New Product Feature: UK Electricity Settlement Calendar
The addition of the Settlement Calendar has helped us to improve the accuracy of our UK electricity invoice validations.
What Is Meant By 'Energy Settlement'?
Energy settlement is the process of reconciling the difference between the energy purchased by energy suppliers from generators and the energy sold to customers.
In the UK, Electricity is settled in half-hour periods. However, many meters record energy over longer periods and are therefore read only once or twice a year. To calculate the half-hourly charges for these customers, it is necessary to estimate their electricity consumption for each half hour of the day. This involves grouping consumers into one of eight profile classes and using these profiles to allocate energy used to each half-hour period. The settlement of electricity over a period will be accurate, however, the timing of when in the day the electricity was consumed will be estimated in line with the profile.
A Settlement Run is the determination of the tariffs and charges for each Electricity Settlement Period for all generators and suppliers. Full settlement involves a number of Settlement Runs, as more accurate data becomes available, and can take up to 28 months after the electricity was consumed.
What Is The Electricity Settlement Calendar?
The Settlement Administration Agent (SAA) is responsible for running the Settlement process. Each year, the SAA publishes a Settlement Calendar which states the dates on which each Settlement Run will be undertaken for each Settlement Day.
How Do Captrics Use This Information?
When performing validations on UK electricity invoices, we require a range of inputs. Some of these are fairly straight forward and can be sourced from the customers’ contracts, such as agreed contract tariffs. However, some inputs need to be sourced from the output of the SAA’s Settlement Runs.
For these inputs, we use the Settlement Calendar in conjunction with the customer’s invoice issue date to determine which Settlement Run data we should use to validate the invoice charges.
In some cases, we even account for specific supplier methods into our logic, as some suppliers choose to use set Settlement Runs as the input data for calculating their charges.
What's The Benefit?
You may think this all sounds like overkill, but there are sound reasons for going to these lengths:
- Validation Accuracy – By including the Settlement Calendar logic in our validations, we can be sure that we are being as accurate as possible when checking your invoices. We can also eliminate any false negatives that may occur from using data that is too old or too new.
- Settlement Analysis – Since we collect data from all of the Settlement Runs, we can easily analyse the impact of each run on your invoice. This means that we can check what influence using the latest industry data has on your electricity costs and we can then alert you to any significant changes. Where new data shows lower charges, this could result in your business receiving a refund.