Why the City of London police?
The City of London Police has been identified as the ideal partner for this initiative due to:
- Their national role: They are the national lead force for fraud and cybercrime.
- Proven success: They have succeeded through other sponsored operations, such as the Insurance Fraud Enforcement Department and the Intellectual Property Crime Unit.
- Enforcement capabilities: Their existing enforcement powers and extensive reach align with the objectives of combating energy theft.
Introducing the Referral Assessment Service (RAS)
The OBC also outlined the creation and operational expectations of a Referral Assessment Service (RAS) designed to:
- Facilitate, triage, and quality assure energy theft referrals to the ETU.
- Operate under REC governance as the referral hub and a conduit between stakeholders and the ETU.
Enhance referrals using additional data, where available, to prioritise serious, organised or repeat offences. This dual structure of the RAS and ETU will close the enforcement and prosecution gap frequently highlighted by REC parties and stakeholders. It aims to make energy theft disruption more effective.
Stakeholder collaboration and service scope
The service will be open to:
- Energy Suppliers
- Electricity Distribution Network Operators
- Gas Transportation Network Operators
Eligible cases meeting the criteria can be referred to the RAS, which will forward high-priority cases to the ETU for further investigation. The ETU will operate as an independent, specialised investigations unit focusing on:
- Organised criminal groups
- Enablers, such as those offering illegal meter replacement services
- Crimes targeting vulnerable consumers
Stakeholder Response to the Outline Business Case
The stakeholder responses to the OBC were overwhelmingly positive and supportive. Our responses to stakeholder queries are set out below.
Change Proposals to introduce the RAS and ETU have been submitted to the REC Change Management Process.
Next Steps
We will continue to engage with REC parties and stakeholders through established REC energy theft forums. This ensures a complete understanding of the expectations and outcomes from the RAS and ETU, including the threat assessment criteria and the evidential referral standards.
We anticipate that the service will be fully operational by early 2026, subject to consultation, budget approval and Change Process progression.
Learn More
- Full Police Partnership OBC: Available on the RECCo website here.
- Strategic Outline Case: Published here.
Consultation Queries and RECCo Responses
Question 1: “The role of RAS as a link between suppliers and ETU has been explained and justified in principle. However, we would like confirmation about how this works in practice. For example, it would make sense to me for RAS to send referrals to ETU using data provided on monthly TRAS reports. The proposal appears to have this action listed as a supplier action, which could have an impact on our business model (FTE, costs, etc).”
Answer: It is anticipated that Parties will make the initial referral to the RAS where an investigation meets one or more of the criteria set out or where information comes to hand about organised criminal activity targeting the energy supply chain. The RAS will likely require information over and above that submitted in the monthly TDIS file during the triage process and for progression to the ETU. However, those files may help establish patterns and other insights not discernible from individual case referrals.
Question 2: “We would find it beneficial to have more background information on how the partnership with City of London Police was established. The document states that RECCo reviewed potential service providers for the ETU, and following assessment and engagement, we don’t believe we have seen any of the data behind this. Has this procurement process been documented and shared with suppliers? Who were the other potential service providers?”
Please see page 30 of the Outline Business Case, Appendix 1—Energy Theft Unit Requirements and Options. This lists the alternatives considered, and slide 20 of the Strategic Outline Case provides more details as to why they were not considered viable options.
Question 3: “We agree there is a need for collaboration with the Police as a whole. We do, however, have some points for consideration: have we identified who the stakeholders are? Will this be suppliers/GTs/DNOs, or is the proposal to include the proposed theft detection resolution body?”
Answer: At this time, REC Party Stakeholders are anticipated to include Suppliers, DNOs, GTs, and MEMS (in particular, those operating/undertaking Energy Theft Investigations and remedial services). The identified stakeholders are detailed on Pg 30 of the Strategic Outline Case. Suppose the Theft Detection Resolution Body proposal is progressed. In that case, its interactions with the RAS and ETU will need further development. Still, our initial thinking is detailed on Pg 13 of the Outline Business Case, under the Strategic Alignment with other Energy Theft Reduction Initiatives. However, we would not expect any TDRB to have any role or responsibilities that are not applicable to other revenue protection bodies working on behalf of REC Parties.
Question 4: “Will the City of London Police have powers to take appropriate action across all geographic areas equally?”
Yes, in addition to policing the City of London, they have a broader role leading nationally on fraud and economic crimes, including the national response to fraud and cybercrime. Please see page 11 of the Outline Business case—City of London Police Existing Arrangements for further details.
Question 5: “Would you get an enhanced service if the site addresses that are referred are in London?”
Answer: The ETU will have a national scope and investigation potential. Referrals will be prioritised and investigated using the agreed-upon RAS and ETU strategic threat assessment. We do not expect the location to be relevant to that assessment.
Question 6: “What established relationships/jurisdiction do the City of London Police have with other police forces? Are there already agreements and processes defined between CoL Police and ALL national and local Police forces? If not, we have reservations that the ETU may not be beneficial.”
Answer: The City of London is the national lead force for fraud and cybercrime and has well-established relationships and working processes with all regional police forces, including Police Scotland. These are well established as part of their existing funded units, IFED, PIPCU, DCPCU and NECVCU. All national police forces are sometimes required to conduct investigations and arrests in other Force areas regardless of local jurisdiction or any ongoing relationship between both Forces. Please see Pg 11 of the Outline Business case – City of London Police Existing Arrangements for more detail.
Question 7: “We refer to the point noted that DNO/GT financial contribution will be considered at a later stage; would it not be beneficial to consider this now? What are the reasons to exclude DNOs/GTs?”
Answer: At present, we have no evidential basis to justify any deviation from the normal RECCo cost recovery methodology. However, as with other RECCo costs, this remains open to review and may suitably be considered as part of consultation on extending the service beyond the initial three-year commitment.
Question 8: “Would suppliers be required to refer all cases of confirmed energy theft? Or are suppliers required to judge which sites are to be referred?”
Answer: We encourage suppliers to report all cases of confirmed theft as part of their reporting under TDIS, but separate consideration should be given to whether the case should be referred for further investigation and potential prosecution. An Energy Theft Strategic Threat Assessment will be developed by RECCo and the City of London Police, with appropriate input from stakeholders. This document will outline industry-specific threats, focusing on risks, vulnerabilities, and organised crime targets, guiding the ETU’s priorities and referral criteria. At this time, the focus is anticipated to be cases involving organised crime groups, professional enablers, repeat offenders and those targeting vulnerable consumers.
Question 9: “In response to question 12: – This will depend on the specifics of how the process works, i.e. if we are required to introduce extra steps to refer cases and provide additional data to the RAS/Police, we would need internal process changes and consider current staffing resource requirements. We would also ask how sensitive data is proposed to be shared, would there be a requirement for a secure portal?”
Answer: It is proposed that referral data is populated onto a defined form or file and sent via an SFTP or dedicated secure messaging facility. It is also suggested that a Referral Management System may be a standalone system or part of a wider Energy Theft data portal. The referral criteria and a secure referral process will be discussed and agreed upon with stakeholders before any go-live date. For more detail, please see Appendix 2 Pg 35 & 36 of the Outline Business Case.
Question 10: “The document references marketing. Will any marketing include I&C customers? Previous marketing campaigns have been focused on domestic properties. However, if we are paying for this package, our customers should be included.”
Answer: Previous Energy Theft marketing has been undertaken as part of the ETTOS service under the Stay Energy Safe brand. This does not focus exclusively on domestic properties but makes up a significant proportion of the targeted marketing activities. It is expected that any additional awareness marketing activities for the ETU will be focused on areas of concern, so it will be dependent on the type of cases that are referred. The marketing campaign can also re-iterate that ALL the energy industry supports the ETU, as ALL have potential benefits to gain from the success of the ETU and consumers.
Question 11: “Page 8 of the document talks about predicted numbers of energy theft broken down by commercial and residential properties, what has been used to make these predications and has the backing data been shared with suppliers? Specifically, the data around the estimated theft numbers for commercial properties, as a very engaged I&C supplier we are surprised that we have not been involved in any of these research/discussions.”
Answer: The detail included on Pg 8 under the ‘Case for Change’ heading is taken from the Theft Estimation Methodology (TEM), a report commissioned by RECCo and undertaken by Capgemini, which sets out a methodology and outcome of a calculation of the estimated value of Energy Theft. The TEM document is available on the RECCo Website here.
Question 12: “Whilst we are supportive of the proposal and can see the potential benefit to the industry as a whole, we are concerned this may not benefit a supplier who supplies only large I&C customers. We would ask that REC consider if I&C suppliers be excluded from this proposal?”
Answer: Energy Theft is not a problem exclusive to the domestic sector, as evidenced by the thousands of confirmed thefts at non-domestic premises reported to TDIS annually. We also note that the costs of undiscovered theft are currently allocated, albeit on a weighted basis, across the whole industry. Therefore, we believe this proposal will benefit all Parties, whether directly through engagement with the RAS and ETU for enforcement activity or indirectly through reduced costs currently attributable to non-technical system losses.
Question 13: “We’d need to implement the ETU escalation criteria into our BAU processes. This may include a change to contractual arrangements regarding SLAs for investigation duration (i.e. it may take longer for an investigation to be concluded if we wait for ETU assistance).”
Answer: Referral to the RAS and ETU should not impact SLAs, as cases will be referred to the RAS for consideration and progression to the ETU upon exhaustion of Party investigations and when ETU assistance is deemed the only viable next step to progress the investigation to a thorough conclusion.
Question 14: “It would be useful to understand what the equivalent of the RAS is for the Insurance Fraud Bureau and if parties find this useful.”
Answer: The Insurance Fraud Bureau (IFB) fulfils a broadly equivalent role to that proposed for the RAS in providing intelligence to the Insurance Fraud Enforcement Department (IFED) and other law enforcement agencies and facilitating industry collaboration. With its funding coming from the Association of British Insurers (ABI), the ongoing and growing scale of the IFB operations is testimony to the benefit the insurance industry considers it provides.
Question 15: “We believe this should be an inclusive process, ensuring that this criterion allows for the most effective use of resources. We note that there is a reference to Suppliers throughout the document and a comment on page 22 that states, ‘While the source of referrals may not be limited to Energy Suppliers alone,’ this is the only indication that we could find that references that this proposal relates to other parties being able to utilise this service. We believe that it should be clearly stated in the document who is able to use this service.”
Answer: The service is intended to be available to all energy suppliers, electricity distribution network operators, and gas transportation network operators whose cases meet the energy theft strategic assessment requirements. RECCo, the City of London Police, and stakeholders will formalise and agree on the strategic assessment before any go-live date.
Question 16: “As per response to Q.11, if there is an expectation the DNO are required to support investigations of supplier theft as indicated in the proposal, then provision to recoup this cost should also be included.”
Answer: There is no expectation of anything to change in the relationship between Suppliers and Network Parties and any collaboration that may take place during theft investigations. However, it is intended that the Energy Theft Unit will accept referrals from all REC Parties via the RAS. Networks have an existing allowance for loss reduction costs as part of RIIO-ED2 and RIIO-GD2 price controls. We further note that the ED3 framework consultation heavily focuses on loss reductions. Reducing theft aligns with minimising network losses since energy theft constitutes unaccounted consumption, impacting efficiency and greenhouse gas metrics. Therefore, we anticipate that Ofgem will appropriately recognise network operators’ efforts to tackle theft and other areas of operations.
Question 17: “It is not clear whether the reference to Network Parties is about supporting the ‘Supplier theft’ investigation or if it is there to accommodate a future plan to include Network parties in this proposal at a later date.”
Answer: The service is intended to be available to all energy suppliers, electricity distribution network operators, and gas transportation network operators whose cases meet the energy theft strategic assessment requirements. As mentioned above, nothing in this proposal would change the role and responsibilities of network parties but will facilitate closer collaboration between industry parties and the police.
Question 18: In terms of the heat map, would DNO have access to this?
Answer: The GB energy theft heat map is available via the Detertech Theft Portal and open to all REC Parties. RECCo will continue the Portal Trial until May 2025. A decision to provide the Portal as an enduring service will be made based on User feedback on applicable benefits. We expect to promote a wider rollout of Portal access to REC Parties in early 2025. If you wish to view a demo and gain access to the Portal meantime, please reach out and request the same at the following email address: Theft@retailenergycode.co.uk
Question 19: “Pg 10, Bullets 2 & 4; Pg 20 Limited Jurisdiction; Pg 33 ‘Enforcement’: – We are unsure of the Network’s requirement scope for this in terms of ‘Supplier Theft’. Clear criteria would be required where evidence and information are required from the Network, and we would expect this to be in exceptional circumstances given that this proposal does not reference ‘Network Theft’.”
Answer: The scope for this unit will be any case of Energy Theft investigated by any REC Party that meets the threshold requirements of the Energy Theft Strategic Assessment. There are numerous references to REC Parties and specifically Energy Networks throughout the document, with no mention of the solution only being intended to deal with Supplier Theft cases.
Question 20: “Pg 33, ‘Seizure of Assets & Compensation’: This would require the implementation of a new process in our business. It is not clear how this would be tracked from the project point of view or how it would be identified to the parties that are the victims.”
Answer: The seizure of assets, be it cash (over £1000), property or vehicles, for example – would be a matter for the prosecution process, and any associated conviction and confiscation order would be fed back to the Supplier as a matter of judicial procedure and not within the scope of the REC.
Question 21: “While the proposal outlines the problem and potential solutions, a detailed cost-benefit analysis is necessary. The sector needs clarity on how the financial and operational costs of the ETU will translate into measurable benefits. Will there be supplier compensation and or recovered losses?”
Answer: Supplier compensation and recovered losses will be determined based on the outcome of any successful prosecution and sanctions the Court applies. It is anticipated that media campaigns promoting the unit’s existence and subsequent successes will act as a deterrent to a proportion of the public who may otherwise have considered energy theft a viable opportunity because no visible enforcement deterrent currently exists.
Question 22: “There is no reference we could see regarding protecting Stakeholders’ brand reputation in the press and online. If and when prosecutions start and increase, this will undoubtedly be reported on and spoken about online etc., whether through the traditional press agencies or social media platforms etc.; what has been considered in this area?”
Answer: Please see Pg 18 of the OBC and Table 6 Key Risks and Mitigations on Pg21. One advantage of the ETU is that cases will be progressed for prosecution based on the Energy Theft Strategic Assessment criteria which will be focussed on professional enablers, organised crime groups and those targeting vulnerable households. It will not operate on behalf of a single supplier but for the entire Energy Industry, reducing the likelihood of adverse publicity for any single supplier. We consider that the emphasis on protecting consumer safety and safeguarding the vulnerable should be a positive rather than negative narrative and will prepare a robust communications strategy accordingly.
