Payment Method Levelisation

What is Payment
Method Levelisation?

Historically, British customers on pre-payment meters (PPM) have paid more for their energy than those on direct debit (DD). On the 15th of March 2023, the Chancellor announced that the Energy Price Guarantee (EPG) would be used to align costs for PPM and DD customers. Initially, these costs were aligned by giving PPM customers a unit rate discount.

Why is reconciliation
needed?

This programme levelises tariffs by requiring energy suppliers to charge DD customers more whilst discounting PPM tariffs. However, a reconciliation method is required as the payment method split is not the same for each Supplier’s portfolio. This is so Suppliers with higher-than-average PPM consumers can be credited, whilst those with fewer-than-average can be debited.

What is RECCo’s
role?

RECCo were tasked with developing industry processes under the Retail Energy Code (REC) and designing, building, testing and delivering a functional system that facilitates supplier payments to allow for non-volumetric levelisation. This system went live on the 1st April, 2024. The change to the REC came into place through Change Proposal R0147, which implemented a new REC Schedule for Payment Method Levelisation (PML) Reconciliation, Schedule 31.

What do Suppliers need to do?

All domestic Suppliers are required to take a snapshot of their data on the 1st day of each Calendar Month and send it to us by the 15th Calendar day of the month. We will calculate positions and send an invoice 15 Working Days (WD) after the data submission date. Suppliers are expected to pay invoices within 10 WDs of receipt of acceptance. All funds are distributed equitably, and payments to Suppliers will be sent within 10 WDs of the payment deadline.

The Invoice Schedule is detailed here, containing key dates for file submission and invoicing.

Templates for Supplier data submission are also provided here. Please note, the file formatting is important for file validation, as such, please ensure the following:

Each region must be populated, even if there is no data i.e. populate with zeros and with relevant date format
file name format for electricity: MPID_YYYYMM.cs
file name format for gas: SSC_YYYYMM.csv
files using column headers or regions different to the template will not be accepted

Invoice Schedule

PML Reconciliation Invoice Schedule

Levelisation Payment Details

This document details the total value of invoices sent to Suppliers and the proportion of that amount collected from Suppliers. For Suppliers due to receive payment from the scheme, it includes the proportion of their calculated credit that RECCo has paid out for the current & previous invoice periods.

Payment Details