SLC 19 & Best Practice in Connections

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Content

• Substantive proposed changes for the SLC 19 reporting template

• SLC 19 audit

• Best practice standards

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SLC 19.4 REPORTING TEMPLATE

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SLC 19

Context

• SLC 19 requires the submission of annual reporting to confirm no discrimination and unfair treatment

• Ofgem is receiving a number of complaints concerning discrimination

Approach

• The template was initially reviewed with input from B.Hoy and S.Bolland

• Legal have also provided input and will do so further to finalise the questions

• General review of the layout and structure of questions in the template

• The need for evidence of non-discrimination was also considered during review

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Specific Additions to the Template

Changes Reasoning

Declaration of services provided by/obtained from DNOs’ affiliates

Context for activities completed with affiliates and how obtained

Details of DNOs’ affiliates in and out of area

Context for activities completed by affiliates in and out of area

Provision of the actual policy statement in place in a DNOs’ business and details of which areas of the Group that this policy applies to

Provides evidence and point of reference of the policy in place for non-discrimination

Details of arrangements in place for unmetered e.g. Charges for UoS, access to non-contestable services, access to bespoke services (rent a jointer)

To ensure non-discrimination and provides evidence specifically on unmetered services

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Additions to the Template contd.

Changes Reasoning

Details of DNO policy for asset adoption (e.g. Type of agreement) and terms of security required for all parties may adopt from

Evidence of policy and details of terms of security

Extension of measures taken to ensure non-discrimination to include ‘other customers’

The current question asks for details of how ICPS are not discriminated against, but 19.3(c) talks about the business of ‘any other person’

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Additional themes added to Template

Accountability and audit

The questionnaire requests details of thefollowing:• Staff member responsible for

compliance• Terms of reference of an audit• Process for completion of the

audit function• Frequency of internal audit• Accreditation of internal auditors• Company registration numbers of

those separate parts of the Group that are audited

• Any parts of the Group audited separately (with details as above)

Communication of SLC 19 requirements

The questionnaire currently requests details of thefollowing:• Details of how SLC 19 requirements

are communicated in the organisation to operational staff

• This has been extended to request details of how these licence requirements are communicated to managerial and executive staff and the methods used to communicate these effectively to different sectors of the organisation

• What parts of the Group are targeted by this communication policy?

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SLC 19 AUDIT

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Update

• Terms of Reference have been received from S.Bolland which we are reviewing for circulation to DNOs

• It is proposed for there to be an independent spot audit on one DNO a year, every year

• ECSG members will be kept informed on this

• Comments are requested

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BEST PRACTICE IN CONNECTIONS

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Introduction

• SLC 19: refers to non-discrimination and evidence to prove this has not occurred

• Ofgem has received lots of complaints about DNOs concerning practices that customers and industry consider anti-competitive behaviours and potential barriers to competition

• Under DPCR5, Ofgem has given DNOs the chance to earn an unregulated margin if they can prove they have encouraged competition in their area

• DNOs to devise their own approach for demonstrating how there is competition or no barriers to competition in their area

• DNOs have an opportunity to lead and develop standards of best practice for consideration

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Themes

1. Stakeholder Engagement

- Treatment of customers

- Resolution of complaints (e.g. Retail issues)

- Provision of advice and consultation (e.g. Breakdown of costs, charging statement, contestable v non-contestable, apportionment.)

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2. Access to information

– Substation general arrangement drawings

– Code of practice relating to substation design up to 33kV

– Cable installation practice up to 33kV

– Code of practice relating to HV network protection (up to 33kV)

– Code of practice re: LV network protection

– Design policy for industrial supplies

– Design policy for HV networks up to 33kV

– Current network load information/feeder load analysis

– Problems in accessing updates to information in general

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3. Notification of Mergers and Acquisitions

– Potential merger of competitive arm of a DNO into the main business

– Provision of multi-utility quotes in area

– No level playing field as the competitive arm no longer needs to compete with IDNOs

– Ring-fencing arrangements

4. Adoption agreements

– Potential discrimination and stringent application of S16 versus SLC 15

– Need for engagement and compromise

– Potential charging for budget estimates

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