Prepayment Levelisation

What is Prepayment Meter Levelisation?

Historically, British customers on prepayment meters (PPM) have paid more for their energy than those on direct debit (DD). On the 15th of March 2023, the Chancellor announced that the Energy Price Guarantee (EPG) would be used to align costs for PPM and DD customers. Initially, these costs were aligned by giving PPM customers a unit rate discount. In October 2023, Ofgem selected RECCo to develop the industry processes and as the reconciliation operator for the delivery of the non-volumetric payment levelisation program.

Why is reconciliation needed?

This programme will levelise tariffs by requiring energy suppliers to charge DD customers more whilst discounting PPM tariffs. However, a reconciliation method needs to be introduced as the payment method split is not the same for each Supplier’s portfolio. This is so Suppliers with higher-than-average PPM consumers can be credited, whilst those with fewer-than-average can be debited.

What is RECCo’s role?

We have been tasked with developing industry processes under the Retail Energy Code (REC) and designing, building, testing, and delivering a functional system that will facilitate supplier payments to allow for non-volumetric levelisation. This system is due to go live on the 1st of April, 2024. The change to the REC will be given effect through Change Proposal R0147.

What do Suppliers need to do?

All domestic Suppliers are required to take a snapshot of their data on the 1st day of each Calendar Month and send it to us by the 15th Calendar day of the month. We will calculate positions and send an invoice 15 Working Days (WD) after the data submission date. Suppliers are expected to pay invoices within 10 WDs of receipt of acceptance. All funds are distributed equitably, and Payments to Suppliers will be sent within 10WDs of payment deadline.

The Invoice Schedule is detailed below, containing key dates for upcoming file submission and invoicing.

Templates for Supplier data submission are also provided below. Please note, the file formatting is important for file validation, as such, please ensure the following:

Each region must be populated, even if there is no data i.e. populate with zeros and with relevant date format
file name format for electricity: MPID_YYYYMM.csv
file name format for gas: SSC_YYYYMM.csv
files using column headers or regions different to the template will not be accepted