IOG Terms of reference

1. Background

1.1. Throughout RIIO-ED1 Electricity North West (ENWL) has operated a number of stakeholder advisory panels and forums which have contributed scrutiny of ENWL’s ED1 business plan commitments and provided input into the development of its business plan for RIIO-ED2. In addition, ENWL also received scrutiny and challenge throughout the development of its ED2 business plan from its independent Customer Engagement Group (CEG) which was established to ensure that the final plan reflected the needs and preferences of consumers.

1.2. To ensure that the customer voice continues to be heard over the duration of the RIIO-ED2 price control ENWL has refreshed its stakeholder advisory panel structure and also established an Independent Oversight Group to provide additional assurance of customer and stakeholder engagement in decision making and to review ENWL’s performance against its business plan commitments as far as they pertain to stakeholders and customers.

1.3. The ENWL Independent Oversight Group (“IOG”) is a panel of independent individuals, with an independent Chair together with members representing each of the six advisory panels that ENWL has established to ensure ongoing stakeholder and customer input into its decision-making processes in important work areas.

2. Role of the Independent Oversight Group

2.1. The primary purpose of the IOG is to provide independent scrutiny of ENWL’s performance during the RIIO-ED2 period against the commitments made to customers in its business plan.

2.2. The IOG will advise and challenge ENWL on how to improve and keep delivering the best service to its customers.

2.3. The IOG will be presented with detailed information about ENWL, but members are not expected to be experts in electricity, engineering or business issues such as finance and economics.

3. Objectives and Scope

3.1. The IOG has the following objectives:

• To ensure customer and stakeholder engagement is contributing to shape ENWL’s delivery of its business plan commitments and decision-making.
• To advise on the quality and scope of ENWL’s stakeholder engagement and the extent to which it is reflected in ENWL’s overall priorities and approach.
• To act as a critical friend and advisor; understanding challenges and expressing views about key issues and priorities that may affect delivery of the business plan commitments as they pertain to stakeholders and customers.
• To review and consolidate feedback from ENWL’s advisory panels directly to the CEO, including raising any areas of concern.
• To produce an annual report on its activities that is provided to ENWL, Ofgem and the public.

3.2. The IOG has the following scope:

• To review ENWL’s performance against its business plan commitments including, but not limited to, those which are not reported to Ofgem via the Regulatory Reporting Packs (RRP), as far as they pertain to customers and stakeholders.

3.3. To review and advise upon the stakeholder feedback reflected in ENWL re-opener submissions to Ofgem and any other planned changes in respect of business plan commitments where appropriate during the RIIO-ED2 price control period The following areas are not within the scope of the IOG:

• Financial topics such as cost of capital, capital structure and financeability
• Cyber Information Technology and Cyber Operational Technology
• ENWL’s compliance with its Distribution Licence and associated regulatory obligations, including meeting the reporting requirements as determined by Ofgem or other statutory regulatory bodies
• The IOG does not have decision-making powers

4. Membership and responsibilities

4.1. The IOG will be led by an independent Chair, initially appointed by ENWL. Once the IOG has been established any changes to the Chair are at the discretion of the ENWL CEO.

4.2. In the absence of the Chair the IOG members present shall elect one of themselves to chair the meeting.

4.3. Members of the IOG will initially be appointed by ENWL to individually chair ENWL advisory panels.

4.4. Thereafter the Chair shall work with ENWL to recruit members of the IOG where changes are required, noting that future recruitments remain linked to the appointment of future advisory panel chairs.

4.5. These advisory panels will report into the IOG, as required, to fulfill the IOG terms of reference. The advisory panels will each also have agreed terms of reference. The advisory panel terms of reference will also be shared with the IOG to ensure transparency and understanding of the remit of each panel.

4.6. Membership of the IOG shall be initially reviewed after 12 months and every other year thereafter. It is expected that members will serve a maximum of three terms but this may be extended at the discretion of ENWL.

4.7. IOG members are selected according to their expertise and experience and must act in an independent capacity.

4.8. IOG members are responsible for undertaking appropriate preparation for each meeting including reading all the supporting information.

4.9. IOG members are expected to attend most meetings in person, although participation remotely may be agreed with the IOG Chair in certain circumstances.

4.10. Whilst deputies will not be permitted, IOG members may invite members of their respective advisory panels to present information to the IOG where those individuals have a particular insight or expertise that is relevant to the work of the IOG.

4.11. Individual IOG members are responsible for notifying ENWL and the IOG Chair if they wish to leave the IOG. The IOG Chair will ensure that the overall role of the IOG is not affected during any change of membership.

4.12. A member may be removed from the IOG by the Chair, in consultation with the Company, if they have committed a serious breach of the Standards of Conduct laid down in these terms of reference.

5. Standards of Conduct

5.1. The Chair and IOG members will observe the highest standards of integrity and independence and comply with the principles established by the committee on standards in public life (Nolan Principles).

5.2. The independence of the IOG Chair and Members from ENWL and Ofgem is essential.

5.3. The work of the IOG will be conducted in as transparent a manner as possible, without compromising either individual rights or ENWL’s commercially confidential information.

5.4. All members must declare any conflicts of interest that may be relevant to their role as a member of the IOG. A conflicts of interest register will be maintained by the IOG and kept available for public scrutiny. IOG members must also declare any conflicts of interest at the start of any meeting of the IOG.

5.5. IOG members may receive commercially sensitive data or personal data relating to named individuals in connection with their role as IOG members. IOG members must maintain appropriate confidentiality of any commercially sensitive data, intellectual property or personal data shared by ENWL. Members of the IOG must agree to keep all such information confidential and to abide by all laws, regulations and legislation in respect of such information (including the processing of any such information).

5.6. Members of the IOG must agree to enter into any separate agreements with ENWL in respect of confidentiality, intellectual property and/or data protection as ENWL may reasonably require.

5.7. IOG members must conform to ENWL’s codes of conduct and with the terms of the Consultancy Agreement established between each individual member and ENWL.

6. Meetings

6.1. The IOG shall normally meet not less than four times each year. Additional meetings may be arranged as ENWL deems appropriate.

6.2. The quorum will be three members plus the Chair (or elected alternate).

6.3. ENWL will provide secretariat support to the IOG.

6.4. The secretariat shall record the names of those present and in attendance and the agreed actions of all meetings of the IOG.

6.5. The draft minutes and agreed actions of the meetings shall be circulated promptly, not later than 10 working days after the meeting, to all members of the IOG.

6.6. A forward programme of indicative meeting dates and times will be agreed on at least a six-month rolling basis. The meeting agenda and any supporting material will be issued no later than 5 working days before the date of the meeting by the secretariat.

6.7. Senior ENWL leaders will attend IOG meetings to ensure a direct link to the business.

6.8. Other members of the company and external stakeholders may be invited to attend for agenda items where they have relevant responsibility or knowledge.

6.9. The IOG Chair will have regular engagement meetings with the ENWL CEO (and Ofgem and other chairs of similar independent challenge groups, if and as required, in consultation and agreement with the ENWL CEO).

6.10. Meetings held with third parties conducted in the capacity of Chair/Member of the IOG will be recorded and notified to ENWL.

6.11. No discussions with Ofgem, Government departments or bodies, relevant to the IOG, will be held without notifying ENWL prior to the meeting, including clarification of the purpose of the meeting.

7. Secretariat

7.1. ENWL will provide secretariat resources to enable the IOG to discharge its activities. This support will include:

• Developing forward work plans and meeting agendas in liaison with the Chair
• Organising meetings including the issuing of agendas as agreed with the Chair and meeting papers
• Producing meeting minutes and maintaining a log of agreed actions as agreed with the Chair
• Ensuring IOG and advisory panel information (and associated documents) on ENWL’s website is kept up to date

8. Expenses

8.1. The Chair and the members of the IOG will be paid a day rate fee by ENWL and additionally can claim reasonable costs and expenses incurred in attending meetings or otherwise conducting IOG business.

8.2. The terms for the payment of fees and expenses will be set out in the individual contracts for the provision of services agreed between ENWL and the IOG Chair and members.

9. Terms of Reference review

9.1. A formal review of the terms of reference will be completed by ENWL and the IOG after twelve months, with subsequent reviews taking place every other year. Any changes will be reviewed by the IOG and agreed/approved by ENWL.

9.2. Changes to the terms of reference can be proposed by a member at any time and will be incorporated into the annual review unless the Chair and/or CEO believes the matter is urgent.

9.3. Changes to the Terms of Reference can be proposed by ENWL at any time and will be incorporated into the annual review unless the Chair and/or CEO believes the matter is urgent.

31 March 2023