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Supplier Charges
Supplier Charges Guidance
The following guidance document was issued to nominated Supplier Charges contacts in February 2006:
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This section describes the function of Supplier Charges (SCs) as detailed in
Annex S-1 of the Balancing and Settlement Code (BSC) and Balancing and
Settlement Code Procedure (BSCP) 536 ‘Supplier Liquidated Damages’. It will
also detail how the SC technique fits into the Performance Assurance Framework
(PAF).
SCs, like Peer Comparison, are part of the Reporting and Monitoring technique.
SCs are described in the BSC as a ‘genuine pre-estimate of loss’ and as such
are a liquidated damage for the losses suffered by other BSC Parties by another
Party failing to achieve a pre-agreed set of standards. In the context of the
PAF SCs are a corrective technique, it is anticipated that SCs should encourage
a Supplier to improve its performance to avoid incurring the SC.
SCs are applied per Supplier Id, per reporting period (Calendar month), per Grid
Supply Point (GSP) Group.
The Serials and Standards to which SCs are applied are detailed within Annex S-1
of the BSC. The SCs are summarised below:
| SP01 |
A charge is applied per working day, per incomplete GSP Group that a full set
of PARMS reports are not received from a Supplier |
| SP02 |
A charge is applied per working day, per incomplete GSP Group that a full set
of PARMS report logs are not received from a Supplier |
| SP04 |
A charge is applied for each calendar day that HH Metering was not installed at
a premise that has qualified for HH Metering |
| SP08a |
A charge is applied if a Supplier fails to settle 80% of the total energy
settled on Annualised Advances (AAs) at third reconciliation and 97% of its
energy on AAs at Final Reconciliation |
| SP08b |
A charge is applied if a Supplier fails to settle 99% of the total energy
settled on Actuals at Initial and First Reconciliation for mandatory 100kW
premises (HH metered)
|
| SP08c |
A charge is applied if a Supplier fails to settle 99% of the total energy
settled on Actuals at Final Reconciliation for non-mandatory 100kW premises (HH
metered) |
SCs are capped to limit the liability of any Supplier. SCs are applied in the
following manner:
-
Annual National Cap (defined by the BSC)
-
monthly national cap (Annual cap /12)
-
GSP Group Monthly Cap (monthly national cap apportioned across the GSP Groups
based on their share of the previous years annual take)
-
Supplier Monthly Cap (GSP Group Cap apportioned for every month across all
Suppliers within the GSP Group based on their share of energy traded in the GSP
Group)
Funds collected from Supplier Charges are re-distributed as follows:
-
90% of funds collected from a GSP Group to those NHH Suppliers operating within
the GSP Group, based on their share of NHH energy traded in the GSP Group
-
10% of total funds collected to all Trading Parties based on their Main Funding
Share
Supplier Charges Exercises
A Supplier Charges Seminar was held in February 2006 to explain how Supplier Charges are applied under
P99. The following set of exercises were created to aid with the understanding
of the principles of calculating GSP and Supplier Caps and how the individual
Supplier Charges and Party receipts are linked together between each of the
different Reports issued from PARMS. (The calculations are colour coded to aid
with following the various stages.)
These exercises employ just three Supplier IDs and three GSP Groups.
- Exercise 1: shows how Caps are apportioned across each financial year, month, GSP
Group and Supplier and where the information can be found on the Supplier Trading
Report. The exercise also demonstrates how Supplier NHH Shares in a GSP Group can
be calculated.
- Exercise 2: calculates the Supplier Charges for Supplier IDs where there is; - no
Cap breach in part (a), and, - with a Cap breach in part (b).
- Exercise 3: calculates the Trading Party Share of the 10% re-distribution of funds.
- Exercise 4: calculates the Net Position (the charges less receipts) for a Trading
Party with two Supplier IDs (part (a)), and for a Trading Party with no Supplier
IDs in part (b).
Refer to the table to download the exercises.
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