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Current system regime – options for change. Gareth Evans. Impacts of process. Shipper feel unable to rely on costs, so difficult to justify internally, except by scale. Similarly long implementation lead times cannot be reconciled.
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Current system regime – options for change Gareth Evans
Impacts of process • Shipper feel unable to rely on costs, so difficult to justify internally, except by scale. • Similarly long implementation lead times cannot be reconciled. • Business solution development hampered by apparent disconnect between public discussion and system development. • Process seen to be overly rigid at times, and slowing down industry change. • Excessive time spent debating appropriateness of cost allocation.
Impacts of process • User pays means shippers will pay for changes if progressed inside, or outside of the UNC. • Shippers have much greater control over costs and processes outside of the UNC as working outside of monopoly environment. • Resulted in movement of services to 3rd parties (NRPS, AUGE, AMR datahub), rather than with xoserve. • Risk of fossilisation of xoserve systems/processes. • Increase in complexity in governance (creation of 3rd party vehicles, increasing reliance on UNCC/Panel for oversight).
Principles for Change • Two guiding reasons why process felt to be inadequate: • Costs cannot be verified by Shippers. • Lack of oversight over xoserve activities means Shippers prefer alternative routes. • Two principles need to be furthered to improve framework: • Transparency • Rigour • Following are a series of possible options that would further these two principles.
Oversight Committee • Creation of committee to handle detailed change management activities. • Expect to be a working committee that would evaluate changes when raised and actively work to identify costs, in particular efficiencies. • Would have access to information so it can challenge solutions and build assumptions. • Composition (fixed or variable depending on change?) • Shippers • Transporters • Xoserve • Adds another layer to the change management process.
Board Structure Changes • Placement of Shipper representatives on xoserve’s board. • Can be executive or non-executive members. • Would expect to have same powers/responsibilities as other board members. • Gives Shippers access as well as a say in xoserve activities. • Does not alter xoserve day-to-day activities. • Would require changes outside of the UNC.
Tender of processes • Xoserve tenders for some/all services, as opposed to providing them internally . • Gives flexibility on service provision. • Brings commercial pressures to bear. • In itself does not increase transparency on process, would increase confidence that costs are efficiently incurred. • Would require licence changes.
Legal/complete Separation • Xoserve is legally/completely separated from transporters • Three ways of doing this. • Creation of wholly owned-transporter entity with separate board and framework (Elexon Model) • Creation of separate licence entity, appointed by tender by regulator (proposed DCC model). • Creation of organisation equally owned by all Transporter/Shipper licence holders (SPAA/MRA model). • Gives maximum transparency as ownership is effectively industry-wide. • Cannot be progressed in the UNC.