PricewaterhouseCoopers appointed as MHHS Independent Programme Assurance provider

On 21 February 2022, Ofgem announced the appointment of PricewaterhouseCoopers (PwC) to the role of Market-wide Half-Hourly Settlement (MHHS) Independent Programme Assurance (IPA) provider.

Ofgem ran a procurement for the IPA provider in accordance with the principles and measures set out in their April 2021 consultation on Implementation Arrangements. These assurance principles and measures are intended to give confidence to Ofgem, the Senior Responsible Owner (SRO), the Programme Steering Group (PSG) and all Programme parties that the Programme is being set up for success and will be well managed.

The IPA are mobilising and working with the Programme to define ways of working and they will share their plan and immediate priorities at the PSG meeting on Wednesday 2 March.

Appointment of Expleo Technology UK Limited as the Lead Delivery Partner

Following a thorough procurement process over the past five months, we are pleased to announce the appointment of Expleo Technology UK Limited (with their subsidiary company, Moorhouse Consulting Limited) as the Lead Delivery Partner (LDP) for the Market-wide Half-Hourly Settlement (MHHS) Programme.

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Ofgem approval of Elexon’s Business Separation Plan

On 19 November 2021, Ofgem approved Elexon’s Business Separation Plan for the MHHS Programme.

Ofgem’s Update document states that it “provides a reasonable basis for ensuring that the service providers, personnel, IT systems and facilities that Elexon uses to perform its role as MHHS Implementation Manager are sufficiently separated from those it uses as an MHHS Participant.”

Elexon has collaborated with Ofgem to ensure the Separation Plan mitigates the potential conflict of interest risk and is aligned with the BSC and MHHS Governance Framework. The Business Separation Plan supports the required physical, organisational and cultural programme separation.

Elexon has implemented internal controls to monitor compliance with the Business Separation Plan and the ongoing management of the potential conflict of interest risk. The Independent Programme Assurance (IPA) provider will monitor and provide assurance that Elexon is complying with its obligations and will be responsible for identifying and reporting on issues relating to business separation and Elexon’s conflict of interest.

Key Elements of Elexon's Business Separation Plan

The Elexon Board has delegated its MHSS IM oversight responsibilities to a named Elexon Executive who has no involvement in Project Helix (Elexon’s Central Systems MHHS Programme).

The Elexon Executive Committee is excluded from receiving MHHS IM information not shared with other Programme participants and from participating in MHHS IM decisions.

No MHHS IM information can be shared with Elexon other than the Elexon Board and the named Elexon Executive and certain named persons providing Professional Services support (such as Legal, Finance and Design Authority subject matter experts).

Any MHHS information shared with the named Elexon Executive and the Elexon Board, and any decisions taken, will be shared with the IPA.

The majority of the MHHS IM roles are outsourced to the Lead Delivery Partner (LDP).

The MHHS Programme has a separate office space, email, website and data directory.

A communications programme and online training tool will raise the awareness of the potential conflict of risk to all Elexon and MHHS IM resources and educate on how to manage the conflict of interest risk.

MHHS Programme Objective

To maximise the opportunities provided by smart metering by developing and implementing an enduring process for MHHS that delivers benefits for consumers and enables a smart, flexible energy system by October 2025.

MHHS Programme Roles

Ofgem, acting as Programme Sponsor, has placed the responsibility for the management and delivery of the MHHS Programme with the industry. Ofgem has confirmed that Elexon will be obligated under the BSC to act as the Senior Responsible Owner (SRO) and MHHS Implementation Manager (IM).

Assurance has been put in place by Ofgem in the form of an Independent Programme Assurance (IPA) function.

The Programme is led by an industry selected Programme Steering Group (PSG) which is the Programme’s primary decision-making body and chaired by the SRO.

Delivery Stage

Following mobilisation of the MHHS Programme, work is progressing on:

• Preparing for the MHHS Programme re-plan

• Delivering the detailed design to deliver MHHS

• Procuring a Data Integration Platform

• Onboarding the Independent Programme Assurance (IPA) provider

• Ensuring full participation from Programme Participants in Working Groups and the appropriate Governance Groups to ensure they are fully mobilised, to enable successful delivery of the Programme

• Fully establishing the Programme Party Coordinator (PPC) function to support Programme Participants

• Enabling the Communications Strategy, e.g. monthly webinars and Open Day

 

Establishing an Industry Blueprint

The MHHS Programme presents the opportunity to develop new ways of working for the industry. The Programme seeks to define the ‘blueprint’ for delivery of large change programmes within the energy industry, if this is how Ofgem wish to proceed with any future programme.

MHHS Expenditure

Review of the MHHS 2021/22 costs – £4m to be returned to Suppliers in December

Elexon has updated the BSC Panel on the ) Programme expected expenditure for 2021/22 which forecasted a lower spend this year. This change to the MHHS Implementation Monthly Management Charge is cost phasing, as opposed to an indication that the cost of the programme has been reduced.

As a result, Elexon proposed, and the BSC Panel agreed, to reduce the Supplier Volume Allocation (SVA) Metering System Identifier (MSID) monthly charge from £0.03847/MSID to £0.02235/MSID back-dated to April 2021.

This will see approximately £4m to be returned to Parties in December rather than waiting until August/September 2022 for the normal final reconciliation of charges. It will however see invoicing for January to March resuming at the £0.02235/MSID for the 2021/22 financial year.

We will have more certainty around the cost of the MHHS Programme once the Lead Delivery Partner (LDP) and Independent Performance Assurance (IPA) contracts have been let. To that end we hope to re-baseline the budget as soon as possible.

If you have any questions, please email [email protected].