The Annual Rating methodology was introduced by the REC Code Manager in September 2023 to assess the overall performance of Parties and the market on an annual basis.
This year, for the first time, the Annual Rating will include Metering Organisations.

Annual Rating Background

The Annual Rating was introduced for the first time in September 2023 with the aim of assigning an overall performance rating to REC Parties on a yearly basis. This is now in its fourth year and covers the period from the 01 April 2025 - 31 March 2026, assessing Energy Supplier, Distribution Network Operator (DNO) and Metering Organisations (MOAs, MAMs, EMOs and AMIs).

The Annual Rating is determined based on criteria components that the Code Manager regularly monitors and that Parties already have access to, listed in the 2025-2026 Annual Rating Criteria section of this Wiki. The assessment criteria were developed by the Code Manager through Performance Assurance Board (PAB) consultation.

The application of the defined criteria results in each applicable Party being assigned one of four Ratings, defined in the Annual Rating Results section below. This year, based on the consultation responses, the Code Manager introduced new labels for these ratings.

This year, Suppliers and DNOs will be able to view their Annual Rating alongside other Parties in a Peer Comparison format. Metering Organisations will only be able to see their own rating and will not be able to view a peer comparison as the PAB has decided to soft-launch the rating and allow Parties to familiarise themselves with the process before providing access to a peer comparison.

Future initiatives may consider publishing Annual Rating more publicly, however this will be subject to PAB consultation and approval.

This year, there will be a query period to allow each Party to review the Rating and request any clarification before final publication. For this purpose, the Contract Managers will see the details of their Annual Rating within their Performance Assurance (PA) Dashboard in July 2026 and will have a 2-week window to provide any comment for consideration before the scores are finalised at the end of August. The Annual Rating Results will be published as a peer comparison table on the REC Portal website.

Timeline

• 01 April 2025 - 31 March 2026: Accrual period
• June 2026: Code Manager prepares draft ratings
• July 2026: Query window
• August 2026: Finalised ratings published + Peer comparison published (for DNOs and Suppliers only)

How is the Annual Rating used?

• Assessment of the overall performance of the market based on a complete reporting year.
• An important feature of the Code Manager’s annual report.
• Parties use this rating as an indication of what areas they should focus improvement efforts on.
• Peer comparison tool (excluding Metering Agents in 2025-2026 reporting year) and promotion of best practice across the industry
• This Rating will also be used to inform the frequency of Performance Assurance Check-ins and the level of engagement with the Code Manager required for each Party.

Annual Rating Results

Each Supplier, DNO and Metering Organisation will be rated based on a four-point scale covering the period 01 April 2025 – 31 March 2026. The four-point scale is outlined below:

• Performing: No significant issues identified with the Party’s processes, and they have met their Code compliance obligations.
• Performing with Minor Concerns: Some of the Party’s processes did not meet Code requirements in a minor way, but no evidence of any significant concern was identified.
• Improvement Required: The Party has either multiple minor Code compliance issues, or a single significant Code compliance issue, or data indicated a risk of poor consumer outcomes.
• Severe Concerns: It has been identified that a significant proportion of the Party processes have failed to meet the requirements of the Code, or their data indicated providing poor consumer outcomes

2025-2026 Annual Rating Criteria

The Annual Rating is based on assessment criteria components and information that Parties already have access to. The following criteria will be applied over the 01 April 2025 - 31 March 2026 period to determine the 2025-2026 Annual Rating for each applicable Party:

1. Performance Data - We use performance data primarily as a risk assessment tool, following up with Performance Assurance Techniques (PATs) where appropriate and utilising more significant PATs where there are validated performance issues. We therefore consider it more appropriate for the rating to be driven by the application of PATs than the underlying performance data and, therefore, have removed the direct link to performance data. We also exclude PATs that are about understanding the circumstances and background, including Notifications, Enquiries, Information Requests and Self-Assessments. This means, the 2025-2026 Annual Rating criteria focuses on Action Plans, Management Assertions, Specific Condition PATs, Periodic Monitoring and Closure Reports, Code Manager/Independent Validation, Referral to Ofgem and Event of Default.
2. Maintenance of Qualification Delay - 2025-2026 Annual Rating considers whether a Party has completed their Maintenance of Qualification (MoQ) activities applicable during the assessed period, and if so, whether their MoQ submission was completed on time. For clarity, if the Code Manager requested follow up information, the extended timelines for this are not considered.
3. CME breach - Whether a Party within Controlled Market Entry (CME) has breached one of their CME Conditions also informs its Annual Rating. Consistent with the approach in previous years, the criteria differentiate between those that breach CME caps by a small amount and larger breaches.
4. Percentage of Theft target achieved - Energy Theft Detection remains a key area of focus of the PAB. Therefore, performance against the assigned theft target under the Theft Detection Incentive Scheme has been used to determine the 2025-2026 Annual Rating. We have applied a de minimis of 0.5% of market share, so that Parties with very small theft targets are not disproportionately represented. Consistent with the approach introduced in 2024-25, I&C Suppliers have received a relaxation of this criterion.
5. NEW: Market Schemes (Payment Method Levelisation) – Accurate submissions and timely payments form an important part of the overall functioning of TDIS. Therefore, the Code Manager included Party performance against these criteria in the 2025-2026 Annual Rating.
6. NEW: Successfully meeting M10 (applicable to those undergoing MHHS transition only) - In ‘Directions to Market-wide Half Hourly Settlement Participants’, Ofgem has outlined the requirement for any Participants to submit MHHS (Market Half Hourly Settlement) Programme milestones on time and respond promptly to any queries and follow up received from Code bodies. Any escalations for the Programme are managed jointly by the REC and BSC. Milestone 10 (M10) was of particular importance given the fact it secured the readiness for the Programme to move forward by ensuring DNOs are ready to assist with the transition. As a result, meeting this milestone forms an important part of overall Party compliance and is included in the 2025-2026 Annual Rating.

The tables below show each component alongside their assessment criteria. They are split between those applicable to MEMs, Suppliers and DNOs.

Please note the following:

• The rating is determined based on the ‘lowest score’ approach. This means that where you receive varying scores across categories, the lowest one will be your overall rating.
• The rating has been applied at a grouped Party level when Parties have elected to be grouped for Performance Assurance purposes. If you are a Party with multiple organisations and have not elected to group, you may need to view multiple dashboards to see the Rating for each of your organisations and similarly will appear multiple times on the peer comparison list (except for Metering Organisations where no peer comparison is available this year).
• We reiterate that the only PATs considered in the Annual Rating are Action Plans, Management Assertions, Specific Conditions, Referral to Ofgem and Event of Default. Other PATs such as Enquiries, Information Requests and Notifications are not considered in the Annual Rating. Definitions of all PATs mentioned can be found in the Performance Assurance Methodology and Techniques document found within the Category 3 Documents section of the REC Portal.

As the period under assessment is the 01 April 2025 - 31 March 2026, it is the 2025 MoQ submission that is considered, not the 2026 submission.

Where to find your Annual Rating

The 2025-2026 Annual Rating and accompanying reason(s) for Supplier, DNO and Metering Organisations will be available in the table on the Overall Score tab of the Performance Assurance (PA) Dashboards.

All reasons for the Party being rated in the given category will be listed under the field 'Annual Rating Reason'. If a Party has a rating of ‘Performing’, the 'Annual Rating Reason' will not apply. Other fields listed in this table are standard metrics or information tracked by the Code Manager on a regular basis and are not related to the 2025-2026 Annual Rating.

Further reading

• 2025 - 2026 Annual Rating - Consultation Responses
• 2024-2025 Annual Rating