ELEXON Quarterly Report - BSCCo Review

This report summarises the operation of the Balancing and Settlement Code (BSC) for the third quarter of the Financial Year 2011/12 and describes the activities of the BSC Panel and its Committees. The report also reviews performance against our Business Strategy and Budget for 2011/12.

Our strategy this year is to maintain and build upon our previous achievements to fulfil our mission – “To deliver the BSC effectively, efficiently and economically, to the benefit of our customers”, and to support the best strategic outcomes for the evolving industry by pursuing our vision – “to be
a leader in the efficient transformation of energy markets by providing shared solutions to address common industry problems.”

We aim to achieve our strategy by fulfilling four strategic priorities designed to improve our service to our customers and stakeholders. These are to:

• Actively manage, and continually improve, BSC services to ensure that we deliver in an efficient, effective and economic way
• Drive efficiencies and savings in our operational business
• Improve the customer experience and develop richer customer relationships
• Develop our services and adapt our business to address industry challenges

To pursue our vision, we will develop our services and adapt our business to address industry challenges.

Managing and improving BSC Services

Risk Operating Plan 2012/13 Published
We presented the Risk Operating Plan (ROP) 2012/13 to the Performance Assurance Board (PAB) November meeting. The PAB reviewed and approved the ROP which will take effect from 1 April 2012. The ROP 2012/13 is published on the Performance Assurance Processes page of our website.

Technical Assurance
The no access rate for the Technical Assurance Agent (TAA) Service is currently running at 10.3% - higher than expected, but the lowest this year. ELEXON has highlighted this to the industry via Newscast, directing readers to our guidance note on the ELEXON website.

We carried out ten site visits between late November 2010 and January 2011 to conduct Technical Assurance checks which have been approved by the Performance Assurance Board (PAB). Affected Parties have been notified, and we will report on this in April.

Driving efficiencies and savings in our operational business

Improving the customer experience

Website Performance Improvements
As part of our continued work to improve the usability of our online channels we have worked with our service providers to improve the speed of the website. This is in response to feedback about the performance of the website and in particular the loading times of key pages. The updates have increased the response times of key areas of the website including the homepage, the calendar, Consultations, Modifications and Change proposals. The resulting improvements in loading times will mean it takes you less time to find the information that you need.

Mid-year Business Update
In November, we published our Mid-year Business Update highlighting progress against the 2011/12 business strategy and budget. We are in a better position to take a more critical look at our assumptions and cost estimates around some of the more demand driven, variable elements of our 2011/2012 budget. This, coupled with our continued efforts to drive efficiencies throughout the business, has meant that we are now forecasting a full year outturn which is around £3.8m (10.7%) below our original budget of £35.5m. As a consequence, BSC Parties will see a reduction in their invoices for the remainder of the financial year. You can read the mid-year business update here.

Customer Survey results published
In October, we published the results of our 2011 customer survey. We were very pleased with the results, which maintain the high level of service which we've achieved over the last four years.
Customers perceive us as more capable, more expert, more proactive, more ambitious and less bureaucratic than in preceding years. They also value us as an expert resource more than ever before. The main perceived improvements relate to Operational Support Managers (OSMs), the service desk, our proactive approach and quality of communications. The main area for attention that customers pointed out was in our website, which we are currently addressing.

You can read our customer survey results here.

Cross codes forum
We continue to hold our Cross-Codes Electricity Forum jointly with National Grid and Electralink. The sessions are an informal way for you to find out how changes impact changes to the BSC, CUSC, Grid Code and DCUSA affect you, how and when you can give your views, and why your views matter. Highlights of the quarter included an update on recently raised Modifications and Change at ELEXON and an update on Ofgem’s Project TransmiT from National Grid.

For more information, visit, the Cross-Codes Forum webpage.

"Introducing ELEXON" Seminar Feedback
Our Introducing ELEXON Seminar on Wednesday 30 November was a great success. Some of the very positive feedback from our audience of the Big Six, smaller Suppliers and other attendees included:

“The high level coverage of what ELEXON does was beneficial to my level of industry understanding. An insight into National Grid was particularly informative and engaging.”
Emma Smeaton, Smartest Energy

The next introduction seminar on Thursday 16 February is now full. You can find out more and register for the 2 May session.

Developing our services

Warm Home Discount Scheme Reconciliation Contract
In October, ELEXON was awarded a four-year contract by DECC to implement and operate the Warm Home Discount reconciliation mechanism. ELEXON successfully participated in a competitive tender process and we began to operate the reconciliation mechanism in December 2011.In December, the Secretary of State directed ELEXON to perform the first Interim Reconciliation Run under the Warm Home Discount Scheme. The Reconciliation Run was successfully completed on Thursday 12 January 2012 with payments to/from scheme suppliers being made without issue, and the reconciliation application operated as expected.

The purpose of the reconciliation mechanism is to ensure that scheme costs are shared equitably between the scheme’s electricity suppliers such that no supplier is disadvantaged as a result of having a higher numbers of consumers eligible for the rebate.

If you want to learn more about the Reconciliation Mechanism, there's a useful guidance note  on the Warm Homes page of our website.

For more information, or if you have any questions, please email warm.homes@elexon.co.uk.

Governance and Vires
On 21 November, Ofgem published a consultation on the “Potential expansion of the role of ELEXON” . We have responded to this this consultation, and look forward to Ofgem’s conclusions and to moving towards a solution that will allow changes to our current business structure to accommodate activities beyond our existing role. We look forward to using our expertise, experience and assets to greater effect for the benefit of all stakeholders in the energy sector.

BSCCo Business Plan 2012-13
On 12 December, we published the BSCCo draft Business Strategy and Annual Budget for 2012-13 and asked our customers and stakeholders for comment. In it, we set out our views on what we would like to achieve in the next year. Our priorities remain the same as the previous business plan, but we’ve added a fifth priority around investing in our people for the benefit of industry. The business plan will be submitted to the board and Panel for approval now that we’ve received customers’ comments.

Electricity Market Reform (EMR)
On 15 December, DECC published its Technical Update on EMR. We welcome the references in that document to  ELEXON’s strong track record of calculating and managing complex payments and settlements in a way that minimises the credit risk and impacts for both suppliers and generators.  We continue to believe that we can add value, reduce costs for the industry and ultimately the consumer by participating in EMR and other industry initiatives including the Smart Metering Programme.

European Developments
We continue to track EU developments and monitor and advise on their impact on the BSC and the systems and processes we manage. Our input to a number of industry groups examining EU initiatives has been welcomed.  You can find out more in our regular updates in the ELEXON reports to the Panel. 

Smart Metering
We provided a response to the four smart related consultations, which included the first tranche of licence changes, data access rules and interoperability requirements. Responses are on the Industry Insights of the ELEXON website.

We presented at the Smart Metering Forum at the end of November, highlighting the steps on the roadmap for DCC. We also took the opportunity to circulate our thought pieces on the impacts of smart metering on the BSC arrangements to ensure those impacts remain at the forefront of industry and policy makers. You can read our thought leadership pieces at http://www.elexon.co.uk/Pages/smartmetering.aspx.

Our engagement with the DECC smart programme is ongoing. Our experts continued to provide ongoing support to the Business Process Modelling team at DECC. We attended a workshop at DECC to discuss the process for identifying and assessing consequential changes to existing industry Codes and agreements arising from the SEC. We will support this working group throughout 2012 and keep the industry informed of developments alongside our regular smart updates. We met with DECC to discuss our experiences of managing industry codes as part of their considerations for designing the SEC Governance framework.

We received the Ofgem Smarter Markets consultation and will be preparing a response for next year.

Consultation responses
We responded to a number of consultations over the quarter, including DECC’s consultation on the detailed policy design of the regulatory and commercial framework for DCC (see Appendix 1 of this report for more information), and Great Britain RES Integration Study National Report. We also responded to a European study on integrating renewable generation into the various European Member State electricity markets, commenting specifically on the Great Britain report. All our consultations and responses, including our response to Ofgem’s open letter consultation on the potential expansion of the role of ELEXON are available on the Industry Insights  section of ELEXON website.