Supplier Charges

Supplier Charges are liquidated damages that Suppliers incur if they fail to meet certain performance levels. They compensate Parties disadvantaged by those who aren’t meeting defined Standards. We consider them to be a remedial technique in our Performance Assurance Framework.

How are Supplier Charges calculated?

The Performance Assurance Reporting and Monitoring System (PARMS) software calculates the Supplier Charges due each calendar month.

These charges are capped for each Supplier to limit each Party’s liability in any one reporting period. A GSP Group monthly liability cap is calculated based on its annual take for the previous financial year. A Supplier’s monthly liability cap is calculated based on its total active import energy in the reporting period.

Who are they applied to?

Each month, the Performance Assurance Board (PAB) authorises Supplier Charges. The Supplier Charges are then distributed among Trading Parties.

90% of funds collected from a GSP Group are re-distributed to the Non Half Hourly (NHH) Suppliers operating in the GSP Group, based on their share of NHH energy traded in the GSP Group.
10% are re-distributed to all Trading Parties based on their Main Funding Share.

What are the Serials used to calculate them?

Supplier Charges are incurred for underperformance against six PARMS ‘Serials’. These are described in the table below. Supplier Charges are applied based on underperformance by Supplier ID, reporting period (Calendar Month) and GSP Group.

Serial	Serial Description	Standard
SP01	Delivery of Routine Performance Monitoring Reports	Zero Working Days that a full set of PARMS Reports has not been submitted into PARMS
SP02	Delivery of Routine Performance Monitoring Logs	Zero Working Days that Drill Down or Ad-Hoc data has not been submitted to the Performance Assurance Administrator (PAA)
SP04	Installation of Half Hourly (HH) Metering	Zero Calendar Days where a mandatory HH Meter has not been installed
SP08a	Percentage of Non-Half Hourly (NHH) Energy Settled on Annual Advances	R3 – 80% RF – 97%
SP08b	Percentage of HH Energy Settled on Actual Readings	SF – 99% R1 – 99%
SP08c	Percentage of non-mandatory HH Energy Settled on Actual Readings	RF – 99%

CP1325 ‘Removal of Obsolete PARMS Serials’

CP1325 goes live on 1 November 2010 and will remove 14 obsolete PARMS Serials. If you are a Supplier, you must amend your Data Provider Information (DPI) files, removing redundant Serials from the November 2010 Reporting Period. If you do not do this you may incur SP01 Supplier Charges.

If you are a Supplier Agent, you must submit all Serials up to the October 2010 Reporting Period. From the November 2010 Reporting Period, you only need to submit the remaining Serials. If you do not do this, Suppliers may incur SP01 Supplier Charges.

For further information visit the November 2010 Release page or call Oliver Meggitt on 020 7380 4143.

Performance Assurance Framework

Supplier Charges are a remedial technique in ELEXON’s Performance Assurance Framework.