Issue 107: Consultation on Confirmation Notices

What is proposed?

Issue 107 ‘Review of BSC Section N – Clearing, Invoicing & Payment’ was raised by Elexon on 5 May 2023 to review BSC Section N and consider making changes, which would make the code more efficient.

Of these changes, the Issue Group have developed two possible options around how we should handle Advice Notes and Confirmation Notices going forward, which we would like the wider industry’s opinion on what option would best fit their organisation’s needs.

At present, the current process is to send out to each Trading Party an Advice Note, which acts as a request for payment, also acting as the Direct Debit Advance Notice where applicable. Once paid, the Funds Administration Agent (FAA) issue Confirmation Notices, which act as the tax document.

This process was widely accepted by the Issue Group as a high administrative burden, having to match Advice Notes to Confirmation Notes and Backing Sheets on a daily basis.

Option 1 – Move to a Single Bill approach

Remove the concept of Confirmation Notices and make the Advice Note the single tax document. This will significantly reduce the administration effort by removing the need to match two separate documents together on a daily basis. This would also act as the Direct Debit Advance Notice where applicable. This is a process already adopted in the Industry under Balancing Services Use of Systems (BSUoS) invoices issued by National Grid, and within Elexon under its operation of the monthly BSC Charge process.

Option 2 – Retain Confirmation Notices but change frequency to monthly

The current process would in part remain, in that Advice Notes would be issued on a daily basis (if the Advice Note Threshold is breached), however the tax documents (Confirmation Notices) would only be issued on a monthly basis, to include all charges up to the last payment date in the month. This would mean any matching process to Advice Notes and Backing Sheets would only have to happen once a month instead of daily.

The below table illustrates the level of documentation provided under each option for those parties who would receive daily charges for the month of Jul.

For information only, as not in scope of the Issue Group, backing sheet data under both Options 1 & 2 will be enhanced, with the aim of providing full detailed data which can be used to validate the charges, in downloadable formats from a self-service portal. Each Advice Note issued (those that had breached the Advice Note Threshold Limit of £500) would have one set of backing data to support the calculations.