On 19th 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.
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.
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.
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 will be put in place by Ofgem in the form of an Independent Programme Assurance (IPA) function.
The Programme will be led by an industry selected Programme Steering Group (PSG) which will be the Programme’s primary decision making body and chaired by the SRO.
The MHHS Programme is currently being mobilised and the focus for the summer of 2021 has been to:
• Establish the MHHS Programme
• Tender for and appoint a Lead Delivery Partner (LDP), to be in situ by November 2021
• Commence the development and detailed design to deliver MHHS
• Establish a communications strategy and communications channels
• Separate the MHHS Programme within Elexon
The MHHS Programme presents the opportunity to develop new ways of working for the industry. The Programme is seeking to define the ‘blueprint’ for delivery of large change programmes within the energy industry, should this be the way Ofgem wish to proceed with any future programme.
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].
