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Billing Operations Forum 24 July 2007 RbD Overview

Billing Operations Forum 24 July 2007 RbD Overview. Fiona Cottam. Agenda. Background Principles Inputs Sources Shares Sectors Calculations. The RbD Concept. Meter point reconciliation would not be cost effective for 20 million SSPs

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Billing Operations Forum 24 July 2007 RbD Overview

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  1. Billing Operations Forum24 July 2007RbD Overview Fiona Cottam

  2. Agenda • Background • Principles • Inputs • Sources • Shares • Sectors • Calculations

  3. The RbD Concept • Meter point reconciliation would not be cost effective for 20 million SSPs • Larger Supply Points (AQ>73,200 kWh) are reconciled on actual meter reads • Smaller Supply Points (AQ<73,200 kWh) are subject to Reconciliation by Difference • Britain’s distribution Network is divided into 18 LDZs • Total daily energy consumption in each of the LDZs is known • Any reconciliation charge in one sector must have an equal and opposite effect on other sectors, so that total LDZ consumption is unchanged • Reconciliation consists of a gas charge/credit and transportation charge/credit to User for both NTS and LDZ transportation

  4. RbD Basic Concepts - 1 • If you know the RQ (Reconciliation Quantity) for Segments 1 to 4, from reading all the meters in them, then… • The RQ for Segment 5 must be equal and opposite to the Sum of the RQs for Segments 1 to 4. • Therefore, you don't need to read any meters in Segment 5 to calculate the total RQ for the Segment. Just apply the equal and opposite rule: Source Charges

  5. LDZ Input Energy Allocation of Measured Energy input into LDZ, after deducting Shrinkage and DM measurements, to all NDM Supply Points in the LDZ NDM Large NDM Small DM Shrinkage Energy Allocation - Summarised The allocation process drives the shippers’ energy balancing imbalance and transportation commodity quantities

  6. LDZ Input Energy NDM Large DM d NDM Small DM NDM Large + d = - NDM Small d Shrinkage Reconciliation by Difference(Smaller Supply Points)

  7. RbD Basic Concepts -2 • As all SSPs have: • AQs calculated on the same basis • Energy deemed to them on the same basis • Comparable actual consumption patterns • Then: • They will have comparable RQs • And: • CSEP sites are no different to Directly Connected, they are affected by the same weather/social/economic factors, so their behaviour is comparable to directly connected

  8. RbD Basic Concepts - 3 • If: • All SSPs in an LDZ are comparable, and • Their RQ is directly related to their AQ • Then: • Shipper's total SSP RQ is proportional to their total AQ in an LDZ • Thus: • We can allocate RQ on the basis of each Shipper's Share of the total AQs for an LDZ • For this purpose, CSEP AQ ranks equally with Directly Connected

  9. The Matching Concept • Group LSP RQs by Meter Read Frequency • RbD Sectors • Give each Sector an Incurred Period of same length as Meter Read Frequency (specifically: Monthly, 6 Monthly, Annual) • Slice RQ into equal amounts for each incurred month in the incurred period • Apply appropriate shipper share to the RQ slice for each incurred month

  10. 1 Month Sector (M) Sources: DM Estimate to Actual NDM Monthly read meters Adjustments to Monthly read meters Reconciliation of LSPs on CSEPs Adjustments to LSPs on CSEPs Adjustments to SSPs of <1 month duration LDZ Measurement Sector (L)(Special case 1 month sector) Sources: LDZ Measurement Errors 6 Month Sector (6) Sources: NDM Non-Monthly read meters Adjustments to Non-Monthly read meters Adjustments to SSPs of 1-4 months duration 12 Month Sector (A) Sources: DM Annual Resynchronisations Adjustments to SSPs of >4 months duration RbD Sectors and Sources

  11. Apportionment of RbD sectors - 1 6 monthly sector Monthly and LDZ errors sectors 12 monthly sector Apportion over last 12 months Apportion over last month Apportion over last 6 months

  12. Apportionment of RbD sectors - 2 • Matching of RQ to Shipper Shares Month -11 Current Month Sector A Sector 6 Sector M Sector L

  13. RbD Charges – Which prices? • Energy – daily System Average Price – no calculation required – inherit from “primary” reconciliation • Transportation – applicable daily rates of: • NTS Exit Commodity • LDZ Commodity • Customer Commodity (for applicable periods) • CSEP sites • Same energy prices • Same NTS commodity prices • LDZ commodity prices reduced to reflect average scheme SOQ in the LDZ • No Customer Commodity charges • Primary Reconciliation energy is broken down into periods of consistent transportation prices, and prices are applied to a single figure for each source

  14. Calculation of Market Shares - Principles • Market share is based on share of all the days in a particular month • Live AQ on the day • Isolated/isolated & withdrawn excluded (same as for allocation) • CSEP sites count equally with Directly Connected sites for energy apportionment

  15. Calculation of Market Shares - Example Shipper market share for the month: 600,000 ÷ 1,000,000 = 60%

  16. RbD Apportionment – Worked example • Let's Assume: • Reconciliation on a non-Monthly-Read meter, from 15/03/2006 to 15/10/2006 • Initially suppressed, approved in December 2006, to be included on December 2006 invoice (issued January 2007) • Imaginary 3-Month Sector Applies • Reconciliation values • RQ: 120,000 kWh • GRE: £9,000 • NRE: £200 • ZRE: £600

  17. RbD Calculations - Cum AQs Monthly Cumulative Daily Aggregate AQs For an imaginary LDZ with four Shippers Shipper Month 1 Month 2 Month 3 ONE 600,000 700,000 800,000 TWO 250,000 200,000 150,000 THREE 0 50,000 50,000 FOUR 150,000 50,000 0 LDZ Total AQ 1,000,000 1,000,000 1,000,000

  18. Sector Q RbD Calculations – UARQ (User Aggregate RQ) Sources Incurred Total Month 1 Month 2 Month 3 RQ (kWh) 120,000 40,000 40,000 40,000 ARQ (kWh) -120,000 -40,000 -40,000 -40,000 Shipper Share(AQ): One 600,000 700,000 800,000 Two 250,000 200,000 150,000 Three 0 50,000 50,000 Four 150,000 50,000 LDZ Total AQ 1,000,000 1,000,000 1,000,000 RbD UARQ: Total One -84,000 -24,000 -28,000 -32,000 Two -24,000 -10,000 -8,000 -6,000 Three -4,000 0 -2,000 -2,000 Four -8,000 -6,000 -2,000 0 Total RbD UARQ -120,000 -40,000 -40,000 -40,000

  19. Sector Q RbD Calculations - UARCV/RBG Sources Incurred Total Month 1 Month 2 Month 3 GRE 9,000 3,000 3,000 3,000 ARCV -9,000 -3,000 -3,000 -3,000 Shipper Share (AQ): One 600,000 700,000 800,000 Two 250,000 200,000 150,000 Three 0 50,000 50,000 Four 150,000 50,000 LDZ Total AQ 1,000,000 1,000,000 1,000,000 RBG Charges: Total One -6,300 -1,800 -2,100 -2,400 Two -1,800 -750 -600 -450 Three -300 0 -150 -150 Four -600 -450 -150 0 Total RBG Charges -9,000 -3,000 -3,000 -3,000

  20. RbD Calculations – contd. • Identical process calculates: • UARCV: User Aggregate Reconciliation Clearing Value • Energy cost of Reconciliation Energy (“RBG”) • UATCA: User Aggregate Transportation Charge Adjustments • Commodity Transportation costs • Since Sale of Networks, split between NTS, LDZ and Customer Commodity Reconciliation

  21. RbD Supporting Information • Breakout of Charges by: • LDZ – Directly connected • Energy – RBG • Transportation – RBN/RBZ/RBC • - Sector • LDZ – CSEP • Energy - RCG • Transportation – RCN/RCZ • - Sector • Breakout of Shares by: • LDZ • Incurred Month • - Calendar Day

  22. Worked example for Shipper One for Dummy Sector Q • Shipper One’s RBG records for Month 1,2 and 3: • J13, 123456779, RBG, AB, 10, 2006, Q, 1000000, 600000, 60.0000000000000, -24000, -1800.00, 123456, • J13, 123456780, RBG, AB, 11, 2006, Q, 1000000, 700000, 70.0000000000000, -28000, -2100.00, 123456, • J13, 123456781, RBG, AB, 12, 2006, Q, 1000000, 800000, 80.0000000000000, -32000, -2400.00, 123456 • [record type, record no, chg type, LDZ, billing month, billing year, sector code, total LDZ AQ, Shipper total AQ, % market share, energy, financial value, invoice no] • J14, AB, Q, RBG, -120000, -9000 • [record type, LDZ, sector code, total energy, total financial value]

  23. Role of the RbD Audit • Calculations are performed within mainframe systems • Large volume of data • 500,000 LSPs • 20,000,000 SSPs • Confidentiality of each Shipper’s LSP Reconciliation values • SSP Shippers can’t check the whole calculation process • RbD Audit checks the following: • Aggregation of Primary Reconciliation sources and allocation into sectors • Extraction of SSP aggregate AQs • Allocation of RbD energy and charges to Shippers

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