Ofgem to Change the UNC to Tackle COVID-19 Issues

Due to concerns over the issue a special session of the UNC Distribution group was convened in April where the impacts of the virus were discussed. Out of those talks several proposals for modifications to the UNC were suggested. 

On 22 April as the lockdown continued, Ofgem agreed that those suggested modifications should be put on an urgent timetable. 

The lockdown has created numerous challenges for energy suppliers. We’ve previously covered issues such as staffing and customer service, but one other major issue relates to meter reads.

Gas allocation arrangements rely heavily on the accuracy of the prevailing Annual Quantity (AQ) for each Supply Point as an indicator of likely demand. This AQ value is itself formed via historic meter readings and depends on frequent meter reads. 

With the lockdown continuing it is harder to obtain the valid meter reads that would allow the gas allocation to be reconciled against actual consumption. With gas, this can lead to increased Unidentified Gas (UIG) exposing Gas Shippers to the cost of energy which their own customers may not be consuming and will remain so until reconciliation occurs.

Both UNC722 and UNC723 seek to provide Gas shippers with opportunity to reduce their exposure to charges sooner than would be possible under prevailing UNC rules. 

UNC724 seeks to address a contrasting problem, with the re-purposing of a Supply Point and associated increases to short term gas demand. Each are discussed further below.

• UNC722 ‘Allow Users to submit Estimated Meter Reading during COVID-19’ proposes to allow shippers to submit estimated meter readings for certain sites during the COVID-19 period. Users can submit an estimated read as an actual reading for sites where an actual cannot be obtained. Estimates must reflect as closely as possible the site’s estimated consumption for the period since the last Meter Reading, in the user’s reasonable opinion. Reading will be treated as an actual for Reconciliation and Rolling AQ purposes – not flagged as estimates. First “actual” reading will correct the energy position.
• UNC723 ‘Use of Isolation Flag to identify sites with abnormal load reduction during COVID-19 period’ proposes to allow shippers to ‘isolate’ certain sites, and as result temporarily exempt those sites from gas nomination, allocation, and application of certain charges.’ This means that for non-daily metered sites which are using no gas or very little gas due to COVID-19 lockdown a Shipper can set a Supply Meter Point to Isolated status without doing any physical work on-site to prevent the flow of gas. The sites must be consuming zero gas or no more than 2.5% of its normal usage.
• UNC724 ‘Amendment to Ratchet charges during COVID-19 period’ proposes to waive ratchet charges for certain sites engaged in the local or national response to COVID-19.

Ofgem approved these modifications on 11 May 2020. It is likely that once the COVID-19 crisis has abated these changes will be reversed. 

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