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Adverse impact on Settlement performance

Suppliers' operational and business processes can have a material negative impact on Settlement performance and the quality of data entering the Settlement process. We can help you reduce the negative impact internal processes can have on Settlement performance. Engage can help you form a holistic view of your internal processes, and help you to understand the links with Settlement Performance and the downstream impact inefficient internal processes can have. 

Engage has a long history in power settlement, having originally been formed by Consultants from the Pool's 1998 programme. We have helped our clients to improve internal processes that we identified as having a negative impact on Settlement performance, and causing imbalance issues. Engage delivered a planned programme of work that recovered several million pounds and addressed management of changes to processes, systems and staff expertise levels to ensure that such gaps would not occur in the future. 

An Engage client, a leading integrated UK energy supplier, had developed detailed customer by customer based reporting highlighting a discrepancy between the unbilled carrying value (per the financial statements) and the new computation based on operational data. Engage undertook the initial review of all the various threads of work underway in B2B and identified other areas that needed to be addressed to pursue both the recovery process and providing an enduring solution that would remove the root causes of this problem. This involved strategic and business analysis skills, as well as applying project/programme management skills. 

In addition to delivering an enduring solution Engage also established Recovery & Risk Minimisation work streams:

  • Top MPANs Investigation Team - was to identify causes of large discrepancies between Settlement and Billing values at an MPAN level and provide recommended actions to the ‘Fix’ team.
  • Operational Fix Team – was to take MPAN by MPAN proposed solution from the Investigation Team and undertake the proposed solution to completion.
  • Essential Data Flow Management – address any critical dataflow areas highlighted via the root cause work or from elsewhere that should be tackled before any enduring processes can be put in place.
  • Volume Allocation – Long Term Deferred Unbilled Reconciliation (LTDUR) was to address the list of MPANs that had not been billed for over 9 months and pursue the associated unbilled revenue and address any settlement implications.
  • Financial Analysis and Control – was to provide specific financially related advice on such issues as the impact of the changes to the Billing Estimation Algorithm and provide the relevant financial expertise to help identify the necessary financial controls needed to support the permanent reduction of this settlement gap. 

On completing the assignment there were 120 staff involved in all aspects of the project (including an increased focus on the Top MPAN area) and the work had instigated the recovery of several million pounds (combination of billed-up and input to settlements process). Additionally, April was the first month since the gap was identified where it was observed to reduce, influenced by the project activities (by c. 10-15%). For the rest of 2007 the project focussed on closing the remaining gap to an acceptable level in GWh terms and recover as much of the revenue through Billing and the settlement process as possible, based on an agreed Gap Closure plan linked to all the key activities.