Customer Engagement Group response to Ofgem’s Consultation on ED2 Draft Determinations
The Customer Engagement Group has responded to Ofgem’s consultation on its Draft Determinations for ED2. We have not attempted to address all of the consultation questions raised by Ofgem, but have instead focused on a few areas where we believe we have relevant contributions to make that are informed by the views of local customers and stakeholders. The main points in our response are set out below, but if you would like to see the full response you can read it here.
We have been impressed by the emphasis that Ofgem has put on consumer and stakeholder consultation throughout the ED2 process so far. No doubt Ofgem will want to have the benefit of similar input to inform the many important decisions affecting consumers that it now intends to take during ED2. These decisions could have a significant impact on the service that customers receive and on their bills.
As a Customer Engagement Group we believe that transparency, both in reporting the progress of DNOs in delivering the commitments in their plans and in Ofgem’s decision making on the application of uncertainty mechanisms and re-openers is of paramount importance if consumer confidence is to be maintained. This is a central consideration in our responses below.
We note particularly the potential improvements in this regard that the proposed modernisation of the regulatory reporting process and the DSO performance panel could have. In the absence of a financial incentive for DNOs on environmental performance we also believe that it will be important for Ofgem to publish an annual report comparing the progress of DNOs in this area to underpin its objective of driving consumer and societal benefits.
We also welcome the focus on whole systems approaches and encourage Ofgem to go even further in seeking to strengthen the links between energy system planning and spatial planning to ensure that shared or fully coordinated plans become the norm.
On reliability, we believe that improvements for customers whose experiences fall well outside of the system wide averages, ie who receive the worst service, should be top priority irrespective of the voltage level at which the fault occurs. Customers are often unaware of, and certainly do not care which part of the network causes an interruption to their supply. We are not fully convinced by the position and the arguments on this point set out in Ofgem’s Core Methodology document.
The Future of Enhanced Engagement
We welcome Ofgem’s proposal to continue the work of CEGs during the ED2 period (2023-28) but we do not support Ofgem’s suggestion of extending their role to encompass comparative reporting across DNOs. This type of activity would not play to the core strengths of CEGs which are rooted in understanding local stakeholders’ priorities. It is in consumer and stakeholder interests that such comparisons continue to be undertaken by Ofgem.
We have agreed an ongoing role for our group during ED2 with Northern Powergrid. This will include scrutinising and reporting on the company’s delivery of its business plan commitments.
We understand that other DNOs may be taking different approaches to the future of their groups and we encourage Ofgem to consider steps to safeguard the independence of CEGs, to avoid any risk of their independence (perceived or real) being eroded.
The Chairs of all the DNOs’ CEGs have written a joint letter to Ofgem setting out our views on these matters, which you can read here.