Billing Operations ForumBilling Operations Forum24 July 200724 July 2007

RbD OverviewRbD Overview

Fiona CottamFiona Cottam

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Agenda

Background Principles Inputs

Sources Shares Sectors

Calculations

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The RbD Concept

Meter point reconciliation would not be cost effective for 20 million SSPs Larger Supply Points (AQ>73,200 kWh) are reconciled on actual meter

reads Smaller Supply Points (AQ<73,200 kWh) are subject to Reconciliation by

Difference

Britain’s distribution Network is divided into 18 LDZs Total daily energy consumption in each of the LDZs is known Any reconciliation charge in one sector must have an equal and

opposite effect on other sectors, so that total LDZ consumption is unchanged

Reconciliation consists of a gas charge/credit and transportation charge/credit to User for both NTS and LDZ transportation

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RbD Basic Concepts - 1

If you know the RQ (Reconciliation Quantity) for Segments 1 to 4, from reading all the meters in them, then…

The RQ for Segment 5 must be equal and opposite to the Sum of the RQs for Segments 1 to 4.

Therefore, you don't need to read any meters in Segment 5 to calculate the total RQ for the Segment. Just apply the equal and opposite rule: Source Charges

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Energy Allocation - Summarised

LDZInputEnergy

Allocation ofMeasured Energy

input into LDZ, after deducting Shrinkage

and DM measurements, to all

NDM SupplyPoints in the LDZDM

NDMLarge

NDMSmall

Shrinkage

The allocation process drives the shippers’ energy balancing imbalance and transportation commodity quantities

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Reconciliation by Difference(Smaller Supply Points)

LDZInputEnergy

DM

NDMLarge

NDMSmall

Shrinkage

DM

NDM Small

+ NDM Large

= -

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RbD Basic Concepts -2

As all SSPs have: AQs calculated on the same basis Energy deemed to them on the same basis Comparable actual consumption patterns

Then: They will have comparable RQs

And: CSEP sites are no different to Directly Connected, they are affected by the

same weather/social/economic factors, so their behaviour is comparable to directly connected

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RbD Basic Concepts - 3

If: All SSPs in an LDZ are comparable, and Their RQ is directly related to their AQ

Then: Shipper's total SSP RQ is proportional to their total AQ in an LDZ

Thus: We can allocate RQ on the basis of each Shipper's Share of the total AQs

for an LDZ

For this purpose, CSEP AQ ranks equally with Directly Connected

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The Matching Concept

Group LSP RQs by Meter Read Frequency RbD Sectors

Give each Sector an Incurred Period of same length as Meter Read Frequency (specifically: Monthly, 6 Monthly, Annual)

Slice RQ into equal amounts for each incurred month in the incurred period

Apply appropriate shipper share to the RQ slice for each incurred month

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RbD 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 Adjustments to SSPs of <1 month

duration

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

LDZ Measurement Errors

6 Month Sector (6) Sources:

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

meters Adjustments to SSPs of 1-4

months duration

12 Month Sector (A) Sources:

DM Annual Resynchronisations Adjustments to SSPs of >4

months duration

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Monthly and LDZ errors sectors

6 monthly sector

Apportionover last month

Apportionover last 6

months

12 monthly sector

Apportionover last 12

months

Apportionment of RbD sectors - 1

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Apportionment of RbD sectors - 2

Matching of RQ to Shipper Shares

Current Month

Month

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Sector A

Sector 6

Sector M

Sector L

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RbD Charges – Which prices?

Energy – daily System Average Price – no calculation required – inherit from “primary” reconciliation

Transportation – applicable daily rates of: NTS Exit Commodity LDZ Commodity Customer Commodity (for applicable periods)

CSEP sites Same energy prices Same NTS commodity prices LDZ commodity prices reduced to reflect average scheme SOQ in the LDZ No Customer Commodity charges

Primary Reconciliation energy is broken down into periods of consistent transportation prices, and prices are applied to a single figure for each source

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Calculation of Market Shares - Principles

Market share is based on share of all the days in a particular month

Live AQ on the day Isolated/isolated & withdrawn excluded (same as for allocation) CSEP sites count equally with Directly Connected sites for energy

apportionment

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Calculation of Market Shares - Example

Day Shipper AQ - KWh LDZ Total AQ – kWh

Day 1 20,000 32,000

Day 2 19,950 32,000

Day 3 20,050 32,200

Etc.

Day 31 20,150 32,500

Total for month 600,000 1,000,000

Shipper market share for the month: 600,000 ÷ 1,000,000 = 60%

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EstimatedConsumption

ActualConsumption

Meter Reading Period

1st MeterRead

2nd MeterRead

DIFFERENCE

Let's Assume: Reconciliation on a non-Monthly-Read meter, from 15/03/2006

to 15/10/2006 Initially suppressed, approved in December 2006, to be

included on December 2006 invoice (issued January 2007)

Imaginary 3-Month Sector Applies Reconciliation values

RQ: 120,000 kWh GRE: £9,000 NRE: £200 ZRE: £600

RbD Apportionment – Worked example

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Monthly Cumulative Daily Aggregate AQsFor an imaginary LDZ with four Shippers

RbD Calculations - Cum AQs

Shipper Month 1 Month 2 Month 3ONE 600,000 700,000 800,000

TWO 250,000 200,000 150,000THREE 0 50,000 50,000FOUR 150,000 50,000 0LDZ Total AQ 1,000,000 1,000,000 1,000,000

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RbD Calculations – UARQ (User Aggregate RQ)

Sector Q

RQ (kWh)

ARQ (kWh)

Shipper Share(AQ):

One

Two

Three

Four

LDZ Total AQ

RbD UARQ:

One

Two

Three

Four

Total RbD UARQ

Sources Incurred

Total Month 1 Month 2 Month 3

120,000 40,000 40,000 40,000

-120,000 -40,000 -40,000 -40,000

600,000 700,000 800,000 250,000 200,000 150,000 0 50,000 50,000 150,000 50,000

1,000,000 1,000,000 1,000,000

Total

-84,000 -24,000 -28,000 -32,000

-24,000 -10,000 -8,000 -6,000

-4,000 0 -2,000 -2,000

-8,000 -6,000 -2,000 0

-120,000 -40,000 -40,000 -40,000

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RbD Calculations - UARCV/RBG

Sector Q Sources Incurred

Total Month 1 Month 2 Month 3

GRE 9,000 3,000 3,000 3,000

ARCV -9,000 -3,000 -3,000 -3,000

Shipper Share (AQ):

One 600,000 700,000 800,000

Two 250,000 200,000 150,000

Three 0 50,000 50,000

Four 150,000 50,000

LDZ Total AQ 1,000,000 1,000,000 1,000,000

RBG Charges: Total

One -6,300 -1,800 -2,100 -2,400

Two -1,800 -750 -600 -450

Three -300 0 -150 -150

Four -600 -450 -150 0

Total RBG Charges -9,000 -3,000 -3,000 -3,000

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RbD Calculations – contd.

Identical process calculates: UARCV: User Aggregate Reconciliation Clearing Value

Energy cost of Reconciliation Energy (“RBG”)

UATCA: User Aggregate Transportation Charge Adjustments Commodity Transportation costs Since Sale of Networks, split between NTS, LDZ and Customer Commodity

Reconciliation

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RbD Supporting Information

Breakout of Charges by: LDZ – Directly connected

Energy – RBG Transportation – RBN/RBZ/RBC

- Sector

LDZ – CSEP Energy - RCG Transportation – RCN/RCZ

- Sector

Breakout of Shares by: LDZ

Incurred Month- Calendar Day

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Worked example for Shipper One for Dummy Sector Q

Shipper One’s RBG records for Month 1,2 and 3: J13, 123456779, RBG, AB, 10, 2006, Q, 1000000, 600000,

60.0000000000000, -24000, -1800.00, 123456, J13, 123456780, RBG, AB, 11, 2006, Q, 1000000, 700000,

70.0000000000000, -28000, -2100.00, 123456, J13, 123456781, RBG, AB, 12, 2006, Q, 1000000, 800000,

80.0000000000000, -32000, -2400.00, 123456 [record type, record no, chg type, LDZ, billing month, billing year, sector

code, total LDZ AQ, Shipper total AQ, % market share, energy, financial value, invoice no]

J14, AB, Q, RBG, -120000, -9000 [record type, LDZ, sector code, total energy, total financial value]

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Role of the RbD Audit

Calculations are performed within mainframe systems Large volume of data

500,000 LSPs 20,000,000 SSPs

Confidentiality of each Shipper’s LSP Reconciliation values SSP Shippers can’t check the whole calculation process RbD Audit checks the following:

Aggregation of Primary Reconciliation sources and allocation into sectors Extraction of SSP aggregate AQs Allocation of RbD energy and charges to Shippers