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Modification: P361

Revised treatment of BSC Charges for Lead Parties of Interconnector BM Units

Proposer: Nord Pool Spot AS

Current Phase: Assessment Procedure

Lead Analyst: Lawrence Jones

Category: Interconnector

Implementation Date: Proposer has requested 1 September 2018 - subject to impact assessment

Summary

Under the EU Third Package (Article 2 of Regulation 714/2009) Interconnector flows should be treated as part of the Transmission System and not as Production or Consumption. The current BSC charging arrangements are not aligned with the EU Third Package.

For the purposes of calculating Balancing and Settlement Code (BSC) Charges, Interconnector Balancing Mechanism (BM) Units in Great Britain, are currently treated as either a Production BM Unit  (generation) or a Consumption BM Unit (demand). The BSC Charges derived from Credited Energy Volumes are paid for by all BSC Parties having Production and Consumption BMUs with non-zero Metered Volumes, including Interconnector Users.

This Modification Proposal seeks to exclude Interconnector BM Unit’s Credit Energy Volumes from the BSC Charges calculations, in order to align with the EU Third Package.

Progression

The Proposer requested P361 be treated as an Urgent Modification Proposal on 31 January 2018. The request was taken to the Panel on 8 February 2018, who unanimously recommended to Ofgem that P361 be treated as an Urgent Modification Proposal. They recommended that the existing progression timetable and procedure is adhered to. We are waiting to hear from Ofgem in regards to this decision.

On 2 January 2018 the Proposer amended his Proposed Modification solution to seek recovery of Net Main Costs and Production-Charging SVA Costs retrospectively from 31 October 2017, the date P361 was raised.

The next meeting is being scheduled for week commencing 5 or 12 March 2018. The first P361 Workgroup meeting was held on Monday 8 January 2018. The Workgroup discussed the issue and the proposed solution. The Workgroup agreed to seek additional legal guidance on the defect. A second meeting was held on Monday, 12 February 2018 and disucssed the legal guidance and the solution options. Business requirements for the Proposed Modification are being drafted and subsequently ELEXON will conduct an impact assessment. The Workgroup also agreed to seek further external legal guidance.

P361 was raised by Nord Pool Spot AS on 31 October 2017. The Initial Written Assessment (IWA) was presented to the Panel at its meeting on 9 November 2017. The Panel agreed to progress P361 to the Assessment Procedure.

Documents

P361 Initial Written Assessment  [774.9 Kb]
Document Date: 2 November 2017

P361 Proposal Form  [390.7 Kb]
Document Date: 31 October 2017