The copyright and other intellectual property rights in this document are vested in Elexon or appear with the consent of the copyright owner. These materials are made available for you for the purposes of your participation in the electricity industry. If you have an interest in the electricity industry, you may view, download, copy, distribute, modify, transmit, publish, sell or create derivative works (in whatever format) from this document or in other cases use for personal academic or other non-commercial purposes. All copyright and other proprietary notices contained in the document must be retained on any copy you make.

All other rights of the copyright owner not expressly dealt with above are reserved.

No representation, warranty or guarantee is made that the information in this document is accurate or complete. While care is taken in the collection and provision of this information, Elexon Limited shall not be liable for any errors, omissions, misstatements or mistakes in any information or damages resulting from the use of this information or action taken in reliance on it.

Amendment Record

Version	Date	Description of Changes	Changes Included	Mods/ Panel/ Committee Refs.
1.0	26/11/08	P207 Release	P207	Panel 144/09
2.0	05/11/15	5 November 2015 Release	P319 Self-Governance	Panel 239/07
3.0	01/09/21	1 September 2021 Non-Standard Release	P420	Panel 316/05
4.0	04/11/21	4 November Standard Release	CP1544	ISG246/03 SVG248/04 PAB248/10

1. Introduction

1.1 Purpose and Scope of the Procedure

The purpose of this Balancing and Settlement Code Procedure (BSCP) is to set out the process that Performance Assurance Parties (PAPs) and BSCCo shall follow when an error and/or failure occurs where a PAP’s Risk Management Plan states that the Error/Failure should be addressed through the Error and Failure Resolution (EFR) process.

For the purpose of this BSCP an error and/or failure means: A failure of a PAP to fulfil the obligations prescribed in the BSC and related Code Subsidiary Documents in the appropriate manner to mitigate a Settlement Risk, including not meeting a serial or standard stated within the BSC or in a BSCP (“Error/Failure”). EFR is the process by which PAPs keep BSCCo informed of how they are resolving an Error/Failure and BSCCo monitors the actions taken by PAPs in the resolution of Error(s)/Failure(s) and takes appropriate steps to ensure that PAPs achieve an acceptable level of resolution in a timely manner.

The objective of the EFR process is to provide assurance to the PAB and the industry that any relevant Error(s)/Failure(s) relating to Settlement Risks are understood and that the PAPs take appropriate steps to resolve them within an agreed timescale.

The EFR process includes an escalation procedure that shall be invoked by BSCCo or the Performance Assurance Board (PAB) when:

an error and/or failure has not been resolved meaning that a Settlement Risk has not been mitigated to an acceptable level by PAPs within the time frames required; or
where the PAP has failed to comply with the EFR Process.

This BSCP also describes the key interfaces, timetables and responsibilities of the:

PAP;
PAB, the Performance Assurance Administrator (PAA) (carrying out functions delegated to it by the PAB); and
BSCCo.

The EFR process does not seek to replace the obligations upon Parties that are defined within the BSC – the Party remains responsible for the performance of its Party Agents.

1.2 Error and Failure Resolution

An Error/Failure may be detected through the application of any Performance Assurance Technique (PAT) (as defined within the BSC and published on the BSC Website) or via any communication between a PAP and BSCCo. Upon detection the PAB shall invoke the EFR process.

The EFR process requires PAPs to keep BSCCo informed of the actions that they are undertaking to resolve identified error(s)/failure(s). BSCCo will monitor the actions being taken by PAPs, to provide comfort to the PAB (and therefore other industry participants) that PAPs understand and are working towards the resolution of Error(s)/Failure(s)s in an appropriate manner and within an agreed timescale.

When an Error/Failure is identified, BSCCo will ask the PAP to set out the actions it will take to resolve the issue and the timescales in which these actions will be completed.(if appropriate using the action plan contained in this BSCP). BSCCo will review the action plan and agree that it is appropriate.

Failure of the PAP to satisfactorily meet the requirements agreed with BSCCo and to resolve the Error/Failure within the timeframes required may lead BSCCo to invoke the escalation procedure.

1.2.1 Escalation Procedure

The purpose of the escalation procedure is to:

inform the PAB (and when appropriate the Panel) when in the opinion of BSCCo a PAP is failing to satisfactorily resolve or mitigate Error(s)/Failure(s) within the required timescales utilising the normal EFR process; and
to ensure appropriate steps are taken by the PAP to resolve or mitigate the Error(s)/Failure(s) in order to minimise the extent of the Settlement Risk to PAPs.

There are two levels of escalation:

PAB Escalation – BSCCo will escalate a PAP to the PAB where a PAP has failed to meet the requirements of 2.1

Panel Escalation – PAB will escalate a PAP to the Panel where a PAP fails to meet the requirements set out or agreed with the PAB.

Circumstances that could give rise to BSCCo invoking the escalation procedures are set out below, however this not an exhaustive list and, as set out above, is at the sole discretion of BSCCo:

the PAP fails to demonstrate to the satisfaction of BSCCo that it understands how it contributes to the Settlement Risk.
the PAP fails to submit in the opinion of BSCCo a satisfactory action plan within the timescales agreed with BSCCo.
when the PAP (including its Party Agents) breaches or fails to undertake or complete a requirement of its action plan (including when the PAP fails to agree or complete an action plan).
The PAP fails to fulfil the requirements of a previously escalated EFR.

The ideal outcome of an escalation is always for the PAP to improve its performance to the levels specified within the BSC.

1.2.2 PAB Escalation

This will involve the PAB considering the evidence provided by BSCCo (from any Performance Assurance Technique) in relation to the unresolved Error/Failure and any information from the PAP and determining the best course of action for resolving the Error/Failure. The PAP will be required to adhere to the course of action agreed with the PAB. The PAB may choose to invite them to present, in person, their action plans.

Following PAB escalation, the revised EFR plan must be signed off by a Category A BSC Signatory or Company Director within the escalated PAP prior to the revised plan being approved by the BSCCo.

In the event that the PAP fails to adhere to the agreed course of action within the required time frames, the PAB has the discretion to escalate the PAP to the Panel. Where a Party Agent is in a PAB escalation, the PAB may wish to correspond with the associated Parties as well as with the Party Agent. Party Agent processes for notifying any associated Parties are outside the scope of this BSCP.

1.2.3 Panel Escalation

The Panel will deploy any methods deemed appropriate to ensure that the PAP resolves the outstanding Error/Failure.

1.2.4 Possible Next Steps

Following monitoring of the situation, if the PAP continues to fail to meet the obligations prescribed in the BSC, the Panel may commence the Removal of Qualification process as stated in BSCP537 ‘Qualification Process for SVA Parties, SVA Party Agents and CVA MOAs’ or the Default process as described in the BSC, section H. If the Panel is of the opinion that the circumstances warrant the commencement of the Removal of Qualification process, then the PAP shall be notified, this procedure shall cease and the appropriate procedures shall be invoked in accordance with BSCP537.

1.3 High Level View of the Error and Failure Resolution Process

1.3.1 Error and Failure Resolution

1.3.2 Escalation

1.4 Interaction with Risk Based Performance Assurance Framework

Performance Assurance Techniques will be applied to PAPs based on the net significance of the applicable Settlement Risk and an assessment of the PAP’s contribution to the Settlement Risk. EFR will be deployed at a PAP in relation to relevant Settlement Risks.

Settlement Risks and their net significance are captured on the Risk Evaluation Register. All the Settlement Risks identified are rated in terms of severity of impact and probability (including a weighting for the strength of controls).

The Settlement Risks are assigned Performance Assurance Techniques to mitigate those risks and these Performance Assurance Techniques are recorded in the Risk Operating Plan against each Settlement Risk.

The Risk Evaluation Register (RER) and the Risk Operating Plan are produced for a Performance Assurance Operating Period in accordance with the Annual Performance Assurance Timetable and the agreed Risk Evaluation Methodology, which details the processes used to identify and evaluate the Settlement Risks and assess their materiality.

At the end of a Performance Assurance Operating Period, the PAB will prepare an Annual Performance Assurance Report for the Panel detailing the assurance that has been provided during the course of the period, the extent to which Settlement Risks have been mitigated, and BSCCo costs of providing that assurance.

The following can be found on the BSC Website.

Risk Evaluation Methodology;
Risk Evaluation Register;
Risk Operating Plan;
Annual Performance Assurance Report;
The applicable Performance Assurance Operating Period; and
Approved Performance Assurance Techniques.

1.5 Main Users of the Procedure

This BSC Procedure shall be used by:

Performance Assurance Parties
Performance Assurance Administrator
BSCCo
Performance Assurance Board
BSC Panel

1.6 Use of Procedure

The remaining sections in this document are:

Section 2, which breaks down the EFR process into a step-by-step description of the duties and responsibilities of the various parties involved in the process (“Interface and Timetable Information”).

Appendix A, which contains a template action plan which a PAP may be required to complete and agree with either BSCCo or PAB, as part of the EFR process (“the Action Plan”).

Note that if the template action plan in Appendix A is not used, the PAP must ensure that another method is agreed with BSCCo.

1.7 Balancing and Settlement Code Provision

This BSC Procedure has been produced in accordance with the provisions of the BSC and in particular Section Z. In the event of an inconsistency between the provisions of this BSC Procedure and the BSC, the provisions of the BSC shall prevail.

1.8 Associated BSC Procedures

This BSC Procedure interfaces with:

BSCP27 Technical Assurance of Half Hourly Metering Systems for Settlement Purposes

BSCP513 Bulk Change of NHH Supplier Agent

BSCP533 PARMS Data Provision and Publication of Peer Comparison Data

BSCP535 Technical Assurance

BSCP536 Supplier Charges

BSCP537 Qualification Process for SVA Parties, SVA Party Agents and CVA MOAs

If during the EFR Process BSCCo makes observations or receives notifications that the Error(s)/Failure(s) of the PAP are so serious that it appears that the PAP is failing to comply with the relevant requirements and/or standards for performance as described in the BSC or any BSCP then BSCCo has the right to invoke BSCP537 which sets out the Removal of Qualification Process for Party Agents or the Breech and Default provisions in Section H of the Code for Parties. If BSCCo does invoke this process it shall notify the PAP, this BSCP shall cease and BSCP537 or Section H of the Code shall be adhered to, as appropriate.

1.9 Acronyms and Definitions

Any capitalised term that is not defined in this BSCP shall have the same meaning given to it as in the Code.

The acronyms used in this BSC Procedure are defined as follows:

BSC Balancing and Settlement Code (the “Code”)

BSCCo Balancing and Settlement Code Company

BSCP Balancing and Settlement Code Procedure

EFR Error and Failure Resolution

PAA Performance Assurance Administrator

PAB Performance Assurance Board

PAP Performance Assurance Party

PARMS Performance Assurance Reporting and Monitoring System

PAT Performance Assurance Technique

RER Risk Evaluation Register

RMP Risk Management Plan

TAA Technical Assurance Agent

2. Interface and Timetable Information

2.1 Error and Failure Resolution

If any steps in this process are not completed in a timely manner or to a satisfactory quality, Escalation, in accordance with section 2.2, may be applied.

REF	WHEN	ACTION	FROM	TO	INFORMATION REQUIRED	METHOD
2.1.1	Following the identification of an Error/Failure or if BSCCo requires a revised action plan to be provided under 2.1.7, in which case only (c) applies.	(a) Ascertain that the Error/Failure which has occurred requires EFR to monitor its resolution. (b) Explain what the Error/Failure is, and how it contributes to the Settlement Risk. (c) Request action plans to be provided within 20 Working Days (WD).	BSCCo	PAP	The PAP’s Action plan.	Meeting / written and/or verbal communication.
2.1.2	Within 20 WD of 2.1.1 OR Within 10 WD of 2.1.4 when an unsatisfactory action plan has been submitted or 2.1.6 when a revised action plan is to be submitted	Determine the actions to be taken and the timescales for these actions.¹ Submit / re-submit the action plan.	PAP	BSCCo	Action plan (using Appendix A- if appropriate).	Meeting / written and/or verbal communication.
2.1.3	Following 2.1.2 and within 20 WD of receipt of action plan.	Review the action plan. If satisfactory, go to 2.1.5. If not, continue at 2.1.4.	BSCCo		Action plan.	Internal process.
2.1.4	Following 2.1.3 if action plan submitted is not satisfactory.	Provide comments on potential changes to the action plan. Go to back to 2.1.2.	BSCCo	PAP	Action plan.	Meeting / written and/or verbal communication.
2.1.5	Following 2.1.3 if action plan submitted is satisfactory.	Confirm that the action plan submitted is appropriate to address the Error/Failure within a reasonable timescale acceptable to BSCCo.	BSCCo	PAP	Action plan.	Meeting / written and/or verbal communication.
2.1.6	Following 2.1.5, in accordance with the timescales in the agreed action plan or on request from BSCCo.	Complete the actions in accordance with the agreed action plan. Provide regular progress reports on the resolution of Error(s)/Failure(s). Progress reports on whether or not the actions have been completed must be provided within 5 WD of scheduled milestones. If the PAP determines that revisions are required to action plans, continue process from 2.1.2. Notify when all required actions in relation to the resolution of the Error(s)/Failure(s) have been completed.	PAP	BSCCo	Action plan. Progress updates.	Meeting / written and/or verbal communication.
2.1.7	In conjunction with 2.1.6.	Monitor the progress of the action plan and the rectification of the Error(s)/Failure(s) through updates provided by the PAP. If BSCCo requires a revised action plan to be provided at any stage, continue at 2.1.1. If BSCCo requires the matter to be escalated to PAB, go to 2.2 (Escalation Process). If BSCCo decides that the PAP is now compliant² in the identified area, cease the EFR process.	BSCCo	PAP	Action plan. Evidence of the Reasons for escalation (as appropriate)	Internal process.
2.1.8	As appropriate. (PAB Meeting)	Provide information on the progress of the rectification of Error(s)/Failure(s) to the PAB. Note: PAB may decide to escalate the Error/Failure in accordance with section 2.2.	BSCCo	PAB	Action plan. Progress updates.	PAB Paper.

2.2 Escalation Process

A PAP can be placed in the Escalation Process by BSCCo at any stage of section 2.1 in the Error and Failure Resolution process. This decision is at the sole discretion of BSCCo who’s consideration will include, amongst other things, the severity of the Error/Failure and the Settlement Risk to which it relates.

All PAPs must nominate a suitable senior manager to act as a contact point during escalation. Technical contacts act as liaison during the EFR process, but a senior manager is needed for escalation.

REF	WHEN	ACTION	FROM	TO	INFORMATION REQUIRED	METHOD
2.2.1	Following the decision to escalate.	Send notification that a PAP is failing to rectify an Error/Failure appropriately, that it is being placed in the ‘escalation process’ and that the Error(s)/Failure(s) will be presented and discussed at the next appropriate PAB meeting. The PAP may be requested to attend the PAB meeting and present its position. If the PAP is not requested to attend, it may ask BSCCo to attend the PAB meeting.	BSCCo	PAB PAP	Evidence of the reason for Escalation. Severity of the Settlement risk that the issue relates to. Action plan. History of the Error/Failure and the PAP’s performance. The date of the PAB meeting.	Paper, Report and/or Presentation
2.2.2	At next appropriate PAB Meeting	Consider and discuss the Error(s)/Failure(s) in the closed session of the PAB Meeting. At the discretion of the PAB chairman, BSCCo and the PAP will have an opportunity to address the PAB. Determine any actions required by the PAP or BSCCo to rectify the Error(s)/Failure(s).	PAB		Provided to the PAB in 2.2.1 or 2.2.5:- Evidence of the reason for Escalation. Severity of the Settlement risk that the Error/Failure relates to. Action plan. History of the Error/Failure and the PAP’s performance. Provided by the PAP or BSCCo at PAB Meeting:- Any other information requested by the PAB in 2.2.3 or deemed relevant by BSCCo or the PAP.	PAB Meeting
2.2.3	Within 5 WD of PAB meeting.	Send notification of PAB’s determination in respect of the Error(s)/Failure(s). If the PAB requires that the PAP should remain within PAB Escalation, continue at step 2.2.4. If the PAB is of the view that the PAP is making sufficient efforts to rectify the Error/Failure, cease the escalation and continue using EFR process set out in section 2.1.	PAB	BSCCo PAP	Details of the PAB’s determination and the next required actions.	Written communication.
		If the PAB requires that the PAP should be escalated to the Panel, go to step 2.2.6. (The PAP may wish to, or will be requested to attend the Panel meeting and present its position.). In this situation, the Panel will be informed.	PAB	Panel	Details of the PAB’s determination and the next required actions.	Written communication.
2.2.4	Following 2.2.3 or 2.2.7 where the Error(s)/Failure(s) have been put before the Panel.	Submit a revised EFR plan incorporating PAB or Panel feedback and actions as provided under 2.2.2 or 2.2.6. Provide sign off by a Category A BSC Signatory or Company Director in respect of the revised EFR plan following escalation. Complete the actions required by the PAB or Panel within the timescales requested by the PAB or the Panel.	PAP		Revised plan incorporating PAB or Panel feedback and actions. Evidence of Category A BSC Signatory or Company Director sign off of revised EFR plan. PAB or Panel determination provided to the PAP in 2.2.3 or 2.2.6.	Written communication.
		Provide progress reports to BSCCo at frequencies required by the PAB or Panel or when requested by BSCCo.	PAP	BSCCo	Any action plans and progress reports provided by the PAP.	Written and/or verbal confirmation / communication.
2.2.5	In conjunction with 2.2.4.	Review the revised EFR plan submitted in 2.2.4 to ensure that required sign off is provided and that the plan incorporates the changes required by 2.2.4. Approve or take further action as required. Monitor the resolution of the Error/Failure in accordance with the timescales requested by the PAB or Panel.	BSCCo		Progress reports provided by the PAP in 2.2.4.
		Send notification on the PAP’s progress for discussion at the next appropriate PAB meeting. Continue at 2.2.2.	BSCCo	PAB PAP	Evidence of performance measures and other related information provided by BSCCo as detailed in 2.2.2.	Paper, Report and/or presentation.
2.2.6	At next appropriate Panel Meeting	Consider and discuss the Error/Failure in the closed session of the Panel Meeting. At the discretion of the Panel chairman, BSCCo, the PAB and the PAP will have an opportunity to address the Panel. Determine any actions required by the PAP, the PAB or BSCCo to rectify the Error/Failure.	Panel		Provided to the Panel in 2.2.3:- Evidence of the reason for Escalation. Severity of Settlement Risk (from RER), and the history of the Escalation Process. Action plan. History of the Error/Failure and the PAP’s performance. Provided by the PAP or BSCCo at the Panel Meeting:- Any other information requested by the PAB or the Panel.	Panel Meeting
2.2.7	Within 5 WD of Panel meeting.	Send notification of the Panel’s determination in respect of the Error(s)/Failure(s). If the Panel requires that the PAP should continue being monitored by the PAB, go to step 2.2.4. If the Panel requires that the PAP should continue being monitored by the Panel, go to step 2.2.8. If the Panel is of the view that the PAP is making sufficient efforts, cease the escalation and continue using EFR process set out in section 2.1. If the PAP fails to meet the requirements prescribed by the Panel satisfactorily within the agreed timescale, go to step 2.2.10. *In this situation, Ofgem will be informed.	Panel	PAP BSCCo PAB Ofgem*	Details of the Panel’s determination and the next required actions.	Written notification.
2.2.8	Following 2.2.7.	Submit a revised EFR plan incorporating PAB or Panel feedback and actions as provided under 2.2.2 or 2.2.6. Provide sign off by a Category A BSC Signatory or Company Director in respect of the revised EFR plan following escalation. Complete the actions required by the Panel in the timescales requested by the Panel.	PAP		Revised plan incorporating PAB or Panel feedback and actions. Evidence of Category A BSC Signatory or Company Director sign off of revised EFR plan. Panel determination as provided to the PAP in 2.2.7.	Written communication.
		Provide regular progress reports to BSCCo.	PAP	BSCCo	Any action plans and progress reports provided by the PAP.	Written and / or verbal confirmation / communication.
2.2.9	In conjunction with 2.2.8.	Review the revised EFR plan submitted in 2.2.8 to ensure that required sign off is provided and that the plan incorporates the changes required by 2.2.8. Approve or take further action as required. Monitor the resolution of the Error/Failure in accordance with the agreed method/timescales.	BSCCo		Any action plans and progress reports provided by the PAP in 2.2.7.	Written and / or verbal confirmation / communication.
		Send notification on the PAP’s progress for discussion at the next appropriate Panel meeting (and for information to the PAB). Continue at 2.2.6.	BSCCo	PAP PAB Panel	Evidence of performance measures and other related information provided by BSCCo as detailed in 2.2.6.	Written and / or verbal confirmation / communication.
2.2.10	Following 2.2.7, if the Panel decides that the PAP has not met the prescribed requirements.	As appropriate, following notification to the PAB, commence the Removal of Qualification Process for a PAP that is a Party Agent in accordance with BSCP537 “Qualification Process for SVA Parties, SVA Party Agents and CVA MOAs” and/or application of Default provisions in accordance with the BSC.	Panel PAB BSCCo		BSCP537 - Qualification Process for SVA Parties, SVA Party Agents and CVA MOAs. BSC Section H	Internal Process

Appendix A – Action Plan

SECTION A – ACTION PLAN CONTROL
Error/Failure Title
Associated Audit Issue Number (where appropriate)		RMR Number (BSCCo use)
Date Error/Failure Originally Identified		Date of Action Plan Submission
Performance Assurance Party (PAP) Type(s)		PAP Identifier(s)
Action Plan Contact and Contact Details
Senior Manager Committing to Successful Delivery of the Action Plan

SECTION B – ERROR/FAILURE and RESOLUTION DESCRIPTION

Error/Failure Description

Resolution Description

SECTION C –MILESTONES
Milestone	Milestone Description	Target Date

SECTION D – AGREED LEVEL OF MONITORING

Agreed Method of Monitoring

Agreed Frequency of Monitoring

Action Plan Guidelines

These guidelines are to be used to assist in the completion of the Action Plan. They give a brief description, with some examples, of the information that should be given for each item. Unless otherwise indicated, all fields must be filled in by the PAP.

SECTION A – ACTION PLAN CONTROL

RMR Number (BSCCo use)
- This is a unique identifier assigned by BSCCo to each Error/Failure.
PAP Types
- E.g. Supplier, NHHDC,
Senior Manager Committing to Successful Delivery of the Action Plan
- This provides assurance to BSCCo and the PAB that there is commitment to the Action Plan and shows that there has been an internal review to ensure that the plans are signed off and have management support.

SECTION B – ERROR(S)/FAILURE(S) and RESOLUTION DESCRIPTION

Error/Failure Description; For example:
- A description of the Error(s)/Failure(s)
- Associated metrics / root cause analysis
- Impact of the Error(s)/Failure(s) (on Settlements, on processes, on the business, on others)
- Age of the Error(s)/Failure(s) – what plans have been submitted in the past and what has worked, what has not?
Resolution Description; For example:
- Solution for each root cause
- Solution for the impact (correcting the symptoms) including any retrospective amendments
- Prioritisation of the resolution if necessary
- Process improvements / training
- Responsibility of action / solution
- Resources
- Involvement of other members of the Supplier hub
- What is a practicable and achievable work in progress level? – How has this been calculated? How will it be measured? Ensure that the error stops at or beneath this level in future.
- What are the risks to the action plan? How will these be mitigated?
- Details of an audit trail
- Internal reporting / monitoring

SECTION C – MILESTONES

Milestone Description; For example:
- Key stages of the Action Plan (analysis completed, resolution actions, monitoring)
- Actions for which any evidence can be provided to BSCCo to demonstrate closure of the milestone and the Action Plan
- Proposed Date of resolution of the Error/Failure