user pays services November 2007 user pays presentation
user pays services November 2007 user pays presentation 6 th November 1
Background § Part of the latest Gas Distribution Price Control Review to; § Focus on how xoserve should be funded, and § Drive efficient use of xoserve services § Incentivise xoserve and GTs to develop innovative solutions for customers § Consultation recommended that xoserve be funded using; § majority covered by transportation charges provided free at point of delivery, and § part ‘user pays’ services § In their updated GDPCR proposals Ofgem has proposed that £ 2. 83 m be excluded from the Transporters allowed revenue. § Ofgem convened workgroups identified a number of current xoserve (ASA) services that will form the user pays services § The industry is to implement arrangements for provision of user pays services § Ofgem view this as the proof of concept of user pays that could inform how the principle could be extended in future. 2 user pays presentation 6 th November
user pays § An industry group has been established to deal with implementation matters § See the Joint Office website for all documentation etc § http: //www. gasgovernance. com/industryinfo/xoserve. Group § Three meetings held, further meeting scheduled for: § December 10 th 3 user pays presentation 6 th November
Current service provision model Ofgem Formula revenue Transporters Transportation Charges Agency Services Agreement Shippers services xoserve 4 user pays presentation 6 th November
user pays service provision model Ofgem Formula revenue - £ 2. 83 m* Transporters Transportation Charges - £ 2. 83 m* Agency Services Agreement services xoserve user pays services payment *subject to GDPCR outcome Shippers 5 user pays presentation 6 th November Shippers / users
Principles § user pays services will be implemented with the following principles; § § § As-Is deliverables Mostly existing service standards Existing delivery frequencies Existing business rules user pays services that were previously free at the point of delivery will now be provided on a directly chargeable basis 6 user pays presentation 6 th November
PROVISION OF INFORMATION (type 2) D 8 TA CENTRE SERVICES SERVICE PERFORMANCE STANDARDS CHARGING BASIS IAD As per current arrangements Per IAD account D 8 TA CENTRE TELEPHONE ENQUIRY LINE Arrangements under review (currently 3 MPRNs per call 5 data items per MPRN) Chargeable phone line DVD On a quarterly basis Per DVD EMAIL SERVICE Based upon number of MPRNs and requests Per request 7 user pays presentation 6 th November BUSINESS PRICE RULES As per UNC, GT Licence etc
PROVISION OF INFORMATION (type 2) D 8 TA CENTRE SERVICES AVAILABLE EMAIL REPORTS 1 Incoming Shipper Report 2 Previous Shipper/Supplier 3 Current Shipper & MSN 4 AQ/SOQ/EUC/Exit Zone/Postcode 5 Meter Removal Date Report 6 Meter Details Report 7 Address Details Report 8 Confirmation Effective Date Report 9 Last Meter Read and Date 10 Domestic Third Party AQ Report Business Rules As per UNC, GT Licence etc 8 user pays presentation 6 th November PRICE
REPORTING (type 2) REPORT TITLE TRIGGER FREQUENCY CHARGING BASIS Query Management - Standards of Service report Auto by date Monthly By report Invoice Queries - queried and withheld amounts End user request Ad hoc By report Invoice Queries - awaiting adjustment End user request Monthly By report Invoice Queries - pending adjustment End user request Monthly By report Portfolio Statement Auto by date Monthly By report User Portfolio End user request Ad hoc (no more frequent than monthly) By report 9 user pays presentation 6 th November PRICE
…REPORTING (type 2) REPORT TITLE TRIGGER FREQUENCY CHARGING BASIS CSEPS portfolio statement Receipt of user request Ad hoc By report Unique Sites - portfolio statement Receipt of user request Ad hoc By report Annual Asset Portfolio Auto by date Annually By report Transco Asset Portfolio Auto by date Monthly By report [“DEad” portfolio Auto by date Monthly By report]* * to be confirmed 10 user pays presentation 6 th November PRICE
AQ Enquiries (type 2) SERVICE PERFORMANCE STANDARDS CHARGING BASIS BUSINESS RULES AQ enquiry 2 business days Per MPRN enquiry As now 11 user pays presentation 6 th November PRICE
MUST READS (type 1) SERVICE PERFORMANCE STANDARDS CHARGING BASIS BUSINESS RULES Must Read provision As now. Trigger, as now. Per valid read obtained As now 12 user pays presentation 6 th November PRICE
Shipper Agreed Reads (type 1) SERVICE PERFORMANCE STANDARDS CHARGING BASIS BUSINESS RULES UO 1 FILES 2 days Per MPRN As now EMAIL To be notified Per MPRN As now FAX To be notified Per MPRN As now 13 user pays presentation 6 th November PRICE
User Admission (type 1) SERVICE PERFORMANCE STANDARDS CHARGING BASIS BUSINESS RULES User Admission None Per user applicant As now 14 user pays presentation 6 th November PRICE
Draft High Level Timeline SEP OCT NOV 24/09/07 – Ofgem – Updated Proposals Published DEC JAN 08 FEB 12/07 – Ofgem – Final Proposals Published MAR APR 01/04/08 – Start of Formula Year User Pays Implementation Discussions +28 days Joint Agency Charging Statement Publication Agency Framework Agreement Draft UNC mod 20/12/07 – Panel 21/02/08 – Panel Issue for Consultation Issue Recommendation 15 user pays presentation 6 th November MAY
user engagement § Next steps: § Contact all users to: § Explain user pays § Assess likely take-up of services § Establish user pays contacts § Early next year § Provide contracts for user pays services § Confirm service delivery arrangements § Note: xoserve are still able to offer commercial services to Shippers and other organisations 16 user pays presentation 6 th November
User Pays Commercial arrangements § Type 1 services invoicing § Type 2 services commercial arrangements 17 user pays presentation 6 th November
User Pays Invoicing Type 1 § Delivery method of invoices and supporting information § Potential Charge Types 18 user pays presentation 6 th November
User Pays Invoicing - Type 1 § Invoices will be sent using existing ad-hoc processes § An existing invoice type will be used (ADN) § New charge types will be added to the invoice for each type 1 service § Notification of these charge types will follow the Operational Rules Governing The Supply of Invoice Charges Via the Ad. Hoc Process (1 month notice) § It is anticipated that there will be one Type 1 invoice per user per month including charges for any/all service lines procured § Supporting information will be delivered via e-mail where required § Payment terms will be in line with Section S of UNC 19 user pays presentation 6 th November
User Pays Invoicing – Type 1 Potential Charge Types Invoice Type Charge Type Description ADN N 28 Shipper Agreed Reads Credit ADN N 29 Shipper Agreed Reads Debit ADN N 30 User Admission Charges Credit ADN N 31 User Admission Charges Debit ADN N 32 Must Reads Credit ADN N 33 Must Reads Debit 20 user pays presentation 6 th November
User Pays commercial arrangements – type 2 services Four contractual documents published in the public domain: - Terms and Conditions - Service Schedules - Contractual documentation e. g. Service Orders - Agency Charging Statement 21 user pays presentation 6 th November
User Pays Type 2 commercial model Agency Charging Statement (prices) User Pays Contract docs: Service order etc User Pays customer User Pays Framework Contract – T&Cs Order (under T&CS) Service and Invoice (under T&Cs and KPIs where applicable) User Pays Framework Contract – Schedules: POI – IAD POI – RFI POI – DVD POI – Email rpts Reporting AQ Enquiries xoserve 22 user pays presentation 6 th November
User Pays type 2 arrangements Users will order services (using the Service Order document) under the published terms and conditions. The Service Order will be part of the contract. Service Orders will be subject to standard confidentiality provisions. xoserve can implement control measures with users e. g. only accepting orders from authorised persons within user organisations 23 user pays presentation 6 th November
User Pays type 2 Service Order e. g. user xoserve Submit Service Order for 12 portfolio reports Validate Service Order and acknowledge Receive acknowledgement Deliver service, confirm delivery Confirmation of delivery Raise invoice (and supporting information) Receive invoice and pay Receive payment 24 user pays presentation 6 th November
User Pays Type 2 contract T&Cs…. Term Comments Contract structure Public documents, Service Order forms part of contract Credit / security arrangements May be required, dependent on contract size and company credit rating Intellectual Property Rights (IPR) General principle that xoserve retains IPR in service delivery mechanisms and reports produced. IPR in the data generally envisaged to be unchanged by the provision of the services Data Protection Recognition and explanation of xoserve’s role Confidentiality provisions to be two was as appropriate. Liabilities Performance standards to be detailed in Service Schedules, as appropriate. Liabilities position under review Invoicing In GB pounds. Monthly in arrears. Possible rule regarding value and age of debt to minimise number of lower value invoices 25 user pays presentation 6 th November
…User Pays Type 2 contract T&Cs Term Comments Price As per published Agency Charging Statement Payment terms 28 calendar days Invoice challenges Bona fide disputes to be notified within set period of invoice issue Late payment Anticipated to be in accordance with Late Payment of Commercial Debts (Interest) Act 1998. Limitations on service provision Where appropriate, permissions to request / release data must be in place. Customer obligations Customer to request services using the Service Order form. Where required to provide data (email reports). Warrant that they are entitled to receive the service. 26 user pays presentation 6 th November
User Pays type 2 Service Order § The Service Order is used to order type 2 services from xoserve § The Service Order will require key customer information e. g. invoicing contact details etc § xoserve will validate the Service Order for completeness, and can, if required, validate against certain user criteria e. g. authorised submitter § xoserve will acknowledge the Service Order and provide service delivery information § The Service Order must contain a signature, anticipated fax or paper submission will be required 27 user pays presentation 6 th November
User Pays Agency Charging Statement SERVICE CHARGING BASIS IAD Per IAD account 2 D 8 TA CENTRE TELEPHONE ENQUIRY LINE Chargeable phone line 2 DVD Per DVD 2 EMAIL SERVICE Per MPRN / request 2 Reports By report 2 AQ Enquiry Per MPRN enquiry 2 Must Reads Per valid read obtained 1 Shipper Agreed Reads Per Read 1 User Admission Per admission application 1 28 user pays presentation 6 th November Type
User Pays Agency Charging Statement Pricing methodology: Principle of reflective cost recovery charges against forecast demand Reflective cost recovery charges to include: - Operational costs - System operations costs Forecast demand: - Assessment of take-up of services 29 user pays presentation 6 th November
User Pays Agency Charging Statement (as per current licence proposals) Contents: Introduction and background Scope of user pays and core services Charging basis Charging methodology Service charges Invoice supporting information Frequency of review Reference to user pays terms and conditions and service schedules 30 user pays presentation 6 th November
Summary § user pays will be effective from 1 st April 2008 § xoserve project team initiated to implement § Industry engagement has commenced § Services themselves unchanged § Changes to GT licences have been proposed by Ofgem. A UNC modification has been proposed § xoserve contact points § for Shipper user pays operational matters; Andy Miller, Helen Field and Emma Lyndon § for all other matters Andy Miller 31 user pays presentation 6 th November
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