The RECCo Board agreed to resume communication of highlights from their Meetings to help inform our community on key operational issues and organisational developments. The October Board meeting was attended by all the Non-Executive Directors and two special advisors, one from Ofgem and one from the Parties representing the Networks sector. The CEO and the Executive Team were also present.
Summary for REC Parties
CSS Transition
The RECCo Operations Team has worked closely with colleagues at Ofgem, the DCC and the REC Code Manager to prepare for CSS transition to enduring REC governance.
Supplier Rebate
RECCo is delighted to announce that it will be returning £4.25m to Energy Suppliers as a rebate against their October 2022 invoices following the audit of our 2021/22 accounts.
Stakeholder Satisfaction Survey
RECCo will be issuing its first annual REC Stakeholder Satisfaction Survey in October. This is an opportunity for all REC users to provide feedback on REC Service Providers.
Golden Nuggets
Our Consumer Needs and Energy Supplier Efficiencies – or “Golden Nuggets” project – has begun following contractual award to Capgemini.
Market Stabilisation Charge
There is an expectation that the Market Stabilisation Charge (MSC) administered under the REC will be extended to the end of March 2023 (subsequently confirmed by Ofgem on 24 October 2022).
Theft Estimation Methodology
A Theft Estimation Methodology will be shared in an industry workshop on the issues associated with energy theft at the end of November, before formal publication in the New Year.
Extended Board Highlights
CEO Update
- The CEO presented the latest organisational chart indicating a strong base of expertise across the spectrum of RECCo activities. This is a relatively small team tasked with delivering a substantial work programme; it is supported by expert contractors, but there remain several permanent roles still to be filled.
- The CEO and Executive Team have developed and put in place contingency arrangements to ensure continued smooth running of the organisation and its works programme in the event of both planned and unplanned absence.
Operational Matters
Operations
- The RECCo Operations Team has been working closely with colleagues at Ofgem, the DCC and the REC Code Manager to prepare for Switching Programme exit and the transition to enduring REC governance. RECCo has agreed with the DCC a ‘Work-Off Plan’ to ensure that all outstanding matters are completed, and this will be independently assured by the REC Performance Assurance Board (PAB).
- The RECCo Operations Team is actively engaging with the Market-wide Half Hourly Settlement (MHHS) Programme to ensure that all impacts on the REC, its systems, and service providers, are considered.
- The RECCo Operations Team has published a ‘Request for Proposal’ (RFP) for a new single Metering Auditor. This service provider will be responsible for the audit and assurance of the newly consolidated REC metering arrangements, or ‘COMCoP’. The successful bidder will be appointed at the end of the current year, with the new service scheduled to commence 1st April 2023.
Financial & Commercial Management
- RECCo continues to manage its financial and other resources prudently. Costs for the first half of the current financial year continue to track favourably against budget. In October it is expected that Ofgem’s exit from the Switching Programme will be confirmed and RECCo will take over responsibility for close-out of any the remaining outstanding matters on the CSS. In the second half of the year, we will continue to develop the data and theft strategies as well as close-out the procurement of a single auditor for the combined metering codes of practice.
- The audit of RECCo’s financial results for the year ended 31 March 2022 have now been completed and RECCo can confirm that the organisation has once again secured an unqualified audit report; the auditors, then, found the Financial Statements of the company to be fair and transparent.
- RECCo is a non-profit making organisation, meaning that in each financial year our income must match our costs. RECCo is delighted to announce that it will be returning £4.25m to Energy Suppliers as a rebate against their October 2022 invoices following the audit of our 2021/22 accounts. Further details of the rebate are included in the October Newsletter published on the RECCo website.
Corporate Affairs
- The Board reviewed progress against its Stakeholder Engagement plan and noted that RECCo will be issuing its first annual REC Stakeholder Satisfaction Survey in October. This is an opportunity for all REC users to provide feedback on REC Service Providers including the REC Code Manager and Electricity Enquiry Service (EES). This feedback will help RECCo shape the development of these services over the coming months.
- The Board approved a recommended evolution of the RECCo visual identity which will be introduced as part of the Forward Work Plan exercise.
Data, Technology & Transformation
- Our Consumer Needs and Energy Supplier Efficiencies – or “Golden Nuggets” project – has begun following contractual award to Capgemini. This project will support the consolidation of needs into a form which can be prioritised and shaped into future projects and changes either through an ‘agile’ delivery or ‘waterfall’.
- Our performance dashboard project, to better digitalise Performance Assurance Board (PAB) reporting has begun with testing via PAB members scheduled for late October and rollout in November.
Strategy & Regulation
- The Board reviewed several recent and upcoming consultations which are relevant to RECCo’s strategic objectives. These included the BEIS consultation on delivering a Smart and Secure Electricity System, which we consider must be built around the consumer needs; this has links with the work being undertaken on consumer consent.
- There is an expectation that the Market Stabilisation Charge (MSC) administered under the REC will be extended to the end of March 2023. Further details on this are expected from Ofgem in due course (confirmed on 24 October 2022).
- A high-level estimate of the current value of energy theft was presented, though it was noted that a more accurate figure would be available on completion of the Theft Estimation Methodology. The latter will be shared in an industry workshop on the issues associated with energy theft at the end of November, before formal publication in the New Year.
Board Committees
Remuneration Committee
- The Committee Chair presented a paper addressing the Cost-of-Living crisis and its impact on RECCo employees. The Chair summarised the response being adopted by third parties including, including several REC Parties, based on anecdotal evidence. The Chair proposed, and the Board agreed, that those employees on modest salaries should be awarded a one-off lump sum this winter to help them meet the increase in the cost of living.
Nominations Committee
- RECCo is now an independent organisation and, working with a range of service providers, has a mission to serve all the community: REC Parties, consumers, and the regulator. It is important, then, that the process delivers Directors with the appropriate knowledge and experience, that it is transparent, and that it offers the REC Parties a say in who is serving on the Board. The Board agreed that the Nominations Committee use the existing process as set out in the REC for the next appointment; it was tasked to reviewing the process and report back to the Board on whether it remains the best option for future appointments.
- The Committee Chair gave an update on contingency planning in the event of foreseen and unforeseen events that may impact the operation of the Board and the Executive Team.
Ethics Committee
- RECCo has matured as an organisation over the last three years and now has employees and contractors progressing the work programme and manging range of service providers. The Board has approved, over time, a suite of policies and procedures that safeguard employees and the organisation. In terms of responsibilities, the Board will be responsible for approving new policies, while the Ethics Committee will be responsible for reviewing and up-dating them.
