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Submission on stakeholder engagement incentive

31 July 2014


Ofgem’s review of the governance arrangements for the SI is timely given the outcomes of the Pilot SI suggest that the assessment process could be better calibrated to ensure networks are appropriately rewarded for the quality of their engagement with their stakeholders. We therefore understand why Ofgem is considering a more sophisticated methodology to convert the assessment of the Independent Panel into a financial reward. But for the reasons we outline in the submission below, we do not think that this addresses the main issue for the governance of the SI, and may in fact, have unintended consequences that could undermine the efficient administration of the incentive. We favour the retention of the linear conversion methodology outlined by Ofgem as Option A in the consultation document, but with a stronger focus on best practice by benchmarking the performance of the networks against that in other sectors.