Avro: Final Order

Opened:
Mar 2019
Closed:
Aug 2019
Company:
Avro
Regulation Area:
Sectoral Regulations

On 8 March 2019 the Authority published a notice of proposal to issue a final order on Avro Energy Limited (Avro) in accordance with Section 26 (1) and (2) of the Electricity Act 1989 and section 29 (1) and (2) of the Gas Act 1986.

The Authority had been in discussions with Avro regarding its requirement to become a DCC User (as defined in standard licence conditions 42.11 and 48.11 of the gas and electricity supply licences respectively).

Standard licence conditions 42.8 of the gas supply licence and 48.8 of the electricity supply licence require licensees to become DCC Users by 25 November 2017.

The particular behaviour of concern giving rise to the proposal to make a final order was that Avro failed to become a DCC User by the deadline and remained non-compliant. Had the non-compliance been allowed to continue, there was a likelihood of increasing numbers of customers with smart meters suffering harm by either switching to Avro and losing their smart functionality or, for existing customers, remaining without smart functionality longer than was necessary.

Representations or objections with respect to the proposed final order were invited to be made to the Authority by 29 March 2019.

Avro made two written representations. In the first, Avro said it had not sought to avoid compliance and argued that the final order was not warranted, because there were mitigating circumstances. Avro offered to voluntarily impose the sales ban on itself if it did not achieve DCC User status before 26 May 2019. In the second, made after it became aware that the date on which first generation SMETS1 meters could be enrolled into the DCC had recently been put back, Avro argued that, because of this delay, the date on which the proposed sales ban in the final order should begin should also be put back.

The Authority considered Avro’s representations carefully but concluded that the final order, including a sales ban from 26 May 2019, was justified. The Authority noted that one of its principal reasons for seeking the final order was its lack of confidence in Avro’s willingness to engage until the matter was escalated. Based on Avro’s conduct to date, the Authority was not convinced that it could rely on an undertaking volunteered by Avro to take action as required without the final order being in place. The Authority noted that while one reason for commencing the sales ban on 26 May - the original date identified for SMETS1 meter enrolment into the DCC - was no longer relevant, other reasons were still relevant. These reasons included the need to protect the growing numbers of second generation SMETS2 meter customers who may switch to Avro and suffer immediate harm, and to retain the incentive for Avro to comply as quickly as possible and by no later than 25 July 2019.

Therefore, on the 3 April 2019, the Authority made the final order, pursuant to Section 26 (1) and (2) of the Electricity Act 1989 and section 29 (1) and (2) of the Gas Act 1986, requiring Avro:

• to become a DCC User by no later than 25 July 2019

• to notify the Authority within 24 hours of completion of each milestone, including completion of the final milestone, as set out in its DCC User Implementation Plan, and

• not to acquire any new customers or add any customer accounts by upgrading to dual fuel from 26 May 2019 until Avro can demonstrate that it is a DCC User.

On 14 June 2019, the Authority received satisfactory evidence from The Smart Energy Code Administrator and Secretariat (SECAS) that Avro had completed all the required steps to become a DCC user and had therefore met the requirements set out in the Final Order for it to be able to acquire new customers and add new customer accounts by upgrading to dual fuel.

On 2 July 2019, the Authority published its notice of proprosal to revoke the final order imposed on Avro dated 3 April 2019. The Authority was satisfied that the order should be revoked because Avro became a DCC User on 14 June 2019 and was therefore compliant with standard licence conditions 42.8 of the gas supply licence and 48.8 of the electricity supply licence.

The Authority gave this notice in accordance with section 26(6) of the Electricity Act 1989 and section 29(5) of the Gas Act 1986 and invited any representations or objections with respect to the proposed revocation by 30 July 2019.  No representations or objections were received in response to the proposal to revoke the Final Order.

On 2 August 2019, The Authority issued a Revocation Order under section 25(7)(c) of the Electricity Act 1989 and section 28(7)(c) of the Gas Act 1986. The Authority decided that the Final Order was no longer required for the purpose of ensuring Avro’s compliance with standard licence conditions 42.8 of the gas supply licence and 48.8 of the electricity supply licence. Avro became a DCC user on 14 June 2019 and therefore has met the requirements of the Final Order. The Final Order is no longer in place.