ALLOCATION OF RbD ACROSS ALLOCATION OF RbD ACROSS RELEVANT PERIODRELEVANT PERIOD

DNOs’ comments on previous DNOs’ comments on previous Workstream discussionWorkstream discussion

Linda WhitcroftLinda Whitcroft

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Current RbD Allocation Process

Daily Shipper AQs aggregated to one monthly AQ (by Shipper, by LDZ) in order to allocate market shares

Three “pots” used for RbD allocation – 4 sectors: (UNC E.7) 1 month sector 6 month sector 12 month sector LDZ measurement sector (L)

special case 1 month sector

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Current process – continuedRbD Sectors and Sources

1 Month Sector (M) Sources:

DM Estimate to Actual NDM Monthly read meters Adjustments to Monthly read meters Reconciliation of LSPs on CSEPs Adjustments to LSPs on CSEPs SSP Adjustments <1 month duration

6 Month Sector (6) Sources:

NDM Non-Monthly read meters Adjustments to Non-Monthly read

meters SSP Adjustments 1-4 month duration

12 Month Sector (A) Sources:

DM Annual Resynchronisations SSP Adjustments >4 month duration

LDZ Measurement Sector (L)(Special case 1 month sector) Sources:

LDZ Measurement Errors

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Current process - continued

All reconciliation is allocated to one of the sectors, totalled and then divided equally across the number of months in each sector

Each monthly slice is allocated to RbD Shippers using their market shares

Maximum RbD period is 12 months. Therefore Shippers who exit the market have assurance that RbD charges will cease after this time

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Suggested process discussed at previous Workstream

Apportion all LSP reconciliations through RbD over the relevant period

Impacts

Every LSP reconciliation would have an opposite RbD allocation. On average 200,000 LSP meter reads/adjustments processed monthly, hence 200,000 sectors to calculate

Requires significant amount of data storage and processing Need to hold daily AQs on system back to RbD start date (1.2.98) Need to calculate and store daily market shares Need to calculate and store total daily LDZ AQ Off line reconciliation – impacts on off line systems/processes to store additional

data

Potential issues on Shippers exiting the market (no foreseeable close-out), e.g. terminations voluntary discontinuance mergers/acquisitions

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Is the focus on the right solution?

Underlying issues that cause RbD allocation for inappropriate period

Portfolio data issues

Infrequent/incorrect meter readings (filter failures)

LDZ measurement errors

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Comments/Conclusions

DNOs’ assumption that draft Modification was raised to address LDZ metering issues

Scope of metering issues? – Those meting 643 notification process requirements (>£1million or >50gWh)?

If so, due to low volumes and clear trigger points an off line solution could be possible to allow RbD to be allocated across relevant periodN.B. Consideration would need to be given on prospective errors and whether retrospective data would be available. Also, issues would still remain on rules for Shippers exiting the market.

DNOs believe that this process is unsuitable for all LSP reconciliations due to scale, complexity and it does not address the root causes