Theft Best Practice Forum Minutes 17 January 2019 at 10:00 Amba Hotel Charing Cross, The Strand, WC2N 5HX

Attendee Company

Daher Aden [DA] Bristol Energy

Ruby Currie [RCu] British Gas

Piers Merritt [PM] British Gas

Andy Channing [AC] EDF Energy

Lucy Watson-Smith [LWS]

Jennifer Pickering [JP] E. ON Energy

Ash Sherratt [AS] E. ON Energy

Mike Wilkinson [MW]

Matthew Simkiss [MS] Npower

Shamil Udayar [SU] Npower

Ross Clarke [RCl] Npower

James Scafie [JS] SSE

Claire Cantle Jones [CCJ] SSE

Sarah Perriam [SP] SSE

Sarah Mcdermott [SM] SSE

Charlotte Williams [CW] SSE

John Sanderson [JS] First Utility

Tracey Burton [TB] Co-operative

Paul Hart [PH] UK Power Networks

Jack Brayshaw [JB] BES Utilities

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In Attendance

Austin Gash [AG](Secretariat) ElectraLink

Michelle Simpson [MS] (Chair) ElectraLink

Fungai Madzivadondo [FM] (Secretariat) ElectraLink

Mark [ME] (part meeting) Experian

Jon Dixon [JD] (part meeting) Ofgem

Apologies Company Ian Main Dave Ackers Xoserve Dave Mitchell SGN Hayley Berry SSE Emma Hegarty SSE

OPEN SESSION

1. Introductions

1.1 The group noted the introductions.

1.2 The Chair provided an overview noting that the Forum seeks to improve Supplier engagement and help industry participants develop and share knowledge of general theft arrangements.

2. Last Meeting Minutes

2.1 ElectraLink received minor comments regarding the September Theft Best Practice Minutes. The updated meeting minutes were circulated to members prior to the meeting. There were no further comments provided during the meeting. ElectraLink took an action to amend the September 2018 meeting minutes and upload to the SPAA and DCUSA Websites.

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ACTION: TBPF _20190117/01: Last Meeting Minutes

ElectraLink took an action to amend the September 2018 meeting minutes and upload to the SPAA and DCUSA Websites.

3. Actions Feedback – September Meeting

3.1 The Chair noted that the September Forum actions had been circulated prior to the meeting however given the number of documents issued it was worth running through all actions to provide a complete update and address questions from the group.

3.2 For action TBPF/20180605/07 - ElectraLink to investigate the use of data flows to report instances of identified theft, it was noted that the SPAA Schedule 33 report had been shared with the Allocation of Unidentified Gas Expert (AUGE) and gaps have been found when comparing against other data sets, such as TRAS data and Joint office reports. ElectraLink has been engaging with the Xoserve and the Joint Office to help determine a solution to improve the current Supplier and Shipper reporting processes. The Chair advised that a proposal to set up a joint Working Group will be put to the UNC and SPAA panels in January.

3.3 Against action TBPF/20180605/12 for ElectraLink to speak with Elexon to find out if Suppliers are reporting lost electricity units into Elexon and consider possible changes to the reporting processes, it was highlighted that the issue was previously discussed at an Issues Group however no progress has been made on if the requirement to report lost energy units should be changed. A member of the group suggested a possible mechanism which could facilitate the use of the TRAS data for settlement reasons. ElectraLink took an action to take this question back to the Theft Issues Group (TIG).

ACTION: TBPF _20190117/02: TBPF/20180605/12

ElectraLink took an action to take the below question back to the TIG:

• Whether there is a possible mechanism which could facilitate the use of the TRAS data for electricity settlement purposes.

3.4 Against action TBPF/20180912/01 for The Theft Issues Group (TIG) to consider whether Crimestoppers should be granted access to Data Enquiry Service (DES), it was noted the Central Data Service Enquiry (CDSP – Xoserve) are unable to provide Crimestoppers access to DES. As an alternative Xoserve are looking at a customer website where customer account details can be checked to get the same information as DES. It was pointed out the only issue is that the system does

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not include commercial data, Crimestoppers will therefore still need to send commercial tip offs to Xoserve for matching.

3.5 Attendees also suggested that this would be useful for Suppliers to use. The Chair advised that this was being looked at by the TIG.

4. Unsafe Situations Update

4.1 Against action TBPF/20180912/02, ElectraLink to discuss the reporting of unsafe situations and interpretation of ‘suspected’ to be discussed with the TIG, it was noted ElectraLink have had further discussions with the TIG, have contacted the relevant groups and are awaiting their response. It was agreed for this item to be carried forward to the next Theft Best Practice Forum in April.

ACTION: TBPF _20190117/03: Unsafe Situations Update

ElectraLink took an action to carry agenda item Unsafe Situations Update forward to the next Theft Best Practice Forum in April.

5. Improvements to the GTDIS Post Year 1 and General Q&A on Incentive Scheme

5.1 ElectraLink has carried out a review of Gas Theft Detection Incentive Scheme (GTDIS) Schedule 39 following the first year of the scheme and has discussed the following proposed improvements with the TIG. At the end of the GTDIS Year 1, the Scheme Secretariat (ElectraLink) carried out a lesson learnt exercise. The Secretariat presented the improvement areas to the Theft Best practice Forum for information and comment.

5.2 The TIG have been looking at the list of items which need to change prior to the commencement of the Incentive Schemes for 2019. Considering timings, the recommended changes will progress within an Urgent Change Proposal (CP) ahead of next scheme year. These changes will include the undermentioned:

• Credit & Debit - Improvement to change wording to reflect whole numbers to be used for supply point market share

• Individual Theft Targets - Improvement to change number of decimal places for rounding a target of less than one

• Incentive Pots – Improvement to communication of the theft incentive scheme pot value prior to scheme year

• Incentive Scheme Reports – Improvement to only include participating Suppliers in the monthly report

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• Debit and Credits – An insolvent company is deemed to not be a ‘Qualifying Supplier’ at the end of the Scheme Year – legal advice sought. Improvement to be made to include invoicing timelines

• GTDIS and ETDIS Items – Change to be implemented to reflect only the target to be reviewed annually

• GTDIS and ETDIS Methodology Review - SPAA Section 2.11– Amendment that this will be published after SPAA EC approval.

5.3 The group noted there will be an end of year report going to the SPAA Board recognising there were many issues in the first year of the gas scheme, particularly around debits and credits for year one and setting targets for year two.

5.4 When calculating the final debit and credits for the gas scheme year one, ElectraLink encountered some issues regarding insolvent Parties and Supplier of Last Resort (SOLR). The Chair covered off some of the SOLR scenarios with the group which have been addressed ahead of the following scheme year. The group noted these scenarios have been clarified by SPAA’s legal advisors.

5.5 If acompany ceases trading during the scheme year they will not be included in the final debit and credit calculations as they are not deemed to be a ‘Qualifying Supplier’. Should a company become insolvent after the scheme year ends and before invoicing, they would be a ‘Qualifying Supplier’ and a debit or credit would be issued, and a debit may remain unpaid if there are insufficient funds in the insolvency.

5.6 The Chair provided an update on the Independent Review of the Theft Target Methodology. It states in the code for gas year three that the TRAS Service Provider will produce a methodology for setting the target. Experian’s proposal has been put forward to the Theft Steering Group (TSG), however, there has been discussions in both the Theft Issues Group and TRAS Expert Group around the fairness of scheme year two and three targets and whether the apportionment of the targets between the domestic and commercial sectors is equitable.

5.7 An accountancy firm, Moore Stephens has been appointed to complete the independent review. It has been agreed that the review will include whether the targets for gas scheme year two and three are fair and equitable, which includes a review of the Experian proposed methodology for gas year three. This has been approved by the TSG and Ofgem are supportive of the review.

5.8 A letter of engagement from Moore Stephens has been received and they should start the work week commencing 28 January. Moore Stephens findings will be issued to the TSG around early March to help them to make a decision to either accept or reject the methodology proposed by Experian for the year three gas scheme. Should the TSG reject the methodology put forward, the Code states to refer back to the previous methodology. Experian will not be producing a new methodology each year, as the licence states it should be a review of the theft targets each year and

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not the methodology. The methodology will be fixed for three years onwards. The Chair pointed out that Moore Stephens will be looking at the electricity target apportionment also.

5.9 The Chair noted the methodology review will only be published to Suppliers after the SPAA EC and DCUSA Panel have approved it.

5.10 A member of the group asked the below question:

Question: What should happen when a company merges with another, or is bought out?

Response: The Chair agreed to clarify and circulate the answer to members.

ACTION: TBPF _20190117/04: Improvements to the GTDIS Post Year 1 and General Q&A on Incentive Scheme

ElectraLink took an action to clarify what happens when a company merges with another or is bought out during the scheme year and circulate the answer to members.

6. Introduction to the Retail Energy Code (REC)

6.1 The Chair introduced the REC noting that Ofgem are having a full review of the licence. As theft will be part of the review there will be an opportunity for the industry to provide feedback and influence the review. The Chair requested members of the group provide any feedback around the obligations and licence conditions to Jon Dixon from Ofgem when he arrives for the panel session.

QUESTIONS –Retail Energy Code (REC)

6.2 Question 1: Do ElectraLink believe a review of the theft licences to be a good thing?

6.3 Response: The Chair responded to say yes. A review of the theft licences will be a good thing as it should help to iron out any inconsistencies between the Licence and the Codes

6.4 Question 2: With these obligations on Suppliers to detect, investigate, prevent and deter theft, why should certain Suppliers continue to adhere to these obligations when others clearly ignore them knowing there will be no consequence from Ofgem?

6.5 Response: The Chair responded that this would be a good question for Ofgem in the panel session, and a useful point to pick up as part of the licence review, given that there is an obligation to have a TRAS in place but no obligation on Suppliers to use the data.

6.6 Question 3: When Suppliers decide to investigate a theft certain inspection costs are incurred and the reward from investigating that theft do not out weight the incurred cost. Would the review of the licence conditions reweight the balance between profit and loses when investigating theft?

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6.7 Response: The Chair responded that as part of the licence review, Ofgem would like to have a full review of the value of the incentive schemes.

6.8 Question 4: What are the timescales for the licence review, if any?

6.9 Response: The Chair advised that John Dixon from Ofgem will be able to update the attendees on this, however, there is a very interesting challenge around the TRAS and ETTOS re-procurement where JD will be writing to SPAA and DCUSA regarding a new Direction to replace the one that has expired. Ofgem have agreed to various actions including the production of a timeline to support the review. The Chair pointed out that It would not be effective to agree a five-year contract and then change the licence conditions relating to the redesign of the TRAS and ETTOS. The plan is to move the theft provisions into the REC by 2021.

7. TRAS Technical Working Group

7.1 The Experian representative, Mark England ran through the TRAS Technical Working Group (TWG) covering off current activities and past and current elements of the TWG pipeline.

7.2 The TWG was established to bring together both Experian and Industry Subject Matter Experts to discuss what opportunities are available to develop and improve the service. The TWG are also involved in suggesting proposed contractual changes (for example, reviewing the results of proposed scorecard changes). The TWG influence the Roadmap for the service and made up of Industry attendees primarily from operational and analytical teams including those who directly work on leads. The TWG feeds into TEG for decision-making and is open for new participants from across the industry. It acts as an ideas forum, is not agenda driven, but collaborative. Experian hold bi-annual workshops (rotating between Nottingham and London), with monthly WebEx calls for updates.

7.3 The Experian representative provided a summary of the Commercial Coverage Expansion project. The Commercial Coverage Expansion piece of work address a gap in the current coverage. Currently the TRAS uses supply point address as critical component to identify key characteristics about a business location. By matching a business to a supply point address, this leaves gaps in the coverage and a need was identified to improve coverage in the commercial sector. In November 2017 three options to address the issue were presented to the TWG. A prioritised option was taken forward for internal development. A model to address this gap was prioritised with the TWG and throughout the development of this model, it was agreed by TWG members to run a test before recommending live implementation to the TEG. The implementation of the model is expected in 2019 (subject to SPAA and DCUSA sign off).

7.4 The Experian representative provided an update on the Proof of Concept. In 2017, a TWG member provided sample pre-payment data and an analysis of this data highlighted the value that could be added to the service. The analysis confirmed the pre-payment data illustrated the highly predicative power of this information. This was presented to the TEG who requested an extended exercise to

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confirm a business case for enhancing the model. The TEG have approved a proof of concept including four Suppliers, which is currently underway.

7.5 The proof of concept will run for a total of six months, three months for Suppliers to provide data and three months to monitor the feedback given. This will then be fed back to TIG and TEG with the hope of a final Contract Change Notice with the full solution being submitted.

7.6 The Experian representative updated the group with the background and scope for the Aperture TRAS Data Quality Review initiated by Experian. Discussions at TWG and TEG have covered Supplier address quality, and how differences in address quality can impact benefits that individual Suppliers derive from the service – poor quality address can impact match rates within the service. This is a one-off review of Supplier address quality using Aperture, an Experian Data Quality product, which takes place in 2019.

7.7 Final deliverables from the exercise will be fed to both Suppliers and TEG and TWG. Individual outputs from the Data Quality review will be distributed to Suppliers - These will include Supplier results and a comparison to the TRAS “averages”. Suppliers will have opportunity to discuss the findings with the Experian Data Quality team.

7.8 The Experian representative provided some background to the DataLabs TRAS Review. In previous TWG workshops they discussed the opportunities that they now have to review the methodology and approach to outlier selection and scoring. One exercise that Experian have initiated as a result of this is a bottom up review of the scoring approach by the Experian DataLabs team.

7.9 The DataLabs are a multi-disciplinary group of data scientists with expertise in advanced analytics and machine learning, as well as other advanced statistical methods. In 2019, the DataLabs team will be reviewing the current approach to modelling, applying their techniques to the rich data they now have on energy theft. They will make a series of recommendations back, which will be reported back to TWG (and then TEG) This may influence future scorecard developments.

7.10 The group also note other discussion points for future workshops, such as:

• Smart Meter Data

• Alignment with Best Practice (Policy Rule Review)

• Alternate Data Sources

• Linked Theft/networks

7.11 The group noted the next workshop is currently being planned. The expected date will be in May 2019.

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8. General Experian Q&A Session

QUESTIONS

Question 1: Regarding key words, Experian highlighted the more obvious buzz words, but could you provide members with the least obvious key words?

Response: Experian agreed to take this request away and circulate the answer back to the group.

ACTION: TBPF _20190117/05: Experian Q&A

Experian took an action to update members of the group with the least obvious key words found in their analysis. Question 2: When address referencing, is it just post-office documents Experian are using, or do Experian use other sources such as the Land Registry?

Response: Experian only use post-office documents for the moment. However, they are looking at other areas such as billing addresses and contact numbers.

Question 3: There are some concerns about profiling. How do you weigh up a desire to give an accurate output to your commercial customers with concerns around political correctness?

Response: Experian explained that’s where their Compliance team would step in. Most predictive characteristics tend to tie into geography and if you build a score card around the most predictive you discard other options. The score would be progressed by the analyst, then reviewed by the scorecard analyst to confirm it is only inputting certain aspects. If there is sensitive information, they would then take to the Compliance team for a steer.

Question 4: Regarding the dual fuel response from Experian which was circulated to members of the forum, if you have two separate Suppliers who supply the property, and one Supplier provides the gas and the other provides the electricity, what is the process for when theft is identified at the property? Would both Suppliers received any alerts, and would this increase the risk score for this property?

Response: At the moment, if it is an outlier (low consumption) it will generate a higher risk score on the other supply and get a flag on the outlier. The risk would be increased only in line with the characteristic. Experian confirmed there are two potential gaps, first being what if it is not an outlier? Secondly do they inflate the score anymore because there has been prior theft at this postcode? The Experian representative went on to say they are looking at further flagging concepts. However, next steps will be changing the policy. Experian agreed to include this scenario in the February working group and to go back through minutes from the last working group and find the original conversation for circulation.

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ACTION: TBPF _20190117/06: Experian Q&A

Experian took an action to include this scenario in the February working group and to go back through minutes from the last working group and find the original conversation for circulation. Question 5: Will Experian be holding Hunter training any time soon?

Response: The Experian representative noted they hold a regular quarterly workshop set up for new Suppliers, accompanied by quarterly webinars, broken down into one-hour topics. The webinars are to help bridge the gap for where companies also have staff turnover.

Question 2: Why do certain cases raised on Hunter sit ‘un-parked’? There is concern that these confirmed thefts will show as companies not reporting any thefts.

Response: The Experian representative agreed to pick this particular query up with TB from the Co-Op Energy offline.

9. Discussion Topic 1 - Encouraging DNOs/GTs/MOPs/MAMs/Data Retrievers to alert Suppliers to suspected tamper

9.1 JS provided a presentation entitled ‘Encouraging DNOs/GTs/MOPs/MAMs/Data Retrievers to alert Suppliers to suspected tamper’. Over the past six months First Utility have come across two issues which they believe may also be issues for other Suppliers.

9.2 First Utility have created a way of categorising alerts, which are ‘eyes on alert’ and ‘tip offs’ or data interference. Eyes on alerts are incredibly high quality, taking into consideration the time taken First Utility would like to ensure there is a very high pass rate for theft, however, these alerts don’t come often.

9.3 With the incentive scheme in place, and a methodology which decides what the residential theft detection target is, JS suggested the current methodology is weighted to Suppliers whose portfolio include the undermentioned:

• Large Pre-payment portfolio

• Landlord type Supplies

• RP Team Capability

9.4 The quality of alerts coming through to the field force are really high and the photos received are of great quality, however it is hard to get a photo from TRAS, ETTOS and UKRPA leads. It was suggested the amount and quality of alerts being received through the allocated avenues are not enough to hit the targets and more should be done from third parties. It was noted it is the Supplier’s job to decide

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which leads to take. JS presented some slides evidencing that DNOs and GTs have the capability to identify tamper but often aren't doing so, therefore an obligation should be directed at the DNO/GT to ensure they are effectively allowing unsafe supplies and tampers to go be reported. In JS slides it also highlighted that Meter Operators (MOP), Meter Assets Managers (MAM) and Data Retrieval (DR) have the capability to identify tamper but often aren't doing. MOP/MAM/DRs are appointed representatives of the Supplier and the obligation should be directed at Suppliers to ensure their representatives perform. OFGEM SLC states the following:

• The licensee must take (and ensure that any Representative takes) all reasonable steps t

• detect Theft

• investigate suspected Theft

• prevent Theft once detected

9.5 JS pointed out the word ‘Detect’ means to actively look for tampers and alert the Supplier whenever a tamper is found, following on by stating there is an obligation already exists, but maybe this could be more tightly worded to improve performance. The suggested solution to the group was there should be more obligations on DNOs and GTs to ensure they are doing more to help Suppliers detect theft. There should be training for DNOs and GTs on revenue protection (RP) services. The group noted both DCUSA and SPAA Codes of Practice seem to use the word "representative" to describe the revenue protection inspector i.e., the person who investigates suspected theft and not the person who detects it in the first place. It was put forward to the group whether more work on the Codes of Practice is need.

9.6 A member pointed out that GTs are making the safe site, however, they may not be going back to Suppliers for further information. PH confirmed this is the same for DNOs, and he suspects this may be an unrealistic request to ask DNOs to train all personnel to an RP provider level. When DNOs were established, the revenue protection stayed with the DNOs, whereas in gas the RP moved to the Suppliers. It is very hard for any Supplier to start off from scratch. It is easier to identify pre-payment meter theft, however a cash return on pre-payment is less likely than a credit meter. It is even harder when recovering gas theft. There are all sorts of reasons why there are differences.

9.7 PM pointed out that in the past it has been quite hard for people to report thefts and if the process for field operatives is cumbersome, they will not report it. British Gas now operate an incentive scheme that encourages operatives to report thefts.

9.8 The group agreed they need to do more to encourage third parties to ensure more alerts are being passed on to Suppliers. ElectraLink agreed to take this back to the TIG for further discussion.

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ACTION: TBPF _20190117/07: Encouraging DNOs/GTs/MOPs/MAMs/Data Retrievers to alert Suppliers to suspected tamper

ELectraLink took an action to take this back to the TIG for further discussion.

10. Discussion Topic 2 – Visit Co-ordination – Complete Chain of Custody

10.1 JS provided a presentation entitled ‘Visit Co-ordination – Complete Chain of Custody’. With the SPAA and DCUSA Codes setting out the safety concern response times, it was suggested to ask for more information from the people reporting the safety concern at the first instance, as this will help with the investigation and getting their RP team out within the timeframes. At the moment they are losing the race in every instance of a safety concern and must call upon a MOP/MAM to ensure the site is safe. The presenter questioned what evidence would suffice when looking to prosecute.

10.2 A member pointed out in terms of chain of evidence for police, a photo of a meter will suffice If you have your photograph and all other evidence has gone, this could still be classed as a proceedable case. One slight flaw from electricity to gas is that you would need to retain the evidence for investigation purposes.

10.3 The presenter suggested it may be worth having a de-minimuslevel for supporting documents when reporting theft which would withstand the Ombudsman. A member confirmed that a photograph is enough, and a de-minimuslevel may act as a counterproductive policy as people would aim to do the bare minimum.

10.4 JS suggested the Industry should establish a sufficient chain of custody of evidence to hand over to the RP inspector when they get to site.

11. Theft Obligations and Processes

11.1 The Chair presented some questions around Theft Obligations and Processes received from members prior to the meeting.

QUESTIONS

Question 1: Since the implementation of GDPR, what are the main challenges that Suppliers have encountered when dealing with both theft allegations and compiling case evidence?

Response: There are concerns around sharing data with external organisations, such as councils. There are clauses in the GDPR act relating to crimes. If a company is more risk adverse, it will put up all the barriers before issuing the data. One issue is the retention of data as for some thefts data may be needed from years before to identify the start date. If Suppliers do not have this data, they would

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not be able to file a full case. You may use this information to determine responsibility to help support a case rather than an assessment of theft only.

Question 2: How do we keep consistency of theft reporting bearing in mind the expanding number of Suppliers in the energy market?

Response: arties who have not submitted their data will be escalated to SPAA and DCUSA and to Ofgem, however, it has not been confirmed what Ofgem will do with this information. There are obligations and rules, but there are no consequences curently

Question 3: We have a lot of reports come in about ‘Energy theft’ where the sole lead for the suspicion is the non-payment of invoices, can this be classed as Energy Theft?

Response: Non-payment relates to debt however some Suppliers have found energy theft in some of these cases There has been an increase in fraud reports and cases where someone moves into the property and use energy in the previous person’s name. These investigations should not be considered as theft.

Question 4: If we have a MOP who has found a tampered meter, or a meter which has been changed illegally and the customer is not allowing for a new meter to be fitted, where do Suppliers stand on how to log that? A Supplier’s MOP cannot de-energise for safety.

Response: What they can do is de-energise and switch to an isolator. It is their liability for safety reasons to make safe. In case of gas the operative should switch it off and leave it for the gas engineer to resolve.

11.2 The group noted the questions and answers provided from members prior to the meeting.

12. Best practice Guidelines Feedback

12.1 The first draft of the Best Practice Guidelines was issued to the TIG and TRAS Expert Group (TEG) on 24 December 2018 for feedback. ElectraLink collated the feedback and updated the guidelines accordingly. It was agreed to circulate the draft guidelines to members of the Theft best Practice Forum for review and feedback. ElectraLink will update the document with any feedback received from the Theft Best practice Forum and circulate to TIG and TEG members before issuing to the Theft Steering Group (TSG). Members of the group requested for the Best Practice guidelines to be resent for feedback.

ACTION: TBPF _20190117/08: Best practice Guidelines Feedback

ELectraLink took an action to resend the Best Practice guidelines to be resent for feedback.

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13. Ofgem Panel Session

13.1 As requested at the September meeting Ofgem was in attendance to address questions from the Forum members.

REC UPDATE - OFGEM

13.2 The Ofgem representative provided an update on the introduction of the Retail Energy Code (REC). Members noted that all Suppliers and Network Operators will be required to accede to the REC. There will be a transitional period to move everything to the REC. The timing of the REC is tied into the new faster switching arrangements. It is expected that the full REC code will be in place in 2021.

13.3 The key point to note is that it will be a comprehensive Code with theft arrangements fromDCUSA and SPAA expected to transition to the REC. Ofgem is not proposing to change the obligation to prevent, investigate, deter and detect theft. It is vital that the Industry continues to follow these obligations. The industry needs to think of ways it can be more agile. Energy theft is not a small problem however it still feels as though the industry has never got to grips with it. Ofgem is encouraging the Industry to put forward ideas on the creation of the REC as this provides an opportunity to do things differently.

13.4 A member asked whether it will be Ofgem’s responsibility to work on transitioning the theft arrangements. JD pointed out that for the next two years Ofgem have a means of providing a resource for the REC activities. As the regulator Ofgem has not previously managed to trial ideas with Suppliers before implementation. If there is a means to run smaller scale trials, Ofgem would be in support of that.

13.5 A member questioned whether this means that Ofgem would want for example to do a small regional trial of the National Revenue Protection Service (NRPS). JD noted that dependent on all Suppliers agreeing to this, a trial could be carried out.

QUESTIONS – OFGEM PANEL

13.6 Members also raised the following questions with the Ofgem:

Question 1: On the REC approach to combine the SPAA and DCUSA theft obligations into the REC, do you anticipate any issues aligning the two?

Response: The Gas and Electricity characteristics will always be slightly different, but the REC provides an opportunity to put the theft obligations in one place. This will potentially improve the sharing and reporting of data.

Question 2: What happens with Suppliers with allocated theft targets but do not participate in the scheme.

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Response: If Ofgem do not obligate participation in the theft incentive scheme this could create safe havens. What has been tried in the past has not worked, and the industry needs to think of new ways to encourage participation.

Question 3: Are there any consequences for not reporting instances of theft?

Response: There are consequences but in the past Ofgem has not followed up with Suppliers. It is a requirement that Suppliers should adhere to.

Question 4: Is there any need for aligning theft reporting, making it the same?

Response: Where there is comparable data why not keep it in one place.

Question 5: Regarding Supply of Last Resort (SORL), do you think Ofgem measures are going to have an impact of how current Suppliers operate?

Response: Ofgem do not think this is something that can be done retrospectively. It may be that rather than initial checks of the business when Suppliers accede, other things could be looked into before granting a Supplier licence. In terms of the incentive scheme it is difficult to know how the licence change will go.

Question 6: Not dealing with theft costs you but dealing with theft costs more. How can you incentivise Suppliers to do better?

Response: Putting theft obligations in one place could potentially help, however not all Suppliers operate in the same way.

Question 7: Could prosecutions be remedied by bringing them under the REC?

Response: If something needs specific action, it can be done through the REC but does not necessarily need to wait until 2021.

Question 8: On the theft incentive schemes, should there be a similar scheme for Gas Transporters (GTs) and Electricity Distributors (DNOs)?

Response: We do not see why not; there is no reason why GTs and DNOs should not be incentivised.

Question 9: What are Ofgem’s views on electricity settlement and theft values? There have been issues identified on Gas.

Response: Ofgem supports looking at Network losses also focusing on electricity. Currently Ofgem is not aware of anyone looking into electricity losses in parallel with Unidentified Gas (UIG) reviews. It would be preferable to have evidence of what the value of theft actually is when it comes to settlement.

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REC Next Steps

13.7 JD reiterated that as part of the REC discussions, Suppliers are encouraged to come up with suggestions for what to include into the REC. Ofgem is open to Industry feedback. Ofgem will provide a follow up on REC discussions at the next Theft Best Practice forum.

13.8 With regards to a National Revenue Protection Service (NRPS,) Ofgem noted that there is a shift in thinking in that something needs to be collaborated on. There could be an opportunity for the Industry to work together. There are obvious benefits and Ofgem would welcome having a service that Suppliers can opt into rather than mandating it.

The Ofgem Panel session came to an end. The Chair thanked Ofgem for attending the meeting.

14. Any Other Business

14.1 No other business was discussed. The Chair closed the meeting.

15. Date of Next Meeting

15.1 The next meeting of the Theft Best Practice Forum should be scheduled in the next quarter at the direction of the Theft Steering Group(TSG).

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