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
BSC proposed designation text 4 August 2004
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
BSC proposed designation text 5 August 2004
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.
BSC proposed designation text 6 August 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
BSC proposed designation text 7 August 2004
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.
BSC proposed designation text 8 August 2004
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
BSC proposed designation text 9 August 2004
Ofgem/DTI
Topic Respondent’s Comment Ofgem/DTI view
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.
BSC proposed designation text 10 August 2004
Ofgem/DTI
Topic Respondent’s Comment Ofgem/DTI view
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.
BSC proposed designation text 11 August 2004
Ofgem/DTI
Topic Respondent’s Comment Ofgem/DTI view
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
BSC proposed designation text 12 August 2004
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
BSC proposed designation text 13 August 2004
Ofgem/DTI
Section Respondent’s Comment Ofgem/DTI view
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.
BSC proposed designation text 14 August 2004
Ofgem/DTI
Section Respondent’s Comment Ofgem/DTI view
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
BSC proposed designation text 15 August 2004
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.
BSC proposed designation text 16 August 2004
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.
BSC proposed designation text 17 August 2004
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.
Topic Respondent’s Comment Ofgem/DTI view
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
BSC proposed designation text 18 August 2004
Ofgem/DTI
Topic Respondent’s Comment Ofgem/DTI view
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.
BSC proposed designation text 19 August 2004
Ofgem/DTI
Topic Respondent’s Comment Ofgem/DTI view
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.
BSC proposed designation text 20 August 2004
Ofgem/DTI
Topic Respondent’s Comment Ofgem/DTI view
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.
BSC proposed designation text 21 August 2004
Ofgem/DTI
Topic Respondent’s Comment Ofgem/DTI view
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
BSC proposed designation text 22 August 2004
Ofgem/DTI
Section Respondent’s Comment Ofgem/DTI view
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
BSC proposed designation text 23 August 2004
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.
BSC proposed designation text 24 August 2004
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
BSC proposed designation text 25 August 2004
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
BSC proposed designation text 26 August 2004
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
BSC proposed designation text 27 August 2004
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
BSC proposed designation text 28 August 2004
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
BSC proposed designation text 29 August 2004
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