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Timescales For Responding To Requests To Increase Cover

44 - Timescales For Responding To Requests To Increase Cover

  • Proposer
  • Proposing Company NPOWER LIMITED
  • Status Closed
  • Urgent No
  • Synopsis

    Under section 3.7 of Schedule 1 of the DCUSA the User may, by notice to the Company, decrease the amount of collateral at any time provided the decrease would not cause the Indebtedness Ratio to breach the Indebtedness Ratio Limit. Section 3.8 obliges the Company to take the appropriate action to facilitate any reduction within two working days of receiving a request from the User.

    Npower would like to propose to replicate this obligation for instances where the User wishes to increase the amount of collateral. In addition to the above, we believe there would be an efficiency benefit to adding a clause to the DCUSA to state that the Company must respond within five working days of receiving such a request (be that to increase or decrease the amount of collateral). If after five working days the Company has not responded to the User, the User can assume the Company has approved their request and can progress with the relevant steps to facilitate the change in cover levels.

    These changes would allow Users to ensure that they had the most appropriate level of cover in place at all times which during non-peak periods would see the User make cost savings by reducing collateral or other arrangements. Users would be able to efficiently increase their collateral ahead of peak periods utilising existing criteria and avoiding any defaults. These cost savings could be significant and may see benefits being realised by consumers.

    This issue was initially discussed at the 06 and 28 November 2014 DCUSA SIG meeting. Some members agreed to discuss the issue offline with Npower to explore whether there are any other ways of addressing the issue outside of a DCUSA change or alternatively to help clarify the issue to raise as a CP. Following these discussions the proposer agreed to close this issue as the bulk of the issues could be resolved without the raising of a formal DCUSA change.