6. Management Case
The purpose of this Management Case is to outline the next steps for developing and implementing the programme for the Energy Co.
The Management Case will review:
- The programme and project management plans
- The governance structure
- Risk register
- Contingency plans.
6.2 Programme and project management plans
For the purposes of the SOC, the following indicative programme has been established. This will be updated as the programme progresses. The likely outputs are:
- A project team will be appointed in early 2018 to develop and manage the programme
- The OBC will be developed during 2018 and approved at the beginning of 2019. During this time extensive market testing will be performed to test assumptions made within the SOC and will build on the initial analysis to inform recommendations. The OBC will confirm the operating model and delivery structure for the Energy Co.
- In the final months of 2018, there will be a consultation period for approximately 12 weeks. The consultation will provide a range of stakeholders the opportunity to discuss the Energy Co. with the management team. Stakeholders will include SG, consumers, existing service providers, Local Authorities and regulatory bodies
- Following the development of the OBC (subject to approval in early 2019) and the consultation period, an implementation plan will be established as the operating model and delivery structure for the Energy Co. will have been agreed. The implementation plan should consider the following tasks:
- The procurement process required for the selected option. For example the White Label option will require the procurement of a White Label supplier, the 'Licence Lite' requires a TPLS to be identified. The lead times and key activities to progress these processes will be built into the implementation plan
- The implementation plan should consider the extent of the operating requirements, for example if there is any existing capability within the public sector that the Energy Co. could use and the plans to expand on any areas which are not developed
- The process to establish the selected delivery structure and the associated timeline for the set-up of the Energy Co.
- From 2019 to 2020, the main areas of focus will be to develop the FBC. This will provide comprehensive evidence against each of the five cases and will support the final decision whether to proceed with the Energy Co.
- Alongside the FBC a business plan and budget for the Energy Co. will be established. The Energy Co. will need to set objectives and key performance indicators in line with its intended policy purposes. This will provide performance benchmarks for management and provide a basis of accountability for stakeholders
- The Energy Co. will require significant financial support in the early years. The FBC will establish the expected cash flow for the Energy Co. and the funding plan will be developed on that basis
- Subject to approval of the FBC (mid 2020), the regulatory requirements to allow the Energy Co. to operate will be established. Additionally, the executive team to manage the Energy Co. will be appointed and the governance structure finalised
- The intention is to have the Energy Co. operational by March 2021.
The timeline is presented below.
Table 12 - Energy Co. project timeline
6.3 Governance structure
The following governance structure has been proposed for the Energy Co.
Figure 11 - Proposed Governance structure
Source: Scottish Government
This structure will be reviewed and revised as the programme of the Energy Co. develops. The current roles and responsibilities are:
- The Project Board will be responsible for the overall governance of the Energy Co. In order to develop the project effectively SG will need to bring one or more select senior energy sector experts onto the Project Board, who have the relevant experience, ideally both from a private sector energy supply company perspective and from a SG project governance perspective
- The Project Steering Group will manage the project and coordinate information from the work streams to the Project Board and vice versa
- The work streams currently represent the initial areas that will be required to operate the Energy Co., however the specific activities within these will be dependent on the operating model selected for delivery. Work streams and their specific roles will be refined at the OBC stage.
6.4 Risk register
The SG, in line with the development of the Energy Co., has constructed a high level risk register which captures the top ten risks identified within the SOC. Establishing a risk register is the process of identifying and quantifying (where possible) risks associated with the project. The risk register should include a description of any mitigating actions for the risks.
For the purposes of this SOC, risks have been qualitatively assessed and as the programme progresses risks will be reviewed, updated and quantified where possible. The risk register identifies a range of risks, all of which are likely to have an adverse impact on the successful implementation of the Energy Co. unless appropriately mitigated. Risk owners will be assigned to each risk and an updated version of the risk register should be completed for the OBC. The initial risk register has been included at Appendix F.
6.5 Contingency plans
Should Scottish Ministers decide that strategic intervention is not required in the form of an Energy Co., a contingency plan should be adopted as an alternative solution. The contingency plan should look to set similar objectives to that of the Energy Co. in supporting consumers and helping to alleviate poverty.
At this stage of the programme, detailed contingency plans have not been made, however, alternative plans with these strategic aims as their focus, will be further developed and considered within an options appraisal in the OBC.
6.6 Conclusion and next steps
The Management Case has considered the initial steps required to progress the programme for the Energy Co. As the project develops the OBC and FBC will detail further the plans to successfully implement the Energy Co. Below we have highlighted the key next steps which should be undertaken within the OBC;
Socio- economic Case
- Confirm the delivery structure for the Energy Co. and the approach to implementing the selected structure.
- Confirm the preferred operating model for the Energy Co. and the approach to implementing the preferred model including, procurement strategy and necessary supply licences.
- Develop a financial base case based on the chosen operating model and delivery structure.
- Develop a robust and comprehensive project plan, confirming dialogue and decision points with SG.