Director of Operations
This month we are celebrating the first anniversary of the operational REC, which went live with the implementation of REC v2.0 on 1 September 2021.
However, the foundations of the REC were laid much earlier and over the last 12 months we have seen the fruition of all the hard work put in from teams across industry in the years leading up to Retail Code Consolidation.
The ambition for the REC was significant... to be a best-in-class industry code, putting consumer outcomes at the centre and providing market participants with an accessible and comprehensible set of rules that are as easy as possible to understand and comply with.
The creation of a new industry code gave us the opportunity to address many of the criticisms of the code governance models in recent times, at the same time as providing a dual fuel retail home for the new more reliable and faster switching arrangements, which successfully went live with the implementation of REC v3.0 in July this year.
So one year in, how are we measuring up in those key areas?
RECCo has implemented a delivery model with a strategic oversight body responsible for the development of the REC to meet to evolving needs of industry and to drive change to deliver consumer benefits. As set our in our annual forward work plan, we identify who is best placed to deliver each workstream. This may be a RECCo led team or an outsourced trusted service provider.
Where work is delivered ‘in house’ we apply a robust project delivery methodology to ensure delivery on time and within budget. The most recent example was the delivery of the Market Stabilisation Charge (MSC). Where work is outsourced, this is delivered within a framework agreement with our service providers who are required to deliver to performance and quality standards set out in commercial contracts.
This applies to our ‘BAU’ service delivery contracts, such as the Code Manager and Enquiry Services, and standalone projects like RECCo’s ongoing project to develop an energy theft estimation methodology for use in future years to come. This model ensures that REC service providers are accountable to RECCo, and RECCo is accountable to REC parties for the quality delivery of the REC.
As we have established this new model of working, we have also recognised the role we have to play in wider industry programmes, that operate across the Codes. We have established the Cross Code Steering Group which allows change to be developed in parallel across multiple regimes, removing duplicated time and effort for parties.
More recently, recognising the material impact the MHHS Programme will have in the retail market as well as on settlement processes, we have established an informal working group of industry experts to support RECCo’s MHHS project team to ensure that RECCo can act as an advocate for its stakeholders.
We are committed to further consolidation and simplification of areas which impact the retail market. Later this year we will deliver a single set of retail metering arrangements, consolidating the four existing REC metering codes of practice into one, and a simplified audit and assurance regime under a single service provider.
It is important to remember that consolidation isn’t limited to the governance arrangements, but where possible the systems and processes that deliver them. As a minimum we want to limit the proliferation of new standalone systems or data sets that are used in the retail market; and longer term, we want to help to join up existing systems within the scope of the REC and promote easier access to, and sharing of, data between them to the extent that they will lead to better retail consumer outcomes.
RECCo has set itself an ambition of seeking to help re-instill consumer trust in the retail market. At the moment that looks to be as challenging as ever, but we are working to make a difference where we can.
RECCo has appointed Helen Charlton to its Board, and the Code Manager has appointed Sue Jackson as Consumer Advocate, both to advise, assess and challenge RECCo policy and REC changes to ensure they deliver consumer benefits.
We are also working with the REC Code Manager and a number of consumer bodies to create a Consumer issues log. This will include known consumer complaints and issues with existing retail market arrangements. This log will be used to help prioritise change under the REC and the development of the REC change roadmap. We look forward to sharing this with our stakeholders in coming months.
We wanted to reduce unnecessary barriers and ‘red tape’ to allow easier access to the REC itself and the retail energy market to better enable change and market innovation. The REC ‘legal text’ has been drafted in plain English. It is available in the public facing area of the REC Portal in downloadable PDF documents and in digital format in the Energy Market Architecture Repository (EMAR).
The EMAR allows you do to much more than just browse the digital REC – you can access the REC Data Specification including Market Messages, view end-to-end business process diagrams and identify the impacts of future planned Code and system changes on your internal processes. Aligned with the Code Manager’s objective of continuous improvement, you can join the Future of the EMAR event on 8th September by registering here.
In line with the principles set out in the Code Administration Code of Practice (CACoP), the REC Change Process has many similarities with the other Codes, but its differences set it apart. Under the REC, anyone can raise a Change Proposal (CP). The proposer does not have to have identified a solution and does not have to commit time and resources to pushing the CP forward.
The Code Manager is responsible for the assessment and development of solutions, in consultation with industry, and developing a robust business case for change which is presented to the Change Panel. The change prioritisation matrix ensures that those changes that align with the Codes Roadmap and deliver the most benefit to consumers and the retail market overall are progressed first. This model is key to addressing Ofgem’s concern under the historic arrangements that incumbent organisations have limited incentives to promote and deliver change that could benefit consumers.
Fortnightly meetings of the Change Panel ensure the timely progression of change and analysis by the Code Manager shows the average progression time for a REC CP is 88 days compared to the industry average of 137. With a focused self-governance model, of the 60 Change Proposals progressed since 1 September 2021, only 9 require Authority Determination.
Under this model we have been able to better utilise industry resources with fewer standing committees and working groups, we instead have targeted sessions to focus on key issues or Change Proposals. Regular drop-in sessions, bulletins and podcasts keep everyone informed and engaged and this move to more digital ways of working has allowed far more stakeholders to engage and contribute.
You can read more about the initiatives that the REC Code Manager has implemented over the last 12 months, and their plans for the next, in the Code Manager’s article in this month’s newsletter and in their Annual Report to be published in the Autumn.
As you can see, for an industry that is sometimes criticised for being slow to change, we have made significant steps forward over the last 12 months. Ultimately however, measures of RECCo’s success are driven by the experiences and perceptions of our stakeholders. We will shortly commence our first annual stakeholder satisfaction survey where we will ask you, our users, to rate your experience of our REC Service providers. Responses to this will drive areas for future development.
And so, we look to the future. The new switching arrangements are still in their infancy, with governance transitioning from the Switching Programme to RECCo over the next few months, and no doubt the year ahead will continue to be a period of further refinement of the new arrangements. But we have seen over the last 12 months the foundations of a new model that allows us to continue to deliver a quality operational service alongside significant programmes of change that will continue to transform the industry for the benefit of consumers and the retail market as a whole.
As the curtain falls on August, the REC Code Manager toasts its first anniversary and reflects on the highlights of the past year
When the REC V2.0 arrangements went live on 1 September 2021, the full Code Manager service was launched. Since well before day one, we have been working hard to ensure we can consistently deliver an effective service to the REC. Critically, we had to hit the ground running to facilitate a smooth transition from legacy code arrangements to the new ways of working.
As early as March 2021 we appointed our first Operational Account Managers (OAMs). The OAMs provide targeted assistance to REC Parties, allowing greater accessibility to support and information. Since Go-Live our OAMs have held 540 meetings with REC Parties, and we’ve received some great feedback about their service.
The OAMs have been particularly valuable in providing onboarding support for new applicants – over 130 applications have been supported by the OAMs in year one.
A high volume of market entry applications kept our Performance Assurance function particularly busy over the first three months of the year. We’ve progressed over 230 applications and are closely supporting many organisations undertaking Controlled Market Entry. We’ve got our eyes on long-term improvements to market entry processes which could bring efficiencies across the energy codes landscape.
We’re grateful for the support of REC Parties submitting data to allow us to monitor market participant performance. Since Go-Live we have analysed over 8.3 million processes across 13 risk drivers, which has allowed us to develop performance thresholds based on real market data. Through this approach, we can drive effective improvements across the industry. We’re reviewing our Performance Assurance Operating Plan and look forward to publishing the outcome shortly.
We designed the REC Change Process to support agile delivery of change that benefits the consumer. 60 REC Change Proposals have been raised in the first year (plus many more for Category 3 Products). Notably, in July 2022 – in a significant milestone – the release of REC V3.0 introduced requirements around Faster Switching.
In the lead up to V3.0 Go-Live, 570 attendees joined 10 stakeholder information events as we explored the impacts of the release. We’re deep into a project to further improve the effectiveness of the Change Process and will publish the outcomes shortly.
The REC Portal underpins many stakeholder interactions with the Code Manager. Our vision is that it should be an accessible, digital platform facilitating two-way communication across stakeholder groups. We are not there yet – but we have plans to make sure your requirements are met as the platform evolves.
We know there is work to do in this space, but we are proud of some of the changes that we have been able to introduce. This year we delivered a new REC Wiki with hundreds of knowledge articles about the retail market arrangements, as well as a REC Metering Hub providing a central source of information relevant to those in metering. Plus, we’re about to launch a new dashboard solution which will mean that Parties can see the data against which they are assessed, and therefore more actively manage their performance.
The REC Portal is also the home of the Service Desk. We’ve seen a tremendous amount of traffic through the Service Desk with over 10,000 queries raised in the first year. 70% of queries are resolved within one day and the creation of a new live chat tool is helping us to respond to you even faster.
We’ve been listening to your feedback on the Energy Market Architecture Repository (EMAR); the home of the digital REC and REC Data Specification. We’ve made enhancements to REC Data Specification, and will shortly be launching our brand new “REC Digital Navigator” within EMAR, to help with engagement and navigation of the REC.
There are many more milestones, highlights, and lessons to explore than this article’s word count allows. We’ve published our Annual Report with a full review of our service, and we encourage you to take a look. We thank all stakeholders for their cooperation over the past year.
We’ve learnt a lot about how our service will need to evolve to continue to support you. We hope you agree that for the most part we have been able to hit the ground running and we do appreciate the time you are taking to work with us to overcome outstanding hurdles.
