Transmission Charging Methodologies Forum & CUSC Issues Steering Group. 14 th March 2018

Transcription

1 Transmission Charging Methodologies Forum & CUSC Issues Steering Group 14 th March

2 Welcome Rachel Tullis, National Grid 2

3 Housekeeping Fire alarms Facilities Red Lanyards 3

4 Actions TCMF Month Requestor Agenda Item Action Owner Notes Target Date Status Dec-17 All Tariff Update - 5 year forecast Explore if there is a way to identify mailing lists in communications such that people know which mailing list that they are on JW & RT Feedback and suggestion given to teams internally (including central customer team who have been asked to share more widely). Mar-18 Complete Dec-17 PB AOB Make enquiries re missing website content specifically in relation to previous mods (TCMF members asked to advise when they come across any additional missing content) RT Transmission Access Review (TAR) related mods have been added to the website. We are currently investigating how we can get other older mods onto the website as a significant piece of work. In the meantime any specific requests can be sent to the cusc.team@nationalgrid.com. TBC On-going 4

5 Today s TCMF CUSC Modifications Update ESO Forward Plan ESO Incentives Modification Proposal EU Regulation 838/2010 within the CUSC 5

6 Today s CISG SO/TO Legal Separation Charging Futures Update AOB 6

7 CUSC Modifications Update Caroline Wright, Code Admin

8 New Modifications Five new Modifications tabled at the February 2018 CUSC Panel Mod Ref Mod area Customer impacted Proposal raised by Process stage Key activities since last update next steps CMP288 CMP289 Introduce explicit charging arrangements to recover additional costs incurred by Transmission Owners and TNUoS liable parties as a result of transmission works undertaken early due to a User initiated delay to the Completion Date of the works, or to facilitate a backfeed. Consequential change to support the introduction of explicit charging arrangements for customer delays and backfeeds via CMP288. Electricity Transmission Owners; Developers requiring new generation, interconnector or demand connections and Parties that pay TNUoS NGET Workgroup nominations open ~ close date 21 Mar 18 n/a CUSC Panel to note and agree the nominations received and arrange first Workgroup meeting 8

9 New Modifications continued Mod Ref Mod area Customer impacted Proposal raised by Process stage Key activities since last update next steps CMP290 Housekeeping change to CUSC Section 14 required as a result of the implementation of CMP264, CMP265, CMP268 and CMP282 on 1st April 2018 to rectify minor typographical errors, correct formatting and consistency and to update/remove paragraph numbering and incorrect references CUSC Parties, NGRID NGET Appeal window closes 19 Mar 18 n/a If no appeals received will be implemented 1 April 2018 CMP291 Set out within the CUSC the obligations in the EU Connection Network Codes and System Operation Guideline as they relate to the harmonised rules for connection and system operation in GB. Transmission Owners (including OFTOs and Interconnectors), Distribution Network Operators, Transmission System Users, System Operator, Generators, Demand customers and providers of services SSE Workgroup nomination s open ~ close date 21 Mar 18 n/a CUSC Panel to note and agree the nominations received and arrange first Workgroup meeting CMP292 Ensure that the charging methodologies (all Charging Methodologies as defined in the CUSC) are fixed in advance of the relevant Charging Year to allow The Company as Electricity System Operator - to appropriately set and forecast charges. Introducing a cut-off date for changes to the methodologies will help to reduce the risk of charges out-turning differently to the forecasts produced by the Company and created by Users CUSC Parties, NGRID NGET Workgroup nomination s open ~ close date 21 Mar 18 n/a CUSC Panel to note and agree the nominations received and arrange first Workgroup meeting 9

10 Ofgem decisions Ofgem decisions and pending decisions since last TCMF: Mod Ref Mod area Customer impacted Proposal raised by Decision CMP250 BSUoS: proposing to fix the value of BSUoS over the course of a season, with a notice period for fixing this value being at least 12 months ahead of the charging season. Customer liable for BSUoS charges DRAX With the Authority for decision CMP251 Ensuring that there is no risk of non-compliance with European Regulation 838/2010 by removing the error margin introduced by CMP224 and by introducing a new charging element to the calculation of TNUoS Suppliers and Generators British Gas With the Authority for decision 10

11 Ongoing modification proposals Mod Ref Mod area Customer impacted Proposal raised by Process stage Key activities since last update next steps CMP271 Improving the cost reflectivity of demand transmission charges Generators, Suppliers, Embedded Generators RWE WG received update on impact of SCR on CMP271 CMP274 CMP276 Winter TNUoS Time of Use Tariff (TToUT) for Demand TNUoS Socialising TO costs associated with green polices (reduction in the demand residual element of the TNUoS /kw ( Triad ) charge by creating two new charge lines for all demand offtakes Generators, Suppliers, Embedded Generation, Transmission Network Operators, HH Demand Customers Parties that manage demand during Triad periods, i.e. embedded generators and those half hourly metered consumers who respond to Triad UK Power Reserve Alkane Energy Workgroup meetings ~ suspended WG received update on impact of SCR on CMP274 WG received update on impact of SCR on CMP276 Ofgem published further clarity to the industry on the scope of the SCR/TCR on 6 November 2017 and Code Admin discussed impact with the Proposers and the WG. The CUSC Panel at its November 2017 meeting agreed to a further extension to the point that Ofgem issues its minded-to position or another event means that the WG should be re-convened. 11

12 Ongoing modification proposals Mod Ref Mod area Customer impacted Proposal raised by Process stage Key activities since last update next steps CMP275 Preventing BM units from accessing multiple sources of duplicate and overlapping revenue from ancillary services on the same asset Generators, Transmission Company and Ancillary Service Providers UK Power Reserve WG finalising report, legal text and considering any alternatives Proposer to confirm legal text and any alternatives proposing WG arranged for 26 March CUSC Panel extended timetable by 1 month and further extension will be requested post WG meeting when length of extension known 12

13 Ongoing modification proposals Mod Ref Mod area Customer impacted Proposal raised by Process stage Key activities since last update next steps CMP280 TNUoS: remove liability from Generators for the Demand Residual element of the TNUoS tariff. CMP281 BSUoS: remove liability from Generators BSUoS charges on imports Suppliers, Generators and NGET Scottish Power WG to continue developing the Proposal WG issued a draft of the WG reports for review 7 March 2018 for a two week review period Consolidate comments received by the WG on the WG report will either agree comments ex-committee or arranged a WG to agree. Note WG Consultation due to be issued April

14 Mod Ref Ongoing modification proposals CMP285 Mod area Customer impacted Proposal raised by CUSC Governance Reform Levelling the Playing Field Process stage All CUSC Signatories UKPR WG to continue developing the Proposal Key activities since last update WG reviewing draft of WG report next steps Consolidating comments received by the WG on the WG report will either agree comments ex-committee or arranged a WG to agree. Note WG Consultation due to be issued April

15 Ongoing modification proposals Mod Ref Mod area Customer impacted Proposal raised by Process stage Key activities since last update next steps CMP286 CMP287 Improve the predictability of TNUoS demand charges by bringing forward the date at which the target revenue used in TNUoS tariff setting is fixed to allow customer prices to more accurately reflect final TNUoS rates. Improve the predictability of TNUoS demand charges by bringing forward the date at which certain parameters used in TNUoS tariff setting (such as demand forecasts) are fixed to allow customer prices to more accurately reflect final TNUoS rates Suppliers, Generators, embedded generators and National Grid Npower WG to continue developing the Proposal 2 nd WG meeting held 12 March 2018 WG Consultation report scheduled to be issued at start of May 2018 this is at risk but until WG meetings held no extension to be requested 15

16 CUSC Modifications Plan on a Page and other CUSC Panel related material can be accessed using the following link: With Authority, awaiting decision please refer to the following link for further information; CMP251 - Remove error margin cap on TNUoS compliance with EU (British Gas) WG - Workgroup ConS Consultation WG ConC Workgroup Conclusion CA Code Administrator Consultation DRMR Draft Final Modification Report * Timetable at risk/to be confirmed by Panel CMP250 - Stabilising BSUoS with 12 month notice period (Drax Power) *CMP271 - Improving the cost reflectivity of demand tx charges (RWE) and CMP274 - Winter TNUoS Time of Use Tariff for Demand TNUoS (UK Power Reserve) and CMP276 Socialising T costs associated with green policies (Alkane) March April May June July August September With Authority Modifications WG Mod Dev on hold pending outcome from SCR/TCR *CMP275 - Transmission generator benefits in the provision of ancillary and balancing services levelling the playing field. Place your chosen image here. The four corners must just cover the arrow tips. For covers, the three pictures should be the same size and in a CMP280 - New Generator TNUoS Demand Tariff which Removes Liability for TNUoS Demand Residual Charges from Gen and Storage Users and CMP281 - Removal of BSUoS Charges From Energy Taken From the National Grid System by Storage Facilities (Scottish Power) CMP285 - CUSC Governance Reform Levelling the Playing Field (UKPR) straight line. WG WG CA ConS DF M R WG ConS WG ConS With Authority WG ConC WG ConC CA ConS CA ConS *CMP286 - Improving TNUoS Predictability Through Increased Notice of the Target Revenue used in the TNUoS Tariff Setting Process. (npower) and CMP287 - Improving TNUoS Predictability Through Increased Notice of Inputs Used in the TNUoS Tariff Setting Process. (npower) WG Mod Dev

17 CUSC Modifications Plan on a Page and other CUSC Panel related material can be accessed using the following link: With Authority, awaiting decision please refer to the following link for further information; CMP251 - Remove error margin cap on TNUoS compliance with EU (British Gas) WG - Workgroup ConS Consultation WG ConC Workgroup Conclusion CA Code Administrator Consultation DRMR Draft Final Modification Report * Timetable at risk/to be confirmed by Panel March April May June July August September Modifications CMP288 - Introduce explicit charging arrangements to recover additional costs incurred by Transmission Owners and TNUoS liable parties as a result of transmission works undertaken early due to a User initiated delay to the Completion Date of the works, or to facilitate a backfeed (NGRID) and CMP289 - Consequential change to support the introduction of explicit charging arrangements for customer delays and backfeeds via CMP288. WG nominations WG Mod Dev Place your chosen Appeals image here. The four window corners must just cover the arrow tips. For covers, the three WG pictures should be the nominations same size and in a straight line. CMP290 Housekeeping change to CUSC Section 14 required as a result of the implementation of CMP264, CMP265, CMP268 and CMP282 (NGRID) CMP291 - Set out within the CUSC the obligations in the EU Connection Network Codes and System Operation Guideline as they relate to the harmonised rules for connection and system operation in GB (SSE) Implement WG Mod Dev CMP292 - Ensure that the charging methodologies are fixed in advance of the relevant Charging Year to allow The Company to appropriately set and forecast charges. (NGRID) WG nominations WG Mod Dev

18 Code Governance Team who to contact For CUSC related matters For Grid Code related matters For STC related matters For SQSS related matters contact For JESG related matters 18

19 Electricity System Operator Forward Plan David Bowman, National Grid

20 Agenda 1. Overview of the Forward Plan 2. Deliverables in the charging sphere 3. Next steps Questions? 20

21 ESO finalising Forward Plan based on feedback ESO to produce annual Forward Plan setting out: Longer term ambition Deliverables Performance Metrics Delivery against the Forward Plan determines incentive payment/penalty Final version published at the end of March 21

22 We have listened to feedback in setting Deliverables and Performance Metrics in the charging sphere Deliverables Deliverable Stakeholder Feedback Our Response Continuous improvement in our TNUoS billing reconciliation, forecast and final tariff setting to help customers manage their profitability Introduction of more detailed and shorter term BSUoS forecasts to bring greater transparency to our charges Welcome the focus on TNUoS forecasting See below Deliverables will remain and be reported against in quarterly performance reports. See below Publication of new BSUoS report at monthly granularity. Broadly welcomed Deliverable will remain. Performance Metrics Performance Metric Target Stakeholder Feedback Our Response BSUoS forecast provision - Half hourly BSUoS forecast at day ahead 85-95% published before: 08:00 for Tuesday-Saturday forecasts 17:00 for Sunday-Monday forecasts Broadly welcomed by stakeholders, but asked if we should focus on accuracy. Brand new - before focusing on accuracy we need to understand BSUoS drivers and how provision of forecasts will change market behaviour, and focus on our processes. BSUoS billing - Response and resolution time of BSUoS queries as proxy for quality of billing service Response: 90-95% initial response within 1 business day Resolution: 60-70% resolved within 2 weeks Customers want to see improvements in this BAU area. Asked if targets were ambitious enough. Timescales are as is because we are reliant on external data. Charging Futures overall coordination and facilitation of Lead Secretariat role TBD survey on overall engagement with process Broad support for the Charging Futures project Metric to be developed targets will be published in final version of Forward Plan 22

23 Next steps Final version published at the end of March Monthly and quarterly reporting to start from May Data will be published on our website Ofgem currently setting up ESO Performance Panel 23

24 Thanks! Place your chosen image here. The four corners must just cover the arrow tips. For covers, the three pictures should be the same size and in a straight line. Any questions? 24

25 ESO incentives Modification Proposal Urmi Mistry, National Grid

26 Recap The ESO regulatory and incentive framework for has been revamped Annual Process There is now a single evaluative incentive covering all of the ESO s activities This is worth± 30m per year There is no more BSIS Performance criteria Evidence of delivered benefits Evidence of future benefits / longer term initiatives Wider stakeholder evidence Plan delivery Performance metrics and justifications 26

27 Reason for Change New Incentive framework for the ESO from 1 st April Reflecting Licence changes that have already been agreed. New special Licence Condition 4M. Change to how external incentive scheme payment element is generated. Move from a mechanistic approach to an evaluative approach. New process includes: Within year reporting, SO Performance panel scrutiny, governance and engagement throughout the year. 27

28 Ofgem Decision Ofgem published their policy decision on the 23 rd February. Paragraph 2.78 details Ofgem s response on recovery of incentive payments. States ESO can make appropriate forecasts of incentive payment to be recovered due to ongoing engagement and feedback. However, there remains a risk under the evaluative scheme. Ofgem will keep this under review and consider if any changes may be needed in future. E.g. recovered proportionally across subsequent years. This needs to be confirmed before the modification is raised. 28

29 The Proposal Amendment to the BSUoS methodology. CUSC changes: Updates to IncPayExt t term. Remove any out of date reference and terms from section onwards. If required, update the amount of payment that can be received which can be in the range of +/- 30million. Aim to update the CUSC in a sustainable manner. 29

30 The Proposal DRAFT LEGAL TEXT (no original text below) External Incentive Payment (IncPayExt t ) In respect of each settlement d, IncPayExt t will be determined in line with Transmission Licence Special Condition 4M The Company will use forecast figures for IncPayExt t for the current incentive year. The forecast External Incentive Payment for the duration of the scheme will be based on The Company s Forward Plan and adjusted throughout the year where necessary. When the actual external incentive amount becomes available, reconciliation/adjustment will be undertaken. PLEASE NOTE: The above wording has not yet been finalised as we are still in the process of confirming which route the recovery will take. 30

31 Recommendation Aiming to raise in April 2018 Proceed to consultation. Following consultation this will go to The Authority for decision. Positive impacts on applicable objectives: B, C and E 31

32 Any Questions? Or any feedback on the proposal? 32

33 EU Regulation 838/2010 within the CUSC Jon Wisdom, National Grid

34 Items CMA decision on CMP261 Compliance with the regulation Potential areas for improvement Options to proceed 34

35 CMA Decision CMP261 sought to return revenues to Generators and charge Suppliers due to an alleged breach of European Regulation 838/2010 in charging year 2015/16. Ofgem rejected the modification in November 2017 as they considered that no breach of the regulation had taken place. In December 2017 SSE and EdF appealed the decision of Ofgem to the Competition and Markets Authority. The CMA on the 26 th February announced that they had dismissed the appeal against Ofgem s rejection of CMP261 as they agreed with Ofgem s interpretation of the connection exclusion. There is no impact on TNUoS charges within 2018/19 or future years as a result of Ofgem s rejection of CMP261 or the CMA s decision. Therefore no mid-year tariff changes are required 35

36 /MWh /MWh out-turn and forecast 3.00 Generation /MWh tariff /15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/ /MWh (Actual) /MWh 5-year forecsat /MWh Forecast Actual /MWh Final Tariffs Regulation Upper Limit Regulation Lower Limit Our expectation is that the CUSC will remain compliant with the regulation under its current wording and definition until around 2020 where the generation tariff may move below the lower end of the range specified. Although not an immediate issue a change will need to be brought forward to the CUSC in this area in future. 36

37 National Grid position National Grid s preference is for changes to be brought forward only once the broader direction of charging is better understood as a result of Ofgem s Targeted Charging Review. We anticipate this to be in Summer 2018 Once the direction of wider developments are known National Grid will bring forward CUSC changes to ensure future compliance with regulation 838/2010. We would encourage industry to come forward and discuss with us any views they may have. 37

38 CUSC Issues Steering Group (CISG) 38

39 Transmission Charging Methodologies Forum (TCMF) SO/TO Legal Separation John Martin 14 th March 2018

40 Introduction Background: August 2017 Ofgem consultation on ESO Separation September 2017 NG Open Letter Code Changes Since September Attended Code Panels, Industry Forums and the National Grid Customer Seminar Webinar Today: To introduce the draft legal text for the legal separation modifications and planned timescales Legal Separation Programme 40

41 SO/TO Legal Separation - Modification Approach Industry codes will need to be modified to create a legally separate SO and associated novations A coordinated set of code of modifications utilising the normal GB code governance arrangements will be proposed by National Grid Electricity Transmission (NGET) Anticipate the effect of the modifications on industry parties to be minimal Views welcome as to whether these modifications would be open to cross code working to ensure best use of industry time Legal Separation Programme

42 SO/TO Legal Separation Scope confirmation Main types of changes are either: Entity changes changes from the NGET to NGESO where relevant Transitional the change can be smooth for all industry participants Consequential some changes are as a consequence of the separation The guiding principles we have focused on are: Minimal change Alignment with other Transmission Owners No housekeeping amendments No betterment changes Legal Separation Programme 42

43 Legal Separation Modification Timeline 2018 JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT Draft legal text issued & webinar with Industry Participants Mod Proposals submitted to Panels Workgroup session if required Consultation Workgroup Mod Proposals submitted back to Panels Code Admin Consultation Mod Proposals submitted back to Panels Ofgem Decision Draft Legal text shared with industry participants Formal Mod Process Panel Meetings, Consultations etc Legal Separation Programme

44 Legal Drafting The following draft legal text has been developed for the legal separation changes for the following Codes and Standard: CUSC Distribution Code Grid Code SQSS STC Code (and procedures) The draft text has been published on the specific code administrators website All the documents have clear tracked changes In due course we will be proposing to make minor changes to the BSC and DCUSA Legal Separation Programme 44

45 CUSC 1 page summary Below are the high level indicative changes that are going to be included within the CUSC Modification required for legal separation: Majority of sections 1-15 Entity changes Majority of Exhibits and Schedules Entity changes Novation Agreement Includes the approach to novate all contracts entered under the CUSC from NGET to NGESO Legal Separation Programme 45

46 Feedback Request We would like to request industry participants to review the draft legal text that we have published on the specific code administrators websites Could you please provide feedback whether: you have any general comments on the approach that has been taken for the legal separation modifications you require clarity on the rationale for the proposed tracked changes there are any additional amendments/alterations to the proposed changes if there are any additional areas/sections of drafting you feel should be included in the legal separation modifications you can provide feedback on the questions identified in the cover letter published with the legal drafting Legal Separation Programme 46

47 Key questions for Industry We have included a cover letter with the draft legal text, which highlight some key questions including: Transitional approach any areas that industry participants require changing prior to the legal separation Housekeeping approach, kept the minimum change required for legal separation Contractual changes will entail contracts signed under the CUSC framework novated from NGET to NGESO Are you comfortable with the novation approach? The naming convention do you think that reference to NGESO is appropriate or should it be a generic reference to the SO? Taken the approach to utilise the baseline Code legal text today, appreciating that the Code baseline text is likely to change as the modifications progress. Legal Separation Programme 47

48 Next Steps Feedback to 15 th March Webinar 2 Divide the session into timed sections for each Code: CUSC Distribution Code Grid Code SQSS STC Code (and procedures) If you cannot attend the webinar or would like an additional opportunity to provide feedback, please contact the.box address above Legal Separation Programme 48

49 Any questions/feedback?

50 Charging Futures Update Lead Secretariat, National Grid 50

51 Charging Futures Forum Charging Futures Forum was held on 28 th February: Update on European changes Consumer perspectives Industry Panel: Electric Vehicles Access and forward looking charges workshop A separate workshop was held by Ofgem in Glasgow on 6 th March Podcast can be found on Summary paper will be available next week 51

52 AOB Rachel Tullis, National Grid 52

53 Next meetings April 11 Wednesday May 9 Wednesday Will be an 10:30am start unless otherwise notified. 53

54 We value your feedback and comments If you have any questions or would like to give us feedback or share ideas, please us at: Also, from time to time, we may ask you to participate in surveys to help us to improve our forum please look out for these requests 54

55 LUNCH 55

56 Close 56