Ofgem raises modifications ahead of RCC and new switching arrangements

The latest edition of our Faster Switching Service Report due to be issued this week includes the latest developments in Ofgem’s Switching Programme and the associated Retail Energy Code (REC).

Launched in November 2019, the Retail Code Consolidation (RCC) Significant Code Review (SCR) set out Ofgem’s intention to amalgamate the Master Registration Agreement (MRA), Supply Point Administration Agreement (SPAA), Smart Metering Installation Code of Practice (SMICoP) and Green Deal Arrangements Agreement (GDAA) into one new industry code, the REC.

Ofgem has since raised a suite of code modifications to facilitate the closedown of the MRA and the SPAA for electricity and gas respectively, with some requirements from the remaining codes to move to the REC. As such, the modifications listed in Figure 1 will ensure that the relevant codes are fit for purpose for RCC on 1 September 2021 and are able to facilitate cross-code change management.

The proposals would introduce a vehicle to give effect to the Cross Code Steering Group (CCSG) arrangements. The new steering group will support the development of proposals that impact on multiple codes and will be made up of one or more representatives from each affected code. Where cross-code proposals arise, the group would decide the Lead Code for the change, and this Code’s modification would be designated as the lead change or principal change. The proposal would then be progressed under the relevant code processes with the Lead Code administrator coordinating with other affected codes. The code administrators of the other codes would be able to raise consequential or subsidiary changes where the need for these has been identified by the CCSG. The REC Code Manager would also be able to raise consequential changes to other codes if needed. These proposals would need to follow the same timelines and be approved at the same time as the Lead Code proposal.

The new cross-code arrangements will add a new layer of governance to the current structure and represents a step towards the Code Manager approaches that will see administrators taking a more active role in raising and progressing modifications.

Ofgem expects to make decisions on all the RCC code modifications in July. If approved, the relevant industry Panels would then need to implement the changes ahead of RCC on 1 September 2021.

Beyond RCC

The regulator’s statutory consultation on proposed licence changes for the Switching Programme (SP) is due in December 2021, with the year ahead seeing SP and REC Company (RECCo) activity ramp up in the run up to go-live of the new switching arrangements in summer 2022.

Of note is RECCo’s establishment of a new forum to facilitate structured engagement between price comparison websites and suppliers to facilitate structured engagement between these parties. The forum continues the work of the Consumer Journey Forum set up in February 2020 to consider the impact of the introduction of faster and more reliable switching on the various journeys that consumers might take through the end-to-end switching process, and to identify any aspects of the journey which may cause issues and/or prevent them from having a positive engagement. The forum is expected to conclude its work by mid-October 2021.

We provide regular coverage of these issues and others affecting the Switching Programme in our quarterly Faster Switching Service. For more information contact l.heyworth@cornwall-insight.com. We also recently released a complementary podcast, ‘REC-ing your brain over faster switching?’, listen to our experts here.

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