P479 Amendments to the Credit Cover calculations
Formal title: Amendments to the Credit Cover calculations to utilise data available closer to real time
This Modification seeks to amend the Credit Cover calculations to make more accurate and operationally efficient estimates of Energy Indebtedness, using data available closer to real time.
The amount of Credit Cover provided by a BSC Party is intended to cover Trading charges accrued until payment is made ~29 Calendar Days (CDs) later. The calculations involved in the first five Working Days (WD) are estimates and not actual Trading Charges which can be inaccurate and have multiple complex business rules to manage. Improving the efficiency and accuracy of the estimations will reduce operational costs and allow BSC Parties to lodge Credit Cover that is more reflective of their outstanding Trading Charges.
The proposed solution should build on the findings of the Issue 106 Issue Group:
- To use average meter reads as proxy for BM Unit Metered Volume (QMij) for calculating Trading Charges between Day 0 and Day A; or
- To use rolling average of trading charges for period Day 0 – A.
As a starting point, we suggest estimating the volume at the Boundary Point using a new method for Metered Volume (MVol). This can involve adjusting for Bid-Offer Acceptance (BOA) data, Final Physical Notification and Maximum Export/Import Limit. These are process enhancements that would also improve the existing Central Data Collection Agent (CDCA) estimation procedures which would become more accurate and benefit from automation to make data available earlier. By considering BOA cashflow, while accepting some inaccuracy in non-delivery charges, the Metered Energy Indebtedness (MEI) accuracy could also be improved. This can involve adjusting for BOA data by considering volume multiplied by price, while accepting some inaccuracy in non-delivery charges, the MEI accuracy could also be improved.