PAB156

30 January 2014

PAB156 Open Session

30 January 2014

PAB156/01b Non-confidential Settlement

Risk Report

Tabled 30 January 2014

PAB156/05 New Issue ‘Further

Qualification Assurance for Suppliers’

Simon Fox 30 January 2014

4

• PAB recommendation and Panel’s decision

• Panel’s questions • Materiality of the issue • Solution - whether

• A barrier to entry • Proportional • Due or undue discrimination

• Questions the Issue Group might raise

PAB 156/05 Purpose of Paper

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• What has changed since P197?

• Conclusions of review

• P197 proposed vs alternative

• Conclusions of P197 with respects to Supplier re-Qualification • Suppliers impact on Settlement • Supplier incentive to be compliant • Focus on other risks • Detective and remedial PATs mitigating any risk

PAB 156/05 – Questions (1 of 6)

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• What do you think is the materiality of the issue?

• Assessment of the significance of the risk

• Evidence for issue

PAB 156/05 – Questions (2 of 6)

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• What are your views on this being seen as a barrier to entry? • Burden

• Proportionality

PAB 156/05 – Questions (3 of 6)

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• Is the solution due or undue discrimination? • Why controls against inactive or recently active Suppliers?

• Why not controls against active Suppliers, which may change systems

& processes and have a greater impact?

PAB 156/05 – Questions (4 of 6)

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• What other ways could the risk be managed?

• Current PATs • BSC Audit • TA • EFR • Breach & Default

• External controls • MRA controlled market entry

– TA check in parallel – Potential MRA change

• Ofgem removal of licence provisions

PAB 156/05 – Questions (5 of 6)

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• What is the underlying issue that the Modification was trying to resolve?

• Materiality low

• Available mitigating actions

• Known issues impacting all Suppliers • Does the issue contribute to these? • Would additional Qualification controls mitigate these?

• What’s to stop Suppliers’ making Material Changes later?

PAB 156/05 – Questions (6 of 6)

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ELEXON invites you to

• RESPOND to the questions within this paper; and

• PROVIDE views on the scope and membership of the Issue Group

PAB 156/05 Recommendations

PAB156/06 Submission of P272

Transition Plans

David Kemp 30 January 2014

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• P272: Mandate HH Settlement for PCs 5-8 • Proposed Modification: from 1 April 2014 • Alternative Modification: from 1 April 2015

• Panel recommended Reject

• Authority minded-to Approve Alternative

• Authority decision anticipated by 13 February 2014

Overview of P272

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• Suppliers can transition customers as they wish • Must complete by Implementation Date

• Concerns CoMC process can’t handle large numbers

• Approx. 155,000 PC 5-8 customers

• Transition plans should be sent to PAB • PAB can advise industry of any potential issues

Transition Plans

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• Notify Suppliers if P272 approved

• Suppliers submit plans by 9 May 2014

• ELEXON validates plans

• Plans presented to PAB on 29 May 2014

Next Steps

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We invite you to:

• NOTE that, if P272 is approved, Suppliers will be required to submit a high-level transition plan by 9 May 2014; and

• NOTE that we will present these plans to the PAB at its meeting on 29 May 2014.

Recommendations

EMR Update

Lawrence Jones - Verbal 30 January 2014

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ELEXON EMR Timeline

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• DECC published consultation on EMR consequential BSC Changes - due by 13 Feb

• Providing data and support to CFD and CM Settlement Agents

• Enabling ELEXON to perform EMR roles

• Protecting BSC Parties from EMR costs, risk and liabilities (and vice versa)

BSC Changes for EMR

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• All BSC and subsidiary document changes directed by SoS July 2014

• Any subsequent EMR changes requiring BSC or subsidiary documents changes raised using existing BSC change process • CfD Counterparty and CM Settlement Body may raise changes

• New BSC objective to facilitate operation of EMR • Modification Reports to include impact on EMR arrangements

EMR BSC Change Process

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How is BSC Data Used?

CM Generators with BSC Meters

BM Units HHDA

CfD Generators with BSC Meters

BM Units

CfD Generators without BSC Meters

Private Wire

CM Generators without BSC Meters

Private Wire

STOR Meters

CfD Suppliers

BM Units

CM Suppliers

BM Units BSC Data

Metering Option

Non-BSC Data

Metering Option

Key

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How is BM Unit data calculated for EMR?

SVAA

SAA Settlement Agent

1a) All AI CCC IDs summed per supplier BM Unit to calculate SVA Gross Demand

4) SAA-I014 - BM Unit Metered Volumes

New flow – Supplier SVA & CVA BM Unit Loss Adjusted (Transmission & Distribution) Demand

1b) Relevant TLM applied to SVA Demand from 1a)

2) CVA BM Units* registered to Suppliers, where the Metered Volume is negative treated as CVA Demand. Appropriate TLM applied to CVA Demand

New data flow – Gross SVA Demand

3) SVA and CVA Demand added together

Suppliers / Generators

New data flow – invoice / credit note with associated backing data

* Excludes Interconnector BM Units

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• One DSR and embedded generator metering option for the Capacity Market proposes that MPAN-level consumption information is provided to the CM Settlement Agent by Supplier-appointed HHDAs

• DECC held workshop with HHDC/HHDAs in Nov 13 • BSC changes drafted • DTC changes to be drafted and raised via normal industry process

The Use of HHDAs for CM Settlement

Supplier HHDA CM

Settlement Agent

Instruction to flag relevant MPANs

Acceptance/rejection of instruction

Flagged MPAN consumption data

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Additional BM Unit Registrations for EMR

• £100/month A.BMU charge will not apply to CfD/CM A.BMUs • CRA change currently under assessment

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A.BMU Naming Convention

New BMU ID Schema for CFD: C__ASUPP001 C_ Supplier BM Unit for EMR

_A GSP Group ‘_A’

SUPP 4 Character Supplier ID

001

Used to identify the CfD or Capacity Agreement. The number increments as more CFD/ Capacity Agreements are registered. Relationship created between this number and the CfD / Capacity Agreement ID from the settlement agent system.

BMU Name

The CfD / Capacity Agreement ID (no convention set yet) used in the settlement agent system will be stored in the A.BMU name field in the CRA system.

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• Proposed change to section L (metering) • Access to property granted to CfD/CM Settlement Agent and CfD

Counterparty and CM Settlement Body or nominated third party

• TAA non-compliances need to be reported to CfD/CM Settlement Agent so CM/CfD metering non-compliance provisions can be applied where appropriate

• Section S: Upon request from customer its Supplier is required to ensure its HHDA submits metered data to CM settlement agent

• Qualification impact?

• Supplier data at II Run onwards used for EMR Supplier funding calculations

PAB Impact

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• Document being prepared with interface options • Discussions on-going with DECC • Interface options with suppliers and generators include:

• Email attachments e.g. with PDF and XML file • Secure FTP • Web services / portal • DTN • CVA network

• Interested to hear views possible consultation • One size fits all vs. ability to choose interface

Settlement Agent Interfaces

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Key DECC Publications Over Last Two Months

Date Published

Title Type Status

16 Jan 14 Allocation of CfDs Consultation Open

15 Jan 14 Industry Code and License Modifications Consultation Open

19 Dec 13 Draft Electricity Market Reform Delivery Plan

Policy Paper -

19 Dec 13 Regulations for Contracts for Difference (Standard Terms and Modifications)

Consultation Open

19 Dec 13 Contracts for Difference Policy Paper -

10 Oct 13 Proposals for implementation of Electricity Market Reform

Consultation Closed

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• http://www.elexon.co.uk/reference/electricity-market-reform/

• https://www.gov.uk/government/consultations/emr-consultation-on-industry-code-and-licence-modifications

• Contacts • Lawrence.jones@elexon.co.uk • david.osborne@elexon.co.uk

More Information

http://www.elexon.co.uk/reference/electricity-market-reform/https://www.gov.uk/government/consultations/emr-consultation-on-industry-code-and-licence-modificationshttps://www.gov.uk/government/consultations/emr-consultation-on-industry-code-and-licence-modificationshttps://www.gov.uk/government/consultations/emr-consultation-on-industry-code-and-licence-modificationsmailto:Lawrence.jones@elexon.co.ukmailto:david.osborne@elexon.co.uk

220 Panel Update

Verbal 30 January 2014

Big Ticket Items

Verbal 30 January 2014

Slide Number 1Slide Number 2PAB156/01b�Non-confidential Settlement Risk Report�PAB156/05�New Issue ‘Further Qualification Assurance for Suppliers’PAB 156/05 Purpose of PaperPAB 156/05 – Questions�(1 of 6)PAB 156/05 – Questions�(2 of 6)PAB 156/05 – Questions�(3 of 6)PAB 156/05 – Questions�(4 of 6)PAB 156/05 – Questions�(5 of 6)PAB 156/05 – Questions�(6 of 6)PAB 156/05 RecommendationsPAB156/06�Submission of P272 Transition PlansOverview of P272Transition PlansNext StepsRecommendations�EMR Update�ELEXON EMR TimelineBSC Changes for EMREMR BSC Change ProcessHow is BSC Data Used?How is BM Unit data calculated for EMR?The Use of HHDAs for CM SettlementAdditional BM Unit Registrations for EMRA.BMU Naming ConventionPAB ImpactSettlement Agent InterfacesKey DECC Publications Over Last Two MonthsMore Information�220 Panel Update���Big Ticket Items��