The operational processes review of the Electricity Enquiry Service (EES) and Gas Enquiry Service (GES) has been completed. We have identified areas to improve and streamline the processes. These are grouped into two categories:
Access to Enquiry Services; and
Maintenance of Enquiry Services
The next step is to deliver the improvement plan. We will potentially be automating the EES/GES access process. We will also be looking at the logistics of opening access to data, where this aligns with RECCo’s strategic aims, values and principles.
There has been a rise in the use of online platforms such as Facebook, Telegram, and LinkedIn to promote fraudulent services which falsely claim to help consumers reduce their energy bills. While the actions of some Revenue Protection Agents has proven to be abhorrent, this does not apply to agents who work on behalf of energy suppliers for legitimate purposes in investigating energy theft.
Stay Energy Safe’s mini-campaign
To dispel misconceptions and fight fraud, Stay Energy Safe has launched a mini-campaign and published an article on its website to educate the public. Such services which claim to reduce energy bills are illegal – Stay Energy Safe’s article can be found here.
The campaign focuses on the misconceptions surrounding meter removal and the proper approvals required.
Please share this article within your business and with your customers.
The Market Stabilisation Charge (MSC) was first triggered in November 2022 for Invoice Period 8 and has remained in effect since then. However, suppliers and other interested stakeholders will have noticed that for Period 10 we deviated from the usual invoicing timeline and issued the invoices five working days later than initially scheduled, distributing them on 14th February 2023.
Explaining the delay
Having run the calculations to determine Suppliers’ net positions, we realised that once the invoices were generated, one Supplier was liable to pay a large sum into the scheme and then receive an almost equivalent amount 15 working days later. This situation arose as the Supplier had acquired another business, and instead of moving the acquired MPIDs to their original business, they had remained under the rebranded acquired Supplier. The Supplier is now carrying out a migration activity and consolidating all customers under its original MPIDs.
Had we gone ahead with Invoice Period 10 as usual, it could have impacted the Supplier’s business and compromised the intentions of the scheme. The MSC scheme is net-zero, and as the funds are distinct from other REC charges, non-payment would have heavily impacted the proportion of credit that losing Suppliers would eventually receive.
For these reasons, we determined that the right thing to do was to withhold the invoices. At the same time, we worked together with the Supplier to agree to reassign its MPIDs in the MSC system so that the final calculations reflect its net position across its entire supply business. The MSC is in place to mitigate the risk of Supplier failure by providing quick compensation for lost customers and RECCo considers that the actions it took support that aim.
Providing earlier notice in the future
We recognise that Suppliers needed to be given more notice of any invoicing delay, and we have now brought forward our manual reviews of the invoices so that any similar situation which arises in future is picked up and communicated earlier. We thank Suppliers for their cooperation in adapting to the altered timescales and commit to refining the process as the charge continues to be in effect.
A reminder of Market Stabilisation Charge (‘MSC’) principles
Supply licence and REC obligations for the MSC became live in April 2022, with our systems and processes designed, developed and implemented ready for live operation from July 2022. We manage the collection and processing of industry data to enable invoices for MSC to be raised and then distribute payments received for each MSC invoicing period. We’d like to take this opportunity to refresh Supplier’s understanding of some of the principles of the scheme:
Only domestic Suppliers are required to participate and any customer switches to or from a non-domestic Supplier are excluded from the calculations. If you are a non-domestic Supplier and believe you have been incorrectly included in the scheme, please contact the Finance team at RECCo to arrange your exclusion.
The gaining Supplier is liable for the MSC for the gained customer.
MSC calculations are done on a weekly basis and invoiced on a 4-weekly cycle
For each Supplier, their gains and losses in the MSC period are netted off prior to any invoice or credit note being raised.
Gaining Suppliers are required to pay their invoices within 10 Working Days.
All amounts payable by a Gaining Supplier must be paid in full without any set-off or withholding.
Failure to pay MSC charges is an event of default under the REC.
All monies received in an MSC period are paid out to Losing Suppliers in the next MSC period. Where monies received is less than expected for a MSC period then Losing Suppliers’ payments are scaled down in proportion to the amount received by RECCo.
All monies received, regardless of when received, will be paid out to the Losing Suppliers on a rolling reconciliation.
RECCo carries out active credit control processes on chasing invoice payment.
A gaining Supplier’s liabilities are calculated by multiplying the MSC (as notified by Ofgem) by the annual consumption of the customer they gained. The Annual Quantity (AQ) is used for gas and the Estimated Annual Consumption (EAC) for electricity. These will be the latest calculated values included within existing industry data sets prior to the switch. Data is extracted from the Data Transfer Service for electricity and from Central Data Services Provider systems for gas.
Our solution mobilisation and delivery were designed to deliver an end-to-end automated process with no manual intervention utilising secure File Transfer protocols throughout.
In agreement with Ofgem, we utilise existing industry data and accept such data as accurate and correct. Data is aggregated and anonymised and not reported at an MPxN level.
Suppliers can dispute their charges but must pay their charges pending resolution of the dispute.
RECCo is happy to help support Suppliers through any queries they may have.
Find out more
Visit our website to find out more about MSC and view the latest payment and invoicing details.