Ofgem recently announced that the Market Stabilisation Charge (MSC) will no longer be necessary and the REC arrangements will be allowed to expire on March 31, 2024. The MSC was initially introduced in February 2022 to manage the risks created by wholesale market volatility, which could lead to high consumer costs if suppliers left the market. Since its implementation, we have been responsible for managing the payment and invoice cycles for the MSC. Learn about Ofgem’s decision to retire the MSC and our work to improve its processes until closure below.
Why has Ofgem decided to retire the MSC?
Ofgem has published this document detailing their decision in full. They state that the MSC was always a temporary measure that would only be retained for as long as it was in the interest of consumers. They continue, “Our view is that market risks that the MSC is designed to mitigate, around instability and volatility, are now markedly less…As we are slowly seeing competition re-emerge in the markets, the MSC is reducing incentives for existing Suppliers to compete and potentially acting as a deterrent for new Suppliers to enter the market.”
We will continue to improve processes
Until March 2024, RECCo will continue to calculate and administer payments to and from Suppliers for all periods for which the MSC is triggered. We will continue to implement the enhancements to MSC processes which were previously requested by Suppliers, including providing MPXN-level invoice backing data. We want to reassure Suppliers that we remain committed to delivering this enhancement in the coming weeks. Not only will Suppliers automatically receive the backing data alongside the issuance of future invoices or credit notes, but they will also be able to request the same data for historic invoice periods. We will update you as appropriate as we move towards scheme closure.
Find out more
More information about Ofgem’s decision to retire the MSC can be found here. You can find out more about RECCo’s role at the bottom of our programmes page here.
For any other queries relating to the MSC, please get in touch with MSCenquiries@recmanager.co.uk
