SVG121/06
Is One Thousand LLFCs per Distributor
Still Sufficient?
Meeting Name
Supplier Volume Allocation Group (SVG)
Meeting Date
1 March 2011
Purpose of paper
For Information
Some Licensed Distribution System Operators (LDSOs) have expressed concerns that the
current limit of one thousand (1,000) Line Loss Factor Classes per Distributor Id may
constrain future development of the Common Distribution Charging Methodology (CDCM)
and EHV Distribution Charging Methodology (EDCM). This paper describes a number of
Summary
possible approaches to solving this issue. Some are long-term solutions that would make
additional LLFCs available to all LDSOs (but would require system changes from Suppliers
and Supplier Agents); while others are potential workarounds that could be adopted by
affected LDSOs (without requiring system changes from other market participants).
1.
Introduction
1.1
The BSC and MRA require LDSOs to allocate each SVA Metering System to a
Line Loss Factor Class (LLFC). The BSC requirement is intended to allow for
allocation of distribution losses, but LLFCs are also used for charging purposes.
For example, the charging statements issued by each LDSO under the CDCM
For more information,
please contact
John Lucas
ELEXON Design Authority
[email protected]
identify the LLFC(s) associated with each tariff.
1.2
Industry data catalogues (such as the SVA Data Catalogue) specify that each LLFC is identified by the
Market Participant Id associated with the LDSO (the „Distributor Id‟), and a three-digit numeric identifier
(the „LLFC Id‟). This limits the number of available LLFCs to 1,000 per Distributor Id.
1.3
In the current version of Market Domain Data (MDD), the number of LLFCs used by each LDSO ranges
from 44 (for id „EDFI‟) to 725 (for id „SOUT‟). If we exclude end-dated LLFCs the figure for „SOUT‟ drops
to 639.
1.4
We believe that two of the main factors accounting for the wide variation in the number of LLFCs
required by each LDSO are as follows:
•
LDSOs who operate in multiple GSP Groups will tend to require more LLFCs than LDSOs who
operate only in one; and
•
Different LDSOs have different approaches to the allocation of LLFCs. For example, some LDSOs
define LLFCs that can apply to any SVA Metering System in a given GSP Group and voltage level
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(regardless of their Profile Class or Standard Settlement Configuration). Such an approach would
require the LDSO to have a billing system that supports a “one to many” relationship between
LLFCs and tariffs. Other LDSOs appear to define more granular LLFCs, each one of which applies
only to SVA Metering Systems in a single Profile Class and with similar Standard Settlement
Configurations. Such an approach requires a much larger number of LLFCs.
2.
Portfolio Billing for Nested Networks under the CDCM
2.1
The CDCM (which came into effect in April 2010) requires „portfolio billing‟ for embedded networks i.e.
charges based on settlement data for the portfolio of customers using the network (as opposed to
boundary metering, which was the norm under pre-CDCM charging methodologies). The DCUSA Working
Group on IDNO/DNO Billing Governance is tasked with defining the changes to systems and industry
codes required to implement this. It defined the interim solution that came into effect in April 2010, and
is still working on the enduring solution. ELEXON attends these Working Group meetings to advise on
BSC impacts1.
2.2
The Working Group has concluded that the limit of 1,000 LLFCs per LDSO is a particular issue in the
context of nested networks (i.e. embedded networks that connect to another embedded network, not the
Host DNO network.) The project team that developed the CDCM (prior to its formal submission to
Ofgem) had envisaged a solution in which the LLFC assigned to each SVA Metering System identified all
the Distribution Systems in the „chain‟ of networks connecting them to the Transmission System, and the
voltages of the connections between those networks. However, such a solution would potentially require
a large number of LLFCs.
2.3
In March 2010 the Working Group consulted DCUSA Parties (and Supplier Agents, via ELEXON) on
options for solving this problem. These included:
•
Extending the LLFC Id to more than three digits;
•
Allowing a single LDSO to have multiple Distributor Ids (each sharing a single two-digit Distributor
Short Code);
•
Adding additional data items into SMRS to identify the „chain‟ of networks between a given SVA
Metering System and the Transmission Company; or
•
Changing Supplier Agent and BSC systems to allow an LDSO to re-use a single LLFC Id in different
GSP Groups (so the limit would become 1,000 per GSP Group rather than 1,000 in total).
2.4
Based on the responses to this consultation, the Working Group concluded that the cost of any of these
options would be disproportionate to the benefits they would bring to LDSOs in billing for nested
networks. The Working Group has therefore developed alternative solutions that require fewer LLFCs
(although it is still anticipated that some additional LLFCs will be required for nested networks).
1
It was discussion at this Working Group that led to Modification Proposal P246 („Reporting to LDSOs of Aggregated Metering Data for
Embedded Networks‟), which is intended to support both the interim and enduring solutions.
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3.
Portfolio Billing under the EDCM
3.1
The availability of LLFCs was also raised in the „Second consultation on the EHV Distribution Charging
Methodology (EDCM)‟ issued by the Energy Networks Association (ENA) in December 2010. Appendix 3
to the consultation („Areas of Risk‟) stated that Southern Electric Power Distribution (Distributor Id
„SOUT‟) would require more than 1,000 LLFCs to implement the EDCM (even without taking nested
networks into account).
3.2
We responded to this consultation, acknowledging that this does appear to be a genuine issue, at least
for those LDSOs who operate in multiple GSP Groups and whose systems cannot support a „one to many‟
relationship between LLFC and tariff. The consultation document is available on the ENA website, and
our response is available on the ELEXON website.
4.
Long-Term Solutions
4.1
In the long term, we believe it may be appropriate to amend industry systems to address this issue. We
have already seen one example where the issue constrains the development of distribution charging
methodologies (i.e. charging for nested networks under the CDCM), and it has the potential to continue
doing so.
4.2
However, any industry solution to this issue is likely to impact all market participants, and to have high
costs (as indicated in the response to the DCUSA Working Group consultation). We believe there is
unlikely to be industry support for such a change at the moment, particularly given the current
uncertainty around smart metering and the scope of the Data Communication Company (DCC). We
therefore anticipate that in the short to medium term individual LDSOs will have to find workarounds to
this issue.
5.
Potential Workarounds
5.1
The options open to an LDSO who doesn‟t have enough LLFCs to implement agreed CDCM or EDCM
requirements would appear to include the following:
•
Option 1: Reengineer their billing systems and internal processes to reduce the need for LLFCs.
For example, allowing a „one-to-many‟ relationship between LLFC and tariff (see paragraph 1.3
above) could significantly reduce the number of LLFCs required;
•
Option 2: Change the corporate structure to reduce the number of LLFCs required by any one
company. For example, an LDSO could set up different companies in different GSP Groups
(although this would mean applying to Ofgem for additional Distribution Licences). The option
(mentioned in the ENA consultation) of Southern Electric Power Distribution transferring some outof-area networks to Scottish Hydro Electric Power Distribution would also fall under this option; or
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•
Option 3: Request an additional Distributor Id from SVG (by submitting a request for an additional
Market Participant Id in accordance with BSCP509, „Changes to Market Domain Data‟).
5.2
Of these three, option 1 appears to have advantages for other market participants:
•
Options 2 and 3 both require Metering Systems to be transferred from one Distributor Id to
another. Currently the only way to achieve this is logical disconnection of the old Metering
Systems, followed by logical new connection of new Metering Systems. This requires a change of
Meter Point Administration Number (MPAN), which impacts both Suppliers and customers.
•
Because each Distributor Id is associated with a two-digit short code (which is used as the first two
digits of that Distributor‟s MPANs) the number of Distributor Ids available to the industry as a
whole is severely limited. Options 2 and 3 both have the potential to deplete the limited supply of
available Distributor Ids.
5.3
For these reasons, we believe that option 1 is the preferable option. Nonetheless, there may be
circumstances in which an LDSO is unable to use option 1 (e.g. because the required changes to internal
systems are prohibitively expensive, or cannot be delivered quickly enough to implement agreed charging
changes). In these circumstances the LDSO would have no option but to pursue option 2 and/or 3.
5.4
If a Distributor were to pursue option 3, SVG would have to consider whether to approve the MDD
Change Request2. The BSC contains explicit rules on how many Supplier Ids a Supplier can have, but is
silent on whether an LDSO is allowed multiple Distributor Ids3. In the absence of such rules, the decision
will fall to SVG, who will have to balance the disadvantages (see paragraph 5.2 above) against the
possible advantages:
•
Option 3 may have less impact on Suppliers and customers than option 2 (e.g. by giving the LDSO
more choice in how to allocate Metering Systems between Distributor Ids);
•
Using option 3 on a temporary basis may allow a decision on whether to change industry systems
(e.g. to increase the number of digits in the LLFC Id) to be deferred until the impact of smart
metering on Supplier Agent processes is clearer, and hence avoid the risk of wasted investment in
legacy systems; and
•
Allowing multiple Distributor Ids would be consistent with the approach adopted to Supplier Ids
when they were not explicitly permitted in the BSC (i.e. prior to the implementation of Modification
Proposal P106).
2
A new Market Participant Id would normally go through the fast track process in section 3.6 of BSCP509, and would therefore not require
approval by SVG. We are assuming for the purposes of this paper that an application from an existing LDSO for a second Distribution Id would
fall outside the scope of the section 3.6 process, and would have to be approved by SVG in accordance with the general process in section 3.3
of BSCP509. Our rationale for this assumption is that the 3.6 process was only intended to fast-track routine, non-contentious MDD CRs.
3
The explicit rules for multiple Supplier Ids were introduced into the BSC by Modification Proposal P106 („Amendments to the BSC to allow
Multiple Supplier Ids„). Prior to this Modification some Suppliers did have multiple Supplier Ids, but the BSC was silent on whether this was
permitted (i.e. the position for multiple Supplier Ids was similar to the current position for multiple Distributor Ids).
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6.
Recommendations
4.1
We invite you to:
a)
NOTE that the limit of one thousand LLFCs per Distributor Id may cause difficulties for some
LDSOs in implementing future charging changes (such as the introduction of the EDCM in April
2012); and
b)
NOTE that requesting an additional Distributor Id is a possible workaround solution for such
Distributors, but would require approval from SVG.
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