KPMG with the Department for Energy Security and Net Zero

KPMG with the Department of Energy

Social Value

MCA Awards Finalist 2024

The energy crisis of late 2022 meant electricity and gas became unaffordable for most UK households. To enable consumers around the country and across social strata to keep using power and heat their homes, a solution was urgently needed – and the Government devised one of the biggest policy interventions in modern history, known as the Energy Price Guarantee (EPG) Scheme, as a response to cap typical household bills at £2,500 a year.

Energy Suppliers delivered the EPG but to make this enormous Scheme viable, Supplier delivery needed to be checked, monitored, and assured by a third party. The Department for Energy Security and Net Zero (DESNZ) appointed KPMG to perform this work.

KPMG’s brief covered over 30 Energy Suppliers providing energy to more than 20 million meters. Just as DESNZ and Suppliers had to work at speed, so did KPMG. A 100+ strong, multidisciplinary, and highly skilled team was mobilised within a matter of days.

Within less than two weeks, leveraging other assets the firm had previously built such as its Cognitive Contract Management platform, KPMG stood up a technical solution that could receive huge amounts of data from Energy Suppliers.

The scope of work included reviewing Suppliers’ processes to ensure they were appropriately set up for the Scheme; detailed Discount Application testing to verify discounts were being properly applied and passed on to customers; matching data to billing information; and investigating any anomalies.

The KPMG team had to be highly agile to adapt as the Scheme evolved, and had to continuously adapt to ensure the audit programme was continuing to address new and emerging risks. For example, KPMG’s work on Prepayment Meters (PPMs) highlighted industry-wide challenges that have led to the design of a bespoke audit programme for PPMs.

In addition, KPMG was required to deviate from its original methodology during certain stages of the project, significantly changing course as the Scheme evolved. This was necessary in part because the Scheme was originally envisaged to run for 12-18 months but, due to unexpected falls in the energy price, it came to an interim close after nine months (end of June 2023). This meant the firm needed to be truly agile and bring much of its work forward. KPMG also needed to produce initial Scheme reports and reconciliations for each Supplier to give to DESNZ much earlier than originally scheduled.

KPMG’s robust quality assurance framework ensured that multiple layers of review were undertaken for all client outputs so that the highest quality standards were continuously maintained. The work also involved enormous amounts of data and analysis, including:

  • Analysing over 1.7 billion rows of industry data
  • Assessing contract types for over 20 million meterpoints
  • Reviewing over 50,000 energy tariffs

The work has had huge social value – benefitting millions of UK consumers, particularly those on lower incomes who would be disproportionately affected and vulnerable customers. It has also delivered significant commercial benefits to the public purse and protected taxpayer money – a project the firm is proud to be part of.

View the KPMG profile in the MCA Members Directory.