With Ofgem’s decision on the changes to the SEC Modification Process proposed under SECMP0049 ‘Section D Review: Amendments to the Modification Process’ anticipated to be received very soon, and implemented 10 Working Days later if approved, we are kicking off a four-part series on the new Development Stage and what this would mean for you as the Proposer of a modification.
Of course, the first question to ask is – just what is this ‘Development Stage’?
The Development Stage is a new stage in the SEC Modifications Process. It is intended to ensure that the problem, issue or defect identified is defined and understood before any solutions are developed. But why is this important?
As wiser men than I have said, “if you don’t know where you are going, you will probably end up somewhere else”; the same is true for developing solutions to issues. If it is not clear what the problem is, it becomes very difficult to know if the solution actually resolves it – there’s no measure of success. By first ensuring the problem is known and understood, effective solutions can then be developed that can be shown to resolve it. It also ensures everyone is working from the same understanding of the issue when assessing the merits of these solutions.
Key questions we would look to answer during the Development Stage include:
- The size and scope of the problem – are you the only one experiencing this or do others share the problem? What is the impact of ‘doing nothing’?
- Whether this is the core issue or the symptom of something else – if the latter then should that root cause be focused on? Is it possible to do something about it? Are other streams elsewhere already looking at this? Would fixing the symptom be effective?
- Whether there are other answers that wouldn’t require a modification – is a change to the SEC the only way to fix this? Is a change to the SEC the most effective way to fix this?
- Whether there is likely to be a viable solution – while the issue may be valid, is there likely to be an effective and economical solution? Is there merit in spending industry time looking at this?
To this end, the outcome of the Development Stage will be a ‘problem statement’ that clearly describes the issue or defect at hand. This statement will then provide the scope that any subsequent solution(s) developed must be shown to resolve.
The Change Sub-Committee, created by SECMP0049, whose input we will discuss in more detail in a later article, will be tasked with working with you to ensure this problem statement is developed and understood, as well as providing views on the above questions. All new Draft Proposals are expected to go through the Change Sub-Committee for them to do this. The Panel will have the final say on whether this problem statement is clearly defined, acting as the gatekeeper into the subsequent stages of the Modifications Process. If they don’t believe it is clear, they can return the Draft Proposal to the Change Sub-Committee for further work.
This may sound like it will add further time into the process, but by ensuring the problem is fully defined up-front, Working Groups will be able to develop more effective solutions quicker, speeding up the Refinement Process. In some cases, the Change Sub-Committee can also assess simpler solutions with a Proposer, allowing the Refinement Process to be skipped altogether.
In the next article, we will look at the steps needed to raise a new Draft Proposal and the support we can give you with this. After that, we look more at the Change Sub-Committee, before finishing with the onward progression of your proposal.