One in, one out: Code Consolidation SCR opens as TCR draws to a close

The number of Significant Code Reviews (SCRs) that Ofgem is progressing shows little sign of diminishing with the launch of the new Retail Code Consolidation SCR on 29 November. This came barely a week after Ofgem’s decision on its Targeted Charging Review (TCR) and, since this has not yet formally closed, it means the regulator is now running no fewer than five SCRs.

The Retail Code Consolidation SCR is the programme under which Ofgem plans to amalgamate the Master Registration Agreement (MRA) and Supply Point Administration Agreement (SPAA) into the new Retail Energy Code (REC), which will allow a reduction in the number of industry codes from 12 to a still-considerable 10. It is therefore intrinsically linked with the Switching Programme, and hence one of the topics covered in the latest edition of our Faster Switching Service. In addition, the scope of the SCR also includes moving the Smart Meter Installation Code of Practice, Green Deal Arrangements, Priority Services Register, theft provisions and other metering codes of practice into the REC, with knock-on impacts on other codes including the Balancing & Settlement Code and Distribution Connection & Use of System Agreement. A distinct hurdle will be aligning the electricity and gas industry processes involved, which result in a lot of duplication.

The end result should be a rationalisation of retail-focused codes and Ofgem plans for this to be completed in early 2021, in advance of the new switching arrangements going live on 1 July that year. However, it will not be an easy task given the scale and complexity of industry codes, and the fairly limited number of people in the industry who fully understand them. BEIS and Ofgem are currently running a joint review into the future of codes and the only real consensus is that there should be a reduction in the number of codes. Full rationalisation and simplification of all codes will be an enormous exercise, so it is very important that consolidation of the retail codes – which are perhaps an easier starting point compared to balancing, settlement and network operation – is seen to be a success.

One step the REC is looking to take towards is the creation of a single market data catalogue, which is currently subject to consultation as part of the REC Technical Specification. This is intended to list all the data items sent and received between all market participants, not just suppliers, but also third parties like metering agents and price comparison websites. Ofgem said this would be a single digital platform for the industry, in line with Energy Data Task Force Recommendations to improve overall market efficiency. Metadata held in the existing catalogues will be migrated over to new registers in the REC, eliminating duplication but seeking to preserve how the information is held.

We cover the development of the REC and new switching arrangements in our quarterly Faster Switching Service, which provides a guide to the programme and the expectations on participants. For more information, contact Steven Britton at s.britton@cornwall-insight.com or on 01603 542126.

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