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USRV Incentives Review
Chris Warner
USRV Resolution Responsibility and Occurrence
E8.1.1 “…the User shall investigate Reconciliation Values that
have been Suppressed following Individual NDM Reconciliation…”
E8.1.2 Suppression occurs in accordance with the Network
Code Reconciliation Suppression Guidelines Financial tolerances per AQ banding Underlying negative consumption
Guidelines reviewed from time to time
Why Suppress?
Network Code Reconciliation Suppression Guidelines para 2.6
“The tolerances are set with a view to maximising the suppression of values generated from erroneous data and minimising the suppression of valid values”
Intended to protect Users from large erroneous invoice values
energy invoice must be paid first and subsequently queried
potential to cause severe financial hardship
Issues Identified pre 0637 Implementation
Uncertainty created for RbD Users by unresolved items
Considerable USRV backlog (38,000 items plus). Lack of incentive for non-RbD Users to resolve Lack of incentive for compliance with existing
Network Code resolution requirements Selective resolution?
More economic to leave unresolved Approval of credits only Lack of priority
Mod 0637 – Network Code Process
Various options discussed at Network Code Reconciliation Suppression Guidelines Sub-Group in 2003
Initial proposal for incentives raised by a Shipper Following discussions at Suppression Guidelines Sub-
Group, Modification Proposal submitted by Transco Final Modification Report issued to Ofgem on 15 Sep 2003 Direction to Implement issued by Ofgem on 19 Nov 2004 Following consultation with the Supply Point & Billing
Workstream, Modification implemented on 21 Feb 2005
Mod 0637 Regime – Resolution Incentives (E8.3)
Backlog (pre 21 Feb 2005) Unresolved after 4 months (or older) incurs £30/month until
resolved Ongoing Performance
50% resolution required by 20th of following month (no incentive charge applied)
95% resolution required by 20th of second month. Any unresolved below the 95% standard incur £20
Any unresolved after 4 months (or older) incurs £30/month until resolved
Additional features Allowance for significant volume increases
>20 USRV item increase, and => 50% increase (in comparison to previous 6 months average) additional 1 month on 2 and 4 month standard
Mod 0637 Regime – Re-distribution of Revenue
Overall monthly cap £100,000. If exceeded all charges scaled down to in aggregate
equal £100,000.
2% allowance for Transporters for administration of scheme
Remaining revenue allocated to RbD community Based on market share for relevant LDZ for relevant
period
Post 0637 Performance – Liable USRVs by Month
985725383657Nov-06
917226793921Oct-06
831723233937Sep-06
763721633495Aug-06
691415543139Jul-06
579816023057Jun-06
655923733502May-06
62187193705Apr-06
635210261429Mar-06
585818301663Feb-06
587829783592Jan-06
424618724629Dec-05
345223862592Nov-05
341313832997Oct-05
316312621906Sep-05
386313431956Aug-05
47126372225Jul-05
58118421175Jun-05
58778091277May-05
100% liable (M+>=4)95% liable (M+2-3)50% liable (M+1)Month
985725383657Nov-06
917226793921Oct-06
831723233937Sep-06
763721633495Aug-06
691415543139Jul-06
579816023057Jun-06
655923733502May-06
62187193705Apr-06
635210261429Mar-06
585818301663Feb-06
587829783592Jan-06
424618724629Dec-05
345223862592Nov-05
341313832997Oct-05
316312621906Sep-05
386313431956Aug-05
47126372225Jul-05
58118421175Jun-05
58778091277May-05
100% liable (M+>=4)95% liable (M+2-3)50% liable (M+1)Month
Post 0637 Performance – Liable USRVs by Achievement Targets
Post 0637 Performance – Generated USRVs
Generated USRVs
0
1000
2000
3000
4000
5000
6000
7000
8000
Feb
-05
Mar
-05
Apr
-05
May
-05
Jun-
05
Jul-0
5
Aug
-05
Sep
-05
Oct
-05
Nov
-05
Dec
-05
Jan-
06
Feb
-06
Mar
-06
Apr
-06
May
-06
Jun-
06
Jul-0
6
Aug
-06
Sep
-06
Oct
-06
Data for Feb and March 06 removed due to a system error
Generated USRVs
Post 0637 Performance – Trends of Liable USRVs
Trends of Liable USRVs
0
2000
4000
6000
8000
10000
12000
14000
May
-05
Jun-
05
Jul-0
5
Aug
-05
Sep
-05
Oct
-05
Nov
-05
Dec
-05
Jan-
06
Feb-
06
Mar
-06
Apr
-06
May
-06
Jun-
06
Jul-0
6
Aug
-06
Sep
-06
Oct
-06
Nov
-06
Dec
-06
Jan-
07
Feb-
07
Mar
-07
Apr
-07
May
-07
Jun-
07
Jul-0
7
Aug
-07
Sep
-07
Oct
-07
Nov
-07
Dec
-07
Linear (100% liable (M+>=4)) Linear (50% liable (M+1)) Linear (95% liable (M+2-3))
Mod 0637 Regime – Effectiveness?
Is the current level of USRVs a concern for Users? Why is the regime arguably not working? What changes could be made to improve
performance Changes to the existing regime? Additional measures?