bsc conclusions & proposed designation text€¦ · bsc licence condition contained within...

The BSC under BETTA

Ofgem/DTI conclusions and publication of proposed designation text August 2004

Summary

This document marks the end of a process of consultation on the Balancing and

Settlement Code (BSC) under BETTA, which commenced in December 2002.

Ofgem/DTI have today, separately published the legal text to give effect to the changes

to the BSC under BETTA. The legal text to give effect to the changes to the BSC under

BETTA is to be designated by the Secretary of State under the powers provided by the

Energy Act 2004 and the BSC is expected to be put into effect GB-wide from 1

September 2004, although many aspects of the application of the BSC will be limited to

England and Wales until BETTA go-live, which is planned for April 2005.

The purpose of this document is to provide:

♦ an explanation of how the changes to the BSC to be designated by the

Secretary of State have been determined

♦ Ofgem/DTI’s conclusions on the responses received following the

publication of the near-final legal text of the GB BSC in April 20041

♦ Ofgem/DTI’s conclusions following the consultation on the transition to

the GB BSC2, including conclusions on the changes proposed to the BSC

licence condition that appears in National Grid Company’s (NGC’s)

transmission licence, and

♦ Ofgem/DTI’s conclusions following the mini-consultations on the

inclusion of approved modifications in the GB BSC3

Ofgem/DTI are also publishing a complete version of the BSC (the version which was

operational on 13 August 2004) change-marked to show all the changes which are

proposed to be designated by the Secretary of State.

1 “The Balancing and Settlement Code (BSC) under BETTA, Ofgem/DTI conclusions and publication of near final legal text for the GB BSC”, April 2004, Ofgem 92/04 2 “Provisions for the transition to the GB BSC under BETTA; including licence conditions for accession and compliance and NGC’s BSC licence condition, changes to the BSC Framework Agreement, and transitional drafting for the GB BSC, Ofgem/DTI consultation”, June 2004, Ofgem 138/04 3 “BETTA consultation on the inclusion of approved modifications in the GB BSC”, Ofgem/DTI, 19 July 2004, Ofgem 169/04

Table of contents

1. Background...............................................................................................................3

2. Publication of documents .........................................................................................6

Designation text ............................................................................................................6

Change-marked BSC......................................................................................................6

3. Conclusions on previous consultations .....................................................................8

Conclusions on near-final legal text published in April 2004..........................................8

Conclusions on the inclusion of approved modifications in the GB BSC ......................14

Conclusions on the legal text for transition to the GB BSC ...........................................17

4. Outstanding issues ..................................................................................................26

Appendix 1 Respondents to publication of near final text of the GB BSC ...................27

Appendix 2 Respondents to consultation on the transition to the GB BSC..................28

Appendix 3 List of approved modifications.................................................................29

BSC proposed designation text 3 August 2004

Ofgem/DTI

1. Background

1.1. The rationale for the British Electricity Trading and Transmission Arrangements

(BETTA) reforms is set out in a consultation paper of December 20014 (‘the

December 2001 consultation paper’) and a report of May 20025 (‘the May 2002

report’). The planned date for BETTA go-live is April 2005 although it should

be noted that a large part of the reforms are being introduced in September

2004.

1.2. Since May 2002, Ofgem/DTI have published a number of consultation and

conclusions documents on BETTA and its component parts. Copies of these

papers and non-confidential responses to them can be found on the Ofgem

website6.

1.3. On 30 January 2003 the DTI published a draft of the Electricity (Trading and

Transmission) Bill (the E(TT) Bill) together with a Regulatory Impact Assessment

(RIA), which explained the purpose and impact as well as the expected costs

and benefits of the proposed primary legislation to enable the BETTA reforms.

The E(TT) provisions of that draft Bill were incorporated into the Energy Bill

which became the Energy Act 2004 following Royal Assent on 22 July 2004.

1.4. Ofgem/DTI have published a number of documents related to the Balancing and

Settlement Code (BSC) to apply throughout GB (referred to as the GB BSC). On

12 December 2002, Ofgem/DTI published the first consultation on the BSC

under BETTA7.

4 ‘The Development of British Electricity Trading and Transmission Arrangements (BETTA): A consultation paper’, Ofgem, December 2001. Ofgem 74/01. 5 ‘The Development of British Electricity Trading and Transmission Arrangements (BETTA): Report on consultation and next steps’ Ofgem/DTI, May 2002. Ofgem 38/02. 6 www.ofgem.gov.uk (see “BETTA publications”). 7 “The Balancing and Settlement Code under BETTA, Ofgem/DTI consultation on a BSC to apply throughout GB”, December 2002, Ofgem 80/02


Ofgem/DTI

1.5. On 6 June 2003, Ofgem/DTI published a second consultation on the BSC under

BETTA8 together with a first draft of the legal text for the GB BSC and on 28

November 2003, Ofgem/DTI published the third consultation on the BSC under

BETTA9 together with a second draft of the proposed legal text for the GB BSC.

1.6. On 30 April 2004, Ofgem/DTI published their conclusions on the BSC under

BETTA together with near final legal text for the GB BSC10.

1.7. On 17 June 2004 Ofgem/DTI published a document11 on the approach to the

transition to BETTA. That document described the approach being adopted to

develop the transitional legal framework and associated legal drafting to support

the transition to and implementation of BETTA. Also on 17 June 2004,

Ofgem/DTI published a consultation on the transition to the GB BSC12, together

will legal text to effect such transition, which included proposed changes to the

BSC and the BSC licence condition which is contained in NGC’s transmission

licence.

1.8. On 19 July 2004, Ofgem/DTI published an open letter consultation13 which set

out recent modifications to the BSC which had been approved by the Authority,

and consulted upon whether they should be included in the GB BSC.

1.9. On 2 August 2004, Ofgem/DTI published a further open letter14 setting out two

further modifications to the BSC, which had been approved by the Authority on

8 “The Balancing and Settlement Code under BETTA, Ofgem/DTI Conclusions and Consultation on the legal text of a GB BSC”, June 2003, Ofgem 40/03 9 “The Balancing and Settlement Code under BETTA, Conclusions and second consultation on the legal text of a GB BSC”, November 2003, Ofgem 152/03 10 “The Balancing and Settlement Code (BSC) under BETTA, Ofgem/DTI conclusions and publication of near final legal text for the GB BSC”, April 2004, Ofgem 92/04 11 “Legal arrangements for the transition to and implementation of the British Electricity Trading and Transmission Arrangements, Ofgem/DTI Statement of approach”, May 2004, Ofgem 137/04 12 “Provisions for the transition to the GB BSC under BETTA; including licence conditions for accession and compliance and NGC’s BSC licence condition, changes to the BSC Framework Agreement, and transitional drafting for the GB BSC, Ofgem/DTI consultation”, June 2004, Ofgem 138/04 13 “BETTA consultation on the inclusion of approved modifications in the GB BSC”, Ofgem/DTI, 19 July 2004, Ofgem 169/04 14 “Second BETTA consultation on the inclusion of approved modifications in the GB BSC”, Ofgem/DTI, 2 August 2004, Ofgem 187/04


Ofgem/DTI

30 July 2004, and consulting upon whether they should be included in the GB

BSC.

1.10. The purpose of this document is to provide conclusions on the April 2004 and

June 2004 BSC consultations and the open letter consultations issued in July and

August 2004. In addition the purpose of this document is to explain how the

changes to the BSC which are published today as proposed legal text for

designation by the Secretary of State have been derived. The GB BSC is

expected to be modified to incorporate such text from1 September 2004.


Ofgem/DTI

2. Publication of documents

2.1. In addition to this document, Ofgem/DTI are publishing two documents which

contain legal text for the BSC: the designation text and a change marked version

of the BSC.

Designation text

2.2. The document to be designated by the Secretary of State identifies the changes

to be made to the existing BSC to form the code which will come into effect GB-

wide on 1 September 2004. It is expected that the designation will take the

form of a direction from the Secretary of State to NGC to modify the BSC. The

power to make such a direction is provided for in the transitional changes to the

BSC licence condition contained within NGC’s licence (Standard Licence

Condition C3). NGC will then be required to issue a notice to BSCCo which

confirms the modification to the BSC in accordance with the terms of the

Secretary of State’s direction. BSCCo will then publish the modified BSC.

2.3. The changes to be made to the BSC are derived from a number of sources as

follows:

♦ the near-final BSC legal text published on 30 April 2004, adjusted where

appropriate to reflect comments made by parties on that text, and

♦ the legal text contained within the document published on 17 June 2004

regarding the transition to a GB BSC, again amended where appropriate

to take account of comments made by parties on that text.

2.4. Each of these areas of change is discussed in chapter 3.

Change-marked BSC

2.5. In addition to the designation text, Ofgem/DTI are publishing a complete

version of the BSC text, change marked to show all the changes that the

designation text requires should be made to the BSC. The version of the BSC

against which the changes are marked is that which was in operation on 13


Ofgem/DTI

August 2004. It therefore includes approved modifications since the version of

the BSC used for the near final legal text in April 2004.

2.6. It should be noted that this version of the BSC includes changes which will

come into effect at different times (some at go-active and some at BETTA go-

live). It should not, therefore, be relied upon as the ‘operational’ version of the

BSC. This publication is purely to enable participants to understand the context

within which the changes to the text designated by the Secretary of State are

being made.

2.7. As usual, BSCCo (ELEXON Limited) should be contacted for an operational

version of the BSC as it exists at any given point in time.


Ofgem/DTI

3. Conclusions on previous consultations

Conclusions on near-final legal text published in April

2004

3.1. As mentioned in chapter 1, near-final legal text for the GB BSC was published

on 30 April 200415. Seven parties submitted comments in response to this

publication and their comments have been published on the Ofgem website16.

The parties who responded are listed in appendix 1.

3.2. This section considers such responses only where new information on

Ofgem/DTI’s conclusions or substantive comments on legal drafting were

brought forward. Ofgem/DTI is grateful for respondents’ support in other areas.

Responses and Ofgem/DTI views

3.3. Respondents repeated a number of their previous comments on several topics.

Such comments have been considered and responded to in previous

consultations and Ofgem/DTI’s views are not repeated here. The table below

summarises the comments of respondents providing new information for

Ofgem/DTI consideration and explains Ofgem/DTI’s views.

Topic Respondent’s Comment Ofgem/DTI view

Shetland

Isles

One respondent suggested that the

risks and costs of the proposed

arrangements for the Shetland Isles

(given the lack of a connection)

might be shared with the rest of GB

participants and thus represent a

subsidy to the Shetlands.

Ofgem/DTI’s conclusion that the

distribution licence holder is

responsible for balancing

generation and demand on its

network on the Shetlands means

that GB participants do not bear

the costs of such action.

15 “The Balancing and Settlement Code (BSC) under BETTA, Ofgem/DTI conclusions and publication of near final legal text for the GB BSC”, April 2004, Ofgem 92/04 16 www.ofgem.gov.uk


Ofgem/DTI


Half-hour

data for TOs

One respondent stated that the

provision of half hour metered data

to transmission owners remains an

unresolved issue but noted that

some this data is publicly available

under the BSC on the payment of a

small fee. The respondent further

commented that there was no

reason apparent to it why

transmission owners should require

data not already available to existing

Transmission System Operators.

Ofgem/DTI note that this issue

has been discussed between

transmission licensees for some

time. Ofgem/DTI have thus far

not been convinced that it is

necessary for transmission

owners to have access to further

settlement meter data.

Ofgem/DTI are also aware that

half-hourly settlement data is

freely available to any party on

application to BSCCo (see BSC

Section V3.2). Ofgem/DTI

therefore have not proposed any

changes to the BSC to enable any

other data to be provided to

transmission owners.


Ofgem/DTI


Consistency

between

codes

One respondent expressed the view

that the nature of the STC was very

different from the other codes and is

more akin to the agreements

between suppliers and data

collectors which exist to ensure that

suppliers meet their obligations

under the BSC. The respondent

suggested that if the BSC and the

STC are inconsistent it is up to the

SO to ensure that they are brought

into line

Ofgem/DTI note that it is their

joint responsibility to ensure that

the STC is consistent with the

other codes at BETTA go-live.

Ofgem/DTI also note that the

obligation is on the BSC Panel (in

Section F 1.6.1A) to put in place

arrangements to facilitate the

making of a change to the STC

consequent upon a BSC

modification proposal and that

equivalent obligations, in relation

to change coordination, on the

STC Committee exist in the STC.

Ofgem/DTI therefore conclude

that the arrangements for change

coordination between the BSC

and the STC will enable parties to

maintain consistency in the

future.


Ofgem/DTI


Liability One respondent stated that the

rights and obligations imposed upon

the transmission owner by the ESQC

Regulations in respect of

disconnection should be reflected in

the BSC. The same respondent

further stated that the transmission

owners should be held harmless for

any action on the instruction of the

GBSO, as the transmission owner

might otherwise be open to an

action under delict.

Ofgem/DTI note that this is

generally an issue that has been

consulted upon in the context of

the STC and the CUSC17.

Provisions have been included in

Section G5 of the STC and

Section 6.12.3 of the CUSC.

Ofgem/DTI believe that these

provisions adequately deal with

these issues for transmission

owners.

3.4. Ofgem/DTI have given consideration to the above comments and have

concluded that they do not require any further proposed changes to the BSC to

be designated by the Secretary of State.

17 “The SO-TIO Code under BETTA: Draft text in progress and CUSC provisions relating to disputes and limitation of liability, An Ofgem/DTI mini consultation document”, July 2004, Ofgem 148/04


Ofgem/DTI

Comments on legal text

3.5. The table below lists the substantive comments on legal drafting contained

within the April 2004 consultation together with Ofgem/DTI’s views.

Section Respondent’s Comment Ofgem/DTI view

Annex D-5 3.1.1 (“… or funded on behalf of …)

appears to be incorrect or

incomplete

Ofgem/DTI agree with this

comment and D-5 3.1.1 has been

corrected to say:

“The amounts recoverable by

Trading Parties as BETTA Support

Costs are amounts expended or

funded by and on behalf of

Trading Parties before the BETTA

Effective Date under work

specifications authorised pursuant

to Section C 8.1.2 and amounts

which are otherwise described in

the Code as being BETTA Support

Costs.”

3.1.3 last line “is” should be “are” Accepted

3.3.4 typo – should read “ . .

Trading Parties shall make . .”

Accepted

Section F 1.7.2(e) should read “and/or the STC

Committee respectively”

Accepted


Ofgem/DTI


Two respondents commented that

F.2.4.5A provides that the Panel may

invite the STC Committee to appoint

a representative to the Modification

Group which is considering a

modification proposal which may

impact upon the STC and argued

that a stronger obligation was

necessary to ensure coordination

between the BSC and the STC.

Ofgem/DTI note that there are

obligations on the BSC Panel and

on the STC Committee to set up

joint working arrangements and

that the change proposed in April

2004 to enable the Panel to invite

the STC Committee to appoint a

representative if appropriate, is

not intended to prescribe how the

joint working arrangements will

operate. The purpose of this

change is to release the Panel

from a restriction that would

otherwise apply, if such an

enabling provision was not

included. Ofgem/DTI do not

therefore consider it is

appropriate to replace the

permissive ‘may’ with an

obligation on the BSC Panel.


Ofgem/DTI


One respondent commented that

Section F 2.4.5B imposed standard

obligations on the STC Committee

representative as a Modification

Group member. That the person

concerned is a representative of the

STC Committee is clear from both

the reason for the appointment and

the text proposed for the Code. This

respondent was not sure therefore

whether the requirement for this

person to act in accordance with

F2.4.9 is appropriate.

The purpose of F2.4.9 is to ensure

that Modification Group members

bring their expertise and

knowledge to the consideration

of proposed modifications. It is

expected that the individual

nominated by the STC Committee

will be put forward on the basis

of knowledge of the STC and its

interactions with other codes.

Ofgem/DTI believe it is necessary

that such an individual should be

able to present an objective view

of any STC implications in the

context of the matter under

discussion.

Section L The “under” at the start of paragraph

3.2.3 (b) should be deleted.

Accepted.

3.6. The changes to the BSC which Ofgem/DTI propose for designation by the

Secretary of State incorporate the changes which are shown as “accepted” in the

table above.

Conclusions on the inclusion of approved

modifications in the GB BSC

3.7. Since the publication of the near final legal text for the GB BSC, eight

modifications to the BSC had been approved by the Authority up to the middle

of July 2004. A brief description of all those modifications is contained in

Appendix 3. On 19 July 2004, Ofgem/DTI published a mini-consultation in the

form of an open letter that proposed that all those modifications (with the

exception of P165, which had the effect of removing P125, which Ofgem/DTI


Ofgem/DTI

had previous concluded should not be included in the GB BSC) should be

included in the legal text of the GB BSC. Two parties, British Energy and EDF

Energy, responded to this consultation. One respondent supported Ofgem/DTI’s

proposals.

3.8. The other respondent commented that, in respect of the proposal to include

P124 (Revision of Mandatory Half-Hour Metering Criteria) in the GB BSC, it

assumed that Ofgem had consulted with all affected parties in Scotland to

ensure that sufficient information about individual meters and circuits is

available and suggested that “Ofgem’s acceptance of P124 effectively relaxes

the criteria for mandatory half-hourly metering”. Ofgem/DTI note that the

process for the development of the modification report by the BSC Panel to the

Authority involves extensive consultation on the implications of any proposed

modification. Ofgem/DTI also note that, prior to reaching its decision on P124,

the Authority consulted upon the additional implications of its application on a

GB wide basis, as opposed to being limited to England and Wales18.

3.9. The same respondent also commented in respect of P140 (Revised Credit Cover

Methodology for Interconnector BM Units). This respondent suggested that the

implementation of the modification should be delayed until after the

implementation of BETTA, noting that it is due to be implemented in February

2005. The respondent also stated that the modification was being implemented

at considerable cost because it is the only modification with significant software

changes being implemented at that time. The respondent added that with the

implementation of BETTA some two months later than P140 and hence the

disappearance of the Scotland – England interconnector, the short term benefits

of the modification will be reduced, stating that it believed that the high costs of

implementation pre-BETTA and the reduced benefit due to BETTA justify delay

to the implementation until an opportune time when implementation costs can

be reduced by sharing with other modifications.

18 “GB consultation for Balancing and Settlement Code (BSC) Modification Proposal P124”, 19 January 2004, Ofgem 11/04.


Ofgem/DTI

3.10. Ofgem/DTI note that both the BSC Panel and the modification group which

advised the BSC Panel believed that the money required to implement P140

would be well spent, and that it was appropriate to schedule P140 into the

February 2005 release. Although scheduling P140 in this manner was expected

to reduce its incremental costs significantly, Ofgem/DTI note that circumstance

has dictated that this has not brought about the cost savings which may have

been expected by the BSC Panel. Ofgem/DTI consider that it is for the BSC

Panel to determine what possible cost savings could be achieved by delaying

the implementation of P140, whether it would be appropriate to recommend to

the Authority that this should be done and, if so, to identify a suitable date.

Ofgem/DTI also note that, though BETTA will remove the Scotland – England

Interconnector, it will bring the Moyle Interconnector under the aegis of the

BSC, thus replacing some of the lost benefits.

3.11. Ofgem/DTI conclude that P124, P131, P140, P142, P151, P152 and P164

should be included in the GB BSC unchanged.

3.12. On 30 July 2004, the Authority approved two further proposed modifications to

the BSC, P160 (“Removal of the Anomalous Effect of the Error Correction

Payment (ECP) for Multiple Claims affecting the same Settlement Period and

Energy Account”) and P166 (“Removal of unintentional effects of P123 to allow

Supplier BM Unit DC values to be revised downwards during a BSC season”).

On 2 August 2004, Ofgem/DTI published a second mini-consultation in the

form of an open letter, proposing that both P160 and P166 should be included

in the GB BSC unchanged. One response (from EDF Energy) was received to

this consultation and the respondent supported Ofgem/DTI’s proposals.

Ofgem/DTI conclude that P160 and P166 should be included in the GB BSC

unchanged.


Ofgem/DTI

Conclusions on the legal text for transition to the GB

BSC

3.13. As mentioned in chapter 1, a consultation on the transition to the GB BSC was

published on 17 June 200419. This consultation contained both transitional

legal text for inclusion in the BSC and transitional changes to the BSC licence

condition contained within NGC’s transmission licence. Five parties submitted

comments in response to this publication and their comments have been

published on the Ofgem website20. The parties who responded are listed in

appendix 2.

Responses and Ofgem/DTI views on transitional legal text for

BSC

3.14. Respondents repeated a number of their previous comments on several topics.

Such comments have been considered and responded to in previous

consultations and Ofgem/DTI’s views are not repeated here. The table below

summarises the comments of respondents providing new information for

Ofgem/DTI consideration and explains Ofgem/DTI’s views.


Energy

Indebted-ness

Two respondents commented on

Ofgem/DTI’s proposal not to make

any changes to the calculation of

Actual Energy Indebtedness during

the period immediately after the

transition to BETTA. Both noted

Ofgem/DTI’s view that the risk was

likely to be small and short lived.

Ofgem/DTI note the concern of

these respondents but still

believe that the risk of failure of

a supplier with a significant

customer base in Scotland in the

first month after the introduction

of BETTA is small. Further

Ofgem/DTI believe that any

19 “Provisions for the transition to the GB BSC under BETTA; including licence conditions for accession and compliance and NGC’s BSC licence condition, changes to the BSC Framework Agreement, and transitional drafting for the GB BSC, Ofgem/DTI consultation”, June 2004, Ofgem 138/04 20 www.ofgem.gov.uk


Ofgem/DTI


One respondent asked Ofgem/DTI

to reconsider their proposals in this

area. The other respondent stated

that it had considered the possibility

of alternative approaches but was

unable to offer an appropriate

suggestion and therefore concurred

with the approach of Ofgem/DTI.

alternative approach is likely to

impose real costs on BSC Parties

in order to put any necessary

systems in place. Ofgem/DTI

therefore conclude that no

change to the calculation of

Actual Energy Indebtedness

should be made.

Confidential

Information

One respondent noted the proposed

intent of Section I12.5 but expressed

a preference that, where it is a

party’s express wish that material

should be treated as confidential, a

“reasonable endeavours approach”

should be adopted.

Ofgem/DTI note that Section I12

provides for an obligation not to

publish that which is stated to

be confidential in the same

terms as the provisions of

Section F 2.10 and believe that

such provisions, having been

adequate during the operation

of the BSC in England and

Wales, must be adequate for the

consultation process during the

transition period.


Ofgem/DTI


Consultation One respondent sought assurance

that, where changes to the BSC were

required between go-active and go-

live, early advance and ‘fit for

purpose’ notification, justification

and consultation as appropriate

should be provided for participants.

Ofgem/DTI note that Annex I-1

2.1 identifies a number of areas

of potential future change to the

BSC between go-active and go-

live, providing advance notice

to participants. In addition

Section I12 identifies the

process to be adopted for the

development and consultation

on such changes. Ofgem/DTI

believe that this provides for the

appropriate approach that the

participant seeks.

Modifications One party stated that Scottish parties

may have difficulties in dealing with

the ongoing proposal of changes to

the BSC “because of the complexity

of the transition into BETTA from the

current arrangements” and asked

that such difficulties which parties

may experience in accommodating

change soon after go-live be

recognised in any modification

decisions which Ofgem may make.

Ofgem/DTI note that the BSC

modification process includes

procedures through which the

BSC Panel can be made aware

of particular implementation

problems, which it must include

in its report to the Authority and

which the Authority will take

account of in reaching its

decision on whether and when

such a proposal should be

implemented.


Ofgem/DTI


Transitional

Provisions

One respondent questioned the

proposal by Ofgem/DTI that the

transitional provisions in Section I

(and Section Q 5.5.1 (d)) should not

be subject to the normal BSC

modification processed (in Section

F), noting that the existing

governance arrangements are

sufficiently robust and effective to

guard against the progression of

spurious modifications aimed at

delaying BETTA go-live. The

respondent added that it would be

prudent to consider the

reapplication of Section F to the

transitional provisions “in the

unlikely event that the go-live date

slips”.

Ofgem/DTI note that the

transitional provisions of the

BSC have been introduced for

the narrow purpose of enabling

the effective implementation of

BETTA and that the transition

period is planned to last for only

six months. Ofgem/DTI further

note that the transition

provisions provide for the

Authority to make changes to

the code under limited

circumstances and for the

transition period only. Under

these circumstances, Ofgem/DTI

therefore believe it would be

unnecessary and inappropriate

to enable amendment of Section

I and Section Q 5.5.1(d) until

the transition period is over.

After that time, it is open to BSC

parties to propose any change to

the transition provisions,

including their removal.


Ofgem/DTI


Removal of

Section I

One respondent welcomed “the

intention to remove section I ‘some

time after BETTA go-live’ but stated

that it would much prefer a

guaranteed removal date e.g. six

months after go-live, noting that it

would be highly inappropriate to

allow the transitional arrangements

to develop once BETTA has been

established.

Ofgem/DTI note that in the

consultation on the transition to

the GB BSC21 they did not state

an intention to remove Section I

merely that it was intended that

such removal after go-live

should have minimal effect

elsewhere in the code. Further,

Section I states that it only

applies during the transition

period and in some cases

immediately following BETTA

go-live (which is to allow for

any cut-over provisions which

endure beyond go-live). Should

any BSC Party wish to remove

Section I after BETTA go-live it

will be necessary for it to

propose a BSC modification to

effect such removal.

3.15. Ofgem/DTI have given consideration to the above comments and have

concluded that no further changes to the BSC are required to be designated by

the Secretary of State as a result of them.

Comments on legal text

3.16. The table below lists the comments on legal drafting for BSC transition together

with Ofgem/DTI’s response.

21 “Provisions for the transition to the GB BSC under BETTA; including licence conditions for accession and compliance and NGC’s BSC licence condition, changes to the BSC Framework Agreement, and transitional drafting for the GB BSC, Ofgem/DTI consultation”, June 2004, Ofgem 138/04


Ofgem/DTI


Section C Paragraph C 8.2.1 (a) should refer to

paragraph 8.1.1 (b) to (d)

Accepted

In 8.2.1 (e), why has paragraph (c)

has been omitted from the list of

those on which Parties may be

consulted.

Accepted

Re-insert the references to 8.1.1(c )

in C8.2.1(a) and C8.2.1(e) in

addition to the references to

8.1.1(d).

Accepted

Section I Should Approved Modification P151

be incorporated in the GB BSC, then

the reference in Section I 6.6.1 to

"BSCP20" will need to be changed

to "BSCP02".

Accepted

Delete reference to “or any

amendment to any Code Subsidiary

Document” from paragraph I 2.2.1.

This change is proposed as it is

believed that the BETTA-related

changes to be made to existing Code

Subsidiary Documents are not

substantive in nature. Any

substantive changes to process will

be contained in the new documents

that will be created pursuant to the

Section I authority process.

Accepted

Annex I-3 Definition of "Proposed Transitional

Modification" – Amend reference to

Annex I-1, 3.5, to paragraph 12.

Accepted


Ofgem/DTI

Definition of "Transition

Modification Implementation Date" -

Amend reference to Annex I-1, 3.6,

to paragraph 12.

Accepted

The definition of a "proving test" in

ANNEX I-3 is incorrect and should

be deleted and replaced with the

following definition.

“Proving Test: is a test required as part of the BETTA CVA Metering System registration process and is designed to establish the following: (a) That the Meter Technical Details submitted by the Meter Operator Agent to the CDCA to enable data collection are complete, accurate and correctly transferred to the CDCA instation; (b) That the CDCA is able to interrogate the Metering System Outstation and satisfactorily retrieve metered data in the required format; and (c) That a Meter register advance for a given Settlement Period is consistent with the metered data retrieved by the CDCA for that same Settlement Period. This definition of Proving Test shall apply where the term Proving Test is used in this Section and in BDTP 02.”

Accepted

Annex X-1 Delete the term “SAS Code of

Practice”

Accepted

3.17. The changes to the BSC which Ofgem/DTI propose for designation by the

Secretary of State incorporate the changes which are shown as “accepted” in the

table above.


Ofgem/DTI

3.18. On 27 July 2004, Ofgem/DTI published a consultation document on non-

standard BM Unit configurations for cascade hydro schemes22 which proposed

(among other things) legal drafting for the BSC to give effect to the proposed BM

Unit configurations. It is not expected that it will be possible for Ofgem/DTI to

conclude on this topic in sufficient time for any necessary drafting changes for

the BSC to be included in the changes to the BSC to be designated by the

Secretary of State. Ofgem/DTI have therefore added the non standard BM Unit

configurations for cascade hydro schemes to the list of topics in Annex I-1 of the

BSC. This will ensure that, should Ofgem/DTI conclude that changes to the BSC

are necessary to give effect to their conclusions on cascade hydro schemes, it

will be possible for the Authority to direct NGC to make such changes to the

BSC after go-active.

Responses and Ofgem/DTI views on transitional legal text for

BSC licence condition

3.19. One respondent noted that it was necessary for Ofgem/DTI to have the ability,

through the Authority, between BETTA go-active and go-live, to make changes

to the BSC. It added that it trusted that Ofgem/DTI will endeavour to consult

prior to making any changes. Ofgem/DTI note that Section I of the BSC requires

BSCCo undertake consultation on developments that they propose to the

Authority and confirm that they will so consult.

3.20. No other substantive comments were received on the transitional legal text

proposed for the BSC licence condition. Some drafting comments were

received which are contained in the table below. The proposed changes to this

licence condition have been published on the Ofgem website today along with

other proposed changes to the transmission licence under BETTA.

22 “BETTA Consultation on Non Standard BMU Configurations associated with Cascade Hydro Schemes and associated GB Grid Code and GB BSC drafting”, Ofgem/DTI, 27 July 2004, Ofgem 177/04


Ofgem/DTI

NGC’s BSC

licence

condition

Condition C 3.3 (b) requires a

reference to the transition period in

relation to the operation of the

licensee’s transmission system.

Ofgem/DTI note that transitional

changes to NGC’s BSC licence

condition will only be in effect

during the transition period. As

such, the reference suggested is

not necessary.

Conditions C3.11, C3.12 and C3.16

contain uncorrected cross-references

to other paragraphs

Accepted


Ofgem/DTI

4. Outstanding issues

4.1. The consultation on the transition to the GB BSC23 identified a number of issues,

some transitional and others enduring which were to be addressed during the

transitional period. The issues identified were:

♦ use of Settlement Agreement for Scotland (SAS) data

♦ the Balancing Mechanism Reporting System and the provision of GB

data prior to BETTA go-live

♦ assistance with BSCCo testing, and

♦ enabling cut-over.

4.2. Ofgem/DTI remain of the view that development of such further provisions for

the BSC (and for BSC subsidiary documents) may be necessary during the

transition period. For that reason, the transition provisions in Section I of the

BSC oblige BSCCo (ELEXON Limited) to develop requirements and proposed

legal text in these areas; to consult upon such proposals and to put a proposal to

the Authority. Ofgem/DTI intend that the transitional version of NGC’s BSC

licence condition should enable the Authority, where it considers it to be

necessary or expedient for the purposes of implementing BETTA, to approve

changes to the BSC “required or appropriate for the purposes of reflecting in the

BSC the development of matters identified for these purposes in Section I of the

BSC …” (see SLC C3 6 (d)).

4.3. ELEXON are developing proposals in these areas and will be publishing

consultations on these matters in due course.

23 “Provisions for the transition to the GB BSC under BETTA; including licence conditions for accession and compliance and NGC’s BSC licence condition, changes to the BSC Framework Agreement, and transitional drafting for the GB BSC, Ofgem/DTI consultation”, June 2004, Ofgem 138/04


Ofgem/DTI

Appendix 1 Respondents to publication of near

final text of the GB BSC

1.1 The seven parties who responded to the Ofgem/DTI publication24, on 30 April

2004, of near final legal text for the GB BSC were:

♦ British Energy

♦ EDF Energy

♦ National Grid Transco

♦ Powergen

♦ Scottish and Southern Energy

♦ ScottishPower energy management

♦ SP Transmission & Distribution

24 “The Balancing and Settlement Code (BSC) under BETTA, Ofgem/DTI conclusions and publication of near final legal text for the GB BSC”, April 2004, Ofgem 92/04


Ofgem/DTI

Appendix 2 Respondents to consultation on the

transition to the GB BSC

2.1 The five parties who responded to the Ofgem/DTI publication25, on 17 June

2004, of a consultation on the transition to the GB BSC were:

♦ British Energy

♦ E.ON UK

♦ EDF Energy

♦ ELEXON Limited

♦ ScottishPower energy management

25“Provisions for the transition to the GB BSC under BETTA; including licence conditions for accession and compliance and NGC’s BSC licence condition, changes to the BSC Framework Agreement, and transitional drafting for the GB BSC, Ofgem/DTI consultation”, June 2004, Ofgem 138/04


Ofgem/DTI

Appendix 3 List of approved modifications

3.1 The following are the approved modifications to the BSC referred to in chapter

2:

Modification

Number

Description of modification

P124 Revision of mandatory Half Hour Metering Criteria

P131 Introduction of further provisions relating to the determination of

Trading Disputes

P140 Revised credit cover methodology for interconnector BM Units

P142 Minor refinement to allow a Level 2 Default Cure Period

P151 Housekeeping

P152 Reduction of Credit Cover for a Trading Party in Default

P160 Removal of the Anomalous Effect of the Error Correction Payment

(ECP) for Multiple Claims affecting the same Settlement Period and

Energy Account

P164 Housekeeping

P166 Removal of unintentional effects of P123 to allow Supplier BM Unit

DC values to be revised downwards during a BSC season