Webinar recording and FAQs about MHHS Supplier Charges

Elexon ran a webinar that highlighted the principles of Supplier Charges post Market-wide Half Hourly Settlement (MHHS) implementation. From that webinar we have also produced a list of FAQ which might be helpful.

Webinar recording

FAQs

Question. When will the MHHS Supplier Charges technique be turned on?

Answer. The MHHS Supplier Charges are planned to be turned on at M11 + 4 months and calculated with ‘Accurate’ and ‘Limited’ volumes.

During migration, Metering Systems that have not been migrated to MHHS will still incur Supplier Charges under the current arrangements using Annualised Advances and Estimated Annual Consumptions.

Question. What thresholds apply for a Supplier to be entered into the Supplier Charges Technique?

Answer. The threshold for incurring Supplier Charges under MHHS Supplier Charges would be any Limited volume above 0 MWh. The threshold for receiving a Supplier Charge Redistribution would be any Accurate volume above 0 MWh.

Question. Why have Elexon applied a 100% Target to Settlement in the MHHS Arrangements?

Answer. The current 97% Non-Half Hourly and 99% Half Hourly targets of Settlement Performance is considered the minimum target, whereas 100% has always been the actual target.

Question. How will Supplier Charge redistribution apply to Participants that do not achieve 100% accurate Settlement Volume?

Answer. 100% Accurate volume is an intentionally ambitious target. However, in order to receive a net payment from Supplier Charges under MHHS, the proportion of a Supplier’s Accurate Volume in the market must be higher than the proportion of their Limited Volume in the market.

Question. Will a Supplier performing below industry average Settlement Performance receive any redistribution?

Answer. The percentage of accurate volumes for that Supplier’s MPID against the total accurate volumes would determine the amount of redistribution regardless of their total Settlement Performance.

Question. How will Supplier Charges apply for non-communicating Smart Meters and where DCC issues prevent the Accurate retrieval of Data?

Answer. In relation to non-communicating Smart meters, Supplier Charges will depend on the Settlement Period Quality Indicator used.

In relation to DCC issues, where a nation-wide concern is identified that impacts the market, the BSC PAB have flexibility to determine whether the charges should be applied.

Question. Will Suppliers be charged for SMART Meter infrastructure failures?

Answer. Smart infrastructure failures and their impact on Settlement performance will be smeared across all Suppliers within a GSP Group.

Under MHHS Supplier Charges design, the Charge element of Suppliers Charges may increase as a result of Smart infrastructure issues, but this would also cause an increased Redistribution. Meaning there is no net penalty to Suppliers.

Question. Does the Settlement Period Quality indicators (SPQI) take into account any Communications infrastructure failure?

Answer. The Settlement Period Quality indicators have been determined by the MHHS programme and are dependent on the market segment (Advanced, Smart, Unmetered) and historic data available to determine the read. These do not take into account specific instances of Communications infrastructure failure.

Question. How will Supplier Charge redistribution apply to Traditional Meters?

Answer. For traditional meters, the Settlement Period Quality indicators (SPQI) within MHHS allows for a more granular approach and there are allowances to not level charges at SF in these circumstances.

This was considered during the Supplier Charge requirement discussions within the Performance Assurance Working Group and during discussions within the BSC Performance Assurance Board (PAB).

Question. How do Suppliers attain Accurate Volume for Traditional Meters?

Answer. Accurate volume for Traditional Meters would be determined when a validated read is received and settlement period indicator E6 used prior to RF.
If a reading is not obtained by RF, 85 WDs, SPQI E7, E8, or E9 would be used and is considered Limited.

Question. What are the Settlement Period Quality Indicators (SPQI) for Traditional Meters?

Answer. The SPQIs which may refer to traditional meters are: E6, E7, E8, E9, ZE2, ZE3.

SPQI A is deemed to be Accurate and applied at SF and RF. SPQI E6 is deemed to be Accurate and applied at SF and RF. SPQIs E7 – E9 are deemed Limited but are not applied at SF – only RF.

SPQIs ZE2 and ZE3 refer to zero consumption and hence no volume will enter the Supplier Charges calculation.

The below SPQIs and CCCs are deemed limited and are not charged at SF so as not to charge Traditional meter estimates at SF.

SPQIs: E7, CCCs 206 & 207; E8, CCCs 114 & 117; E9, CCCs 114, 117

Question. Where can Suppliers find the Settlement Period Quality Indicators (SPQI)?

Answer. The Settlement Period Quality Indicators can be located in the SDS Estimation Methods section of the Smart Data Service Validation and Estimation: Methodology Statement Q13. Can non-domestic consumers opt out of half-hourly data collection?

Non-domestic consumers will not be able to opt-out of HH data collection.

Question. Why Are Supplier Charges applied at SF and RF?

Answer. Section S-1 of the BSC allows the PAB to determine the applicable Volume Allocation Runs for MHHS Supplier Charges and was recently approved to be SF and RF.

SF has been used to encourage as high Settlement performance as quickly as possible. RF allows time for data correction and improved performance.

Once MHHS Supplier Charges is turned on, the PAB have the ability to waive these charges should they be erroneous and re-determine the applicable Volume Allocation runs.

In current Supplier Charges arrangements, SF, R1, R3, and RF are used. It was considered reasonable to use SF and RF under MHHS.

The contraction of the Settlement Calendar is a Programme decision in taken in 2021 to make the Settlement process more efficient. The contraction of the Settlement Timetable will be implemented at M16 currently scheduled for July 2027.

Question. Will Supplier Charges be capped in the MHHS Arrangements?

Answer. Supplier Charges will not be capped under the MHHS arrangements providing a greater incentive for Suppliers to improve their Settlement performance.

Question. Will Supplier Charges apply to Advanced Meters?

Answer. Domestic Advanced meters are able to opt-out of Half Hourly readings. For these sites, MHHS Supplier Charges will still apply.

The Settlement Period Quality Indicator methodology applied would be in Section 3 of the Advanced Data Service Validation and Estimation: Methodology Statement which can be found in the Design Artefacts of the MHHS Programme site.

Question. What would be considered Accurate and Limited data in the Unmetered segment?

Answer. With regards to unmetered, the Settlement Period Quality indicator has been determined by the MHHS Programme with status applied to Actual and Estimates. It is noted that this is not technically polled for a metering system.

Question. Where can Participants see the list of Accurate and Limited Consultation Component Class (CCC) IDs?

Answer. The Consumption Component Class table and their Accurate or Limited status has been posted on the Supplier Charges Webpage.

Question. Is all of the data required to calculate charges available to Suppliers?

Answer. Suppliers will be provided a breakdown of their Supplier Charges monthly, three months in arrears.

Question. How will Elexon access the data for Supplier Charge Calculations?

Answer. P429 was implemented on 11 February 2021 and removed the obligations from Suppliers to self-report PARMS Serials and removed the associated Supplier Charges.

The Volume Allocation Service (replacing the Supplier Volume Allocation Agent) will automatically have access to the data required for Supplier Charges via the Market Wide Data Service.

Question. Can Suppliers “Game” the Supplier Charge Technique?

Answer. The risk of Suppliers “gaming” the new Supplier Charges arrangements was considered throughout development. Code Bodies do not believe that it is feasible a Party could sufficiently game the system to have a significant impact to Supplier Charges.

Question. What does the acronym AQ represent?

Answer. “AQ” denotes Accurate Quantity