Draft Terms of Reference for Modifications Committee Working Group

January 2011

Background

Mod_24_10 Introducing loss of profits as a relevant damage within the Limitation of Liability Provisions was presented to the Committee on 29 July 2010 where it received a dissenting legal view from SEMO with regards the proposed change in the liability provisions, this is something that would significantly increase the risk profile for SEM and in turn the costs of running SEM and as being counter to the RAs policy to limit liability as is currently in the T&SC.

The Modifications Committee agreed at Meeting 29 on 29 July 2010 to defer the proposal under the advice from the RAs that a Modification Proposal addressing data errors was being developed for submission at the next Modifications Committee Meeting.

Mod_38_10 Treatment of Errors under the Code was presented by the RAs to the Committee at Meeting 31 on 30 September 2010. Concerns were raised by SEMO around the query timeline proposed and the necessity for an alternative query process given that there are provisions in the Code for raising queries. Questions were raised by Generator Members regarding the need for a provision to allow correction of data entries by the Market Operator.

As both Modification Proposals are related, the Committee felt that both proposals should be considered by a single Working Group.

Objectives

The objectives of the Working Group are:

To gain an understanding of the intention of the Modification Proposals;

To identify any short comings with the existing provisions in the Code regarding errors when inputting data;

To identify with whom responsibility for data entry lies;

To identify risks associated with potential misconduct of a central party in the Gross Mandatory Pool;

To provide an overview of the current rules for the DRB regarding the Limitation of Liability provisions;

Identify legal drafting changes that may enhance the proposals; and

Make a recommendation to the Modifications Committee.

Scope

The Working Group will:

Address issues raised by Mod_24_10 and Mod_38_10;

Consider both proposals and any changes necessary to the proposals;

Consider the impact of possible T&SC changes both in terms of the Central Market Systems and Participants’ systems; and

Determine a timetable for the completion of the agreed work in light of the resources required to achieve this undertaking.

Deliverables

Terms of Reference for first Working Group;

Working Group meeting on 16 February 2011;

Amendments, if required to the Modification Proposals; and A report to the Modifications Committee setting out the Working Group recommendations.

Stakeholders

Market Participants, Regulatory Authorities, Market Operator.

Roles and Responsibilities

Chair to direct the Working Group;

SEMO to identify (or estimate if appropriate) the impact of options on the CMS; and

Stakeholders to feed into the group - analysis of problem, opinion (including justification) and recommendations.

Resources

Independent Chair – to be confirmed;

SEMO Secretariat;

RAs;

SEMO;

Generators; and

Interested Parties from Industry.

Resources should ideally attend and participate in all scheduled meetings and carry out required preparation and follow up action on action items assigned.

Schedule

Proposed half day Working Group meeting on 16 February 2011. Any relevant outstanding issues will be discussed at the next Modifications Committee Meeting.

Working Group report recommendations to be presented to the Modifications Committee at Meeting 34 on 05 April 2011.

Risks and Restraints

There is a risk that the scope of the Working Group strays to wider participation issues which may not be associated with the terms of reference of the Working Group.

Mod_24_10 Introducing loss of profits as a relevant damage within the Limitation of Liability Provisions 17/01/2011

Mod_38_10 Treatment of Errors under the Code

Page 1	17/01/2011

Terms of Reference

Administrator

2011-01-06

sking

Eirgrid