Supplier Failure - Advice re Supplier of Last Resort (SoLR) process not fit for purpose

PowerDev

And.....   When OFGEM asks the Suppliers Community for one of them to take on the SoLR role theay also ask them to declare if they will cover any shortfall in Customer credit from the assets from the failing supplier.
If the candidate SoLR answers No, OFGEM will issue a Consultation to the Industry asking that the shortfall be covered by directing the Distribution Network Operators to cover the shortfall by an addition to the overall Distribution Use of System charge levied on Suppliers.    

Noting that each Retail Bill comprises Wholesale, Environmental, Transmission, Distribution and ESO Balancing  services Cost elements.  From 2010 to the end of the pandemic the wholesale element was mainly staic in actual terms and declined from 54% to 34% of the Retail bills.  Retail charges actually increased by 50% Actual over the period.   

Mstty

You expected too much of the system with your eagerness to secure your next fix deal.

You just moved too fast for the process.

I don't see this as a failure by the suppliers and Ofgem that tried to help you out by not letting you lose any money with a busy energy supplier (something you were protected by twice?

CSI_Yorkshire

I think 'A' is a big issue, because I personally was affected by it.

Suppliers, the regulator, MPs, and the parliamentary ombudsman all think that 'A' is not an issue, because for almost all of the time it doesn't matter and for most customers it works acceptably.  There are much bigger issues to be concerned with.

I, however, am correct, and any other opinion is "of course a completely wrong interpretation".

OP - the MSE forum is not a sensible place to try and get support for a relatively obscure change in a rarely used background system.  Some of us who actually understand what you are talking about would still not support effort being diverted in the direction you suggest.

PowerDev

Matty, that isn't the point. I don't expect the SoLR, and the Distribution Network Operators who are also involved, to be able to move fast as processing switching hundreds of thousands of Customers from a failed Supplier is a non standard and more onerous task than they normally have to carry out. However, noting that the SoLRs are usually the larger Suppliers and DNOs are large organisations, I do expect the processing to be carried out correctly. After all in total Suppliers are charging £50bn+ per annum for Electricity alone. Please understand what I wrote; the modification to the National MPAN database query which caused the problems for Supplier D identifying me is a trivial change. Which should have been picked up by OFGEM instead of just advising Customers to delay switching from an SoLR.

CSI_Yorkshire

stephenbrowning said:

Which should have been picked up by OFGEM instead of just advising Customers to delay switching from an SoLR.

Have you considered that their advice may be because the possible issue has been picked up and they think it is the most effective way to prevent it?

[Deleted User]

stephenbrowning said:

And.....   When OFGEM asks the Suppliers Community for one of them to take on the SoLR role theay also ask them to declare if they will cover any shortfall in Customer credit from the assets from the failing supplier.
If the candidate SoLR answers No, OFGEM will issue a Consultation to the Industry asking that the shortfall be covered by directing the Distribution Network Operators to cover the shortfall by an addition to the overall Distribution Use of System charge levied on Suppliers.    

Noting that each Retail Bill comprises Wholesale, Environmental, Transmission, Distribution and ESO Balancing  services Cost elements.  From 2010 to the end of the pandemic the wholesale element was mainly staic in actual terms and declined from 54% to 34% of the Retail bills.  Retail charges actually increased by 50% Actual over the period.   

Consumer credits. Paragraph 2 of this Ofgem consultation suggests that consumer credit balances paid by the SoLR form part of the SoLR claim:

https://www.ofgem.gov.uk/sites/default/files/2022-07/Open%20letter%20Review%20of%20how%20the%20costs%20of%20supplier%20failure%20are%20recovered%20.pdf

PowerDev

CSI_Yorkshire said:

stephenbrowning said:

Which should have been picked up by OFGEM instead of just advising Customers to delay switching from an SoLR.

Have you considered that their advice may be because the possible issue has been picked up and they think it is the most effective way to prevent it?

Of course they considered it and came up with the wrong solution from the point of view of protecting customer interests. 

Anyone who has been involved with relational databases (as I was with the big ESO Scheduling systems) can understand that changing the query from which MPANs are assigned to the failing supplier code (by default as at the date of extraction) to which MPANs were assigned to the failing Supplier code at the date of failure is trivial.
  
The major Supplier organisations, who took on the SoLR roles in 2021 (I think there were 29 failures) and the 6 DNOs (covering the 14 Distribution Zones) must have IT departments capable of making the change. 
The advice to stick with the SOLR must have cost Customers millions overall.  Although I must admit most customers might not have realised the impact and just accepted the advice.

Mstty

stephenbrowning said:

CSI_Yorkshire said:

stephenbrowning said:

Which should have been picked up by OFGEM instead of just advising Customers to delay switching from an SoLR.

Have you considered that their advice may be because the possible issue has been picked up and they think it is the most effective way to prevent it?

Of course they considered it and came up with the wrong solution from the point of view of protecting customer interests. 

Anyone who has been involved with relational databases (as I was with the big ESO Scheduling systems) can understand that changing the query from which MPANs are assigned to the failing supplier code (by default as at the date of extraction) to which MPANs were assigned to the failing Supplier code at the date of failure is trivial.
  
The major Supplier organisations, who took on the SoLR roles in 2021 (I think there were 29 failures) and the 6 DNOs (covering the 14 Distribution Zones) must have IT departments capable of making the change. 
The advice to stick with the SOLR must have cost Customers millions overall.  Although I must admit most customers might not have realised the impact and just accepted the advice.

They had IT depts of course but if you have ever worked in that world you are resourced up to the current planned levels(more normally lower)

Something this big hitting out of the blue and being dumped on does not mean you rush to the contractor market and spend £xxxxxxx's to solve the problem quickly when you are only making circa 1.9% profit per customer.

It takes a year to resource up for known projects in recruitment in IT so this is a completely unrealistic expectation.

CSI_Yorkshire

stephenbrowning said:

CSI_Yorkshire said:

stephenbrowning said:

Which should have been picked up by OFGEM instead of just advising Customers to delay switching from an SoLR.

Have you considered that their advice may be because the possible issue has been picked up and they think it is the most effective way to prevent it?

Of course they considered it and came up with the wrong solution from the point of view of protecting customer interests user stephenbrowning on the MSE forum. 

FTFY.

When everyone except you who considers the issue sees no problem with the solution, it is quite plausible that the solution is not problematic.

PowerDev

I've worked with IT all the way from Punched Cards through the first version of Mainframe based User editable file systems and the extension of same with screen editing.  Through to PC's and more complex IBM and VMS based software with linked Oracle and in core Hierachical databases.  I also have my own Domain on which I alone maintain the website files.

As you should have realised the SQL query change I've cited is trivial and every major Supplier and DNO (and thus their IT depts) have been involved with the SoLR process for some time. 

As I said, the SoLR process wont be quick but just needs to be correctly configured to allow Customers more flexibility when their Supplier ceases trading.   We've had Supplier failures over the years from 2016, well before the big shakeout in 2021.

And the consequences of the solution you think is OK are more serious in terms of financial impact.
Say 200000 Customers of a failing supplier ending up paying 70% more than they needed to over the last 2 years?        
Assume 3000kWh/year at 35p/kWh instead of 20.5.  I make that and extra £435 each per annum or £87m per annum for all of them.  And that's just 200000 of those whose Supplier failed. 31 companies in all; I'll leave you with Forbes's review.  As I said the Industry costs the customer £62bn/annum if you assume 20.5p/kWh. 
Customer annual demand (summated at the meters)  307Twh.   

https://www.forbes.com/uk/advisor/energy/failed-uk-energy-suppliers-update/