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REC

In 2015, Ofgem launched the Switching Programme to increase consumer engagement and improve the energy switching experience for everyone. Its aim to deliver reliable, next day switching for consumers by replacing the existing switching services with a new Centralised Switching Service (CSS). ElectraLink have been instrumental in developing the detailed design providing expertise of current system architecture and regulation, as well as leading discussion to deliver a modernised simplified service.

A large part of the programme is development and implementation of the Retail Energy Code (REC). The REC has been created as a new dual fuel code with the aim of governing the Central Switching Service (CSS) and wider switching and registration arrangements. It is intended to replace existing retail codes, including the Master Registration Agreement (MRA) and Supply Point Administration Agreement (SPAA).

The REC objectives are to:

  1. To improve consumer experiences and perceptions of changing supplier
  2. To improve customer engagement in the market
  3. Offer consumers control over when they switch
  4. Offer a faster switch for consumers
  5. Encourage more effective competition by minimising market barriers to entry for newcomers

A key milestone in the creation of the new code was designation of REC V1 which govern the transitional arrangements necessary to facilitate the successful delivery of Ofgem’s switching programme. We are therefore in the Enactment Phase detailed below.

 

FAQs:

What is the background to introducing the REC?

In February 2015, Ofgem kick-started a programme of work to implement faster, more reliable switching. Their vision was to introduce a centralised registration service that would be implemented by the Data Communications Company (the DCC).

In May 2016 Ofgem modified the DCC licence to set out new obligations for their role in the Switching Programme. Through its licence they are required to contribute to the design of the Central Switching Service and switching arrangements to provide a platform for faster, more reliable switching.

Since then, Working Groups have been set up to consider policy, delivery, regulatory and commercial issues related to the design and implementation of the new switching arrangements.

What is the timeline for REC implementation?

There will be three versions of the REC for initial designation:

  • V1 covers the transitional arrangements;
  • V2 covers the core switching provisions;
  • V3 covers the areas not directly related to switching.

REC V1 was designated on 1st February 2019. It is intended that REC V2 and V3 are implemented together in 2021. These are being progressed via Significant Code Reviews (SCR) under Ofgem.

What is in REC V2?

REC V2 will contain the REC Main body with boiler plate governance provisions, e.g. change process, funding arrangements and Panel duties. It will also contain the technical documentation including User Interface documentation, system specifications etc.

In terms of the Operational Schedules, this would be:

  • Switching Schedule setting out end to end switching arrangements;
  • Address Management;
  • Data Management – covering processes relating to MDD and application of sanctions;
  • Issue Resolution – covering Erroneous Switch resolution, crossed meters, duplicate MPXNs;
  • Meter Reads – covering agreement of CoS Read and Disputed Read processes; and
  • Prepayment – covering Smart and Legacy prepayment provisions.
What is in REC V3?

REC V3 will add other existing schedules which are not necessarily related to switching, e.g: Theft, Green Deal, Priority Service Register, supplier agent interactions, metering.

What does the SCR do?

At the moment, switching arrangements are found in these codes: Master Registration Agreement (MRA); Supply Point Administration Agreement (SPAA); and Uniform Network Code (UNC). There are also some supporting elements being contained in other codes, such as the Balancing and Settlement Code (BSC) and the Distribution Connection Use of System Agreement (DCUSA).

Ofgem are leading an end to end process to develop the code modifications, including provision of legal text – and therefore, the standard modification process does not apply. There are two separate Ofgem led SCRs for implementing consequential code changes for REC V2 and V3. Each code will develop its own modifications noting the impact of switching requirements on their current governance. Then Ofgem will lead the consultation needed to develop the appropriate code changes and the SCR phase will end when the Authority made a decision on any modification proposals, at CSS go-live.

Which Working Groups has ElectraLink been involved in to develop the REC?

ElectraLink has supported a number of workstreams, including Regulatory Design Team, end to end Design, Security and Commercial to develop the REC provisions across version 1, 2 and 3.

  • RDT: The RDT has focussed on reviewing the current code provisions, in order to draft the main body and associated Schedules of the Retail Energy Code (REC), as well as the transitional governance required for switching.
  • Design Team: Firstly, this was leading role in the documentation of the data model and business processes reflected in Abacus. This then involved the review of DCC documentation e.g. the User Requirements Specification, and now it is the assessment of change requests.
  • Commercial: Support the DCC Procurement Industry Representative.
  • Security: Security advisory support services to the Switching Programme, including establishment of a security workstream plan and stakeholder engagement programme.
Which Parties will accede to the REC?

The REC will apply to the DCC, Gas and Electricity Suppliers, Gas Transporters and Electricity Distributors.

Has the REC Company been set up?

Yes. The REC Company (RECCo) will serve as the corporate vehicle for ensuring the proper, effective and efficient implementation and ongoing management of the REC. In particular, during the implementation of the Switching Programme, the RECCo costs will fall into two main categories:

  • administrative arrangements to support establishment and operation of the REC and of RECCo itself; and
  • services to support the delivery of the Switching Programme.

Once the new switching arrangements are implemented and  REC V.2 takes effect, which is due to be mid-2021, the RECCo will also be responsible for the payment of other REC governed services, including those of the CSS.

Has a RECCo Board been appointed?

An interim board has been appointed by Ofgem until such time as there is sufficient business for the enduring RECCo Board to be fully constituted; i.e. upon implementation of REC V2 and V3. The interim directors have been drawn from the existing SPAA Ltd and MRASCo Ltd boards, given the obvious overlaps in required expertise and competencies, and the fact that those individuals have already been through an industry selection process.

The interim directors are Kevin Woollard, Rachael Mottram, Steve Mulinganie, Tracy Pitcher and Richard Pomroy.

When will a REC Code Manager be appointed?

A procurement for the role of the REC Code Manager is expected in Quarter 2 2019, with an appointment expected in Quarter 4 2019.

Further Information on the REC

REC
REC Webinar 2019

A webinar update on the REC

Last May, our ‘Introduction to the Retail Energy Code’ webinar explained how the REC would impact SPAA and other industry parties. A lot has developed in the past 12 months, and with the upcoming Ofgem consultation this month ElectraLink’s Governance Services team has presented a new webinar. Here, SPAA parties and wider industry will get a preview of what we have done, what still needs to be done and what SPAA parties need to know for the next phases of the REC’s development.

Retail Energy Code
Retail Energy Code Webinar 2018

A webinar update on the REC

Here you can learn about progress on the REC, using ElectraLink webinars and documentation, such as Ofgem consultation responses.

Switching Programme Consultation

ElectraLink’s response to Switching Programme Consultation

Download

Electralink REC Vision

Electralink REC Vision

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