Elexon backs industry panel reforms
Elexon has backed reforms to the industry panel which scrutinises modifications to the code governing the use of the transmission network.
16th August 2017 by Networks
The firm was commenting on proposals which aim to make the Connection and Use of System Code (CUSC) panel more representative – mainly by altering the voting procedure for elected members.
Elexon administers the Balancing and Settlement Code (BSC) which sets the rules for participation in the balancing mechanism. The company’s chief executive Mark Bygraves told Network’s sister title Utility Week the BSC panel which reviews changes to the code should be seen as a “template” for others.
“As far back as 2008, we recognised that a lot of the industry codes don’t have specific reference to consumer benefits, which is utterly bizarre.”
He welcomed the reforms suggested by peaking plant developer UK Power Reserve, saying they would move the CUSC panel towards operating in a more similar way to the BSC panel.
In addition to an independent chair, a secretary and representatives from Ofgem, National Grid and Citizens Advice, the CUSC panel includes seven elected members who are voted into office by the CUSC signatories.
UK Power Reserve has submitted a code modification to the CUSC panel to address its concerns that flaws in the election process have allowed the body to become dominated by the employees of incumbents.
If implemented, parent companies would be required to declare any CUSC signatories they have control over and would be prevented from casting any more than five votes in total through their subsidiaries, as they are currently able to do.
A minimum of three seats would be reserved for “fully independent” members who are not employed by any CUSC signatory, and at least two elected members would be required to have experience working in a distributed generation company.
Elexon already provides a similar level of transparency over the electorate for the BSC panel, according to Byrgraves: “We publish a register of votes for trading parties, and we do that on a monthly basis.”
He said the election rules for the BSC panel go even further than the reforms proposed for the CUSC panel by limiting votes to just two votes per parent company – one for demand and one for generation – rather than five.
Two places are also reserved for members which are not employed by BSC signatories, and the BSC panel currently features an additional member which was appointed by the panel chair to represent the interests of smaller generators.
“We do believe, whilst of course, there’s always room for further improvements around governance of panels, that the BSC nevertheless represents a good template,” he added.
Bygraves said Elexon “must be doing something right” after receiving the highest net satisfaction score of the eleven code administrators in a survey of code signatories published by Ofgem in April.
He said other panels would do well to follow Elexon’s lead by employing “operational support managers” to engage with industry players and encourage their participation in working groups and consultations: “This is a unique function of the BSC where every party to the BSC is allocated a dedicated individual – a bit of an account manager if you like.
“They work closely with the BSC parties and therefore are well placed to provide contact details to those work group lists to encourage as wide as participation as possible.”
Elexon head of strategy David Jones said all industry code panels – the BSC panel included – also need to have a greater focus on outcomes for consumers: “As far back as 2008, we recognised that a lot of the industry codes don’t have specific reference to consumer benefits, which is utterly bizarre.”
He said consumer benefit should become one of the applicable objectives for all codes alongside the existing objectives such as competition and efficiency.
Jones added that there is “definitely more opportunity for greater cross-code coordination” as it can be a “significant undertaking” for signatories to keep track of changes across all code panels.
“They are all quite disparate in the way that they operate,” he noted.
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