Finally, following years of lobbying, Ofgem has introduced legislative changes that will change the face of Competition in Electricity Connections forever, finally creating a truly competitive and open market that will offer customers improved service and reduced costs.
These changes have the potential to revolutionise the customer experience by allowing Power On to deliver an end to end connection service to customers without any reliance upon the DNO.
Self Service for Power On
The new Competition in Connections Code of Practice was formally approved by Ofgem on 16 July of this year. The objectives of the Code of Practice can be summarised as follows: Distribution Network Owners (DNO) must, as far as reasonably practicable, minimise their involvement in the provision of new connections by Independent Connection Providers (ICP’s) to their customers.
Should an ICP require a service from the DNO to enable it to provide connections for its customer(s) then the DNO must provide the service on an equivalent basis as it would to its owns connections business.
Finally, DNOs must work to harmonise their processes and procedures relating to Competition in Connections in line with industry best practice thereby allowing ICPs to freely and easily operate across DNO boundaries.
Legally enforceable
The Code of Practice becomes legally enforceable through the new Electricity Distribution Standard License Condition 52 that comes into force on 30 October 15. The license mandates that the DNO must adhere to their Code of Practice which shall be published and maintained through regular review. In addition to the Incentive on Customer Engagement (ICE) that came into place at the beginning of the latest Electricity Distribution Price Control (ED1), the Code of Practice is a further incentive on DNOs to take a more positive and proactive approach towards Competition in Connections.
When Ofgem completed their review of the electricity connections market in 2014, they concluded that the most appropriate way to further develop the market was to remove the DNO from the critical path of their competitors that are offering connection services to their own customers. As a result, the Code of Practice has a strong focus on DNOs empowering their competitors to undertake previously non-contestable activities themselves much like the gas connections market which has successfully operated for the last 10 to 15 years.
Ofgem set out these minimum requirements which have now been incorporated into the Code of Practice.
This means that Power On in future will be able to liaise directly with their prospective customers to obtain all of the necessary information to:
– Undertake the study of the Distribution Network to determine the most appropriate point of connection;
– Complete the design for the network extension and any required reinforcement; and
– Carry out all of the works including the final connection and network reinforcement.
When approving the Code of Practice, Ofgem added an absolute requirement for the DNOs to propose changes to the Code by 15 January 2016 to make the processes for self-determination of point of connections to, and design approval of DNO networks adaptable networks more definitive, following the completion of further process trials and stakeholder consultation by the DNOs.
Power On has built its business on a commitment to, and proven track record of delivering first-class customer service in the provision of connections. Our sole focus is to deliver connections in a timely and cost-effective manner.
The challenge that now lies ahead is bringing all of this into business as usual. DNOs must provide Power On the same level of access to their network information as to their own equivalent connections business or service providers.
For many DNOs this will require changes to their IT systems and processes. Those who were not ready for the October deadline will be making this information available on CDs and other similar media to ensure that we have the opportunity to hit the ground running so that we can identify our own points of connection.
Many DNOs are still running pilot or proof of concept schemes to ensure the seamless transition to this new way of working. Power on, through its leadership of the Metered Customer Connections Group (MCCG), continue to work alongside its BUUK sister company GTC to lead the way, assisting DNOs to understand the requirements of the detailed processes for Self Determination of Points of Connections, Self-Approval of Designs and Self -Connection including the associated operational activities.
Power On has built its business on a commitment to, and proven track record of delivering first-class customer service in the provision of connections.
Next Steps…
The first draft of the Code of Practice set out at a high level what the DNO must undertake to enable Self Service to take place for ICPs. Changes are required to add some more detail and to address other issues that were excluded from the first version of the Code approved by Ofgem.
These changes will be made through the governance arrangements set out the SLC52 which outlines that any future changes need to be put to the Code of Practice governance 12 member panel comprising an equal split of DNO and Competitor electricity connections market experts.
Future proposed changes will be tested against the objectives of the Code of Practice. Where a proposed change is shown to have the potential better meet the objectives of the Code, a working group will be established by the Code governance panel to take the proposal forward. The working group will be tasked with creating a Change Report for presentation to Ofgem for their decision on where or not to direct the DNOs to update the Code of Practice with the proposed changes.
It is anticipated that the early proposals will look to mandate that DNOs provide IDNO customers with emergency response services and the ability to trade unmetered supply inventories under the DNO’s MPAN. Such changes will help support the development of IDNO networks; which in itself promotes Competition in Connections as many ICPs construct assets for adoption by IDNOs.
Finally after 15 years since its inception and following the full implementation of the COP can a truly open and competitive market place for new connections being considered as being realised.
This provides the customer with real choice and for Power On the opportunity to continue to be the national provider of choice. We look forward to the challenges of providing the additional enhanced services that we have been long fought for.
We believe that having control of the entire process will enhance our service offer and deliver improved customer service and experience all of which support our mission statement. “To deliver consistently high-quality service to customers to earn their long term loyalty”.
Bob Theobald
Managing Director
Power On Connections
Tel: 0845 2300 116
Mob: 07557 430558
bobtheobald@poweronconnections.co.uk
