Utility Week

10 | 15TH - 21ST NOVEMBER 2019 | UTILITY WEEK Policy & Regulation This week RO payment shortfall will be mutualised Ofgem confirms compliant suppliers will have to pick up the bill for Renewables Obligation shortfall Ofgem has confirmed that Renewables Obligation (RO) payments will be mutualised aer suppliers missed the late payment deadline. Last week, Utility Week revealed that failed energy sup- pliers le behind an unpaid RO bill of £72 million for 2018/19. The figure, from BFY Con- sulting, is well above the threshold for activating the mutualisation process, which last year was triggered for the first time aer suppliers failed to make more than £58 million in late buyout payments by 31 October. Ofgem on 7 November confirmed that it is completing its calculations and internal checks on late payments received and funds to be redistributed. "The shortfall amount will therefore be mutualised in respect of both RO (England and Wales) and RO (Scotland)," it said. The regulator is yet to reveal the full amount owed, but is expected to publish this on its website next month. Recently, Ofgem released its latest consultation on the supplier licensing review regarding ongoing requirements and exit arrangements and the mutualisation process was one issue it examined. Under the proposals, a pro- portion of credit balances and government scheme costs will be protected. Furthermore, chief executive Dermot Nolan has proposed to introduce monthly RO payments. Speaking at Utility Week Congress last month, he said: "There are elements of the SoLR process, the way ROs are issued and collected, that have given some firms the licence to be, shall we say, a little too venture-some in their activities. We are closing such gaps." AJ ENERGY Administrators of failed firms 'caused avoidable harm' Ofgem has accused insolvency practitioners appointed to failed energy suppliers of "extremely disappointing" behaviour in their dealings with customers. The regulator's head of compliance, conduct and enforcement, Tessa Hall, has written an open letter calling on administrators to agree to a set of common standards if they interact with customers of defunct retailers. She warned that while Ofgem has no explicit remit to regulate administrators, it has the option to file a complaint, refer the issue to The Insolvency Service or make a public statement about how customers have been treated. Hall said: "We have observed a mixed level of service and regard for consumers, including the vulnerable. Some practices have been very good and some have been extremely disappoint- ing, and we believe some poor practices have led to avoidable consumer harm." ELECTRICITY Centrica proposes double charge fix Centrica has proposed a lasting solution to the unintended dou- ble charging of electricity stor- age for contracts for difference and capacity market costs. The modification to the Balancing and Settlement Code (BSC), named P395, would replace an interim solution introduced in February that only rectified the issue for standalone facilities. Prior to its implementation, the charges would be applied twice to stored energy – once when it was purchased by the storage operator and again when it was sold on to the end user. "To the extent that suppliers pass on these charges to their customers, the issue may act as a barrier to market for certain forms of generation and storage," the proposal document explains. Unlike the interim measure, P395 would introduce the neces- sary registration, metering and calculation process to remove the liability from behind-the-meter storage systems such as those co-located with solar farms. The proposal document says several of these processes have already been developed for two related BSC modifica- tions – P375, which aims to introduce meter splitting to enable consumers to buy and sell power through multiple par- ties, and P344, which will allow companies to create aggregated balancing market units without being the registered supplier for its components. It calls for the modification to be implemented at the same time or shortly aer P375. Nolan: Ofgem is 'closing the gaps' Political Agenda David Blackman "Main parties fighting it out for green votes." The first skirmishes done, much of the early debate is now focus- ing on spending plans. Labour and the Greens have both been competing for the eco-vote by saying they would splash the cash on measures to tackle rising emissions. Labour has made the biggest noise, with shadow chancellor John McDonnell's pledge last week to splurge £250 billion over five years on a National Infrastructure Fund. The Greens went double or voters who backed the Greens in the 2015 general election. And a few percentage points could be crucial where Labour will be fighting against a unified Leave candidate following the Brexit Party's decision not to stand in Tory seats. One commentator has sug- gested that this year's general election will be more like 650 local elections rather than a single national poll due to the very different dynamics at play in different parts of the UK. quits, literally, by promising to invest £100 billion on delivering a carbon neutral UK by 2030 in the unlikely event that they form the next government. The outcome of the next elec- tion won't hinge on the tussle between the Greens and Labour. Apart from holding on to their sole constituency in Brighton, the odds are strongly against the Greens adding to their tally of one MP, even aer last week's decision to form a Remain alli- ance with the Liberal Democrats and Plaid Cymru. With the polls beginning to tighten, though, Labour will be desperate to repeat its 2017 trick when it won back many of the

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