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PAF Review - Frequently Asked Questions
Below are high level answers to the frequently asked questions. For more information
download the FAQs document in the Related Documents menu to the right of this page.
What is the Performance Assurance Framework?
Where can I find out information on the PAF?
Does the PAF only deal with Supplier Volume Allocation (SVA) or does it
impact on other areas of the BSC?
Why is the PAF Review being carried out?
How is the PAF Review being carried out?
Has a PAF Review been carried out previously, and if so, what were the
results?
What other work is being carried out in addition to the PAF Review?
How does the PAF Review interact with other PAF related work e.g. the SVA
Qualification Review and the implementation of Supplier Charges?
If the PAF Review concludes that a new PAF should be implemented, then
how will this be done?
How does the PAF Review fit in with the other aspects of industry, such
as the Customer Transfer Programme?
How are the BSC Panel and the PAB involved with the review?
What is the Performance Assurance Framework?
The Performance Assurance Framework (PAF) aims to provide BSC Trading Parties with
independent assurance regarding the integrity of Settlement. The PAF consists of
complementary preventative, detective and corrective techniques that are set out
in the BSC. It‘s designed to identify whether the obligations and performance
standards placed on BSC Parties and Party Agents by the BSC are met and to promote
corrective actions to address any identified issues.
Where can I find out information on the PAF?
The PAF techniques are set out in the BSC and its subsidiary documentation. Primary
references to PAF techniques can be found in BSC Sections H, J, L and W and in Annex
B-1 and Annex S-1.
An overview of the PAF can be obtained from the
PAF section of the website.
Does the PAF only deal with Supplier Volume Allocation (SVA)
or does it impact on other areas of the BSC?
The PAF considers both SVA and Central Volume Allocation (CVA). Certain techniques,
such as the BSC Audit and Technical Assurance of Metering Systems, contain specific
CVA components.
Why is the PAF Review being carried out?
While the current assurance regime has led to significant improvements in certain
areas of performance, it has been questioned whether these improvements are material.
The PAF is complex and the cost of implementing is often considered higher than
the savings incurred from this assurance. Recent work has considered separate PAF
techniques independently with varied success and there is a clear need to review
the entire framework as a whole to ensure that a balanced portfolio of techniques
can be identified. The PAF Review is examining, from first principles, the need
for assurance in the SVA arrangements, and how this assurance would be best delivered
in the future. The goal of the review is to design a new assurance regime that will,
at minimum cost to industry, mitigate risks arising under the SVA aspects of the
BSC.
How is the PAF Review being carried out?
A Core Working Group (CWG), comprising industry experts, is leading the review,
investigating issues, and it will consult on proposals. The success of this review
will depend on the full engagement of stakeholders throughout the process. A series
of open invitation sessions will be held throughout the project seeking views from
across the industry.
Has a PAF Review been carried out previously, and if so,
what were the results?
A review of the PAF was undertaken in 2001/02. This review was delivered in two
phases proposing an integrated assurance framework that would mitigate the risks
to the Settlement arrangements. Unlike the current PAF Review, this work did not
re-consider the underlying requirement for a PAF that was agreed during the 1998
Programme.
What other work is being carried out in addition
to the PAF Review?
The Core Working Group for the PAF Review recognises that other streams of work
have recently considered or are currently contemplating the effectiveness of processes
that deliver assurance to BSC Trading Parties. In formulating options for a new
assurance regime the Core Working Group will take account of the analysis performed
and the findings of the review of the BSC Audit terms of reference, the review of
the SVA Qualification Processes, Modification Proposal P157 and Modification Proposal
P182.
How does the PAF Review interact with other PAF related work
e.g. the SVA Qualification Review and the implementation of Supplier Charges?
The PAF Review is looking to the longer term in recommending changes that may be
the subject of a future Modification Proposal. It is being conducted in parallel
with other work that may impact the current PAF in the shorter term e.g. the SVA
Qualification review. The views provided by the industry in relation to such work
will be fed into the PAF Review and may be adopted under a new PAF regime. While
the PAF Review is being progressed there is nothing to prevent industry participants
raising Modification or Change Proposals impacting aspects of the PAF. These changes
would be assessed against the current baseline. If approved, they could be further
amended based on the findings of the PAF Review.
If the PAF Review concludes that a new PAF should be implemented,
then how will this be done?
A significant number of requirements relating to the PAF are contained within the
BSC. Therefore, implementing a fundamental change to the PAF is likely to require
one or more Modifications. Following the conclusion of the PAF Review it will be
open to a BSC Party to raise an appropriate Modification to reflect the changes
agreed by the Core Working Group. It is unlikely the BSC Panel can raise this Modification
under its limited vires to raise Modifications on efficiency grounds.
How does the PAF Review fit in with the other aspects of
industry, such as the Customer Transfer Programme?
It is recognised that other aspects of industry governance are relevant to the assurance
provided under the BSC. For example, assurance under the Master Registration Agreement
(MRA), the powers of Ofgem and the industry self-governance approach used by the
Customer Transfer Programme. So far as is possible, the review will seek to take
account of these in designing the proposed new framework.
How are the BSC Panel and the PAB involved with the review?
The BSC Panel endorsed the Terms of Reference for the PAF Review in October 2005.
Regular updates will be provided to both the BSC Panel and the Performance Assurance
Board on the progress of the review. The Core Working Group, which comprises industry
experts, was established to lead the PAF Review, investigate issues, and make proposals.
Two of the CWG members currently sit on the Performance Assurance Board.