RECCo’s Case for the Transfer
The transfer of the CRS to RECCo presented an opportunity to align switching services with REC’s consumer-focused governance framework, enabling:
- Enhanced service delivery;
- Strategic alignment with REC obligations and
- Operational, management, and financial challenges to be addressed.
We developed a robust case and provided evidence that we could deliver additional value to industry and consumers through this transfer. Notably, the overwhelming majority of consultation respondents who expressed a preference supported the transfer, recognising its potential benefits. However, Ofgem ultimately concluded that these benefits are outweighed by risks that have not yet been fully qualified or quantified.
Continued Oversight and Focus Areas
Despite this decision, we remain committed to:
1. Providing Assurance and Oversight:
We will continue to monitor DCC’s performance as a REC Party and address the significant performance issues identified with the CRS. However, we maintain our position that the current governance arrangements and operating model may not fully support resolving these issues.
2. Advocating for Governance and Operating Model Improvements:
In light of Ofgem’s decision, we will undertake a review of the current CRS governance arrangements and operating model. We believe that strengthening the governance and operating model is essential to:
- Effectively incentivise service excellence in operations and change management and
- Support the retail aspects of energy market transformation.
We look forward to Ofgem’s support in implementing any necessary changes to the REC.
3. Driving Efficiency and Cost Savings:
We acknowledge DCC’s identification of possible cost savings in CRS provision from this review, and we will ensure that these savings are fully delivered to RECCo parties.
Planned Initiatives
While the CRS transition will not proceed in the manner proposed in the Ofgem consultation, RECCo remains focused on delivering meaningful improvements to the Switching service. Our initiatives include:
- Addressing Quality Improvements: Designing and implementing processes to enhance data accuracy and efficiency annually.
- Technical and Process Enhancements: Pursuing enhancements to service delivery models, technical systems, and security architecture to ensure compliance with REC obligations.
- Data and Reporting: Refining reporting frameworks and updating knowledge repositories to align with REC standards.
- Stakeholder Engagement: Continuing our transparent Communication and Engagement Strategy to foster active stakeholder participation.
- Commercial and Financial Management: Ensuring robust management of switching service providers and contracts, safeguarding operational continuity and financial accountability.
Conclusion
We remain dedicated to delivering reliable, high-quality switching services through our governance structures. However, there is a clear need to strengthen the governance arrangements and operating model for switching to align with best practice. We believe that targeted reforms to CRS governance and the operating model could unlock significant opportunities to enhance performance and service excellence while addressing the risks associated with a wholesale transfer.
We are committed to collaborating with DCC and Ofgem to improve the overall service to stakeholders. We will provide further updates as this work progresses.
We would like to thank all those who supported the development of the case for transferring the CRS to RECCo. The insights and comments we received will help inform our ongoing discussions with Ofgem and DCC on how best to meet the performance challenges highlighted.
For any further information, please contact RECCo at info@retailenergycode.co.uk.
