Performance Assurance Techniques

The Performance Assurance Framework (PAF) is a complementary set of preventive, detective, incentive and remedial assurance techniques. These techniques are used flexibly to address Settlement Risks.

A Settlement Risk is anything that could pose a risk to accurate Settlement: it could be a failure in a process or an error in data.

The Performance Assurance Techniques must address risks to Settlement and the impact of actual failures or errors in Settlement.

  • Preventive Technique - Qualification

    Qualification is a preventive technique in ELEXON’s Performance Assurance Framework designed to limit the possibility of an undesirable outcome.

    The process is intended to provide assurance that new organisations entering the market in certain roles have developed their systems and processes to an appropriate standard in order to meet their obligations under the BSC. This constitutes the approval of ‘Qualified status’ to new participants (applicants) seeking to enter Settlement based upon:

    • A declaration from an officer of the applicant that it will meet the requirements of the BSC.
    • An independent review of evidence and risk-based witnessing of testing.

    BSC obligations:

    • Defined in Section J of the BSC and detailed in BSCP537 ‘Qualification Process for SVA Parties, SVA Party Agents and CVA MOAs’.
    • Section Z of the BSC sets out PAB’s responsibilities with regard to the Qualification process.

    Related information can be found on the Qualification webpage.

  • Preventive Technique - Re-Qualification

    Re-Qualification preventive technique in ELEXON’s Performance Assurance Framework designed to limit the possibility of an undesirable outcome.

    Once an organisation is Qualified in a certain role (other than Suppliers), that organisation is required to maintain its Qualified status through the Re-Qualification process when it makes material Changes to its previously Qualified systems and/or processes. This requires re-approval of ‘Qualified status’ for existing participants (Qualified Persons) seeking to make material changes to their systems and processes based upon the following:

    • A declaration from an officer of the applicant that it will continue to meet the requirements of the BSC.
    • An independent review of evidence and risk-based witnessing of testing.

    BSC obligations:

    • Defined in Section J of the BSC and detailed in BSCP537 ‘Qualification Process for SVA Parties, SVA Party Agents and CVA MOAs’.
    • Section Z of the BSC sets out PAB’s responsibilities with regard to the Re-Qualification process.

    Related information can be found on the Qualification webpage.

  • Preventive Technique - Bulk Change of Agent

    Bulk Change of Agent is a preventive technique in ELEXON’s Performance Assurance Framework designed to limit the possibility of an undesirable outcome.

    Where responsibilities change for large volumes of Metering Systems, this preventive technique ensures that such Bulk Changes of Agent are only carried out where the Panel is satisfied that the Supplier, Supplier Agents and SMRAs involved can undertake the necessary procedures in a controlled and competent manner without adversely impacting their daily operations and other Suppliers within the SMRS, thereby protecting the integrity of Settlements.

    BSC obligations:

    • Defined in Section J of the BSC and detailed in BSCP513 ‘Bulk Change of NHH Supplier Agent’.

    Related information can be found on the Bulk Change of Non Half Hourly Agent webpage.

  • Preventive Technique - Education

    Education is a preventive technique in ELEXON’s Performance Assurance Framework designed to limit the possibility of an undesirable outcome.

    ELEXON publishes guidance on common (market) issues identified by the PAF and how best to address them. This may include a view of root causes of these issues. It may also reference other areas of the BSC that may help in monitoring or controlling the issues in some way. This excludes sharing of business operational practices as these are confidential and are an area where competitive advantage may be gained.

    ELEXON assigns an Operational Support Manager (OSM) to each BSC Party and Party Agent when they accede to the BSC. The OSM is the first point of contact and  provides support and guidance regarding the BSC arrangements.

    Education is not intended to mitigate the entire risk of any possible failure or error in a step or process required under the Code. ELEXON shall provide support under these provisions on a reasonable endeavours basis and that, where applicable, such support will be subject to an agreed understanding of the particular query that has given rise to the support request.

    Information provided by ELEXON in connection with the implementation of the BSC under these support services shall be set out in plain English wherever possible and shall be framed as general support on the BSC rules and processes and which does not replace or remove the responsibility of parties operating under the provisions of the BSC from understanding and correctly applying its detailed requirements.

    BSC obligations:

    • Section C3.1.1 (e) of the BSC states that BSCCo is responsible for the provision of such facilities, services and information in connection with the implementation of the BSC as it may provide or the BSC Panel may require.

    Related information can be found on the Training webpage.

  • Detective Technique - Performance Reporting and Monitoring

    The Performance Reporting and Monitoring process is a detective technique in ELEXON’s Performance Assurance Framework designed to identify occasions of undesirable outcome that have occurred.It complements the BSC Audit and Technical Assurance processes through the provision of quantitative data designed to identify performance at key control points in Settlement processes.

    The Performance Assurance Reporting and Monitoring System (PARMS) Serials and Standards are defined Service Levels on Suppliers, Non Half Hourly and Half Hourly Data Aggregators, Non Half Hourly and Half Hourly Data Collectors, Non Half Hourly and Half Hourly Meter Operator Agents and Supplier Meter Registration Service Agents (SMRS).

    The purpose of the Serials is to provide assurance that participants are meeting their obligations in the BSC and Code Subsidiary documents. The Serial determines the process being measured, and the Standards are the measurement points within the process.

    BSC obligations:

    • The Serials and Standards are established in Annex S-1 of the BSC and identified within Section J of the BSC as being further defined in BSCP533 ‘PARMS Data Provision’.
    • Section Z of the BSC sets out PAB’s responsibilities with regard to performance monitoring and reporting.

    Related information can be found on the Performance Assurance Reporting and Monitoring System (PARMS) webpage.

     

  • Detective Technique - Material Error Monitoring

    The Material Error Monitoring process is a detective technique in ELEXON’s Performance Assurance Framework designed to identify occasions of undesirable outcome that have occurred. It complements the BSC Audit, Technical Assurance and Trading Disputes processes through the provision of quantitative data designed to quantify the contribution made by Performance Assurance Parties to error and the impact of such errors on Performance Assurance Parties.

    BSC obligations:

    • Section C3.1.1 (n) of the BSC states that BSCCo is responsible for monitoring whether any Party is or could be in Default of the BSC (in accordance with Section H3).
    • Data is collected by the PAB in order to calculate and track identified material errors on a regular basis. This monitoring supports a range of assurance mechanisms including, but not limited to, the BSC Audit as noted in section Z7.1.2(f) of the BSC. It enables BSCCo to model and communicate the impact of identified settlement errors.
    • The PAB establishes each set of reporting requirements as it considers necessary or appropriate in accordance with Sections Z1.4.2 and Z1.4.3 of the BSC.

    Related information can be found on Material Error Monitoring webpage.

  • Detective Technique - Technical Assurance of Metering Systems

    The Technical Assurance of Metering Systems is a detective technique in ELEXON’s Performance Assurance Framework designed to identify occasions of undesirable outcome that have occurred.

    The Technical Assurance Agent (TAA) service consists of a combination of sampled and targeted visits to sites with HH Metering Systems registered in SVA and CVA and is designed to monitor the compliance of these Metering Systems with respect to the requirements stated in the BSC and its Subsidiary Documents, in particular the Metering Codes of Practice (CoP). This provides a level of assurance that the metered values being passed into Settlement are representative of actual consumption.

    BSC obligations:

    • The Technical Assurance of Metering Systems is identified in Section Z of the BSC and the functions and activities of the Technical Assurance Agent (TAA) are set out in Section L of the BSC and detailed in BSCP 27 ‘Technical Assurance of Half Hourly Metering Systems for Settlement Purposes’.
    • Section Z of the BSC sets out PAB’s responsibilities with regard to the Technical Assurance of Metering Systems process.

    Related information can be found on the Technical Assurance of Metering Systems webpage.

  • Detective Technique - BSC Audit

    The BSC Audit is a detective technique in ELEXON’s Performance Assurance Framework designed to identify occasions of undesirable outcome that have occurred. It is used to identify occasions of undesirable outcome that have occurred.

    The BSC Audit involves reviewing systems and business processes at Suppliers, Supplier Agents and SMRS Agents, as well as the Central Settlement Systems in order to provide a level of assurance that the calculations and allocations that have been performed within Central Volume Allocation (CVA) and Supplier Volume Allocation (SVA) are in accordance with the BSC and its subsidiary documents. The scope of the BSC Audit is set by the Panel for each Audit year and includes the determination of the annual Audit Materiality Threshold.

    The BSC Auditor bases his opinion for a ‘qualified’ or ‘unqualified’ audit on the level of cumulative error discovered in Settlement against the acceptable level of error as defined by the Materiality Threshold. The Materiality Threshold was increased for the Audit Year starting in April 2005 following an industry consultation and is now set at 1. 5TWh which represents approximately 0.5% of the total annual electricity supplied across Great Britain.

    BSC obligations:

    • The BSC Audit is set out under section H5 of the BSC. The BSC requires that the BSC Audit is a compliance-based audit.

    Related information can be found on the Audits webpage.

  • Detective Technique - Technical Assurance of Performance Assurance Parties

    Technical Assurance of Performance Assurance Parties is a detective technique ELEXON’s Performance Assurance Framework designed to identify occasions of undesirable outcome that have occurred.

    The service consists of a combination of routine and targeted checks and site visits which seek to ensure that each Supplier or Supplier Agent continues to meet its obligations in respect of the BSC.

    The scope of work for Technical Assurance is agreed by the PAB on an annual basis. The scope is designed to cover gap areas, recently introduced requirements and significant market issues. Targeted checks may also be performed by BSCCo as and when required. Checks can either be performed centrally or as part of a site visit to a market participant.

    BSC obligations:

    • The process of Technical Assurance is identified in Section Z of the BSC and defined in BSCP535 ‘Technical Assurance’.
    • Section Z of the BSC sets out PAB’s responsibilities with regard to the Technical Assurance process.

    Related information can be found on the Technical Assurance of Performance Assurance Parties webpage.

  • Incentive Technique - Peer Comparison

    Peer comparison is an incentive technique in ELEXON’s Performance Assurance Framework designed to motivate action in order to avoid undesirable outcomes.

    Peer Comparison is used to encourage performance improvement and compliance with the required standard through the publication of named Peer Comparison data to Trading Parties and also publicly on the BSCCo website.

    Suppliers and Supplier Agents are required to submit data for certain key performance Serials (Serials are defined above in the Reporting and Monitoring section). Graphs showing comparative performance levels are produced by BSCCo and then authorised for use by the PAB. A copy is also sent to all participants who appear on the graphs.

    BSC obligations:

    • The process is identified in the BSC under section Z and is detailed in BSCP534 ‘PARMS Techniques’.
    • Section Z of the BSC establishes PAB’s responsibilities with regard to Peer Group Comparison.

    Related information can be found on the Peer Comparison webpage.

  • Incentive Technique - Removal of Qualification

    Removal of Qualification is an incentive technique in ELEXON’s Performance Assurance Framework designed to motivate action in order to avoid undesirable outcomes.

    The PAB may remove previously granted qualified status for Supplier Agents based upon historic performance and non-compliance with BSC requirements. As Suppliers must use Qualified Supplier Agents this constitutes a significant response to a breach of the BSC.

    BSC obligations:

    • Defined in Section J of the BSC and detailed in BSCP537 ‘Qualification Process for SVA Parties, SVA Party Agents and CVA MOAs’.
    • Section Z of the BSC sets out the PAB’s responsibilities with regard to the Removal of Qualification process.

    Related information can be found on the Removal of Qualification webpage.

  • Incentive Technique - Breach and Default

    Breach and Default is an incentive technique in ELEXON’s Performance Assurance Framework designed to motivate action in order to avoid undesirable outcomes.

    Formal notification may be provided to a BSC Party of persistent or material breach of the BSC. A failure to address this breach in all material respects with all reasonable diligence and so far as reasonably practicable may constitute a ‘Default’.

    The Panel may apply specific provisions to Defaulting Parties including (but not limited to):

    • Notifying each other Party of such Default, suspending the right of the Party to submit: Energy Contract Volume Notifications
    • Metered Volume Reallocation Notifications.
    • Bid-Offer Pairs.
    • With the prior approval of the Authority, the right to register further Metering Systems and BM Units.
    • Expelling the Party from the BSC in accordance with Section A5.

    BSC obligations:

    • The breach and Default provisions are set out in section H3 of the BSC. Section Z of the BSC establishes PAB’s responsibilities with regard to the PAB Escalation Cycle detailed in BSCP534 ‘PARMS Techniques’ which may lead to escalation to the Panel.
  • Remedial Technique - Supplier Charges

    Supplier Charges is a remedial technique in ELEXON’s Performance Assurance Framework designed to correct undesirable outcomes that have occurred.

    Supplier Charges constitute liquidated damages that Suppliers incur for failing to meet applicable Performance Levels set out in the BSC. Pursuant to the BSC, each Supplier has agreed that each of the Supplier Charges represent a genuine pre-estimate of loss likely to be suffered by other Parties as a result of the failure of a Supplier to meet the appropriate Performance Level.

    The PARMS system calculates Supplier Charges per calendar month (reporting period) and by Grid Supply Point Group (GSPG). The charges are capped for each Supplier based on the Supplier energy take in the GSPG thus limiting the liability of any participant in any one reporting period.

    Ninety percent of the total capped Supplier Charges are then redistributed to other Non Half Hourly Suppliers in each GSPG pro-rated according to the energy registered to each Supplier for that month with a further ten percent of the total charge distributed to Trading Parties.

    BSC obligations:

    • Supplier Charges are applied for failure to meet obligations set out in Annex S-1 of the BSC and are applied only to those Serials defined within Annex S-1. The process for managing Supplier Charges is detailed within BSCP536 ‘Supplier Charges’.
    • Section Z of the BSC sets out PAB’s responsibilities with regard to Supplier Charges.

    Related information can be found on the Supplier Charges webpage.

  • Remedial Technique - Error and Failure Resolution

    Error and Failure Resolution is a remedial technique in ELEXON’s Performance Assurance Framework designed to correct undesirable outcomes that have occurred.

    The Error and Failure Resolution (EFR) processes are managed by BSCCo The objective of the technique is to provide a structured and managed framework for the rectification of Party and Party Agent issues including areas of non-compliance and underperformance against obligations and standards prescribed in the BSC. The process includes the provision of general support and information.

    This technique ensures that action is taken to resolve issues identified by detective techniques, in particular the BSC Audit and Technical Assurance checks.

    BSC obligations:

    • Section C3.1.1 (n) of the BSC states that BSCCo is responsible for monitoring whether any Party is or could be in Default of the BSC (in accordance with Section H3).
    • The Error and Failure Resolution Process is identified in the BSC under Section Z and detailed in BSCP538.
    • Section Z of the BSC establishes PAB’s responsibilities with regard to Error and Failure Resolution which interfaces with the PAB Escalation Cycle detailed in BSCP534 ‘PARMS Techniques’.

    Related information can be found on the Error and Failure Resolution webpage.

  • Remedial Technique - Trading Disputes

    Trading Disputes is a remedial technique in ELEXON’s Performance Assurance Framework designed to correct undesirable outcomes that have occurred.

    A Trading Dispute can arise where errors in the data, processes and/or rules used for the purposes of Settlement are identified and where such errors affect the amounts paid to or from Trading Parties. Trading Disputes can also arise as a result of errors in the determination of whether a Party is in Credit Default.

    BSC obligations:

    • The process for settling Trading Disputes under the BSC is set out in Section W of the BSC and is detailed in BSCP11 ‘Trading Disputes’.
    • Section W of the BSC sets out TDC’s responsibilities with regard to Trading Disputes.

    Related information can be found on the Trading Disputes Decisions webpage.

  • Remedial Technique - Change Mechanism

    The Change Mechanism is a remedial technique in ELEXON’s Performance Assurance Framework designed to correct undesirable outcomes that have occurred.

    The PAB, on identifying a perceived weakness or defect in the arrangements set out in the BSC, may recommend to the Panel that a Modification Proposal is raised. Alternatively, the PAB may instruct ELEXON to raise a Change Proposal to address the identified defect. This provides a mechanism to correct areas of weakness within the design of Settlement under the BSC. This limits the scope of the technique to only those applications of the change process made in order to address specific defects relating to Settlement Risks. It is distinct from the more general Change Management function and the assurance that it may provide to Trading Parties.

    BSC obligations:

    • Amendments to the BSC, Code Subsidiary Documents, BSC Systems and associated documentation are subject to a formal change procedure as set out in Section F of the BSC.

    Related information can be found on the Change webpage.