1. Proposed publication of objection rates for LSP Supply Points On behalf of Gazprom Marketing and Trading-Retail

2. Background  SLC 14.2 of the Supplier’s licence allows Suppliers to object to any transfer of a non-domestic customer from its portfolio to that of a competitor only if: the contract with that customer allows for the current Supplier to prevent the Proposed Supplier Transfer. Supplier contracts generally prevent transfer if the Customer has not paid any outstanding invoice or a fixed term contract has not yet expired ; or the Supplier that initiated the Proposed Supplier Transfer has agreed with the current Supplier that the transfer was initiated in error.  UNC section G2.8.1(b) allows lodging of Supply Point Transfer Objection seven business days after Supply Point Nomination submitted.

3. Concerns with current process  Process is clearly designed as a mechanism to halt incorrect transfer and obviate the need to re-nominate for correct problems.  It is not a customer retention tool  Ofgem expressed concern in the Energy Supply Probe that objections process is used to retain customers, contrary to the intended purpose of the objections process.  Part of this concern is a lack of transparency around the use of the objections process.  No evidence that Ofgem has used statutory power to investigate use of objections process by Shippers

4. Proposal  Change proposal relatively straightforward.  Xoserve will produce a quarterly report indicating for each Shipper the number of Supply Point Transfer Objections raised compared to the total number of Supply Point Transfers for all LSP Supply Points from that Shipper.  This information would be provided as a percentage, not absolute numbers, to preserve confidentiality.  It will NOT be anonymous  To prevent small numbers of objections giving a misleading impression, the Shipper will need to raise ten objections in the relevant time period to trigger inclusion within the report.

5. Format of proposed publication Shipper% objections raised Gazprom Marketing and Trading Retail 100 Corona Energy0.0111 GDFSuez0.3 Total Gas and Power Ltd0.45 Etc,

6. Benefits of Modification  Will provide clear and public information on the use of the objections process.  The modification will therefore deter unwarranted use of this facility, deterring anti-competitive behaviour.  The reduction in spurious objections will reduce the administrative costs incurred by Shippers in dealing with the objections.  Self-governance solution to ensure compliance with Shipper licence obligations, avoiding authority intervention.

7. Implementation of Modification  We would expect this information would be published on the Joint Office website as a spreadsheet or similar.  Understanding that the cost of providing this information will be minimal.  Our initial view therefore is that the User Pays regime will incur more costs than are recovered.