MP095 Alignment of SEC Credit Cover

Proposer Paul Saker
Lead Analyst Bradley Baker
Date raised 12/11/2019
StageRefinement Process
Implementation date Unknown
Latest update This modification is currently on hold. SECAS will use this time to investigate modifications covering a similar topic with other industry Codes.

What is the issue?

In the financial years 2018/2019, and 2019/20, five SEC Parties ceased trading, and it is anticipated that more will follow. This has so far resulted in unpaid DCC charges of c£731,000 being socialised amongst all other SEC Parties. Of the five parties ceasing to trade, the credit cover circumstances have varied. The most significant example is where a SEC Party had sufficient credit cover for the first month’s missed payment, but not for the following months. This alone resulted in c£362,000 being socialised amongst all SEC Parties.

The Proposer therefore wishes to explore the current credit cover requirements to identify if there are ways it can be amended to reduce the risk of cost socialisation across the industry.

As part of this modification, other aspects surrounding the Defaults process will also be explored, such as actions which the SEC Panel can take when a default occurs or is anticipated, and the actions of and escalations to the Authority.

The full Problem statement can be found here.

Does this issue affect your company? Send us your comments to SEC.change@gemserv.com

Who is impacted?

Large and Small Suppliers
Electricity and Gas Network Operators
Other SEC Parties
DCC

Timeline

12 Nov 2019
Draft Proposal raised
13 Mar 2020
Converted to Modification Proposal
05 Aug 2020
Working Group
01 Jan 2021
Modification placed on hold

Modification documents

MP095 June 2020 Working Group summary
25/06/2020
MP095 April 2020 Working Group summary
08/04/2020
MP095 Modification Report
19/02/2020
No files
No files
No files
No files
No files

If you believe there is a problem with this modification, please let us know HERE.

Feedback
close slider