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Annual Rating Background

The Annual Rating was introduced for the first time in September 2023 with the aim of assigning an overall performance rating to REC Parties on a yearly basis. This is now in its second year, where the Rating covers the period from the 01 April 2023 - 31 March 2024 and assesses Energy Supplier and Distribution Network Operator (DNO) Parties. Whilst the current Annual Rating does not cover Meter Operator Agents (MOA), we intend to expand its application in the future years.

The Annual Rating is determined based on criteria components that the  Code Manager regularly monitors and that Parties already have access to, listed in the  2023-2024 Annual Rating Criteria section of this Wiki. The assessment criteria used was developed by the  Code Manager through  Performance Assurance Board (PAB) consultation. It may change each year depending on the PAB’s focus areas.

The application of the defined criteria results on each applicable Party being assigned one of four Ratings, defined in  Annual Rating Results  section below. This year, Parties will be able to see their Annual Rating alongside that of other Parties in a Peer Comparison format. Future initiatives may consider publishing Annual Rating more publically, however this will be subject to PAB consultation and approval. This year, a query period is implemented to allow each Party to review the Rating and request any clarification before final publication. For this purpose, the Contract Managers will see the details of their Annual Rating within their Performance Assurance (PA) Dashboard in July 2024 and will have a 2-week window  to provide any comment for consideration before the scores are finalised at the end of August. The Annual Rating Results will be published as a peer comparison table on the RECCo website

The Annual Rating will be used to assess the overall performance of the market based on a complete reporting year. This assessment will contribute into the Code Manager’s annual report. The Annual Rating will also provide an indication of what areas each Party should focus improvement efforts on. This Rating will also be used to inform the frequency of Performance Assurance Check-ins required for each Party.

Annual Rating Results

Each Supplier and DNO has been rated based on a four-point scale covering the period 01 April 2023 – 31 March 2024. The four-point scale is outlined below:

• No Material Weaknesses:  No significant issues identified with the Party’s processes, and they have met their Code compliance obligations.
• Minor Weaknesses:  Some of the Party’s processes did not meet Code requirements in a minor way, but no evidence of any significant concern was identified.
• Moderate Weaknesses:  The Party has either multiple minor Code compliance issues, or a single significant Code compliance issue, or data indicated an increased risk of providing poor consumer outcomes.
• Severe Weaknesses:  It has been identified that a significant proportion of the Party processes have failed to meet the requirements of the Code, or their data indicated providing poor consumer outcomes.

2023-2024 Annual Rating Criteria

The Annual Rating is based on assessment criteria components and information that Parties already have access to. The following criteria were applied over the 01 April 2023 – 31 March 2024 period to determine the 2023-2024 Annual Rating for each applicable Party:

1. Performance Data  - We use performance data primarily as a risk assessment tool, following up with Performance Assurance Techniques (PATs) where appropriate and utilising more significant PATs where there are validated performance issues.  We therefore consider it more appropriate for the rating to be driven by the application of PATs than the underlying performance data and, this year, have removed the direct link to performance data. We also exclude PATs that are about understanding the circumstances and background, including Notifications, Enquiries, Information Requests and Self-Assessments. This means, the 2023-2024 Annual Rating criteria focuses on Action Plans, Management Assertions, Specific Condition PATs, Referral to Ofgem and Event of Default. Please note, within the 2023-2024 Annual Rating Criteria we have recognised that Management Assertion PATs issued specifically to generate engagement with the first data cleanse sprint do not necessarily indicate performance issues. Therefore, we have classed those differently that other Management Assertion PATs.
2. Maintenance of Qualification Delay  – 2023-2024 Annual Rating considers whether a Party has completed their Maintenance of Qualification (MoQ) activities applicable during the assessed period, and if so, whether their MoQ submission was completed on time. For clarity, if the Code Manager requested follow up information, the extended timelines for this are not considered.
3. CME breach  - Whether a Party within Controlled Market Entry (CME) has breached one of their CME Conditions also informs its Annual Rating. This year, we have enhanced the criteria to differentiate between those that breach CME caps by a small amount and larger breaches.
4. Percentage of Theft target achieved  – Energy Theft Detection remains a key area of focus of the PAB. Therefore, performance against the assigned theft target under the Theft Detection Incentive Scheme has been used to determine the 2023-2024 Annual Rating. We have applied a de minimis of 0.5% of market share, so that Parties with very small theft targets are not disproportionately represented.
5. The table below shows each component alongside their assessment criteria.

Please note the following:

• The rating has been applied at a grouped Party level when Parties have elected to be grouped for Performance Assurance purposes. If you are a Party with multiple organisations and have not elected to group, you may need to view multiple dashboards to see the Rating for each of your organisations, and similarly will appear multiple times on the peer comparison list.
• We reiterate that the only PATs considered in the Annual Rating are Action Plans, Management Assertions, Specific Conditions, Referral to Ofgem and Event of Default. Other PATs such as Enquiries, Information Requests and Notifications are not considered in the Annual Rating. Definitions of all PATs mentioned can be found in the Performance Assurance Methodology and Techniques document found within the Category 3 Documents section of the Portal.
• As the period under assessment is the 01 April 2023 – 31 March 2024, it is the 2023 MoQ submission that is considered, not the 2024 submission. 

Where to find your Annual Rating

The 2023-2024 Annual Rating and accompanying reason(s) for Supplier and DNO Parties are available in the table on the Overall Score tab of the Performance Assurance (PA) Dashboards.

All reasons for the Party being rated in the given category are listed as under the field 'Annual Rating Reason'. If a Party has a rating of ‘No Material Weakness’, the 'Annual Rating Reason' will not apply. Other fields listed in this table are standard metrics or information tracked by the Code Manager on a regular basis and are not related to the 2023-2024 Annual Rating.