The Annual Rating is a new methodology introduced by the Code Manager in September 2023 to assess the overall performance of Parties and the maket on an annual basis. 

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. The first publication of the Rating covers the period from the 1 March 2022 - 31 April 2023 and assesses Energy Supplier and Distribution Network Operator (DNO) Parties. We have not included MEMs in the 2022-23 Annual Rating because of the Metering Equipment Manager (MEM) Request for Information (RFI) in progress at the time of assessment.

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 2022-2023 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. The Annual Rating of each Party is only visible to the Party themselves on the REC Performance Assurance (PA) Dashboards. No other Party can see the Annual Rating of any other. Future initiatives may consider the publication of an unanonymised Annual Rating, however this will be subject to PAB consultation and approval. If the Rating were to be published more publicly in future years, the Code Manager would implement a query period to allow each Party to review the Rating and request any clarification before final publication. 

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.

Annual Rating Results

Each Supplier and DNO has been rated based on a four-point scale covering the period 01 April 2022 – 31 March 2023. 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.

2022-2023 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 1 April 2022 - 31 March 2023 period to determine the 2022-2023 Annual Rating for each applicable Party:

1. Percentage of Risk Drivers over threshold - The performance of the Party against the Risk Drivers that are applicable to them, using the PAB’s thresholds as defined. Where the PAB updates thresholds during the assessment year, the changes will only apply going forward and will not apply retrospectively.
2. Percentage of Theft target achieved - Performance against the assigned theft target under the Theft Detection Incentive Scheme. There is a de minimis of 0.5% of market share applied, so that Parties with very small theft targets are not disproportionately represented.
3. Maintenance of Qualification Delay - 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.
4. Action plan PAT issued - Whether this specific Performance Assurance Technique (PAT) has been applied or not.
5. Management Assertion issued - Whether this specific PAT has been applied or not. 
6. Specific condition PAT issued - Whether this specific PAT has been applied or not. 
7. CME breach - Whether a Party within Controlled Market Entry (CME) has breached one of their CME Conditions.

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.
• We have applied whitelisting to specific Risk Drivers for Parties that have informed us of their use of internal flows between Suppliers and their agents, which impacts the measurement of these risk drivers through monthly collected data – i.e. these Risk Drivers are not considered for whitelisted Parties.
• We reiterate that the only PATs considered in the Annual Rating are Action Plans, Management Assertions and Specific Conditions. Requests for Clarification (RFC), Requests for Information (RFI) and Notifications are not considered in the Annual Rating. Definitions of all PATs mentioned can be found in the Performance Assurance Techniques document found within the Category 3 Documents section of the Portal.
• As period assess is the 1 April 2022 - 31 March 2023, it is the 2022 MoQ submission that is considered, not the 2023 submission. 

Where to find your Annual Rating

The Annual Rating 2022-23 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 listsed 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 peices of information tracked by the Code Manager on a regular basis and are not related to the 2022-23 Annual Rating.

The diagram below provides an illustration of the dashboard view for an individual Party. The Annual Rating applied and the Annural Rating Reason are highlighed in red. The other information and metrics listed in the table are not related to the 2022-23 Annual Rating.