Highlights, RECCo Board Meeting, 3rd February 2021
- Financial Matters
- 2021/22 RECC Budget
In January 2021, the RECCo Board published its Draft Strategy and Budget for consultation. The Board has taken regard of the consultation responses received and, as far is reasonably possible, reflected those in the Budget. The Board at its February meeting considered the estimated costs and resources needed to deliver the services and/or discharge the obligations placed upon it by the Retail Energy Code (the ‘REC’) for the financial year to 31st March 2022 and agreed the Budget. The agreed Budget, along with a detailed supporting narrative, to the extent allowed to ensure commercial confidentiality is protected, was published to all REC parties on 8th February 2021.
To enable REC Parties to plan for the longer term a 3-year projection is also included in the Budget pack. This demonstrates the evolution of the RECCo cost base reflecting the completion of code manager mobilisation activities in 2021/22, the full year impact of Code Manager and transitioned services from SPAA and MRA in 2022/23, and the potential introduction of new products – CSS operational charges, new TRAS service – in 2023/24.
The Budget pack also details the Preparation and Approvals Process as set out in Section of the REC, including the basis on which a Party can appeal one or more cost items to the Authority. A RECCO Budget stakeholder engagement event is scheduled for Monday, 15 February 2021
- Financial Management
RECCo continues to manage its finances actively and in a prudent manner to ensure that the cashflow burden on funding parties is mitigated while still ensuring it has the resources to deliver its key objectives. The Board considers the full year outturn on a quarterly basis and current forecasts indicate a small underspend against the budget for the current year. Invoices for the expected costs for the quarter January to March 2021 were issued to funding Parties in January 2021.
- RECCo Operational
- REC Development
REC Development remains on track. Ofgem confirmed on 15 January that REC v1.1 had been accepted with immediate effect; the consultation on REC v2.0, which with deliver Retail Code Consolidation, closes 23 February 2021. One of the key areas to be determined by Ofgem following consideration of responses to that consultation is the future scope of metering arrangements to be governed and assured by the REC, and how that will satisfy the needs of upstream processes such as settlements.
Wherever the boundary of responsibilities is drawn, there will be a need for a close and effective working relationship between the REC, the BSC and the UNC.
Separately the DCC has submitted several documents into Switching Programme Design Forum which are required to facilitate the March 2021 consultation on REC v3.0 drafting. At this stage it is assumed that the document will be published on schedule.
The Board approved Subject Matter Expert (SME) support for a ‘discovery’ phase to explore the options available to RECCo to replace the current Theft Risk Assessment Service (TRAS) and to progress its wider theft reduction strategy. These options will inform a Strategic Outline Case, which RECCo will publish for consultation. The findings of the discovery phase will be delivered to the April 2021 meeting of the Board, together with a comprehensive plan for taking forward any of the options which RECCo may wish to pursue. The 2021/22 budget includes funding to progress this project, subject to further approval by the Board of the Outline and Final Business Case(s).
- Transition Programme
RECCo is engaging with other code bodies on transition matters. Sessions are now being arranged between existing code managers and the REC Code Manager to discuss detailed mobilisation issues, for example on data access, knowledge transfer, and arrangements for the transfer of inflight issues. Cross-code issues, such as the transition of help desk requirements, are being discussed at the RTWG and RTSG. Further work is being undertaken to examine the case for RECCo to maintain access to information (such as change registers) from existing codes once they have closed.
RECCo is working to put in place the service provider contracts required under the REC. Discussions are taking place with a range of service providers, including Crimestoppers with regard to the Energy Theft Tip-Off Service (currently a SPAA and DCUSA service), which will go live under the REC from 1st April 2021.
The Board discussed how it can contribute to the successful delivery of the Switching Programme. This included its role as the Party Under Integration (PUI) with responsibility for ensuring the Electricity Enquiry Service meets the Switching Programme requirements as well as more generally on the decisions that will impact the services it will be responsible for under the REC. Proposals to be presented at future Board meetings.
- Code Manager Mobilisation Programme
The Code Manager Mobilisation Programme has moved into the Milestone 2 delivery phase as planned and is due to be completed on the 9th of April 2021.
The technology builds for the REC Portal, the EMAR and the Analytics toolset have all tracked to the planned start dates. The REC Code Manager Service has started to build the internal business processes and work instructions that will support the live service for the 1st September 2021. Stakeholder engagement is ramping up and new branding will be used to give the REC Code Manager Service an identity for the future.
This is a challenging and exciting time for the programme and RECCo continues to work closely and collaboratively with the REC Code Manager service partners towards the Service Live date.
- Consumer programme: PCW Project
RECCo is committed to improving consumer outcomes and promoting trust in the energy market. Last year it provided funding for the Consumer Journey Forum (CJF) and is now developing a wider Consumer Strategy as part of its REC readiness programme.
Having delivered on its Terms of Reference, the CJF concluded in January 2021. One of the key outcomes of its work was the recognition of the critical role of Price Comparison Websites (PCWs) in the consumer journey. PCWs are the primary route by which consumers switch energy suppliers and will therefore be significantly impacted by the Faster Switching Programme. To date there has been some positive, but limited, engagement with PCWs and the CJF has highlighted a material risk to consumer outcomes if this is not developed further.
The Board has recognised feedback from stakeholders and agreed to establish a project to address areas of concerns. The Board will review a detailed project plan and draft ToR at its March meeting. It is anticipated that a PCW Forum will be established in April 2021. Please contact email@example.com for more information.
- Stakeholder Engagement Plan
The Board has agreed a 2021 Stakeholder Engagement Plan to ensure REC Parties and other stakeholders are kept well informed of progress as we move toward Retail Code Consolidation go-live in September, and beyond. As well as utilising existing industry groups and refreshing the RECCo website, the following webinar engagement programme have been scheduled:
- Feb 21 – 2021/22 Budget
- March 21 – REC Drafting Updates
- April 21 – Introduction to RECCo CEO
- May 21 – MEM Accession
- June 21 – Transition Programme
- August 21 – Operational Readiness
The Board very much hopes that Parties will engage with this programme and raise any questions or areas of concern they have in the run up to REC go-live.
- CM Procurement: Lessons Learned Exercise
RECCo was established with a remit to procure a Code Manager to manage the REC. Following a highly competitive process, RECCo appointed three established and experienced service providers in September 2020 that are aligned with its vision and will strive to promote innovation, competition and positive customer outcomes. In line with good practice, RECCo has conducted a lessons-learned exercise to inform its future procurement activities. RECCo is pleased to share its key learnings to support similar industry initiatives and these will shortly be published on the RECCo website.