P507 Balancing and Settlement Code (BSC) proposed changes

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.