Performance Assurance Framework (PAF) Techniques Guiding Principles V8.0

Breach and Default

• An incentive technique;

• The application of the technique is ‘non-standard’;

• The breach provisions are in Section H of the BSC;

• It can be applied to BSC Parties (Suppliers and Licensed Distribution System Operators (LDSOs));

• The Panel may apply default where the Authority advises they have a regulatory concern that a Party may have breached their obligations and this breach is identifiable against one or more Settlement Risks;

• It’s only switched on if non-compliance is either persistent or quantifiably material across a wide range of Settlement Risks; and

• It’s switched on after Error and Failure Resolution (EFR) is applied, if applying EFR didn’t address the area of concern.

BSC Audit

• A detective technique;

• The application of the technique is ‘standard’;

• It’s applied to:

  • Central Volume Allocation (CVA) and Supply Volume allocation (SVA) PAPs, Elexon, and BSC Agents;

  • CVA and SVA Settlement Risks and controls; and

  • PAPs according to the BSC Auditor’s rotational approach (see below and the BSC Auditor’s approach document for more information).

• Size of audited entity (in terms of Meter System Identifier (MSID) numbers, volume of energy);

• Complexity of systems and processes;

• Role type (i.e. Non Half Hourly Data Collector (NHHDC) or Non Half Hourly Data Aggregator (NHHDA));

• Control environment of the audited entity and number of known audit issues (identified by the application of accumulated knowledge and experience);

• Level of manual processing as opposed to automated; and

• Performance in the market and information received from other PAF techniques.

• MSID count over 500 (HH) or 50,000 (NHH);

• The role is perceived as higher risk (e.g. NHHDC); and/or

• Performance issues have been detected by other Performance Assurance Techniques (PATs).

Bulk Change of Agent (BCoA)

• A preventative technique;

• The application of this technique is ‘non-standard’;

• It mitigates various NHH Settlement Risks;

• It’s applicable to Suppliers (they’re responsible for managing the process) but also covers risks around moving Meter Technical Details (MTDs) and Meter reading history between Supplier Agents; and

• It’s only applied if the criteria for BCoA are met (BSCP513).

Change Mechanism

• A remedial technique;

• The application of this technique is ‘standard’;

• It can affect all industry (based on the nature of the change);

• It’s initiated by the PAB, or independently by a Party at any time;

• It’s used alongside other PAF techniques, but operates within its own framework; and

Education

• A preventative technique;

• The application of this technique is ‘standard’;

• Deployed as directed by the PAB;

• Education can be applied to any type of PAP;

• Ideally covers all PAPs, but can’t be enforced as such;

• Education is provided subject to an agreed understanding of the particular query that has given rise to the support request;

• Education is not intended to mitigate the entire risk of any possible failure or error in a step or process required under the Code;

• Information provided by Elexon in connection with the implementation of the BSC shall be set out in plain English wherever possible; and

• Should a Trading Dispute be raised following information being provided by Elexon, the Trading Disputes Committee will determine whether a Settlement Error has occurred on a case by case basis.

Error and Failure Resolution (EFR)

• A remedial technique;

• The application of this technique is ‘non-standard’;

• EFR is used to assist PAPs to understand and rectify performance issues and non-compliances;

• It’s applicable to any type of PAP;

• When applying EFR against a Settlement Risk, we take into account the net significance of the risk and the PAP’s contribution to the issue identified; and

• The PAB can define specific escalation criteria for specific Settlement Risks or net significance values.

Material Error Monitoring (MEM)

• Erroneously Large Estimated Annual consumption (EACs) and Annual Advances (AAs);

• Erroneous Values of Unmetered Supplies (UMS); and

• Incorrect Energisation Status.

• A detective technique;

• The application of the technique is ‘standard’;

• Issues covered under MEM are agreed by the PAB. The PAB’s decision to include a new issue under MEM takes into account the net significance of the Settlement Risk, evidence of materiality identified by other detective techniques, and the cost of putting in place systems to carry out monitoring;

• MEM may be applied in conjunction with EFR if monitoring indicates that a PAP’s contribution to the issue is over their threshold;

• It can also result in using the education technique so the PAP has a better understanding of the issue; and

Peer Comparison

• An incentive technique;

• It provides a mechanism for publishing performance at key control points in Settlement among PAP’s peer groups;

• The application of the technique is ‘standard’;

• The PAB can, at its discretion, select which PARMS Serials it publishes as public peer comparison and the frequency at which reports are circulated;

• It can be applied to Suppliers and on the serials defined in BSCP533; and

• Amending the scope of the peer comparison technique depends on:

  • Settlement Risks identified as of particular regulatory concern and covered by an applicable PARMS Serial; and

  • Persistent or quantifiably material under performance.

Performance Assurance Reporting and Monitoring (PARMS)

• A detective technique;

• The application of the technique is ‘mandatory’;

• It provides a mechanism for collecting and reporting data to identify performance at key control points in Settlement;

• It’s applied to all PAPs monthly for all Settlement processes (and therefore risk areas) defined in the BSC and BSCP533 (the PARMS Serials and standards); and

Qualification

• A preventative technique;

• The application of this technique is ‘non-standard’;

• It’s initiated by a Qualification application;

• It’s applied to all types of PAP including Licensed Distribution System Operators (LDSOs) when acting in their capacity as a Supplier Meter Registration Agent (SMRA) and Unmetered Supplies Operator(UMSO); and

• The technique can be partnered by a detective technique (e.g. Post-Qualification Technical Assurance check) at the direction of the PAB.

Re-Qualification

• A preventative technique;

• The application of this technique is ‘non-standard’;

• It’s applicable to all PAPs with the exception of Suppliers;

• It’s normally initiated by the PAP based on a risk and impact assessment of the change it wishes to make;

• The PAB can also enforce a re-Qualification under the provisions of Section J 3.5.4 of the BSC; and

Removal of Qualification

• An incentive technique;

• The application of this technique is ‘non-standard’;

• The technique can be applied to all PAPs that are ‘Qualified Persons’, but not Suppliers (Suppliers would go through the default technique);

• It’s switched on when non-compliance is either persistent or quantifiably material across a wide range of Settlement Risks; and

• Removal of Qualification process should be followed only after a Qualified Person has failed to rectify the non-compliance through the Error and Failure Resolution process.

Supplier Charges

• A remedial technique;

• The application of this technique is ‘mandatory’;

• It’s only applied to Suppliers; and

Technical Assurance of Metering (TAM)

• A detective technique;

• The application of this technique is a combination of ‘standard’, ‘non-standard’ and ‘mandatory’;

• The technique is applied to CVA and SVA HH Registrants, CVA MOAs, SVA HH Data Collectors (DCs) and the Central Data Collection Agent (CDCA). The technique does also check the activity of SVA Retail Energy Code Metering Equipment Managers (REC MEMs), but only to be able to check the end to end Commissioning process. The results of REC MEM audits are passed to the REC for any follow up action;

• The technique is applied to:

  • CVA Registrants (including LDSOs where they are the Registrant), CVA MOAs and the CDCA as a mandatory technique for all relevant CVA Settlement Risks and non-standard for targeted visits; and

  • SVA HH Suppliers, HHDCs (and LDSOs where they are an asset owner) and HH REC MEMs as a standard technique for the main sample, and as a non-standard technique for the specific sample and targeted visits.

• The PAB defines the scope of the audits in the main sample (i.e. the technique can be switched off for particular Settlement Risks/PAPs) and the scope of the specific sample and targeted visits (i.e. the technique would be switched on for particular Settlement Risks/Participants) according to specific areas/Settlement Risks/types of Metering Equipment.

Technical Assurance of Performance Assurance Parties (TAPAP)

• A detective technique;

• The application of the technique is ‘non-standard’;

• Applied to SVA Settlement Risks where other techniques indicate there is a problem, or do not provide enough detective assurance;

• Performance issues identified could trigger EFR; and

• It can be applied to any PAP.

Trading Disputes

• A remedial technique;

• The application of the technique is ‘standard’;

• It provides a mechanism for correcting Settlement errors and the subsequent impacts on Trading Charges;

• It can only be applied to BSC Parties;

• The Trading Dispute technique can be applied to any Settlement Risks identified of a particular concern at a market issue level (e.g. following the BSC Audit);

• It’s only switched on when non-compliance is either persistent or quantifiably material and so is partnered with a detective technique such as MEM, TAM or the BSC Audit; and

• It can be combined with the EFR and Education techniques.

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