P366 Change to Supplier Charge SP08a for hard-to-read sites

Formal title: Change to Supplier Charge SP08a calculations to account for small scale non-Domestic Non Half Hourly hard-to-read Meters

P366 proposed amending how Supplier Charge SP08a is applied to Non Half Hourly non-Domestic Meters that are hard-to-read (HTR). It is believed that applying Supplier Charge SP08a to HTR Metering Systems is anti-competitive and limits consumer choice. 

 

Current Status

Submission
Initial Written Assessment
Assessment Procedure
Report Phase
With Authority
Rejected

Summary

The BSC requires that, in relation to each GSP Group, the percentage of total energy attributable to a Supplier, in respect of Non Half Hourly (NHH) Metering Systems, Settled on the basis of Annualised Advances (AA) for each Settlement Day shall be not less than 80% for the Third Reconciliation (R3) Volume Allocation Run (VAR) and 97% for the Final Reconciliation (RF) VAR. Any underperformance against these targets is subject to a Supplier Charge. This is monitored and reported in the Performance Assurance Reporting and Monitoring System (PARMS) using PARMS Serial SP08a.

Due to the nature of the NHH performance requirements, small Suppliers are most susceptible to HTR related SP08a Supplier Charges. The Proposer believes they are unfairly disadvantaged and are less able to compete competitively for customers with HTR sites. This is because, in contrast to large Suppliers, the inability for small Suppliers to absorb HTR sites into their Settlement performance means that they must price the SP08a Supplier Charge cost into their Supply contract, which makes their prices less competitive.

The P366 Proposed solution was to set the SP08a Supplier Charge for PARMS Serial SP08a for R3 and RF to £0.00 for all Suppliers, and does not require the declaration of HTR Metering Systems.

Progression

The Modification Report was submitted to the Authority for consideration on 19 June 2019. The Authority rejected P366 on 19 July 2019.

The Panel considered the Report Phase consultation responses at its meeting on 13 June 2019 and affirmed their initial recommendation that P366 should not be implemented.

The P366 Assessment Report was presented to the Panel on 9 May 2019 and the Report Phase consultation, seeking views on the Panel’s initial recommendations to the Authority, was issued on 17 May 2019 to 3 June 2019.

The P366 Assessment Phase consultation was issued to industry on 25 March with responses due by 15 April 2019.

The third Workgroup was held on 22 November 2018 to discuss the merits of three solution options. The Proposer believed his solution, being the most robust and accurate, would better facilitate the Applicable BSC Objectives. The Workgroup raised an Alternative solution (as described above) as they believed it was better than the Proposed solution. However, the Workgroup believed both solutions should be rejected.

The second Workgroup meeting was held at ELEXON’s office on 7 August 2018. ELEXON prepared Business Requirements for three potential System options discussed at the second Workgroup as well as a potential Alternative solution.

The first Workgroup meeting was held at ELEXON on 7 June 2018. The Workgroup identified several areas of analysis and investigation that are required in order to progress P366.

The Initial Written Assessment was presented to the Panel on 10 May 2018. The Panel approved P366 to proceed to the Assessment Procedure and the associated timetable. The Panel agreed the Workgroup membership and Workgroup’s Terms of Reference pending some additions suggested during the meeting.

The Panel was required to submit to the Authority a Significant Code Review (SCR) Suitability Assessment Report in regards to whether P366 falls within the scope of the three SCRs being undertaken. The Panel considered the draft SCR Suitability Assessment Report at their 14 June 2018 meeting and the SCR Suitability Assessment Report (see below) has now been submitted to the Authority. P366 will progress in accordance with the approved Assessment Procedure timetable unless the Authority determines that is shall be a SCR Subsumed Modification.

 

Next Events

P366 was rejected by the Authority on 19 July 2019 and is now closed.

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