Establishing a harmonised prioritisation process in the Industry Codes: statutory consultation

What this is about

This is the first statutory consultation that gives the Strategic Direction Statement teeth. The Energy Act 2023 handed Ofgem a new architecture for governing the eleven industry codes: a power to set strategic direction, a power to license and supervise code managers, and a power to drive modifications it considers necessary. The Strategic Direction Statement is the policy instrument; code governance reform is the institutional vehicle. Neither does anything on its own. What turns strategy into delivery is the question of which modification gets worked on next, by whom, and how fast. That is what prioritisation decides, and that is what this consultation proposes to harmonise across every designated code.

The problem being fixed is real and structural. Today each code runs its own prioritisation logic, or none. The BSC, the CUSC, the UNC and the rest each have their own panels, their own workgroup capacity, their own informal sense of what is urgent. A cross-cutting reform such as connections, market-wide half-hourly settlement, or a settlement change that touches the BSC and the REC and the DCUSA simultaneously has to fight for attention in several queues at once, each governed by different rules and different bodies, with no mechanism to sequence them coherently. The result is that the modifications most central to system-level reform are the ones most exposed to queue friction, because they are the ones that span the most codes. Ofgem is using the transitional powers in the Act to impose a single prioritisation process across all codes, plus a licence obligation on code managers to cooperate with it and to align prioritisation with the SDS. The timing is not arbitrary: the SDS framework was confirmed in the preceding decision on the preliminary Strategic Direction Statement and governance arrangements, and prioritisation is the first operational lever needed to make it bind. Without it, the SDS is a statement of intent with no transmission mechanism into what actually gets built.

Read against the incentive structure, this is an attempt to fix a coordination failure that the existing institutions cannot fix themselves. Eleven codes, eleven separate prioritisation regimes, and no actor with the authority or the interest to sequence work across them. That is a classic case of good intentions defeated by institutional fragmentation: each code panel optimises its own queue, nobody optimises the system, and the cross-code modifications that matter most for reform are precisely the ones that fall between the stools. Harmonisation plus an SDS-alignment duty is the mechanism Ofgem is reaching for. Whether it works depends almost entirely on the criteria and the governance, which is where the detail sits.

Options on the table

The consultation does not present discrete either/or options. It is a statutory consultation on a single proposed model, structured around four policy areas, with proposed legal drafting for each code already written. The real choices are embedded in those four areas, and that is where a response has leverage. Treat each as a design choice on which Ofgem is genuinely consulting, not a settled position.

Prioritisation process

The proposal is a single, common process for assigning priority to modifications, replacing the eleven separate regimes with one. The mechanics of how a modification enters the queue, how it is assessed for priority, and how that priority is reviewed would be the same whether the change sits in the BSC or the IGT UNC. The winners here are proposers of cross-code modifications and Ofgem itself, which gains a coherent lever over the whole code estate. The friction falls on the individual code panels and code managers, who lose discretion over their own queues. The substantive question is whether one process can accommodate codes that differ enormously in scale and tempo: the BSC modification pipeline is not the SQSS modification pipeline, and a process calibrated for the busy codes may impose dead weight on the quiet ones.

Prioritisation criteria and categories

This is the load-bearing part. Criteria determine what counts as high priority; categories determine how modifications are bucketed and triaged. Whoever writes the criteria controls the queue. If SDS alignment is itself a criterion, then the SDS becomes the de facto sequencing instrument for all eleven codes, which is the entire point of the reform and also its principal risk. The question worth pressing is how much weight SDS alignment carries against criteria such as consumer benefit, urgency, deliverability, and legal necessity, and whether the criteria are specific enough to constrain discretion or loose enough to rationalise any ordering after the fact. Vague criteria do not remove the coordination problem; they relocate it into the act of judgement and make it less visible.

Prioritisation governance

This sets who decides priority, who can challenge it, and where the appeal sits. The proposal pairs the harmonised process with a licence obligation on code managers to cooperate with prioritisation and support SDS alignment. That obligation is the enforcement mechanism: it converts cooperation from a matter of goodwill into a licence condition. The beneficiary is Ofgem, which gains a direct line of authority into code managers' work programmes. The exposure falls on code managers, whose operational independence narrows, and on code parties, whose ability to push a modification up the queue now depends on how the governance treats challenges. The question to test is whether there is a transparent, reviewable basis for priority decisions, or whether priority becomes an administrative determination with limited recourse. An unappealable priority decision is a single point of failure for every reform that depends on it.

Policy implementation

This covers transition: how the new process comes into force, what happens to modifications already in flight under the old regimes, and the basis for using the Act's transitional powers. Ofgem has published a separate notice document setting out which transitional powers it proposes to use and its justification. The practical stakes are real for anyone with a live modification: a change that was progressing under a code's existing prioritisation could be re-triaged under the new criteria, which can move it up or down. The question is whether the transition is clean and time-bound or whether it creates a period in which the rules are ambiguous and modifications stall while the regime changes underneath them. Delay during transition is a cost borne by every proposer in the queue, not a neutral administrative interval.

Questions being asked

Ofgem has not published the individual numbered questions in the page text; they sit in the consultation document and the accompanying response template (DOCX, 97.88KB). What the consultation tells us is the structure: feedback is sought on the four policy areas, on the proposed Authority guidance in Annex A, and on the proposed legal drafting for each code in Annexes B to L. Group a response along these lines.

The four policy areas

- Is a single harmonised prioritisation process workable across codes that differ by orders of magnitude in modification volume and tempo? (Really asking: does one process fit both the BSC and the SQSS, or does harmonisation impose dead weight on the quiet codes and under-serve the busy ones?) - Are the proposed prioritisation criteria and categories specific enough to constrain discretion? (Really asking: can the criteria be used to justify any ordering after the fact, and how much weight does SDS alignment carry against consumer benefit, urgency, and deliverability?) - Is the prioritisation governance transparent and reviewable, with a meaningful route to challenge a priority decision? (Really asking: is priority an appealable determination or an administrative fiat, and is the code manager licence obligation proportionate?) - Is the proposed implementation and transition clean and time-bound? (Really asking: what happens to modifications already in flight, and how long is the period of regulatory ambiguity?)

Annex A: the Authority guidance

- Does the proposed guidance on code modification prioritisation give code managers and proposers enough certainty about how priority will actually be assigned in practice? (This is where the criteria become operational. The guidance, not the high-level criteria, is what will be applied day to day. Scrutinise it harder than the consultation text.)

Annexes B to L: the per-code legal drafting

- For each code you have an interest in, does the proposed legal drafting (Annex B BSC, C CUSC, D D-Code, E DCUSA, F Grid Code, G IGT UNC, H REC, I SEC, J SQSS, K STC, L UNC) faithfully implement the harmonised process without introducing code-specific distortions? (Really asking: harmonisation is only as good as eleven separate pieces of drafting that must each say the same thing. Inconsistency between annexes reintroduces exactly the fragmentation the reform is meant to remove. Check the drafting for the codes you care about against Annex A.)

Transitional powers

- Is Ofgem's proposed basis for using the Energy Act 2023 transitional powers, set out in the separate notice document, sound and proportionate? (Really asking: the legal route matters because it determines what can be challenged later. A weak basis for the transitional powers is a vulnerability for the whole reform.)

How to respond

This consultation has closed. It opened on 20 November 2025 and closed on 13 January 2026, and its status is "Closed (awaiting decision)." The page also references a 12 January 2026 date for returning the response form by email; the headline closed date is 13 January 2026. Either way, the window has passed and no response can now be submitted.

For reference, the stated method was to complete the response template (DOCX provided with the consultation) and email it to industrycodes@ofgem.gov.uk.

What matters now is the decision, not a response. This is awaiting a statutory decision from Ofgem, and that decision is the one to watch: it will fix the prioritisation criteria and the per-code legal drafting that determine the queue for every cross-code reform that follows, including connections, MHHS, and settlement change. Track the decision document and, critically, the final Annex A guidance and the final per-code drafting, because that is where the criteria stop being consultation language and start binding what gets built and when.