performance, service highlights, performance management activities, insights from the annual survey, and planned improvements for the upcoming year.
- The REC Change Management process performance, including key metrics and ongoing enhancements based on stakeholder feedback.
- REC Performance Assurance activities, including the REC risk register, data cleansing, service provider assurance, REC Data Access, market entry, and qualification.
- Core REC service performance and service improvements during 2023/24.
- Strategic performance and financial management activities, including a forward look at priorities for the coming year.
The report underscores RECCo’s commitment to maintaining the stability, improvement, and evolution of core REC services, to ensure they remain relevant and effective for all stakeholders. The final report will be published at the end of June 2024.
