Our Performance Assurance Framework sets out how performance is measured and assessed, but crucially focuses on interventions to improve standards for consumers and make market processes smoother for participants.
Unsurprisingly, operating for the first year against this backdrop has had some challenges, particularly related to the provision of performance related data submitted by REC Parties. With continued development of the REC Portal both the Code Manager and and Parties have needed to be flexible; we're working hard to make this process more efficient and effective.
We've also been working against the backdrop of unprecedented challenges in the energy market as a whole, including the rising wholesale energy prices and the high number of Supplier exits and Supplier of Last Resort (SoLR) events, as well as industry preparing for significant change in preparation for Central Switching Service (CSS) go-live on 18 July 2022.
Notwithstanding these challenges, we have been able to make good progress across a number of areas. Key Performance Assurance activities we have undertaken include:
Implementation of internal data dashboards, establishing a new way of detailed monthly performance assessment. The outputs of these dashboards are used to inform and support Performance Assurance Board (PAB) decision making.
Delivery of four industrywide engagement sessions, including deep dive sessions on specific topics covering the Performance Assurance Report Catalogue (PARC), Market Entry process, Qualification and Maintenance and the Debt Assignment Protocol (DAP) process. See more information about REC Events
Completed direct assessments of Electricity Enquiry Service (EES) and Secure Data Exchange Portal (SDEP) access, publishing our findings to the PAB and industry in order to resolve gaps in the controls around provisioning and revocation of access to the data, and whether access granted is in line with the Data Access Matrix (DAM). The findings highlighted issues in role design and assignment, contributing to a Change Proposal to update the DAM - planned to be implemented in November 2022.
Completed a direct assessment of the Priority Services Register (PSR) in order to identify data quality issues. We plan to conduct the assessment three times a year to assess DNOs and GTs against their obligations to maintain the PSR. The first assessments found several findings and concerns which will be explored in further detail during the assessments due to take place in the next quarter.
Developed a Peer Comparison for Erroneous Switches, which is now published to industry on a monthly basis as an incentive for performance.
Between REC go-live on 01 September 2021 and 31 March 2022, we:
In September 2021, we published our Performance Assurance Operating Plan (PAOP) for 2021/22. In addition to our overall risk monitoring approach, the PAOP set out the specific Performance Assurance Techniques (PATs) and wider activity we would deliver in the first year of operation. In this section, we'll summarise our progress against the PAOP.
1. Peer Comparison
Peer comparison is used as an incentive to improve performance, and involves performance data being displayed in a comparative table so that Parties can compare their performance against their peers. In our first year of operation, we stated we would perform Peer Comparison on address quality and Erroneous Switches. To date, this PAT has been used to monitor Erroneous Switches.
Although REC Portal functionality delays have constrained delivery of this PAT, it has had positive feedback from the PAB, with agreement that the publication of the peer comparison will be an effective way to incentivise Parties to improve performance.
We had planned to produce a peer comparison based on resolution of plot to postal addresses, however as this is monitored as part of a range of data quality measures by the Switching Programme Data Working Group (DWG), we have not progressed an address quality peer comparison as it would duplicate work across the industry. We have been developing plans to transition relevant aspects of data quality monitoring previously performed by the DWG into our ongoing Analytics for Risk Monitoring.
2. Direct Assessments
The direct assessment PAT is in place to assess if processes/operations are being handled in line with the REC. In our first year of operation we stated we would conduct direct assessments related to SDEP and EES data access. These direct assessments took place in December 2021, with findings presented to the PAB in January 2022. We completed direct assessments of PSR accuracy based on DNO records in January 2022.
Our review found that direct assessments of EES and SDEP have been useful to contribute towards the DAM review and the findings are now being used to contribute towards a Change Proposal to better align and improve the DAM. From the assessment we expected to understand whether the EES/SDEP users’ access was appropriate. In addition we identified three further issues and findings which we presented to PAB in January 2022. As part of the assessments we were able to collaborate with the Service Providers and they were helpful with providing the information that we required in order to conduct the analysis.
The direct assessment on the PSR has also been useful to understand whether the PSR is accurate and maintained appropriately. We had productive conversations with the owners of the registers, as well as those assisting in keeping them up to date, to confirm they had processes in place that worked effectively. All Parties were helpful with providing the data that we required in order to conduct the analysis.
3. Performance Charges
Performance Charges are a technique used to act as a financial incentive to improve performance. In the first year of operation we stated we would develop Performance Charges related to Erroneous Switches and Service Provider Performance. Following discussion with the PAB and further analysis of Ofgem’s Guaranteed Standards of Performance (GSoPs), it was decided not to take forward a Performance Charge for Erroneous Switches at this point in time.
The Service Provider Performance Charge is currently progressing through the formal change process, as an update to the Performance Assurance Schedule is required in order to implement the charge. This Performance Charge will apply to Service Providers who do not have contracts in place with RECCo (CSS, GRDS and ERDS). REC Parties should be assured that all Service Providers are held accountable if they don't deliver to the standards that industry rightly expects.
4. Specific Topic Monitoring (STM)
STM focuses on small groups or individual Parties and therefore focuses on a specific area of monitoring. In our first year of operation we stated we would conduct STM related to metering, specifically assessing compliance of MEM parties against the SLAs surrounding the completion of Meter Technical Details (MTDs) updates and associated communications.
STM related to Metering is in development, with initial data available from February 2022 onwards. This will continue to be a priority area for the Code Manager looking ahead to the coming year.
5. Market Entry and Maintenance of Qualification
The Market Entry and Qualification process makes sure that Metering and other Parties can deliver REC processes to the high standards expected, protecting customers and existing businesses from the consequences of underperformance.
All REC and Non-REC Parties are required to maintain their qualification each year to remain compliant. From go-live, we outlined the schedule for the annual cycle of Maintenance of Qualification (Q&M). All submissions from Parties must be completed by a Company Director or equivalent representative. We notify Parties 30 days before the date they are required to submit the relevant forms via the REC Portal. Any Party that fails to submit Q&M submissions, or where we believe that the Party is in breach of the Code, is escalated to PAB.
Q&M has been ongoing since the start of the reporting year. During this time, we have engaged with industry to develop a suitable timeline for approval by the PAB before implementing the timeline with Q&M submissions starting from January 2022 to coincide with the delayed implementation of the necessary REC Portal functionality. We review submissions and the Party is notified of any remediation via the REC Portal.
A key area of focus for us was trying to avoid Parties having to complete Q&M during periods of high resource demand due to external industry priortities.
Over the coming months, we'll work closely to set up correct permissions for the REC Director Role on the REC Portal, as well as continuing to streamline the Q&M process through lessons learned. Click here to access the latest version of the Performance Assurance Operating Plan on the REC Portal
We recognise several challenges which have resulted in a need to adapt our approach to Performance Assurance. One of the primary challenges has been with respect to data.
Parties are expected to submit data on a monthly basis via the REC Portal, however many Parties have not submitted data which has impacted our ability to monitor performance. We continue to engage with Parties to resolve this challenge and it will continue to be an area of focus.
On reflection, initial engagement around the PARC prior to REC V2 go-live could have been improved. We are addressing this issue through increased and improved communication on the PARC, and it will continue to be an area of focus. We're also looking to improve communications with Parties in relation to data, including through their OAM interactions.
In addition to Party data submission, data is sourced from API endpoints provisioned by ElectraLink. Data quality issues have been identified in the meter operations endpoints, which delayed commencement of the Metering Specific Monitoring.
DTN data is used to perform analysis to reduce the data collection burden and seek to collect standardised data from all Parties. However, we are aware that the use of the DTN is not mandated in all cases so we're seeking to further understand the level of coverage afforded by our current analysis.
The Code Manager has since issued a Request for Clarification to all Electricity MEMs regarding their individual use of the DTN within the metering operation processes to gather insights on how often organisations are using DTN flows versus alternative mechanisms and whether there are certain processes for which the DTN is used more than others.
Information from Parties indicated that the DTN is used in the majority of cases except for internal flow communication.
We have also experienced challenges with the delivery of Performance Assurance activity due to the delays and limitations with REC Portal functionality. The introduction of externally facing performance assurance dashboards through the REC Portal will allow REC Parties to proactively monitor and improve their performance. This will also increase the amount of data and reporting available to Parties.
We will continue to use a risk monitoring approach to identify key priorities for Performance Assurance activity and intervention. In terms of developing and improving our service, we will take forward the following priorities into 2022/23:
Annual review and refresh of the PAOP, using data and market performance from the previous year to identify priorities and key activities for the upcoming year. This will involve close engagement with the PAB and will be reported to industry in Autumn 2022.
Monitoring new risk drivers in light of CSS and REC V3 implementation, to identify performance against key new areas of the Code.
As we consider our priorities for the coming year and drive cost efficiencies, we are aware that challenges may be encountered. Specifically:
The annual review of the PAOP will be more difficult to complete in some areas due to limitations in market performance and risk data. Given the flexible approach we've had to take, some areas in the PAOP are less advanced.
Following publication of the Prepayment Schedule and Retail Risk Register, we faced challenges obtaining the data required for monitoring the associated PPM Risk Drivers. We plan to hold a Prepayment workshop with Parties later in 2022 to discuss the key industry issues and a vision for the future.
As previously mentioned, we recognise that the DTN is not used by all Parties across all data flows which hinders the completeness of Performance Assurance Techniques.