Clarification and Amendments to Annulment Definition in Schedule 23 – Alignment with SLC Obligations
Summary
The current wording of the Annulment definition in REC Schedule 23 – Registration Services does not sufficiently align with the obligations set out in Ofgem’s Electricity Supply Standard Licence Conditions (SLC) 14.2(d),14.4(c) and 14.10. This misalignment has led to inconsistent interpretations of the usage of the Annulment process across the industry compared to the intention of the REC change and the licence obligation. This Issue is seeking further amendments to REC Schedule 23 - Registration Services and clearer guidance. This clarification is essential to prevent retention-based misuse, ensure regulatory compliance, and uphold Consumer trust in the Switching process.
Latest update and next planned activity
Date of latest update
Latest Update
This Change Proposal has been implemented as part of the February 2026 REC Release.
Impacts Overview
Impacted REC Parties and Market Participants
Energy Supplier
Impacted REC Documents
Schedule 24 - Switching Data Management
Priority and rationale
High
Priority last updated on 29 May 2026
Change Reports, Impact Assessments, Consultations and Documents
Change Reports
Solution development
Problem Statement
The current wording of the Annulment definition in the REC Schedule 23 – Registration Services is insufficiently aligned with the obligations set out in Ofgem’s Electricity Supply Standard Licence Conditions (SLC). This has led to inconsistent interpretations of the usage of the Annulment process.
No documents available.
There is currently no Change Plan.
Original submission
Change details
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14 Oct 2025
Change details
Clarification and Amendments to Annulment Definition in Schedule 23 – Alignment with SLC Obligations
The current wording of the Annulment Definition in Schedule 23 remains ambiguous and does not sufficiently align with the obligations set out in Standard Licence Conditions (SLC) 14.2(d),14.4(c) and 14.10. This misalignment has led to inconsistent interpretations of the usage of the annulment process across the industry compared to the intention of the REC change and the licence obligation.
We are seeking further amendments and clearer guidance to ensure the definition explicitly outlines:
• When and how annulments should be used.
• That annulments are only appropriate where a customer has informed their existing supplier that they have not entered into a contract with another supplier.
• That other industry processes such as customer-initiated cancellations should be used when a customer changes their mind after entering into a contract.
We feel this clarification is essential to prevent retention-based misuse, ensure regulatory compliance, and uphold consumer trust in the switching process.
We are seeking further amendments and clearer guidance to ensure the definition explicitly outlines:
• When and how annulments should be used.
• That annulments are only appropriate where a customer has informed their existing supplier that they have not entered into a contract with another supplier.
• That other industry processes such as customer-initiated cancellations should be used when a customer changes their mind after entering into a contract.
We feel this clarification is essential to prevent retention-based misuse, ensure regulatory compliance, and uphold consumer trust in the switching process.
The current ambiguity in the Annulment Definition is creating several challenges:
• Commercial impact due to inconsistent application of the process, which may lead to disputes and regulatory scrutiny.
• Customer confusion, as the lack of clarity sends mixed signals about switching protections and processes.
• Market disruption, particularly for new entrants who may misinterpret the definition, leading to operational inefficiencies and reputational risk
• Commercial impact due to inconsistent application of the process, which may lead to disputes and regulatory scrutiny.
• Customer confusion, as the lack of clarity sends mixed signals about switching protections and processes.
• Market disruption, particularly for new entrants who may misinterpret the definition, leading to operational inefficiencies and reputational risk
An effective solution would be to ensure full alignment between the Annulment Definition in Schedule 23 and the relevant Supplier Licence Conditions (SLC). This should include:
• Clear criteria for when annulments are appropriate.
• Explicit guidance on evidentiary requirements and customer consent.
• Consistent terminology and process expectations across both documents to avoid misinterpretation by suppliers and market participant
• Clear criteria for when annulments are appropriate.
• Explicit guidance on evidentiary requirements and customer consent.
• Consistent terminology and process expectations across both documents to avoid misinterpretation by suppliers and market participant
In the implementation of FMRS, the annulment process was intended to be a core component of the switching arrangements. It enabled Supplier A to prevent a switch from proceeding if the customer had confirmed that no contract had been agreed with another supplier.
This approach sparked considerable debate, particularly around the potential for misuse. Ofgem addressed these concerns in its November 2020 Licence Modification Consultation, outlining its rationale and confirming that the REC Performance Assurance Board (PAB) should actively monitor the use of the annulment process.
In November, Change Proposal R0119 – Annulment Definition – was introduced to provide further guidance within REC Schedule 23. However, since its implementation, we have observed a noticeable increase in the incorrect use of the annulment process. It has become clear that the original intent of the process is now widely misunderstood. Internal tracking has revealed consistent patterns of misuse, raising concerns about compliance and market integrity.
This approach sparked considerable debate, particularly around the potential for misuse. Ofgem addressed these concerns in its November 2020 Licence Modification Consultation, outlining its rationale and confirming that the REC Performance Assurance Board (PAB) should actively monitor the use of the annulment process.
In November, Change Proposal R0119 – Annulment Definition – was introduced to provide further guidance within REC Schedule 23. However, since its implementation, we have observed a noticeable increase in the incorrect use of the annulment process. It has become clear that the original intent of the process is now widely misunderstood. Internal tracking has revealed consistent patterns of misuse, raising concerns about compliance and market integrity.
Impacts
No details provided
Switching experience, Trust and confidence
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Schedule 24 - Switching Data Management
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No details provided
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Energy Suppliers
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No details provided
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No details provided
Priority & timing
No
We believe this issue should be progressed under an urgent timetable to ensure that all industry parties remain compliant with their Supplier Licence Conditions (SLC). Prompt action will help mitigate further misuse and maintain consistency across the market
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No details provided
Switching experience, Trust and confidence
Activity
Change report - Final Change Report has been updated to Test (6).txt.
Status has been changed to Implemented.
vaishnsharma@deloitte.co.uk, Orphaned SME: Lead Assurance Analyst have been allocated as SME.
Implementation Date has been updated to 27 Feb 2026.
Status has been changed to Issue Review.
vaishnsharma has been allocated as SME.