The truth about our £9.4 million Ofgem payment and company accounts
There has been a lot of speculation today about our business. But in the interest of openness and transparency, we wanted to set the record straight.
Our £9.4m Ofgem payment
As a UK energy supplier, we are obligated by Ofgem to source an increasing proportion of the electricity we supply from renewable sources.
Renewable Obligation Certificates (ROCs) are certificates issued to operators of accredited renewable generating stations (solar and wind farms etc.) for the eligible renewable electricity they generate. ROCs are then used by suppliers to demonstrate that they have met their obligation.
Where suppliers do not present a sufficient number of ROCs to meet their
obligation, they must pay an equivalent amount into Ofgem’s buy-out fund.
Since July 2018 we have only bought 100% renewable electricity, but as we do not physically own any electric generation capabilities, we pay into Ofgem’s buy-out fund.
Like all suppliers, we are obligated to pay our ROCs payment. We had planned to pay all our ROCs payment in one go. We have always paid in full and on time in the past since entering the market in 2015.
In August of this year, we wrote to Ofgem and met them in September to discuss making this year’s payment in instalments, as they had previously agreed with other suppliers last year.
This was a prudent business decision to help us more effectively manage the high demand of the winter period, a potential general election as well as mitigating potential market risks around a No-Deal Brexit.
Despite welcoming our proactive approach and advising that as long as our ROCs payment was made by March 2020, which we had always planned to do, then this matter would be resolved. However, Ofgem has now written to us today (1st October 2019) demanding payment in full by 31st October.
It is frustrating that, in our view, following our proactive and open conversation with Ofgem, we now find ourselves the subject of significant media interest, with questions being asked about our fundamental ability to operate as a business.
This is plainly incorrect.
We operate in a tough market but we remain on track to report a surplus for this financial year and next. As a business, we are paying all other suppliers as per the terms of those contracts.
A number of companies paid last year via installments and this was our proposal to Ofgem in September.
We will be making our ROCs payments to Ofgem in full and we will be doing that in monthly installments starting in October. This means that as a business we are in a robust and stable position to continue to grow and challenge the big 6 energy providers in the UK.
As you probably know, we are a publicly owned business, fully owned by Nottingham City Council.
Each year, like every limited business, we are required to file audited accounts. Robin Hood Energy’s accounts are not late, they have to be filed by 31st December 2019.
However, signed accounts are required by our parent, Nottingham City Council prior to December, in July. This year, as we have done each year since we were founded in 2015, we have had an auditor in our business assessing our finances on a timeline to provide audited accounts in time for Nottingham City Council’s July deadline.
One item required to sign off Robin Hood Energy’s accounts is a ‘letter of comfort’ which is provided every year by Nottingham City Council. We are working with the Council to finalise this.
While Nottingham City Council has been able to publish their accounts, they haven’t been able to provide full accounts as Robin Hood Energy is still awaiting the letter of comfort from them.
As mentioned earlier, we’re operating in a tough market but we remain on track to report a surplus for this financial year and next that can be invested in our communities and our most vulnerable customers.
We have robust financials and neither of these situations will impact our ability to continue operating or supplying our customers with energy.
We will continue to focus on delivering a great customer experience for the 130,000 people who have chosen us to supply their energy.
I hope you decide to join us on our mission.
Chief Executive Officer