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CONTENTS

Material Change and Triggers for re-Qualification V8.0

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Material Change and Triggers for re-Qualification

Guidance Note

Material Change and Triggers for re-Qualification

As a requirement of BSCP537: SVA Qualification Process for BSC Parties, Party Agents and CVA Meter Operators, all organisations who are Qualified, except Suppliers and Virtual Lead Parties (VLPs), are required to maintain their Qualified status through the re-Qualification process. The principle of self-assessment underpins the re-Qualification process and Qualified Persons must undertake a Risk and Impact Assessment preceding changes to their systems or processes to determine if any changes are Material Changes1 . Re-Qualification is triggered by a Material Change to a Qualified Person’s systems and processes and must be completed before the change is implemented. BSCP537 details the key steps in the process once re-Qualification has been initiated by a Qualified Person. This guidance provides additional advice on what might constitute a Material Change and therefore trigger re-Qualification.

A trigger for re-Qualification will normally be any change that would impact the Qualification Requirements embodied in the Self-Assessment Document (SAD). Any Risk and Impact Assessment process should ascertain whether a change has the potential to materially impact the Settlement process and/or a Qualified Person’s obligations under the BSC should that change not be appropriately implemented.

Various factors including operational, implementation and data quality issues should be assessed for their levels of risk and probability so that a view can be taken on the likeliness of a change to be material or not.

Table 1 below shows a series of example events and scenarios that could trigger the re-Qualification process. It should be noted that:

    • Changes that are highly likely to have an impact on a Qualified Person’s ability to meet its BSC Obligations would normally be a Material Change and it is almost certain that re-Qualification would be required;

    • Changes that are likely to have an impact on a Qualified Person’s ability to meet its BSC Obligations may be the subject of a discussion with Elexon to determine whether they would constitute a Material Change;

    • Changes that are unlikely to have an impact on a Qualified Person’s ability to meet its BSC Obligations would not normally be the subject of a discussion with Elexon and re-Qualification would probably not be required;

    • The impact of a change and its potential to trigger a re-Qualification exercise will vary at different agent organisations. Where it is unclear from the results of a Risk and Impact assessment conducted on any change whether or not re-Qualification is required, the organisation should consider the questions and obligations in the SAD which may be impacted, and if necessary contact Elexon for further guidance;

    • Changes to the core IT systems used to operate the Qualified Persons’ service (and hence deviation away from those system that were Qualified) may be the subject of a discussion with Elexon to determine the scale of the risk to and potential impact on BSC Obligations should those changes not be appropriately implemented;

    • The Qualification Requirements embodied in the SAD should be considered when assessing the impact of a proposed change that may impact the declarations made previously by a Qualified Person;

    • All aspects of a change (system, processes, staff etc.) should be considered to determine if the change is a Material Change. Where any one of these is highly likely, the change is likely to be a Material Change but a combination of likely impacts may also be a Material Change;

    • A change may be a single change implemented in isolation or a group of changes that are batched together for implementation;

    • The extent of the SAD which would be completed and the level of supporting evidence required will vary per application, based on the scope of the re-Qualification and initial assessment of the risk of the re-Qualification applicant by Elexon.

In all cases, if the organisation is in doubt about the need for re-Qualification, it should contact Elexon who will discuss and give advice as necessary.

It should be noted that other performance assurance techniques operated by Elexon and applied to Party Agents, such as targeted Technical Assurance checks, may highlight instances where a Party Agent has implemented a Material Change but not completed re-Qualification. In such circumstances where re-Qualification has not been completed, the Party Agents’ Qualified status will automatically lapse. The Performance Assurance Board will be notified and will agree on an appropriate course of action, which may include initiating the Removal of Qualification2 process.

It is stressed that information in the tables are examples only and are not a definitive list of the possible triggers for re-Qualification. Triggers for re-Qualification will vary on a case by case basis depending on factors such as market role, scale of operation and IT systems operated. The examples are intended to assist participants in their own assessment of whether a change that they are intending to make is likely to trigger re Qualification.

Table 1: Example re-Qualification Triggers

Typical Impact on BSC Obligations

Unlikely

Likely

Highly likely

System Change

Changes to non-Settlement interfacing systems.

Replacement of IT system core to the operation of the agency service with established, proven system.

Replacement of Settlement systems with a new, unproven system.

Minor software application version upgrades.

Major upgrade of IT systems core to the operation of the agency service.

Bulk migration of data with industry content between systems.

Software changes that do not affect the structure, format or calculated content of data flows sent to other participants.

Replacement of flow router or gateway.

Upgrade to or replacement of systems which impact inter-operation with other participants.

Upgrade to server or operating system.

Process Change

Changes to non-Settlement interfacing processes.

Manual process replaced by automated process (industry facing).

Process modifications that affect the calculation of any data items that are subsequently transmitted to another participant.

Multiple manual processes replaced by automated processes (industry facing).

Major rewrite of business processes used for the operation of the agency service, requiring new supporting documentation (e.g. Local Working Instructions) and staff re-training.

Staff Change

Changes to appointed sub-contractors.

Staff changes due to acquisition of new company.

Relocation requiring total staff replacement.

Change of Ownership

Qualified Party has been sold and all staff, systems and processes remain the same.

Qualified Party has been sold and some staff, systems and processes remain the same.

Qualified Party has been sold and very few staff, systems and processes remain the same.

Growth

Step changes under an agent’s previous maximum Certified volume (granted under the Accreditation and Certification process before Modification P197 implementation) would not require a re-Qualification exercise as the agent will have demonstrated volume and performance capabilities when the maximum Certified volume was granted, This also applies for step changes arising as a result of the Bulk Change of Agent Process which is covered in BSCP513: Bulk Change of NHH Supplier Agent

Step changes in number of Metering Systems for which the agent intends to be responsible (for example an increase of 25% in the number of Metering Systems in 2 months) over the agent’s previous maximum Certified volume, or volume capabilities demonstrated through testing under the Qualification Process. This also applies for step changes arising as a result of the Bulk Change of Agent Process. It should be noted that there is no set ‘tolerance’ percentage level for step increases in Metering Systems; this may vary at different organisations and by agent type. Factors for consideration when assessing the need for a re-Qualification in this area should include (but not limited to); current operating volumes, previous maximum Certified volume, previously tested volumes, previous demonstration of business expansion and timescales for the step change.

Significant Non Compliance

Where suggested by the PAB due to the number of non-compliances identified by other PAF techniques, e.g. the number of BSC Audit issues that a participant has (Party Agents and SMRAs only).

Need more information?

More information on the Qualification and re-Qualification processes is provided on the Qualification page of the BSC Website.

If you would like to contact Elexon to discuss Material Change and re-Qualification please email qualification@elexon.co.uk.

For other information please contact the BSC Service Desk at bscservicedesk@cgi.com or call 0370 010 6950.

Intellectual Property Rights, Copyright and Disclaimer

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.

1 Material Change is defined in Section X-1 of the BSC as being a proposed change to the Qualified Person’s systems and processes has the potential to impact that person’s ability to meet its obligations under the Code.