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CMA Investigation: Final Report Published

The Competition and Markets Authority (CMA) has published its Final Report on the Great Britain energy market investigation, first opened in June 2014 following Ofgem referral.

The Final Report details the CMA’s package of over 30 remedies which seek to bring in both technical and regulatory changes to refresh the market and ensure it works in consumers’ interests. ElectraLink continues to support the CMA’s assessments and looks forward to working with Ofgem and the industry to deliver a number of the CMA remedies surrounding data in the electricity and gas market and changes to the industry code governance.

Industry Code Governance:

The CMA has concluded its decision on a number of measures to reset and refresh existing code governance arrangements.  It’s also clarified the responsibility and roles of DECC, Ofgem and code administrators to ensure that future regulatory and policy decisions are robust and efficiently delivered.

ElectraLink believes the reforms announced will lead to welcomed consistency, consolidation and transparency within the code governance framework.  This is turn will help the increasing number of new entrants in today’s market by providing a more consistent and accessible governance structure. ElectraLink was cited in the report in a number of areas, including our support of the licensing of code administration and delivery bodies.  The report also adopted our recommendation that small and new players are fairly represented within the design of the new Ofgem Consultative board which brings stakeholders together to discuss and address issues which cross the industry.

We look forward to working with Ofgem to understand the detail behind the code governance measures which build upon Ofgem’s publishing of the Code Governance Review (Phase 3) Final Proposals on 31 March 2016.

Debt Assignment Protocol

The CMA has found restrictions arising from the Debt Assignment Protocol (DAP) hindering indebted prepayment customers’ ability to switch supplier. As a result, Ofgem is to take appropriate steps to ensure that changes to the Debt Assignment Protocol (currently being developed by Ofgem and the industry) are implemented by the end of 2016, and in particular in areas relating to objection letters, complex debt and issues relating to multiple registrations.

Alongside supporting the implementation of code governance changes to the SPAA (including recently approved SPAA CP  16/ 352), ElectraLink will also be supporting the industry in migration to a more structured transfer mechanism for sending DAP data flows, using the DTS. We believe the use of the DTS can support the DAP process by providing validation on file formats to reduce instances where suppliers can reject flows due to inconsistencies, improving the efficiency of suppliers receiving and managing the information and consumers ease of switching.

Half-Hourly Settlement

The CMA is to advise Ofgem to conduct a full cost benefit analysis of the move to mandatory Half-Hourly Settlement and to consider options for reducing the cost of Half-Hourly Settlement. DECC and Ofgem shall be advised to jointly publish and consult on a plan outlining the estimated timetable for such interventions, alongside responsibilities for the introduction.

ElectraLink fully supports the benefits of Half-Hourly Settlement in enabling consumers to monitor consumption more closely, buying energy more efficiently and understanding costs.. In 2015 we completed a migration of the DTS to a cloud-based infrastructure which enables the quick and cost-effective scaling of the service to support step-change volume growth in DTS traffic as demonstrated by recent price reductions to DTS users. We will work alongside Ofgem to ensure the low cost of providing additional data transfer capacity over the DTS, resulting from increased volumes of data arising from half hourly settlement, is correctly captured in the cost benefit analysis.

For more information about the CMA investigation and the remedies in full please visit the CMA’s website. If you would like to talk to ElectraLink about how we are actively supporting the delivery of CMA remedies, please contact Rachael Mottram at [email protected].