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BSC Panel 205 8 November 2012. Report on Progress of Modification Proposals Adam Lattimore 8 November 2012.

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Presentation on theme: "BSC Panel 205 8 November 2012. Report on Progress of Modification Proposals Adam Lattimore 8 November 2012."— Presentation transcript:

1 BSC Panel 205 8 November 2012

2 Report on Progress of Modification Proposals Adam Lattimore 8 November 2012

3 2 Modifications Overview New Definition- AssessmentP272, P283, Standing Issue 45 ReportP274, P282, P285, P286 With Authority - Authority Determined P280 Self-Gov Determined -

4 205/04 P272 ‘Mandatory Half Hourly Settlement for Profile Classes 5-8’ David Kemp 8 November 2012

5 4 Current arrangements: SVA Metering Systems below 100kW can be settled HH or NHH Usually settled NHH, but Suppliers can elect to settle HH Measurement Class used to reflect how a Metering System is settled Profiled data used for NHH-settled sites Consumption for each Settlement Period estimated using profiles More accurate estimations once Meter reading obtained P272: Issue (1 of 2)

6 5 Changes to Supply Licence requirements All new Meters for PC 5-8 customers must be advanced Meters Capable of recording HH consumption and being accessed remotely All PC 5-8 customers must have advanced Meters by 6 April 2014 No mandate to settle these Meters HH Can elect to continue to settle NHH Proposer contends that settling such sites NHH is less accurate Prudent to make better use of the HH data available P272: Issue (2 of 2)

7 6 All PC 5-8 sites required to be settled HH from 1 April 2014 Five days before mandate goes live More appropriate date as aligns with start of BSC Year, the April contract round and annual processes (e.g. DUoS charging) Transition plans submitted to PAB by 31 May 2013 Allows for issues with transferring customers to be managed/mitigated (e.g. bulk CoMC) P272: Proposed Solution

8 7 All PC 5-8 sites required to be settled HH from 1 April 2015 One year later – allows more time to manage issues Transition plans submitted to PAB by 31 May 2014 All other aspects/requirements unchanged from proposed solution Implementation Date is the only difference P272: Alternative Solution

9 8 Costs: Central Costs: Approx. £19k (either solution) Participant Impacts: Suppliers Distributors HH & NHH Data Aggregators Meter Operators & Meter Operator Agents Document Impacts: BSC Sections L, S, S-1 & X-1 BSCP533 & Appendix A Profile Administrator SD PARMS URS P272: Impacts and Costs

10 9 Workgroup recommends Implementation Date for Proposed Modification of: 1 April 2014 if approved on or before 14 February 2013 Workgroup recommends Implementation Date for Alternative Modification of: 1 April 2015 if approved on or before 13 February 2014 P272: Implementation Date

11 10 Assessment Report was presented to Panel in January 2012 By majority, Workgroup believed: Neither Proposed nor Alternative was better than baseline Alternative was better than Proposed Workgroup recommended that both P272 Proposed and P272 Alternative were Rejected Panel instructed Workgroup to undertake a cost-benefit analysis P272: Workgroup’s Previous Conclusions

12 11 Defined Cost Categories and potential Benefits for P272 Data sought from Suppliers & Distributors through two consultations Costs and benefits calculated up to 2020 Defined range of estimates for costs and benefits Due to range of costs provided and sensitivity of some benefits Also considered scenarios where P272 was not implemented Different levels of voluntary transition to HH elective by 2020 P272: Cost-Benefit Analysis (1 of 2)

13 12 Proposed Modification: Total Costs: £112m (range from £46m to £199m) Total Benefits: £144m (range from £71m to £198m) Gives net outcome of +£32m (range from –£129m to +£152m) Alternative Modification: Total Costs: £103m (range from £41m to £182m) Total Benefits: £128m (range from £63m to £176m) Gives net outcome of +£25m (range from –£120m to +£134m) P272: Cost-Benefit Analysis (2 of 2)

14 13 Workgroup majority view: believe costs would outweigh benefits Different views on whether costs outweigh benefits or vice versa View that not all benefits would be realised, and that costs may be exceeded Focusses on small segment of market Significant impact Better to do as part of a wider change? P272: Workgroup’s Discussions (1 of 2)

15 14 Consider DUoS pricing differential to be significant obstacle Obstacle to moving to HH elective now Dis-incentivise early migration under P272 Current climate – avoid increasing customer bills But view that P272 would encourage other changes in this area HH Settlement good in principle, but not at any cost Workgroup’s views largely unchanged following CBA P272: Workgroup’s Discussions (2 of 2)

16 15 Workgroup consulted Industry as part of original assessment Majority supported P272 Disagreed with Workgroup’s majority view Views for/against were broadly in line with those of the Workgroup Workgroup were unable to consult again following CBA P272: Responses to Original Consultation Does P272 Better Facilitate Applicable BSC Objectives? YesNoNeutral 1161

17 16 P272: Applicable BSC Objectives ABOYes (both solutions)No (both solutions) (c)Minority Increase competition – smaller Suppliers work better in HH market Better use of available data HH Settlement better in principle Majority Significant costs for small segment of market Unlikely to realise all the benefits Potentially increases customer costs If HH Settlement good, more would be doing it now Differential in DUoS charges Not convinced PCs 5-8 should be treated differently to PCs 1-4 (d)Minority Benefits outweigh costs HH market works well, issues in NHH HH more efficient, more accurate data No longer need to profile PCs 5-8 Majority Costs outweigh benefits Change cannot come at any cost More efficient to do a market-wide solution – this is wrong solution at wrong time HH Settlement better in principle, but not conclusive benefits outweigh costs

18 17 Workgroup has discharged its Terms of Reference By majority, Workgroup believes: Neither Proposed nor Alternative is better than baseline Alternative is better than Proposed Workgroup recommends that both P272 Proposed and P272 Alternative are Rejected P272: Conclusions

19 18 The P272 Workgroup invites the Panel to: AGREE an initial recommendation that the P272 Proposed Modification should not be made; AGREE an initial recommendation that the P272 Alternative Modification should not be made; AGREE an initial recommendation that the Alternative Modification is better than the Proposed Modification; [Continues] P272: Recommendations (1 of 3)

20 19 AGREE an initial Implementation Date for the P272 Proposed Modification (if approved) of: 1 April 2014 if an Authority decision is received on or before 14 February 2013; AGREE an initial Implementation Date for the P272 Alternative Modification (if approved) of: 1 April 2015 if an Authority decision is received on or before 13 February 2014; [Continues] P272: Recommendations (2 of 3)

21 20 AGREE the draft legal text for the P272 Proposed Modification; AGREE the draft legal text for the P272 Alternative Modification; AGREE that P272 is submitted to the Report Phase; and AGREE that ELEXON will issue the P272 draft Modification Report (including the draft BSC legal text) for a 15 Working Day consultation and will present the results to the Panel at its meeting on 13 December 2012. P272: Recommendations (3 of 3)

22 205/05 ‘Aligning Supplier Charge SP08a calculation with current practice’ David Barber 8 November 2012

23 22 What are Supplier Charges? Remedial technique, part of the Performance Assurance Framework overseen by PAB Suppliers incur a charge on failing to meet certain performance standards Compensates Parties disadvantaged by those not meeting those standards 11 PARMS Serials that monitor Suppliers, of which 4 have associated Supplier Charges Recommended Modification from the PAB concerns PARMS Serial SP08 In particular SP08a ‘Percentage of Non-Half Hourly (NHH) Energy Settled on Annual Advances’ Background

24 23 The Issue: Supplier Charges applicable to PARMS Serial SP08a are and have always been calculated using underperformance values rounded to 1 d.p. The Code requires this to be calculated to 2 d.p. Proposed Solution: PAB recommends that Modification is raise to amend Code Section S-1 to reflect that SP08a is calculated to 1 d.p. to reflect existing practice How did the PAB get to its recommendation? Error between PARMS and Code was identified Two options: amend system (CP) or amend the Code (Modification) Analysis carried out revealed cost of changing the systems outweighed the benefit of doing so PAB considered both options, recommended a Modification should be raised Modification Proposal

25 24 Modification Proposal better facilitates the achievement of BSC Objective (d): Removes potentially confusing inconsistency from the Code Ensures that the alternative potentially costly PARMS changes and the resultant cost impact on parties is not needed Applicable BSC Objectives

26 25 Recommend: Report Phase – approve Merits of Proposal are self-evident: Believe it is self-evident that an inconsistency exists between the Code and PARMS. Most efficient method to address issue is to amend the Code Recommend Implementation Date of: One working day after Self-Governance appeal window closes (8 January 2012) No links with any current SCRs Proposed Progression (1 of 2)

27 26 We are requesting Self-Governance We believe Proposal meets Self-Governance Criteria: No material impact on consumers, competition, the Transmission System or BSC governance Corrects a known inconsistency No impacts on Parties, no change to how Supplier Charges are calculated Will issue Self-Governance Statement to Authority and seek views of Report Phase Consultation respondents Proposed Progression (2 of 2)

28 27 We invite the Panel to: RAISE the Modification Proposal in Attachment A; SUBMIT the Modification Proposal directly to the Report Phase; AGREE a provisional view that the Modification should be made; AGREE a provisional Implementation Date of 08 January 2013; AGREE the draft legal text in Attachment B; AGREE a provisional view that the Modification meets the Self- Governance Criteria; and AGREE that the Draft Modification Report should be issued for consultation and submitted to the Panel at its meeting on 13 December 2012. Recommendations

29 Minutes of Meeting 204 & Actions Arising Adam Richardson 8 November 2012

30 Chairman’s Report BSC Panel Andrew Pinder 8 November 2012

31 205/01 ELEXON Report: Smart Update Peter Haigh/Chris Rowell 8 November 2012

32 Distribution Report David Lane 11 October 2012

33 National Grid Update Ian Pashley 8 November 2012

34 European Update: Ofgem Report Dora Ianora 8 November 2012

35 205/01a Report from the ISG 8 November 2012

36 205/01b Report from the SVG 8 November 2012

37 205/01c Report from the PAB 8 November 2012

38 205/01d Report from the TDC 8 November 2012

39 205/02 Trading Operations Report 8 November 2012

40 205/03 Change Report 8 November 2012

41 205/06 REMIT: Reporting Inside Information David Osborne 8 November 2012

42 41 1.Information paper to the Panel. Why’s it come back to the Panel? Revised ACER guidelines published Discussion with a number of Parties indicate it is timely and appropriate for this topic to be raised with the Panel 2.January – BSC Panel requests ELEXON not to develop a REMIT inside information platform for GB electricity due to liability issues 3.September – ACER publishes revised REMIT Guidance: Platforms should be used where available Specified requirements for what should be published (wherever published) Temporary failure of third party transparency platforms should not be seen as a breach of the disclosure obligation Platforms should conform with “Regulated Information Service” requirements Platforms should be able to send data to ACER/regulators and store it for at least 2 years 4.October – National Grid launches REMIT transparency platform for GB gas with liability disclaimers REMIT transparency platforms: current GB situation

43 42 5.Development of a central service platform for REMIT information disclosure under the BSC may have several advantages The ability to define precise requirements with industry and regulatory approval under the BSC Modification process The ability to define a system capable of meeting the RIS requirements, including the ability to operate and maintain administrative arrangements designed to prevent conflicts of interest with market participants; data storage for at least 2 years and the ability to onward report If there is interest in this, a BSC Modification would be required 6.The BSC Panel is invited to NOTE paper 205/06 Suggested approach for GB electricity and Recommendation

44 Creation of a New BSC Agent Service Description Update Adam Richardson 8 November 2012

45 BSCCo Business Plan 2013/14: Process and Timetable Victoria Moxham 8 November 2012

46 45 Timetable NovDecJanFebMarApr Board Parties Panel Note Process & Key Themes Review draft Strategy Consider comments & revisions Review Budget & Strategy Consider comments & revisions Issue for comment Workshop Strategy approval Consider Panel comments 1 5 10 8 97 3 2 4 Request to vary timetable 6 11 Approve Budget

47 46 BSCCo Strategy will continue to develop from the mission and vision Maintain and build upon BSCCo’s previous achievements whilst readying the BSC for future market developments “To deliver the BSC effectively, efficiently and economically, to the benefit of our customers” BSCCo’s focus will be on delivering the core and ensuring that the BSC arrangements support future market developments. “To be a leader in the efficient transformation of energy markets by providing shared solutions to address common industry problems”

48 47 BSCCo’s 5 Strategic Priorities Actively manage, and continually improve, BSC services to ensure that we deliver in an efficient, effective and economic way Drive efficiencies and savings in the operation of the BSC Improve the customer experience and develop richer customer relationships Develop BSC Services to address industry challenges Invest in our people for the benefit of the industry 1 2 3 4 5

49 48 Regardless of the outcome of the governance work, this Business Plan is fit for purpose This is a BSCCo strategy No change in the focus on efficient, effective and economic provision of BSC Services We’ve considered comments on the 2012/13 Business Plan, and also feedback from the 2012 customer survey Build upon successes and improvements bedded down over the past 2 years Continue to enhance the experience for BSC Parties Recognise the need to galvanise the BSC for the impacts of market developments (EMR, EU activities, Smart, Smarter Markets etc.) Key Themes and Considerations

50 2012 Customer Survey Results: Presentation for BSCCo Board and BSC Panel Victoria Moxham 8 November 2012

51 50 ELEXON believes this is an excellent set of results. The value for money score has increased by 11% from 2011. The high standard of 2011 has been maintained – the overall satisfaction score of 8+ (out of 10) has reached 65% for the second year running. Some indication of areas for improvement have arisen, but customers have not highlighted anything unexpected or raised any major causes for concern. ELEXON has asked a lot of its customers this year in the Governance and Vires work. We believe this feeling is evident in some responses and comments. Highlights

52 51 Overall satisfaction & value for money SCORE 8+ (Out of 10) 1/ 10 = Not At All Satisfied/ Extremely Satisfied 1/ 10 = Poor/ Excellent Value For Money Satisfaction has remained stable overall. Value for money ratings are three times higher than they were at the start of the study. An 11% improved score of perceived value for money score of 8+ out of 10.

53 52 Scores continue high in key service areas SCORE 8+ (Out of 10) 1= Poor/ 10= Excellent These measures have been fairly stable over the past four years.

54 53 Comparisons with competitors are strong SCORE 8+ (Out of 10) 1= Poor/ 10= Excellent ELEXON/ BSC (79) Electralink/ DCUSA (36) SPAA Ltd/ SPAA (17) Gemserv/ MRA (48) National Grid/ Grid Code (20) National Grid/ CUSC (21) Gas Transporters/ UNC (21) Because the survey was for ELEXON, the position is likely to be somewhat exaggerated. However, ELEXON’s position is currently stable at present while Gemserv seems to be suffering a long-term decline.

55 54 The quality of ELEXON’s people is universally recognised Other areas where we’re doing well They genuinely want to talk to me They know what they are talking about They always follow up on my queries Meeting them is always worthwhile Increased usefulness of Newscast, Circulars and particularly information sheets/process guides 85% of respondents have read them 43% found them very useful (compared to 34% last year) Big improvement in perception of how well we facilitate industry debate (up 13% from last year to 63% satisfaction of 8+ out of 10).

56 55 Key areas for improvement and planned actions ELEXON to focus efforts on senior engagement with the Big 6 companies Overall satisfaction had declined by 15% amongst Big 6 companies A case for dropping the Quarterly Report due to low readership and reporting of the information elsewhere is being prepared. Perceived usefulness of quarterly reports has reduced A piece of work to address web navigation and structure issues is underway. Key stakeholders will be heavily involved in developing the solution. Website still prompts negative feedback (ease of navigation: 26% 8+ score; ease of finding info: 25% 8+ score) New templates are being developed to ensure ease of use and consistency of presentation. Write for the Reader refresher sessions are planned for 2012/13. Quality of documentation (presentation and content) raises some concerns Consideration is to be given to setting appropriate expectations for Panel and committee work and ensuring appropriate timetables of work are maintained. Lower satisfaction about the support we provide to committees and timeliness of Mod process ELEXON plans to focus on how ELEXON can share and maintain expertise and develop new starters’ knowledge. Some negative perceptions about loss of expertise (expertise resource has fallen 5% to 68% 8+ score)

57 Smarter Markets Settlement Reform Work Update David Jones 8 November 2012

58 Any Other Business

59 Next Meeting: 13 December 2012

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