General good practice;
The options available to a Replacement Supplier;
Examples of potential pitfalls to watch out for and good practice for each of the options;
The information that Elexon will request from you to help understand the approach you are taking and the controls you are putting in place;
How to use Elexon’s performance reporting to ensure the management of the SoLR is not resulting in any Settlement Performance issues; and
The Performance Assurance Framework (PAF) responsibilities of the Replacement Supplier following a SoLR.

Prior to reading this guidance you should read:

General good practice

We recommend that, where possible, the Replacement Supplier undertakes the following as general good practice:

Contact the appointed agents of the failing Supplier to inform them of your plans and any impacts this may have on them, for example with regards to submission of de-appointment and other Change of Supplier (CoS) or Change of Agent (CoA) flows;
Contact any agents you plan to appoint to the new MSIDs to inform them of your plans and any impacts this may have on them, for example with regards to submission of appointment and other Change of Supplier (CoS) or Change of Agent (CoA) flows;
Contact the Administrator of the failing Supplier, where one has been appointed, and agree a clear view between both organisations of Settlement volumes associated with the account on the date of the change; whilst this isn’t a Settlement obligation, it can help to avoid misunderstanding between the two organisations and identify any issues early;
Compare this information to any data you are provided with from Ofgem around the customer base of the failing Supplier;
Ensure you have controls for identifying any data quality issues associated with the MSIDs you have been appointed to, and that any problems you identify are addressed quickly;
Contact Electralink and ensure they are aware of the SoLR event. They can advise on any DTN changes (such as flow re-routing) that will be necessary;
Ensure you have processes in place to request reads from customers of the failing Supplier, followed up by a robust read strategy that identifies and addresses the root cause of any problems processing these reads; Ofgem advises customers of failing Suppliers to take a Meter read when they announce the appointment of a SoLR, and getting accurate actual reads processed properly will be the best way to make sure that the MSIDs you are appointed to are settled accurately;
Monitor the Settlement performance data you receive from Elexon and via any relevant DTN (or other) flows, to identify and quickly work to resolve any issues not picked up by other processes; and
Liaise regularly with your Elexon Operational Support Manager (OSM) to inform them of how you are progressing with the actions, and advise them of any possible help or support you may need (for example, contact details for agents you may not currently work with, or any additional data that would be helpful to you).

The options available to a Replacement Supplier

At the point of the SoLR (i.e., the date and time notified by Ofgem of the SoLR transfer taking place), the Replacement Supplier becomes:

Responsible for the BM Units’ Exports and Imports;
The Registrant for all Metering Systems associated with those BM Units; and
Liable for all charges and benefits relating to the Metering Systems.

The Supplier Id(s) associated with the failing Supplier and all associated Metering Systems are transferred to the Replacement Supplier on the SoLR date. The Replacement Supplier is then able to either:

Manage the new MSIDs using the Supplier Id that had belonged to the failing Supplier; or
Undertake a CoS to transfer the MSIDs to one of your existing MPIDs

Whilst it is not a requirement, you should consider that the second of these options may be useful in establishing a clearer boundary in Settlement through the closing read in the CoS process within three months of the SoLR date.

Potential pitfalls and mitigations

As with migrations of Metering Systems (MSIDs) for other reasons such as a Change of Supplier (CoS) or Change of Agent (CoA), a SoLR can introduce risk into Settlement processes if data is not correctly transferred, or if any issues that occur as a result of the process are not detected and addressed.

You can mitigate some of these risks by following the general examples of good practice detailed above. However, depending on which of the two options you decide to take for managing the MSIDs, you may also wish to consider the following.

In general:

You should have a clear migration plan in place, with indicative numbers of migrations against dates; these dates should take into account any external limitations on what you will be able to process – for example, the Gas market has a hard limit of 5000 registrations that some Suppliers have found restricts the number of dual-fuel customers they are able to register in a single tranche and you may need to consider whether your plans exceed the Bulk Change of Agent threshold set out by the BSC Panel and follow the process set out in BSCP513 “Bulk Change of NHH Supplier Agent” ;
Your plan should consider any additional resources that will be required both at your business and your agents’ in order to complete the migration work and address any issues encountered along the way;
Your plan should include regular migration reports to check for any issues, and be clear as to who is responsible for addressing these, including clearly defined escalation points;
Depending on the number of MSIDs to be migrated, you may wish to consider undertaking a small pilot migration to see if any issues are encountered, and make sure these are addressed before continuing with the migration;
You should share this plan with your Elexon OSM, and keep them updated throughout any migration activities;
Whether you have undertaken a pilot migration or not, you should keep track of root causes for any issues you encounter during the migration, and analyse any common root causes to determine if changes to your chosen approach are required;
You should take steps to ensure that all account details are up-to-date and accurate, and that any notes or issues logged on a customer’s account are resolved; where the data provided to you by Ofgem or the failing Supplier is missing or incomplete, you should have a clear strategy in place for obtaining the missing information as quickly as possible;
You should take steps to ensure that there will be a full set of agents appointed and Meter Technical Details (MTDs) in place for each MSID that is due to be migrated, and check to make sure that this is the case once migration is complete;
You should take steps to ensure that any exceptions (for example, those indicated by D0095 and D0023 data flows), whether open before or created following migration, are detected, investigated, and addressed; and
You should take steps to ensure that any excessive positive or negative Estimated Annual Consumption (EACs)/Annualised Advances (AA)s whether in place before or created following migration, are detected, investigated, and addressed. Excessive EAC and AAs are common after SoLRs as the customer read provided may be out of line with the previous consumption.

If you encounter any issues or problems in either putting a plan together, or in delivering that plan, you should speak to your Elexon OSM as quickly as possible. They can not only ten try to help you out, but also will be aware of potential Settlement or Settlement Performance impacts as early as possible, and again can work with you to try to minimise these.

If you are intending to manage the new MSIDs using the Supplier MPID that had belonged to the failing Supplier:

You should consider how best to establish a boundary marking the point that you took responsibility for the MSIDs for any billing purposes or as part of any agreements you have with the administrator for the failing Supplier as BSCP504 “Non Half Hourly Data Collection For SVA Metering Systems” does not permit you to deem a read in these circumstances. If you intend to use customer reads to generate a D0010, you should consider planning what to do if these are unavailable and you need to be aware that re-dating actual reads is not compliant with BSCP504.

If you are intending to undertake a CoS to transfer the MSIDs to one of your existing MPIDs:

You should carefully monitor CoS reads both to ensure that these have properly entered into Settlement, and to make sure that they are not masking any issues that may need to be addressed by your read strategy; for example, a high proportion of deemed CoS reads may indicate a lack of engagement in the customer base that, if not addressed, will cause Settlement performance to drop over time; and
You should consider how best to establish a boundary marking the point that you took responsibility for the MSIDs for any billing purposes or as part of any agreements you have with the administrator for the failing Supplier as BSCP504 “Non Half Hourly Data Collection For SVA Metering Systems” does not permit you to deem a read in these circumstances. If you intend to use customer reads to generate a D0010, you should consider planning what to do if these are unavailable and you need to be aware that re-dating actual reads is not compliant with BSCP504 and re-dating CoS reads is only allowable within 5 working days of the CoS date.

Where data flows concerning the migration are to be sent over the Data Transfer Network (DTN) you should make sure that you are monitoring these to ensure that they are sent, received, and processed as you expect. This may require you to set up additional monitoring, for example to confirm that your Agents have received and processed all of the data flows associated with their Appointment, or that any CoS reads from D0086 data flows have been entered into Settlement.

Where the DTN is not being used for the transfer of data you should make sure that you are monitoring that any information you have sent by other means is sent, received, and processed. Again, this may require you to set up additional monitoring, depending on the method you have chosen.

You should again keep your Elexon OSM up to date with your plans and progress, and alert them to any issues or potential issues you come across. They will be able to help you manage these, and will also be aware of any subsequent Settlement or Settlement Performance impacts at an early stage.

How Elexon’s Performance reporting can help

Elexon’s weekly performance reports can be a helpful tool in understanding what data the Supplier Volume Allocation Agent (SVAA) holds for an MPID, and to track the performance of any migration carried out due to a SoLR event. The GSP tab will show you the latest data Elexon holds for the MPIDs. This may include how many MSIDs remain on the MPID, and the number of MSIDs which are being settled on a Default EAC (these may cause issues for the DC(s) processing new reads provided).

The following graph depicts the progression of a SoLR where the Replacement Supplier has migrated the MSIDs to one of its existing MPIDs, and no major issues have been encountered:

As can be seen from the graph, the SoLR has an immediate impact on the data: as CoS reads, (whether deemed reads or actual reads) are entered into Settlement, an AA is created for the period prior back to the previous read.

If you choose to manage the new MSIDs using the Supplier MPID that had belonged to the failing Supplier, you will not be able to deem reads for the SoLR date. You will need to consider how you will ensure any issues with processing customer reads from the SoLR are detected, investigated, and addressed. You will also need to consider how you will obtain a read for any supplies where a customer read is not available.

Any deviation from the example shown requires prompt investigation to ensure issues are rectified becoming more complex. The following graph depicts the progression of a SoLR where Settlement issues are encountered.

As can be seen from the graph, performance at SF/R1 has not reacted strongly which indicates that the benefit from the customer reads and any deemed or actual CoS reads has not taken place, and the settlement runs have not reacted uniformly. This suggests the DC(s) may be having issues validating reads, perhaps where RF performance for the previous Supplier was low. The DC may require assistance with creating deemed reads at RF to be able to process the customer reads and any deemed or actual CoS reads that are entered.

If performance falls based on the SoLR Calendar date, this indicates the flow of data has stopped. This may be because the old DC has stopped processing CoS Reads, or has become unable to.
Whilst the Settlement performance prior to the SoLR date is not your responsibility as the Replacement Supplier (see the section below), it will be your responsibility to ensure that the appropriate steps for the CoS are completed in line with the BSC. Reviewing the performance data prior to the SoLR to ensure these issues don’t occur will help you monitor whether the customer reads and any deemed or actual CoS reads have been successfully processed or whether there are issues that you need to investigate with your agents (pre and post the CoS date). Please contact your OSM if you would like to discuss this monitoring.

Information that Elexon will request

Elexon will request the following information from you to help understand the approach you are taking and the controls you are putting in place:

Confirmation on whether you will be undertaking a CoS process or maintaining the failing Supplier’s MPID;
Details of the controls you will put in place to manage appointments, data quality, exceptions and obtaining reads;
An indication of expected performance across all run types for the next 14 months for the failing Supplier’s MPID and the MPIDs you are migrating MSIDs to if undertaking the CoS route from the SoLR date; and
Regular progress updates during performance discussions with your OSM.

Please remember that your OSM is here to provide any help and support you need through this process. They also have access to Elexon’s other experts across the business, who can help out whatever situation may arise during the SoLR process and subsequent activities. If you’re ever unsure, please reach out to them.

Performance Assurance responsibilities of the Replacement Supplier

General Principles

From the SoLR date, all responsibilities under the BSC transfer to the Replacement Supplier. However, any Settlement Dates which fall before the SoLR date, and any responsibilities or obligations associated with those Settlement Dates, remain the responsibility of the failing Supplier.

For clarity, in an example where a SoLR event occurs on 01 January, the new Supplier will be responsible for obligations relating to all Settlement Dates from that point forward, so would only begin to be responsible for Final Reconciliation (RF) Performance after 14 months (when 01 January reaches the RF run). Until that point, the responsibility of RF performance would remain with the failing Supplier. It is worth noting, however, that actions the Replacement Supplier takes may still contribute to improving performance for Settlement Dates prior to them being responsible.

When a SoLR date occurs in the middle of a period being used for a Performance Assurance Technique (PAT), that period should not be the responsibility of either the old or the Replacement Supplier. This is because it would not be possible to accurately quantify the materiality or impact of the two Suppliers throughout that period.

Approaches for PATs that are impacted by a SoLR

Material Error Monitoring

This technique covers Large Estimated Annual Consumption (EAC)/Annualised Advance (AA) Reporting, Unmetered Supplies (UMS) Reporting, and Energisation Status Reporting. Whilst Suppliers are only responsible for excessive instances that are after the SoLR date, you should try all you can to resolve these and ensure that Settlement is as accurate as possible.

Technical Assurance of Metering Systems

Non-compliances identified before the SoLR date should be closed (as there is no way the failing Supplier would be able to resolve them).

Non-compliances may be re-opened under the Replacement Supplier if the same non-compliance is identified on a date on or after the SoLR date.

Any organised Technical Assurance checks should be re-confirmed with the Replacement Supplier, but should still take place. Any new Technical Assurance checks should be planned with the Replacement Supplier.

Technical Assurance of Performance Assurance Parties (TAPAP)

Any non-compliances identified before the SoLR date should be closed (as there is no way the failing Supplier would be able to resolve them)

Non-compliances may be re-opened under the Replacement Supplier if the same non-compliance is identified on a date on or after the SoLR date.

Any TAPAP checks planned or organised should be re-confirmed with the Replacement Supplier, but should still take place. Any new TAPAP checks should be planned with the Replacement Supplier.

BSC Audit

All open BSC Audit issues should be closed.

BSC Audit checks currently planned or being undertaken should continue, in discussion with the Replacement Supplier. The sample checks should only utilise Settlement Dates after the SoLR date.

BSC Audit Issues uncovered through this Audit check should be allocated under the Replacement Supplier, which will have responsibility to resolve these issues.

Error and Failure Resolution (EFR)

All open EFR plans should be closed.

If the performance standards are breached following the SoLR date, the Replacement Supplier can be placed into EFR in line with the normal EFR processes.

Trading Disputes

Settlement Dates falling before the SoLR date will be the responsibility of the failing Supplier to correct. Note that this is not likely to be possible if the company has ceased trading and therefore poses a notable risk to the market.

Settlement Dates on or after the SoLR date will be the responsibility of the Replacement Supplier to correct.

Any charges and/or refunds necessitated by any Trading Disputes will also be assigned to the failing or Replacement Supplier dependent on the Settlement Date/s for which the Dispute occurs.

Supplier Charges

Supplier Charges for SP01, SP02 and SP04 for complete PARMS Reporting Periods (i.e. calendar months) falling before the SoLR date should be assigned to the failing Supplier and are its responsibility to pay.

Supplier Charges for SP01, SP02 and SP04 for complete PARMS Reporting Periods falling after the SoLR date should be assigned to the new Supplier and are its responsibility to pay.

Supplier Charges for SP01, SP02 and SP04 for PARMS Reporting Periods which straddle the SoLR date do not have a clear responsibility with either Party, and therefore should not be assigned to either.

SP08 and SP09 Supplier Charges should be examined by Settlement Date, with Supplier Charges relating to a Settlement Date prior to the SoLR date being assigned to the old Supplier, and Supplier Charges relating to a Settlement Date on or after the SoLR date to the new Supplier.

The invoices Suppliers receive are in line with this approach. However, in the reports presented to the PAB, ELEXON has been manually adjusting the data to remove these charges. ELEXON will investigate how the reporting can be updated to ensure it is fully aligned with the invoicing and aligns with the outcome of the review of Supplier Charges as part of the wider PAF Review project.

For more information please contact your OSM, the BSC Service Desk or call 0370 010 6950.

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Guidance Notes

CONTENTS

Supplier of Last Resort (SoLR) - Settlement Performance and Performance Assurance

Introduction