BSC Modification P507 Rejected, Alternative Approved
Summary
Ofgem has rejected BSC Modification P507 and approved the BSC P507 Alternative Modification. The decision concerns Grid Supply Point (GSP) Group Correction Scaling Weights used in electricity settlement calculations. The approved Alternative Modification reinstates pre-M10 scaling factors on a forward-looking basis from the implementation date of 5 May 2026, rather than backdating them to the M10 date of 22 September 2025 as P507 would have done. This regulatory decision was made to avoid retrospective application of rules in the Balancing and Settlement Code.
Energy suppliers participating in the Balancing and Settlement Code should verify whether their Half Hourly settlement processes and systems correctly applied post-M10 scaling weights between 22 September 2025 and 5 May 2026, as the forward-looking nature of this decision means that period's calculations remain unchanged. Suppliers with significant non-Migrated Extra High Voltage customer populations should assess whether the reinstated pre-M10 weights materially alter their settlement error exposure or reconciliation obligations.
What changed
Ofgem's decision rejects P507, which proposed backdating the reinstatement of legacy Half Hourly scaling factors to 22 September 2025 (the M10 implementation date), in favour of the Alternative Modification which provides a forward-looking reinstatement from 5 May 2026. The decision was made to avoid retrospective application of regulatory rules.\n\nElectricity suppliers, particularly those with non-Migrated Extra High Voltage customers, should note that GSP Group Correction Scaling Weights will revert to pre-M10 values from 5 May 2026. Suppliers who raised concerns about disproportionate impacts from non-zero scaling weights under the new MHHS arrangements should monitor how this change affects their settlement positions and compliance obligations under the Balancing and Settlement Code.
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Apr 21, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
P507 Balancing and Settlement Code (BSC) proposed changes
Publication type: Code modification Publication date:
21 April 2026
Topic: Electricity supply, Energy codes Subtopic: Market-wide half-hourly settlement (MHHS), Balancing and settlement code (BSC) Print this page
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- Outcome of proposed changes to Balancing and Settlement Code, P507 Reverting the legacy Half Hourly scaling factors in Market Domain Data to the pre-M10 values.
Details of outcome
We have decided to reject BSC Modification P507 and approve the BSC P507 Alternative Modification. Implementation of P507 would, on balance, not better facilitate the achievement of the applicable objectives of the BSC. Implementation of the P507 Alternative Modification would, on balance, be likely to better facilitate the achievement of the applicable objectives of the BSC.
Start date
The implementation date for the BSC P507 Alternative Modification is 5 May 2026.
Code modification description
The implementation of Market-Wide Half Hourly Settlement (MHHS) on 22 September 2025 (MHHS Milestone M10, or ‘M10’) led to a significant change in Grid Supply Point (GSP) Group Correction Scaling Weights (or Scaling Factors). GSP Group Correction is not applied uniformly to all customer types because they are not all judged to contribute equally to errors in settlement. Since M10, however, concerns have been raised by some suppliers that:
- the new approach does not sufficiently require the Scaling Weight for each group of customers to take into account the size of that customer group and the extent to which errors in its consumption are correlated with broader market error
- the impact of applying non-zero scaling weights to non-Migrated Extra High Voltage customers is disproportionate P507 and the Alternative Modification proposed to reinstate the pre-M10 GSP Group Correction Scaling Weights for all non-migrated Half Hourly (HH) customers. Under P507, this reinstatement would be backdated to the M10 date of 22 September 2025. Under the Alternative Modification the reinstatement would be forward-looking from the date of implementation one month after the Authority’s decision.
On 15 December 2025, we granted urgency - consistent with our published guidance - on the basis that the proposal was linked to an issue that may cause a significant commercial impact on parties and consumers if not urgently addressed. At the BSC Panel meeting on 19 January 2026, the BSC Panel considered that both P507 and the Alternative Modification would better facilitate Applicable BSC Objectives (c) and (d) but that P507 was better than the Alternative Modification. The BSC Panel therefore unanimously recommended approval of P507 and rejection of the Alternative Modification. We have decided to approve the Alternative Modification and reject P507 in order to avoid the retrospective application of regulatory rules. The Alternative Modification shall be implemented one month after this decision.
Documents
Balancing and Settlement Code (BSC) P507: Reverting the legacy Half Hourly scaling factors in Market Domain Data to the pre-M10 values [PDF, 265.81KB] Print this page
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