We welcome the opportunity to respond to the consultation, ‘DCC Review Phase 2: Governance and Centralised Registration Service.’ Our non-confidential response represents the views of the Retail Energy Code Company Ltd (RECCo). It is based on our role as operator of the Retail Energy Code (REC) and potential recipient of the Centralised Registration Service (CRS).
Our response
RECCo is a not-for-profit, corporate vehicle ensuring the proper, effective, and efficient implementation and ongoing management of the REC arrangements. We seek to promote trust, innovation, and competition in the energy market whilst keeping positive consumer outcomes at our heart. Through the REC, the services we manage, and the programmes we run, we are dedicated to building a more effective and efficient energy market for the future. We are committed to ensuring that RECCo is an “intelligent customer”, ensuring efficacy and value-for-money of the services we procure and manage on behalf of REC Parties, including those which constitute the REC Code Manager. We would bring all of these attributes to our delivery of the CRS.
As proposed in Section 6 of the Consultation, we fully support Ofgem’s view that there may be sufficient reason to transfer responsibility for the delivery of the CRS to RECCo for the following reasons. The transfer of responsibility to RECCo will bring benefits, including:
- Increased scrutiny of the service providers’ delivery to drive service improvements;
- Streamlined governance to enable decision-making for Switching under the REC to become more effective;
- Synergies with other retail market services delivered by RECCo to provide a platform for change and contribute to the energy industry’s move to decarbonisation;
- Enhanced service delivery to enable benefits over and above those outlined in the Switching Outline Business Case to be realised, for example operational efficiencies in areas such as
market entry, and; - Service improvements, by addressing operational issues with the Switching Operator role which currently cause difficulty and frustration for end users, for example, the incident management process and the delivery of change.
The transfer can be achieved with minimal if any, impact on the service at the point of transfer. We have taken a risk-based and value chain analysis approach to defining how transition will work. This has enabled us to identify the most appropriate transition treatment for each component of the CRS and build key mitigations into the transition plan. We have already started to engage stakeholders in the transfer process through an Advisory Forum which we will run throughout the transition to enable users to engage in the development of the future Service Delivery Model and the transition plan and raise any concerns they may have. Transferring the CRS in September 2025 will be optimal because it would take place before Market-wide Half Hourly Settlement goes live and de-risks the DCC Licence renewal process
by allowing bidders to focus on their approach to delivering Smart Metering. The transfer also provides the best opportunity to separate the Switching service from Smart Metering and thus realise all that Ofgem and industry envisaged for the new faster, more reliable Switching service, including:
- Priority Services Register improvements through using better address data;
- An approach to address quality monitoring which focuses on the benefits to users arising from improved address quality;
- Reduction in the level of erroneous transfers;
- Better integration with Third Party Integrators;
- Data quality improvements through triangulation against an additional dataset and;
- Increased championing of Switching through supporting consumers to get the best deal by highlighting potential savings and publishing consumer-focused information.
We have included a more detailed document providing supporting information on our approach to delivering the CRS and the transfer of the service from DCC to RECCo as an attachment in our full consultation response here.
We also support the review of DCC’s governance arrangements. We have set out our detailed comments in the annex and note the potential for extending the approach to aligning governance with best practice for other licensees. While we support this in principle as it will lead to greater consistency and certainty, Ofgem should adhere to the principles of good regulation and consider the merits of each provision on a case-by-case basis, ensuring that each is necessary, proportionate and appropriately targeted while avoiding unintended consequences.
Read our response in full
Read our full response, including our answers to consultation questions 1 to 17 here.
