19 th November 2018 Agenda 1. Introduction and Status Review 2. - - PowerPoint PPT Presentation

EBCC Presentation 19th November 2018

Agenda

1. Introduction and Status Review 2. Operational Update 3. 6 Month Operational Review 4. Focus for 2018/19 5. Security Review 6. Modification Update 7. Project Update 8. Any Other Business 9. Diary Planning

Operational Update

October 2018

Operational Update - October 2018

• Cash Collection 99.97%
• Rolling 12 Months 98.52%
• 1 Failure to Pay Invoice Notice issued
• No Cash Calls issued
• No Further Security Request Notices Issued
• No Failure to Pay Cash Call Notices issued

Cash Collection

This graph provides a breakdown of the monthly figures that were collected against target on payment due date.* All figures rounded to 2 decimal places 99.59% 99.48% 99.96% 99.99% 88.52% 99.99% 95.38% 99.98% 100.00% 99.57% 99.76% 99.97% 82% 84% 86% 88% 90% 92% 94% 96% 98% 100% 102% Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18

% Of Cash Collected

Monthly Breakdown Of Cash Collected At Payment Due Date

Target PDD Collected PDD Collected PDD

Year Cash Collection

The above graph is a yearly breakdown of cash collection against target on payment due date. The data is collated as a rolling 12 month figure.

98% 98% 98% 98% 98% 99.63% 99.51% 99.51% 99.51% 98.52% 95% 96% 97% 98% 99% 100% 2014 2015 2016 2017 2018

% Of Cash Collected

Yearly Cash Collection Targets Payment Due Date

Target PDD Collected PDD

Year Cash Calls position

17 25 31 40 41 5 10 15 20 25 30 35 40 45 2014 2015 2016 2017 2018

• No. Of Cash Calls

Yearly Total Of Cash Calls Issued

This Graph provides a yearly breakdown of cash calls issued.

Overview of Cash Calls process

• 41 Cash Calls have been issued in 2018, this figure is comparable to

2017

• 265 Users have been contacted during 2018 as a result of:-

– Instances where utilisation has increased above 75% to discuss remedial action. – Utilisation has increased above 100% due to the following reasons:-

• Genuine cash call but users have paid in additional funds

immediately to avoid cash call being issued prior to 3pm

• Provided missing CVA data
• Paid EBI or Amendment invoices early

6 Month Operational Review

April 2018 – October 2018

6 Month Operational Review

• Cash Collection figures have remained consistent over the last 6 months.
• Cash Call figures have remained significantly low since April 2018, this is due to the

continued pro-active engagement with users reaching 75% where Users have taken early remedial action by placing additional funds in the Cash Call account or increasing Security.

• Due to the high SAP prices in March, this has had an effect on the 12 month Rolling

Sap Price as a consequence we have seen an increase in Securities during the annual security renewals.

• 100% Letter of Credit Renewals in place prior to Expiry date.
• 2 New members have joined the Credit Risk Team
• The Credit Risk Team have supported 2 Customer Discovery Days providing

additional training on the Energy Balancing Process.

Focus for next 6 months

October 2018 – April 2019

Focus for next 6 months - Team

• Team re-organisation – Due to OLS 3 members of the Credit Risk team will

be leaving by the end of March 2019

• Mark Cockayne will be passing over responsibility to Palminder Sandhu to

Manage the Credit Risk Team over the next few months.

• Brendan Gill joins the Credit Risk team from today to replace Loraine

O’Shaughnessy and Sandra Dworkin who will be leaving at the end of March 2019.

• A full review of the Credit Risk Team is under review to look at process

improvements, and where synergies of roles can be merged.

• CICM Training across the team will continue
• Continue to Support Customer Discovery days

Energy Settlements and Credit Manager Mark Cockayne Credit Risk Lead EB Loraine O’Shaughnessy Credit Risk Lead (DSC) Sandra Dworkin Neutrality Finance Neutrality Accountant Rehana Begun Neutrality Finance Assistant Accountant Sheila Chauhan A/R Credit Risk Co-Ordinator TBC EB Security & Cash Call Process Credit Risk Co-ordinator Sharon McBride EB Credit Controller & Security Process Credit Risk Co-Ordinator Therese Siene Credit & Risk Business Process Administrator Farhan Haq EB Credit & Risk Business Process Administrator Liz Bennett Xoserve DSC Credit & Risk Co-Ordinator Monali Kale CDSP Credit & Risk Business Pocess Administrator Vacancy Credit Controller Credit & Risk Co-ordinator Sue Nunnington/ Nichola Dowding

Credit & Risk Management Team - Current

Business Process Manager (M2) Palminder Sandhu Credit Risk Lead (DSC & EB) (E1) Brendan Gill Neutrality Finance Neutrality Accountant (E1) Rehana Begun Credit & Risk Business Process Administrator (DS2) Sheila Chauhan Neutrality Finance Assistant (DS3) Jehanzeb Chohan EB Security & Cash Call Process Credit Risk Co-ordinator (DS3) Sharon McBride EB Credit Controller & Security Process Credit Risk Co-Ordinator (DS3) Therese Siene Credit & Risk Business Process Administrator (DS2) Farhan Haq EB Credit & Risk Business Process Administrator Liz Bennett (DS2) Xoserve DSC Credit & Risk Co-Ordinator (DS3) Monali Kale Credit Controller Credit Risk Co-Ordinator (DS3)) Nicola Dowding

Credit & Risk Management Team – April 19

Mark Cockayne (M3) Support EBCC

Focus for next 6 months - Operational

• Review the Winter Planning – Termination end to end process
• Continue customer visits and early engagement with new market

participants.

• Brexit – Review potential impacts to Financial Institutes
• EBCC Operational Pack – Review and update reporting mechanism
• Continue to embed Xoserve’s Strategy House,
• Full review of Energy Balancing Credit Rules
• Support System enhancements to Gemini
• Potential changes to internal A/R functionalities

Security Review

April 2018 – October 2018

Security Review

• Mod 587 - Seasonal energy balancing credit cover – 2 User’s have

taken this service since it was introduced only an increase of 1 since last review

• Letter of Credit Security has increased by £5.6m since April 2018.
• Deposit Deed Security has reduced by £1.7m since April 2018.
• The BBR changed August 2018, due to the increase interest is being

applied to Deposit Deed and Cash Call Accounts which is payable quarterly by the bank.

• 3 User admissions completed since April 2018
• 2 Voluntary discontinuances since April 2018

Security Update – November 2018

Period Letter of Credit Deposit Deed Deposit Deed FSR CC A/C Deposit Total Security held October 18 £286,830,200 £38,259,000 £510,000 £224,000 £325,323,700

Security held – November 2018

5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 CC A/C Deposit Deposit Deed FSR Letter of Credit Deposit Deed

Spread of Financial Exposure

£62,000,000 £25,605,000

£0.00 £20,000,000.00 £40,000,000.00 £60,000,000.00 £80,000,000.00 £100,000,000.00 £120,000,000.00 Aa3 (Moody's) AA- (S&P) A1 (Moody's) A+ (S&P) A2 (Moody's) A (S&P)

Aggregate Secured Limit by Rating Band- Letter of Credit

Secured Credit Limit

20 3 5 35 33 6

Spread of Financial Exposure

£62,000,000 £25,605,000

£0.00 £5,000,000.00 £10,000,000.00 £15,000,000.00 £20,000,000.00 £25,000,000.00 AA- (S&P) A+ (S&P) A2 (Moody's)

Aggregate Secured Credit Limit by Rating Band - Deposit Deed

Secured Credit Limit

1 5 94

Rating Comparison Table

Financial Insitute Moody's S&P Barclays Bank PLC A2 A BNP Paribas Aa3 A Citibank, N.A. A1 A+ Credit Agricole Corporate and Investment Bank A1 A+ DBS Bank Ltd. Aa1 AA- DNB Bank ASA Aa2 A+ DZ BANK AG Aa1 AA- HSBC Bank plc Aa3 AA- ING Bank N.V. Aa3 A+ JPMorgan Chase Bank, N.A. Aa1 A+ Landesbank Hessen-Thueringen GZ Aa3 A Lloyds Bank Plc Aa3 A+ Mizuho Bank, Ltd. A1 A MUFG Bank Ltd A1 A Natixis A1 A+ Nordea Bank AB Aa3 AA- Rabobank Aa3 A+ Royal Bank of Canada (London Branch) Aa2 AA- Santander UK PLC Aa3 A SEB Aa2 A+ Societe Generale A1 A Standard Chartered Bank A1 A Sumitomo Mitsui Banking Corporation A1 A Svenska Handelsbanken AB Aa2 AA-

Modification Update

Project Update

A.O.B

• 1. Voluntary Discontinuance

Diary Planning