Reporting in the UK – Consolidated Segmental Statement
The energy market regulator, Ofgem, requires the six major energy suppliers in the UK to publish a Consolidated Segmental Statement (‘CSS’), summarising the revenues, costs and profits or losses of their generation and supply businesses.
The CSS sets out the revenues, costs and profit/losses for each segment in a specific template, to make sure that the performance of each energy company can be easily compared. It includes the results of all RWE entities in the UK that held an electricity generation, electricity supply or gas supply licence, and engaged in the activity of electricity generation or gas/electricity supply during a financial year.
To comply with the Ofgem guidelines results from certain activities are omitted from the CSS. For example, the UK Generation segment operates a portfolio of combined heat and power plant (CHP), which do not require a generation licence. Similarly the activities of the Energy Services business in the Supply segment, which performs activities such as boiler installation and maintenance, are also excluded. These are referred to as "out of scope" activities.
The consequence of these and other adjustments necessary to comply with the Ofgem guidelines, means that the Earnings Before Interest and Tax contained in our CSS is not directly comparable with the segmental operating result published in the RWE AG Annual Reports. To help explain the differences between the two, a detailed reconciliation is contained within the CSS, which clearly sets out what the variance is, and why it arises.
Since 2014 Ofgem has required that the CSS be subject to independent audit, and this has been completed by PricewaterhouseCoopers LLP.