In May 2024, we discussed our plans to enhance RECCo’s budget process and improve transparency for stakeholders. Our goal is to ensure that our stakeholders can easily understand our policies and expenditures while also providing the information necessary to demonstrate that they, and ultimately consumers, are getting value for money. Today, we are pleased to share an update regarding a budget adjustment that will reduce Market-Wide Half-Hourly Settlement (MHHS) charges to REC Parties. This reduction is driven by an expected underspend against our 2024-25 MHHS project budget.
Proactive financial management and re-forecasting
RECCo is committed to best practices in financial management, ensuring sufficient resources are available to meet operational needs and contractual obligations. The RECCo Board regularly reviews performance against budget and conducts re-forecasts throughout the year. This ensures an accurate view of our financial position and expected full-year outcomes.
The Board has now reviewed the expected 2024-25 financial outcome and found that there is likely to be an underspend on our MHHS Project costs. This is partly due to the replanned Market-Wide Half-Hourly Settlement (MHHS) programme timescale. Change Request CR-055 has proposed postponing the MHHS go-live date from March to August 2025. This will impact certain RECCo activities and reduce costs in the 2024-25 financial year. It is important to note that MHHS is charged separately from other REC charges.
Reducing MHHS charges for REC Parties
Recognising that RECCo utilises industry funds and is committed to delivering value for money, we will reduce the MHHS charges for the remainder of this financial year. This reduction will be reflected in the October 2024 invoices. Separately, we will return the underspend from 2023-24 as a reduction against the REC Charges invoices for 2024-25 in the same month.
The MHHS charge for the remaining 6 months of this financial year will reduce from £0.016 per RMP to £0.0053 per RMP. On an annualised basis, this reflects a c33% reduction in MHHS charges.
In addition, reflecting our commitment to deliver value for money, we will develop our second budget forecast in January 2025. If it indicates a likely sustainable underspend against the broader 2024-25 Budget, we will return that to funding parties by reducing REC charges that month, ensuring that any monies are returned to REC funding parties as early as possible.
Contact us
If you have any questions on the above, please do not hesitate to contact Brian O’Shea at brian@retailenergycode.co.uk
