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BSC Panel 205

BSC Panel 205. 8 November 2012. Report on Progress of Modification Proposals. Adam Lattimore. 8 November 2012. Modifications Overview. 205/04 P272 ‘ Mandatory Half Hourly Settlement for Profile Classes 5-8 ’. David Kemp 8 November 2012 . P272: Issue (1 of 2).

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BSC Panel 205

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  1. BSC Panel 205 8 November 2012

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

  3. Modifications Overview

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

  5. P272: Issue (1 of 2) • 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

  6. P272: Issue (2 of 2) • 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

  7. P272: Proposed Solution • 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)

  8. P272: Alternative Solution • 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

  9. P272: Impacts and Costs • 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

  10. P272: Implementation Date • 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 Modificationof: • 1 April 2015 if approved on or before 13 February 2014

  11. P272: Workgroup’s Previous Conclusions • 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

  12. P272: Cost-Benefit Analysis (1 of 2) • 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

  13. P272: Cost-Benefit Analysis (2 of 2) • 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)

  14. P272: Workgroup’s Discussions (1 of 2) • 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?

  15. P272: Workgroup’s Discussions (2 of 2) • 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

  16. P272: Responses to Original Consultation • 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

  17. P272: Applicable BSC Objectives

  18. P272: Conclusions • 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

  19. P272: Recommendations (1 of 3) The P272 Workgroup invites the Panel to: • AGREEan 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]

  20. P272: Recommendations (2 of 3) • AGREEan 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]

  21. P272: Recommendations (3 of 3) • AGREEthe 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.

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

  23. Background • 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’

  24. Modification Proposal • 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

  25. Applicable BSC Objectives • 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

  26. Proposed Progression (1 of 2) • 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

  27. Proposed Progression (2 of 2) • 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

  28. Recommendations 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.

  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. DistributionReport 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. REMIT transparency platforms: current GB situation • 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 • January – BSC Panel requests ELEXON not to develop a REMIT inside information platform for GB electricity due to liability issues • 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 • October– National Grid launches REMIT transparency platform for GB gas with liability disclaimers

  43. Suggested approach for GB electricityand Recommendation • 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 • The BSC Panel is invited to NOTE paper 205/06

  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. Timetable 1 3 6 8 10 Note Process & Key Themes Request to vary timetable Consider comments & revisions Strategy approval Review draft Strategy Panel 7 9 2 11 Consider comments & revisions Review Budget & Strategy Consider Panel comments Approve Budget Board 5 Workshop Parties Issue for comment 4

  47. BSCCo Strategy will continue to develop from the mission and vision Maintain and build upon BSCCo’sprevious achievements whilst readying the BSC for future market developments “To be a leader in the efficient transformation of energy markets by providing shared solutions to address common industry problems” “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.

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

  49. Key Themes and Considerations • 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.)

  50. 2012 Customer Survey Results: Presentationfor BSCCo Board and BSC PanelVictoria Moxham8 November 2012

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