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user pays services

This presentation discusses the implementation of user pays services in the gas distribution industry, focusing on funding xoserve, driving efficient use of services, and developing innovative solutions for customers. It includes details on the current service provision model, principles of user pays, and commercial arrangements for invoicing.

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user pays services

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  1. user pays services November 2007 user pays presentation 6th November

  2. Background • Part of the latest Gas Distribution Price Control Review to; • Focus on how xoserve should be funded, and • Drive efficient use of xoserve services • Incentivise xoserve and GTs to develop innovative solutions for customers • Consultation recommended that xoserve be funded using; • majority covered by transportation charges provided free at point of delivery, and • part ‘user pays’ services • In their updated GDPCR proposals Ofgem has proposed that £2.83m be excluded from the Transporters allowed revenue. • Ofgem convened workgroups identified a number of current xoserve (ASA) services that will form the user pays services • The industry is to implement arrangements for provision of user pays services • Ofgem view this as the proof of concept of user pays that could inform how the principle could be extended in future. user pays presentation 6th November

  3. user pays • An industry group has been established to deal with implementation matters • See the Joint Office website for all documentation etc • http://www.gasgovernance.com/industryinfo/xoserveGroup • Three meetings held, further meeting scheduled for: • December 10th user pays presentation 6th November

  4. Current service provision model Ofgem Formula revenue Transportation Charges Transporters Shippers Agency Services Agreement services xoserve user pays presentation 6th November

  5. user pays service provision model Ofgem Formula revenue - £2.83m* Transportation Charges - £2.83m* Transporters Shippers Agency Services Agreement services xoserve user pays services payment Shippers / users *subject to GDPCR outcome user pays presentation 6th November

  6. Principles • user pays services will be implemented with the following principles; • As-Is deliverables • Mostly existing service standards • Existing delivery frequencies • Existing business rules • user pays services that were previously free at the point of delivery will now be provided on a directly chargeable basis user pays presentation 6th November

  7. PROVISION OF INFORMATION (type 2)D8TA CENTRE SERVICES user pays presentation 6th November

  8. PROVISION OF INFORMATION (type 2)D8TA CENTRE SERVICES user pays presentation 6th November

  9. REPORTING (type 2) user pays presentation 6th November

  10. …REPORTING (type 2) * to be confirmed user pays presentation 6th November

  11. AQ Enquiries (type 2) user pays presentation 6th November

  12. MUST READS (type 1) user pays presentation 6th November

  13. Shipper Agreed Reads (type 1) user pays presentation 6th November

  14. User Admission (type 1) user pays presentation 6th November

  15. 20/12/07 – Panel Issue for Consultation 21/02/08 – Panel - Issue Recommendation 01/04/08 – Start of Formula Year 24/09/07 – Ofgem – Updated Proposals Published 12/07 – Ofgem – Final Proposals Published Draft High Level Timeline SEP OCT NOV DEC JAN 08 FEB MAR APR MAY User Pays Implementation Discussions +28 days Joint Agency Charging Statement Publication Agency Framework Agreement Draft UNC mod user pays presentation 6th November

  16. user engagement • Next steps: • Contact all users to: • Explain user pays • Assess likely take-up of services • Establish user pays contacts • Early next year • Provide contracts for user pays services • Confirm service delivery arrangements • Note: xoserve are still able to offer commercial services to Shippers and other organisations user pays presentation 6th November

  17. User Pays Commercial arrangements • Type 1 services invoicing • Type 2 services commercial arrangements user pays presentation 6th November

  18. User Pays Invoicing Type 1 • User Pays Invoicing Type 1 • Delivery method of invoices and supporting information • Potential Charge Types user pays presentation 6th November

  19. User Pays Invoicing - Type 1 • Invoices will be sent using existing ad-hoc processes • An existing invoice type will be used (ADN) • New charge types will be added to the invoice for each type 1 service • Notification of these charge types will follow the Operational Rules Governing The Supply of Invoice Charges Via the Ad-Hoc Process (1 month notice) • It is anticipated that there will be one Type 1 invoice per user per month including charges for any/all service lines procured • Supporting information will be delivered via e-mail where required • Payment terms will be in line with Section S of UNC user pays presentation 6th November

  20. User Pays Invoicing – Type 1 Potential Charge Types user pays presentation 6th November

  21. User Pays commercial arrangements – type 2 services • Four contractual documents published in the public domain: • Terms and Conditions • Service Schedules • Contractual documentation e.g. Service Orders • Agency Charging Statement user pays presentation 6th November

  22. User Pays Type 2 commercial model Agency Charging Statement (prices) User Pays Contract docs: Service order etc User Pays customer User Pays Framework Contract – T&Cs Order (under T&CS) Service and Invoice (under T&Cs and KPIs where applicable) User Pays Framework Contract – Schedules: POI – IAD POI – RFI POI – DVD POI – Email rpts Reporting AQ Enquiries xoserve user pays presentation 6th November

  23. User Pays type 2 arrangements Users will order services (using the Service Order document) under the published terms and conditions. The Service Order will be part of the contract. Service Orders will be subject to standard confidentiality provisions. xoserve can implement control measures with users e.g. only accepting orders from authorised persons within user organisations user pays presentation 6th November

  24. User Pays type 2 Service Order e.g. user xoserve Submit Service Order for 12 portfolio reports Validate Service Order and acknowledge Receive acknowledgement Deliver service, confirm delivery Confirmation of delivery Raise invoice (and supporting information) Receive invoice and pay Receive payment user pays presentation 6th November

  25. User Pays Type 2 contract T&Cs…. user pays presentation 6th November

  26. …User Pays Type 2 contract T&Cs user pays presentation 6th November

  27. User Pays type 2 Service Order • The Service Order is used to order type 2 services from xoserve • The Service Order will require key customer information e.g. invoicing contact details etc • xoserve will validate the Service Order for completeness, and can, if required, validate against certain user criteria e.g. authorised submitter • xoserve will acknowledge the Service Order and provide service delivery information • The Service Order must contain a signature, anticipated fax or paper submission will be required user pays presentation 6th November

  28. User Pays Agency Charging Statement user pays presentation 6th November

  29. User Pays Agency Charging Statement • Pricing methodology: • Principle of reflective cost recovery charges against forecast demand • Reflective cost recovery charges to include: • Operational costs • System operations costs • Forecast demand: • Assessment of take-up of services user pays presentation 6th November

  30. User Pays Agency Charging Statement (as per current licence proposals) • Contents: • Introduction and background • Scope of user pays and core services • Charging basis • Charging methodology • Service charges • Invoice supporting information • Frequency of review • Reference to user pays terms and conditions and service schedules user pays presentation 6th November

  31. Summary • user pays will be effective from 1st April 2008 • xoserve project team initiated to implement • Industry engagement has commenced • Services themselves unchanged • Changes to GT licences have been proposed by Ofgem. A UNC modification has been proposed • xoserve contact points • for Shipper user pays operational matters; Andy Miller, Helen Field and Emma Lyndon • for all other matters Andy Miller user pays presentation 6th November

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