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Identifying issues that overstate losses

DNOs are incentivised to reduce the electrical losses in their network through the Distribution Loss Incentive Scheme (DLIM) that Ofgem operates. This scheme uses Settlement data to establish the units entering and exiting the network in the derivation of these losses.

Issues with this Settlement data can make it appear that fewer units were distributed to end customers than was actually the case. This makes losses appear artificially high and results in DNOs being penalised unfairly through the loss incentive scheme.

At Engage we understand the retail and Settlement related business process and know the common issues that give rise to Settlement data quality issues. Using this knowledge, we are able to identify from industry data flows instances that will give rise to misleading determinations of units distributed.

We load the relevant flows into our monitoring databases and use knowledge related rules to identify likely issues of significance so that DNOs can instigate corrective action with the relevant Supplier. This allows DNOs to play a key role in improving the quality of the Settlement data upon which their performance under the loss incentive scheme is measured. This results in a truer determination of losses and can increase allowable revenues by £millions.