The 1st of September 2021 marked the dawn of the Retail Energy Code (REC) and its regulation of the electricity and gas retail markets. The previous day marked the end of the Supply Point Administration Agreement (SPAA) and its linked codes, as well as the end of the Smart Metering Installation Code of Practice (SMICoP) and the end of ElectraLink’s role as Code Manager of those agreements. Various energy theft governance frameworks transferred from ElectraLink’s remit to the REC managers earlier this year.
As SPAA Code Manager and leaders in theft strategy, our work with these codes and their arrangements, changes, processes and people has taken us on a journey of success, learning and reflection. As an organisation, we would like to share observations of these moments for the benefit of customers and a smooth net zero transition.
Code governance success
ElectraLink secured the contract to manage SPAA in 2003 – our first milestone in governance services. SPAA’s linked codes which provided rules for metering practices followed in 2012 and 2013, and the Theft Risk Assessment Service in 2014, with other key codes secured, we built our code management portfolio throughout the years. With thousands of change proposals, meetings, reports and queries passing our desks since then, we have achieved many successes and learnt several valuable lessons throughout the years.
Providing value for money to our customers is perhaps one of our biggest achievements. The transformation of the energy market is busy and expensive, so we have added value wherever possible to provide exceptional cost control without compromising on what we offer and deliver. We believe our annual customer survey results prove this, as does the cost of delivery. Our customer service has rarely faltered and communication with Code Parties to clearly explain complex concepts and requirements has been and continues to be strong.
Over time, we have also witnessed a transition in ways of working with Code Parties and what they require of us. Initially, market participants undertook much of the work required to fulfil processes, make improvements and understand and meet code requirements. However, a more efficient and rewarding approach involved ElectraLink taking on additional responsibilities and projects, developing the contents, and then presenting solutions to our customers who would then contribute to iterations, exemplified by our work on documenting the Review of Gas Metering Arrangements (RGMA). This has reduced time to change, built new relationships and trust, and reduced the pressure on industry players to overcome hurdles.
These two key successes have laid the ground for ElectraLink to innovate for our customers, particularly where we married our strengths in governance and data transfer. Our role as SPAA Code Manager has also made the code more flexible, with several data flows and catalogues being introduced to SPAA and mandated for transfer across the trusted Data Transfer Service (DTS).
A further success is the change in regulatory philosophy we have brought to the industry. Moving many aspects of best practice and compliance from a centralised governance regime to a system of self-governance has made market participants more aware of their roles and responsibilities in the market. This has provided room for the energy regulator, Ofgem, to focus on more emerging challenges such as decarbonisation, protecting vulnerable customers and innovation projects.
Observations on progress
The same thousands of interactions with the codes and their customers which brought progress to the energy market also provided opportunities to reflect on where gaps could have been filled better, conversations could have been more comprehensive, and progress could have emerged sooner.
The market-beating low cost to serve was a tight collaboration between ElectraLink and the SPAA Board. Both sides identified ways to maximise value from every penny spent and agreed costs for additional work which benefitted Code Parties. However, on some occasions this caused delay to small-scale projects due to the need to always seek Board approval. An alternative approach could have been to allocate a budget for small project delivery overseen by the Board with the onus being on the Code Manager to demonstrate delivery and value for money. This framework would have provided direction for where investment could be injected to create efficiencies and improvements as needed.
Hindsight has given us a chance to reflect on timing and urgency when planning to enrich codes with additional responsibilities. The Erroneous Transfer Performance Assurance Board (ETPAB) was launched in June 2019 to assist suppliers in reducing the number of ET incidents and minimise the time taken to resolve ET escalations and queries. The Board and ETPAB framework operated across SPAA and the Master Registration Agreement (MRA) to enable a joined-up, dual fuel approach. As supplier switching picked up speed over the years and became more actively encouraged, we believe a dual fuel ETPAB was necessary much sooner to improve end user engagement with ET resolutions. The ETPAB benefitted industry and end users while it was in operation and many more would have seen the benefits with more time to run and improve.
A diversity of perspectives is also necessary for improvements, and this was obvious in the formerly slow-moving energy market. Phenomenal new ideas and opportunities have arisen from new, small, disruptive market participants who are geared towards solving problems in the future. While wisdom and experience have their strengths, when they join forces with a fresh perspective, we see sustainable, high-value progress. In SPAA, at times we saw overwhelming representation from large legacy organisations and a low level of engagement from potentially under-resourced newcomers; a trend we hope evolves in the most beneficial way for other Codes.
ElectraLink’s role in the transition
The end of SPAA, its linked codes and ElectraLink’s management of theft governance has been a busy task involving many stakeholders and functions. We worked with Ofgem and the REC transition team on a detailed handover plan to pass all documentation and assets to the REC Code Manager and transferred all ongoing queries and topics to ensure flawless continuity of service.
ElectraLink has always been committed to a complete transition of knowledge and tactics as the REC took over from SPAA and other code stipulations. Although 18 years of energy market code governance experience is difficult to fully pass on, we have maintained feedback loops and helplines with the REC teams to provide answers and solutions wherever possible. Throughout the transition we have received positive feedback and recognition from customers of old codes and the incoming code authorities; I am so proud of what my colleagues at ElectraLink have achieved during this feverishly busy period. You can see a more detailed list of some of the transition work on our website. With SPAA, SMICoP and Theft responsibilities now under other code administrators’ remit, we are eager to give the Distribution Connection and Use of System Agreement (DCUSA) our full attention to innovate and boost user experience for DCUSA parties.
The REC has been created to improve the energy experience for end users in homes and businesses. Improving the speed of change and focusing on areas that engage customers will take power away from traditional ways of working which have long been abandoned in other industries such as banking and telecommunications. All transitions are also learning curves and some risks need to be taken. I hope a recap of many years of learning serves food for thought for many stakeholders in the energy market. Now, with the REC requirements in full swing, it will be exciting to see how these new aspirations are delivered in the real world while advancing the interests of various energy market businesses and personalities. We wish the code administrators the best of luck in delivering the future of the retail energy market.