Consultation on reducing the Credit Assessment Price to £32/MWh
A trigger event has occurred, meaning that the absolute difference between the CAP and the reference price is greater than the trigger level of £4/MWh. As a result, a consultation on a new CAP value has commenced.
Consultation to decrease CAP
The Credit Assessment Price (CAP) is used in the Energy Indebtedness calculations to convert Credit Cover into an energy value. We are consulting on a decrease of the CAP to £32/MWh from the last notified value of £36/MWh. A change to CAP can impact the amount of Credit Cover required by a Trading Party.
If all respondents and Credit Committee members are in agreement, the proposed value will be implemented on Wednesday 15 April 2020, 10 Business Days after the consultation closes. The trigger level will also decrease to
If at least one respondent or Credit Committee member requests it or disagrees with the proposed value, Elexon will arrange a Credit Committee meeting. The Credit Committee will determine if a change needs to be made to the value of the CAP, the trigger level and when any new value should be implemented.
How to respond
Trading Parties are invited to respond to this consultation using the proforma available on the Consultations page of the Elexon website.
Please return responses to [email protected] by 17:00 on Friday 27 March 2020.
What is the Credit Assessment Price?
The Credit Assessment Price is used in the Energy Indebtedness calculations to convert Credit Cover into an energy value. The BSC requires that suppliers and generators (known as BSC Parties) hold collateral with Elexon. This is so that there are sufficient funds to cover outstanding charges, should they be unable to pay. This is known as Credit Cover.