Those in the gas industry must make changes to their business processes, writes Naomi Anderson, senior consultant, Engage Consulting.
The UK Link systems operated by Xoserve facilitates gas settlements, supply point administration and other critical functions for the UK’s gas market. These systems will be replaced on 1 October 2015. Additional requirements, identified through Project Nexus, will be implemented within the UK Link replacement system.
Heralded as a ‘step change’ for the UK gas market, Project Nexus will implement process improvements and facilitate the use of additional data available from smart and advanced metering within settlements.
Over the forthcoming six months, gas shippers, gas transporters and gas suppliers will need to make significant changes to their business processes to ensure readiness for ‘go live’.
Current gas settlement process limitations, created by the Reconciliation by Difference regime, mean billing and settled volume never match for domestic properties. The amount of unidentified gas is approximated by an industry expert on a yearly basis, which creates accounting challenges.
Project Nexus will change this by introducing individual meter point reconciliation across all meter points, in conjunction with a monthly AQ process. A new process will be implemented to adjust for unidentified gas on a daily basis. This change will allow gas shippers to more accurately pinpoint where costs are incurred and for the first time, be able to reconcile settled volume and billed volume. This will lead to fairer, predictable and more equitable invoicing and settlement.
To ensure readiness for the ‘go live’ date, gas shippers will need to update their IT systems to communicate effectively with Xoserve’s central systems. The changes will involve shippers updating meter read validation rules and meter read submission frequency which will ensure that more frequent meter reads are used within settlement.
Xoserve will be taking on the role of central service provider for independent gas transporters (IGTs) so disparate IGT processes will be brought together and aligned to gas transporter processes. This will provide one single detailed register of Meter Point Reference Numbers irrespective of transporter. This move will simplify the processes for the shippers and transporters, and deliver significant cost savings and improve standards of service for switching and other functions. However, to ensure a successful transition, shippers will need to move from manual, often ring fenced processes, to automated processes requiring designing and testing.
Ensuring industry readiness will also require extensive multi stakeholder engagement. Consistent data held by Xoserve, transporters and shippers is paramount to ensure that the processes are fully automated from the outset. This will mean future settlements are reflective of actual consumption and improve the accuracy of meter reads held centrally and used for downstream processes.
Data cleansing is an important part of the wider change programme and it will take time to check all the data is accurate before it is transitioned into Xoserve’s central system.
A separate programme of data cleansing is being completed for IGTs with extracts from IGTs being loaded into an interim database. Shippers are working with IGTs and Xoserve to ensure a consistent data set.
There will be four levels of industry testing spanning from May until August 2015 and will involve, shippers, IGTs, gas transporters, daily meter service providers, traders, the Data Communications Company (DCC), major energy users and meter asset managers.
Level 1 testing is set up to ensure that files can be exchanged with Xoserve. Level 2 testing will ensure that file formats and data sets are correct within each of the files. Level 3 testing will allow end users to run end to end scenarios. Level 4 testing will ensure that the change of shipper process is fit for purpose.
It is important that participants are involved in testing to ensure that they will be able to access all the benefits of Project Nexus from the ‘go-live’.
Xoserve’s switch over plan will also involve around 80 process changes which will be implemented alongside other industry change programmes including Gemini consequential change, the DCC implementation and faster switching, thus adding complexity to the programme for all stakeholders.
So there are many considerations for the industry in ensuring readiness for the go live date and companies will be at different stages of the project cycle. All will need a detailed project plan in place, as well as resources allocated to analyse the project requirements and implement the required business change processes.
We’re currently working with companies at different stages to prepare them for delivery. Our consultants have a detailed understanding of the transition phase and areas which might delay phases of the project.
The work ranges from providing strategic advice on the changes ahead, to helping with business processes and system change requirements, as well as operational support to analyse and help to embed new processes or even advise on optimising data flows or developing meter reading strategies.
For suppliers in the gas markets, there are clearly many business benefits that will come from Project Nexus and the next few months of preparation will surely underpin project success.