Bulk Supply Charging Methodology

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الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
Bulk Supply Charging
Methodology

الهييه السعوديه لترطيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
مرجعيه هذه الوثيقه
في حال وجود اي استفسارات او ملاحظات فان المرجع فيها الي الاداره العامه للشؤون
الاقتصاديه والتعريفيه
economic@sera.gov.sa : البريد الالكتروني
00966112019000: هاتف:
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جدول ضبط النسخ
November 2022
Bulk Supply Charging Methodology
حقوق النسخ والنشر محفوظه للهييه السعوديه لتنظيم الكهرباء
Bulk Supply Charging Methodology
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الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
Table of Content
<table><tr><td>No</td><td>Title</td><td>Page No</td></tr><tr><td>1</td><td>Introduction</td><td>5</td></tr><tr><td>2</td><td>Costs to be Recovered</td><td>6</td></tr><tr><td>3</td><td>Responsibility for Paying BSC</td><td>7</td></tr><tr><td>4</td><td>Calculating BSCs</td><td>8</td></tr><tr><td></td><td>4.1 Estimating SRMC</td><td>8</td></tr><tr><td></td><td>4.2 Setting Charges to Signal SRMC</td><td>8</td></tr><tr><td></td><td>4.3 Converting SRMCs into BSCs</td><td>11</td></tr><tr><td></td><td>4.4 Within Year Adjustment Process</td><td>15</td></tr><tr><td></td><td>4.5 Determining End-of-Year Deficit Amount</td><td>16</td></tr><tr><td></td><td>4.6 Summary of Setting BSCs</td><td>16</td></tr><tr><td></td><td>4.7 Remuneration of Spilled Energy</td><td>16</td></tr><tr><td></td><td>4.8 Invoicing</td><td>16</td></tr><tr><td>5</td><td>Annex A: BSCs and SRMS Schedules</td><td>18</td></tr><tr><td>6</td><td>Annex B: Glossary and Abbreviations</td><td>19</td></tr><tr><td>7</td><td>Annex C: Possible Future Developments</td><td>21</td></tr></table>
List of Figures
<table><tr><td>No</td><td>Title</td><td>Page No</td></tr><tr><td>1</td><td>Figure 1: Monthly Demand Shape in January 2018 - Hourly and Pricing Block Averages</td><td>10</td></tr><tr><td>2</td><td>Figure 2: Monthly Demand Shape in July 2018 - Hourly and Pricing Block Averages</td><td>11</td></tr><tr><td>3</td><td>Figure 3: Illustration of Methodology to Set BSCs</td><td>14</td></tr><tr><td>4</td><td>Figure 4: Illustration of Process for Setting BSCs and the Key Deadlines</td><td>17</td></tr></table>
List of Tables
<table><tr><td>No</td><td>Title</td><td>Page No</td></tr><tr><td>1</td><td>Table 1: Mapping of Hours to Pricing Bands</td><td>9</td></tr><tr><td>2</td><td>Table 2: Date of Peak Demand (2013-17)</td><td>13</td></tr><tr><td>3</td><td>Table 3: Required Format for the Schedule of SRMC Charges</td><td>18</td></tr><tr><td>4</td><td>Table 4: Required Format for the Schedule of BSCs</td><td>18</td></tr></table>
Bulk Supply Charging Methodology
3

الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
1. Introduction
The Bulk Supply Charge (BSC) is a schedule of annual regulated charges to recover the costs incurred by the Principal Buyer (PB). Aside from recovering the costs incurred by the PB, the BSC also seeks to be cost reflective and should signal to customers how changes in the volume or timing of their consumption of electricity affect the PB's costs.
This document describes the bulk supply charging methodology, setting out the costs that the BSC are intended to recover, the responsibility for paying BSC, the way the BSC is calculated, and the process for setting the BSC.
2. Costs to be Recovered
Saudi Electricity Regulatory Authority (SERA) determines the PB's Allowed Revenue (AR) in Saudi Arabian Riyals (SAR) per year. The PB's AR is set to recover its electricity procurement costs, fuel costs and any other procurement costs. It also includes an allowance set by SERA to fund the PB's efficiently incurred operating costs, and any other costs or allowances that SERA decides may be recovered by the PB. The details for determining the AR are described in the Principal Buyer Revenue Requirement Determination Methodology document.
SERA determines the costs that may be recovered through BSCs (i.e. the BSC AR) as follows:
- Subtracting, fully or partially, any firm revenue to be earned by the PB from the sale of electricity through other commercial mechanisms besides the BSC, including, but not limited to, the revenue earned for electricity exported to other jurisdictions outside the Kingdom of Saudi Arabia;
- Subtracting any revenue to be earned by the PB from National Grid of Saudi Arabia (NG) in respect of the System Services Payment recovered by NG through the Annual Transmission Use of System Charge;
- Subtracting, fully or partially, any revenue to be earned by the PB from the provision of any other services; and
- Adding any deficit of revenues that is anticipated to occur by the end of a year on which previous BSCs were applied. More details are in Section 4.5.
Bulk Supply Charging Methodology
4

ال Estimates Hareket وتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
3. Responsibility for Paying BSC
The following customers will be responsible for paying BSCs, based on the hourly volume of electricity consumed, expressed in kilowatt-hours defined by each customer's Hourly BSC Quantity:
3-1 All retail companies: For this type of customer, the Hourly BSC Quantity will be determined by each customer's share of hourly metered quantity ("MQ") for electricity, summed across all Connection Points to NG's transmission system.
3-2 All transmission-connected customers with captive generation: This type of customer is allowed to wheel their excess energy from any site (export sites) \( ^{1} \) to their other sites (import sites). The Hourly BSC Quantity will be determined by each customer's share of hourly metered quantity (MQ) for electricity, summed across all Connection Points to NG's transmission system, after netting off any metered exports within the same hour to NG's transmission system (adjusted for allowed transmission loss factor determined by SERA):
\[
\text { Hourly BSC Quantity } = \operatorname{Max} \left\{\left[ \sum_ {\text { all import sites }} \mathrm{MQ} - \sum_ {\text { all export sites }} \mathrm{MQ} * (1 - \text { loss factor }) \right], 0 \right\}
\]
Any customer who is responsible for paying BSCs, is also responsible for paying the Annual TUoS charge, as described in the Transmission Use of System Charging Methodology document.
Customers liable to pay BSC shall prepare and submit their demand forecast to NG no later than 180 days before the start of each calendar year.
\( ^{1} \) Based on Transmission Use of System (TUoS) charging methodology.
Bulk Supply Charging Methodology
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ال Estimateseوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
4. Calculating BSCs
4-1 Estimating SRMC
While also recovering the remainder of the PB's AR, the BSC is also set to signal to customers how the cost of generating electricity varies over the course of the year. The BSC signals the cost of generating electricity using estimates of the Short Run Marginal Cost (SRMC) of electricity production in each hour of the year. SRMC is calculated in terms of SAR per kilowatt-hour.
The SRMC of production represents an estimate of the unit cost the PB would incur, in terms of the additional fuel and variable operating and maintenance costs, to serve marginally more demand for electricity. It therefore accounts for the fact that higher demands for electricity would:
- in the winter months – tend to be served by increasing production from relatively low marginal costs "baseload" or "mid-merit" generation plant; while
- in the peak summer months – tend to be served by increasing production from relatively higher marginal costs peaking plant.
The estimates of SRMCs shall be prepared by the PB, using production cost modelling tools for generation operation planning, to ensure the estimates reflect the costs that the PB incurs to accommodate changes in demand for electricity:
- It shall be calculated in a way which does not account for transmission system constraints which leads to locational variation in the marginal cost of electricity production;
- It shall be calculated in a way which uses the same assumptions on demand for electricity, capacity availability based on Committed Outage Program as described in the Grid Code, thermal efficiencies and other relevant technical operating parameters of the generation fleet, operating and maintenance cost, and fuel pricing as the PB uses for the purposes of system planning; and
- The modelling tools used by the PB for the purpose of estimating the SRMCs of production, as well as the data assumptions feeding into the model, shall be subject to review and approval by SERA.
Bulk Supply Charging Methodology
6

هييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
4-2 Setting Charges to Signal SRMC
The BSC calculation shall group hours of the year with similar estimated level of demand together for the purpose of setting charges. Specifically, the BSC calculation identifies 36 different pricing bands, which are intended to reflect the impact on SRMC from variation in demand between peak and off-peak hours of the day and across months of the year. Hence, the PB shall (for each month of the relevant year) compute the average of the estimated SRMCs (using the methods set out in Section 4.1) for those hours within each month that are classified as Peak Hours, Shoulder Hours and Off-peak Hours, following the definition shown below in Table 1.
Table 1: Mapping of Hours to Pricing Bands
<table><tr><td></td><td>Jan</td><td>Feb</td><td>Mar</td><td>Apr</td><td>May</td><td>June</td><td>July</td><td>Aug</td><td>Sept</td><td>Oct</td><td>Nov</td><td>Dec</td></tr><tr><td>00:00 - 01:00</td><td>Should er</td><td>Should der</td><td>Should der</td><td>Should der</td><td>Should er</td><td>Should er</td><td>Should der</td><td>Should der</td><td>Should er</td><td>Should er</td><td>Should der</td><td>Should der</td></tr><tr><td>01:00 - 02:00</td><td>Should er</td><td>Should der</td><td>Should der</td><td>Should der</td><td>Should er</td><td>Should er</td><td>Should der</td><td>Should der -</td><td>Should er</td><td>Should er</td><td>Should der</td><td>Should der</td></tr><tr><td>02:00 - 03:00</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Should der</td><td>Should er</td><td>Should er</td><td>Should der</td><td>Should der</td><td>Should er</td><td>Should er</td><td>Off- peak</td><td>Off- peak</td></tr><tr><td>03:00 - 04:00</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Should der</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Should er</td><td>Off- peak</td><td>Off- peak</td></tr><tr><td>04:00 - 05:00</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- Peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td></tr><tr><td>05:00 - 06:00</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>OFF- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td></tr><tr><td>06:00 - 07:00</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off-peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td></tr><tr><td>07:00 - 08:00</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>OFF- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td></tr><tr><td>08:00 - 09:00</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td><td>Shoul der</td><td>Shoul er</td><td>Shoul der</td><td>Shoul der</td><td>Shoul der</td><td>Off- peak</td><td>Off- peak</td><td>Off- peak</td></tr><tr><td>09:00 - 10:00</td><td>Shoul er</td><td>Shoul der</td><td>Shoul der</td><td>Shoul der</td><td>Shoul der</td><td>Shoul er</td><td>Shoul der</td><td>Shoul der</td><td>Shoul der</td><td>Shoul er</td><td>Shoul der</td><td>Shoul der</td></tr><tr><td>10:00 - 11:00</td><td>Shoul er</td><td>Shoul der</td><td>Shoul der</td><td>Shoul der</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Should er</td><td>Shoul der</td><td>Shoul der</td></tr><tr><td>11:00 - 12:00</td><td>Should er</td><td>Shoul der</td><td>Shoul der</td><td>Shoul der</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>P</td><td></td><td>Shoul er</td><td>Shoul der</td></tr><tr><td>12:00 - 13:00</td><td>Should er</td><td>Shoul der</td><td>Shoul der</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Shoul der</td><td>Shoul der</td></tr></table>
Bulk Supply Charging Methodology
7

[Non-Text]
الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
<table><tr><td>13:00 - 14:00</td><td>Should er</td><td>Should der</td><td>Should der</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Should der</td><td>Should der</td></tr><tr><td>14:00 - 15:00</td><td>Should er</td><td>Should der</td><td>Should der</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak &amp;</td><td>Peak</td><td>Peak</td><td>Should der</td><td>Should der</td><td>Should der</td></tr><tr><td>15:00 - 16:00</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td></td><td></td><td></td><td></td></tr><tr><td>16:00 - 17:00</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak &amp;</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td></tr><tr><td>17:00 - 18:00</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td></td><td></td><td></td><td></td></tr><tr><td>18:00 - 19:00</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak &amp;</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td></tr><tr><td>19:00 - 20:00</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td></td><td></td><td></td><td></td></tr><tr><td>20:00 - 21:00</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Shoul der</td><td>Shoul er</td><td>Shoul der</td><td>Shoul der</td><td>Shoul der</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td></tr><tr><td>21:00 - 22:00</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Shoul der</td><td>Shoul er</td><td>Shoul der</td><td rowspan="2">Shoul der</td><td rowspan="2">Shoul der</td><td rowspan="2">Peak</td><td rowspan="2">Peak</td><td rowspan="2">Peak</td><td rowspan="2">Peak</td></tr><tr><td>22:00 - 23:00</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Shoul der</td><td>Shoul er</td><td>Shoul der</td></tr><tr><td>23:00 - 00:00</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Shoul der</td><td>Shoul er</td><td>Shoul der</td><td>Shoul der</td><td>Shoul der</td><td>Peak</td><td>Peak</td><td>Peak</td><td>Peak</td></tr></table>
The PB shall provide SERA with SRMC calculation at least 60 days prior to the start of the upcoming calendar year for review and approval. Additionally, the PB shall provide SERA with a Schedule of SRMC Charges (in the format illustrated in Table 3 in Annex A).
Table 3 shows that the definitions of these pricing bands differ across seasons, in order to ensure that the pricing bands reflect the historically observed load shape in the Kingdom of Saudi Arabia. For instance, Figure 1 shows how average demand in January 2018 across all 24 hours of the day (the blue line) compares to average demand in each of the pricing bands (the orange line). The shapes of the two curves show a close correspondence, suggesting the definition of the pricing bands track systematic changes in demand within each day. Figure 2 shows the same illustration, but for July 2018. It shows that the summer peak occurs earlier in the day than the winter peak, and there is a pronounced off-peak period in the hours before sunrise. The BSC pricing bands correspond closely to these systematic demand shapes in both the summer and winter as shown in Table 4.
The pricing band approach assumes that the shape of demand is the primary driver of within-day variation in SRMC. However, as the electricity system transitions towards greater use of renewable energy, it is possible that intra-day patterns of solar energy production may cause
Bulk Supply Charging Methodology
8

العربيه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
the hourly shape of SRMCs to differ from the hourly shape of demand. As and when this change in the generation mix occurs, SERA may reconsider the definition of these hourly pricing bands when setting the BSC year-ahead.
Figure 1: Monthly Demand Shape in January 2018 - Hourly and Pricing Block Averages

Figure 2: Monthly Demand Shape in July 2018 - Hourly and Pricing Block Averages

4-3 Converting SRMCs into BSCs
Bulk Supply Charging Methodology
9

الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
In order to compute BSCs, NG shall prepare a forecast of hourly demand for each customer liable to pay BSC for the relevant calendar year, as defined in Section 3. NG shall provide the PB with final demand forecasts at least 90 days prior to the start of the upcoming calendar year for which the BSCs shall apply.
The PB shall then compute the total revenue that would result from charging the schedule of SRMC Charges (derived as set out in Section 4.2 and in the format shown in Table 3 in Annex A) to all customers responsible for paying BSC. The sum of revenues from all customers responsible for paying BSC defines the total annual SRMC Revenue in a particular year, as follows:
Annual SRMC Revenue = \( \Sigma_{hours, customers} \) [Applicable SRMC Charge x Customer Demand]
It may be that the expected total Annual SRMC Revenue will be less than or more than the BSC AR that the PB needs to recover from BSCs. Therefore, BSCs will need to be adjusted so the PB expects to recover its BSC AR. More specifically :
- If the expected total annual SRMC Revenue exceeds the BSC AR that the PB needs to recover, then the Schedule of SRMC charges will be proportionally reduced through a negative Cost Recovery Mark-up (defined in percentage terms) that applies to SRMC charges in all hours. The Negative Cost Recovery Mark-up shall be set so that the expected total annual SRMC Revenue equals the BSC AR that the PB needs to recover, as follows:
If BSC AR < Annual SRMC Revenue:
Cost Recovery Mark – up = BSC AR / SRMC Revenue ; and
Applicable Hourly BSC = Applicable Hourly SRMC Charge x Cost Recovery Mark – up
- If the expected total annual SRMC Revenue is less than the BSC AR that the PB needs to recover, then SRMC Charges shall be uplifted through a positive Cost Recovery Mark-up (defined in percentage terms) that applies in all hours during the summer months defined below. The Positive Cost Recovery Mark-up shall be set so that the expected total annual SRMC Revenue equals the BSC AR that the PB needs to recover. The Positive Cost Recovery Mark-up shall be zero in other months because the costs which are not associated with generating energy efficiently are likely to be associated with providing sufficient capacity to meet demand at peak time. Summer months are, for the purpose of this adjustment, defined to include May, June, July, August and September. Applying this mark-up over the summer months in this way reflects that the time of system peak may occur across any point in the summer period, as Table 2 shows. The Positive Cost Recovery Mark-up shall be applied as follows:
If BSC AR > Annual SRMC Revenue:
Bulk Supply Charging Methodology
10

[Non-Text]
الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
Cost Recovery Mark-up = 1 + (BSC AR - SRMC Revenue) / ∑ Customers, Summer Hours [Hourly SRMC Charge x Demand]
Applicable Hourly BSC (Summer) = Applicable Hourly SRMC Charge x Cost Recovery Mark-up
Applicable Hourly BSC (Winter) = Applicable Hourly SRMC Charge
Bulk Supply Charging Methodology
11

الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
Table 2: Date of Peak Demand (2013-17)
<table><tr><td>Rank</td><td>2013</td><td>2014</td><td>2015</td><td>2016</td><td>2017</td></tr><tr><td>1</td><td>18 Jul</td><td>31 Aug</td><td>30 Aug</td><td>27 Jun</td><td>22 Aug</td></tr><tr><td>2</td><td>18 Jul</td><td>31 Aug</td><td>31 Aug</td><td>27 Jun</td><td>22 Aug</td></tr><tr><td>3</td><td>16 Jul</td><td>02 Jul</td><td>30 Aug</td><td>30 Jun</td><td>21 Aug</td></tr><tr><td>4</td><td>18 Jul</td><td>01 Sep</td><td>23 Aug</td><td>28 Jun</td><td>15 Aug</td></tr><tr><td>5</td><td>03 Sep</td><td>25 Aug</td><td>01 Sep</td><td>28 Jun</td><td>23 Aug</td></tr><tr><td>6</td><td>11 Jul</td><td>02 Jul</td><td>23 Aug</td><td>29 Jun</td><td>20 Aug</td></tr><tr><td>7</td><td>17 Jul</td><td>26 Aug</td><td>31 Aug</td><td>30 Jun</td><td>23 Aug</td></tr><tr><td>8</td><td>18 Jul</td><td>01 Sep</td><td>30 Aug</td><td>29 Jun</td><td>21 Aug</td></tr><tr><td>9</td><td>20 Jul</td><td>25 Aug</td><td>31 Aug</td><td>28 Jun</td><td>20 Aug</td></tr><tr><td>10</td><td>17 Jul</td><td>24 Aug</td><td>24 Aug</td><td>29 Jun</td><td>22 Aug</td></tr><tr><td>11</td><td>10 Jul</td><td>25 Aug</td><td>27 Aug</td><td>26 Jun</td><td>06 Aug</td></tr><tr><td>12</td><td>03 Sep</td><td>24 Aug</td><td>24 Aug</td><td>26 Jun</td><td>14 Aug</td></tr><tr><td>13</td><td>21 Jul</td><td>26 Aug</td><td>01 Sep</td><td>27 Jun</td><td>21 Aug</td></tr><tr><td>14</td><td>11 Jul</td><td>01 Jul</td><td>26 Aug</td><td>07 Aug</td><td>14 Aug</td></tr><tr><td>15</td><td>17 Jul</td><td>31 Aug</td><td>27 Aug</td><td>26 Jun</td><td>15 Aug</td></tr><tr><td>16</td><td>16 Jul</td><td>02 Jul</td><td>26 Aug</td><td>27 Jun</td><td>13 Aug</td></tr><tr><td>17</td><td>16 Jul</td><td>26 Aug</td><td>25 Aug</td><td>28 Jun</td><td>23 Aug</td></tr><tr><td>18</td><td>10 Jul</td><td>02 Jul</td><td>25 Aug</td><td>29 Jun</td><td>15 Aug</td></tr><tr><td>19</td><td>13 Jul</td><td>24 Aug</td><td>23 Aug</td><td>23 Jul</td><td>16 Aug</td></tr><tr><td>20</td><td>04 Sep</td><td>28 Aug</td><td>01 Sep</td><td>26 Jun</td><td>13 Aug</td></tr></table>
The PB shall publish the results of this calculation as a Schedule of BSCs (in the format illustrated in Table 4 in Annex A) at least 30 days before the start of the calendar year in which the BSC will apply.
The methodology for setting BSCs is summarised in Figure 3.
Bulk Supply Charging Methodology
12

[Non-Text]
الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
Figure 3: Illustration of Methodology to Set BSCs

Bulk Supply Charging Methodology
13

[Non-Text]
الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
4-4 Within Year Adjustment Process
4.4.1 Mid-year Adjustment
This methodology provides for the possibility of applying a mid-year adjustment process to correct the following:
- Difference in Revenue: The difference between the forecasted revenues that should have been recovered and the actual revenues that were recovered through the published BSC for the period from January to May (inclusive) during the same relevant year.
- Difference in Cost: The difference between initially determined AR and the actual AR based on actual costs and demand for the period from January to May (inclusive) during the same relevant year.
The mid-year adjustment process works by updating the AR (calculated as set out above in Section 2) to reflect outturn costs, and subtracting the actual BSC revenues received during January-May (inclusive). It then subtracts the amount the PB currently expects to receive over the remainder of the year without any change to BSCs. The Mid-Year Adjustment in SAR is calculated as follows:
Mid – Year Adjustment Amount (SAR) =
{ Updated AR – Actual Revenues (Jan – May) – Expected Non – BSC Revenue (Jun – Dec) – ... £ Customers, June-Dec Hours [Hourly BSC x Updated Demand] }
In case the resulting Mid-Year Adjustment Amount represents less than -3% or more than +3% of the following expression:
Σ Customers, June-Dec Hours [Hourly BSC x Updated Demand]
Then, an adjustment to the BSCs must be applied. In such case, the PB shall adjust the BSC only for the third quarter of the relevant year in accordance with the following formula:
Adjusted Q3 BSCs
\[
\begin{array}{l} = \text { BSCs } x (1 + \text { Mid } - \text { Year Adjustment Amount } / " \Sigma \text { Customers,Jul } \\ - \text { Sept Hours" [Hourly BSC x Updated Demand] }) \end{array}
\]
In all cases, the mid-year adjustment of BSC must not lead to an increase in BSCs by more than 10%.
The PB shall adjust the BSC and publish the results of this adjustment no later than 15 June in each year. The adjusted BSCs shall apply from 1 July of the same calendar year.
4.4.2 Exceptional cases
Any time during the year, where a significant incremental costs relative to the initially determined BSC AR happened or expected to happen due to changes in fuel prices, unforeseen major incidents occur due to a NG's system event, or force majeure, the PB shall file a case to SERA providing the details of such cases and asking to adjust the BSC to recover such differences. Adjustments to the BSC shall be subject to review and approval by SERA.
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ال Estimates Hareket وتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
4-5 Determining End-of-Year Deficit Amount
The PB may calculate the deficit of revenues that is anticipated to occur by the end of a year for which the BSCs were applied and that may have not been captured by the within year adjustment process described in Section 4.4. The PB shall provide SERA with its forecast of the end of year deficit amount with all supporting documents at least 90 days before the start of the calendar year in which the BSC will be applied. Subject to SERA's approval, the PB is entitled to add this deficit amount to the cost to be recovered by next BSCs.
4-6 Summary of Setting BSCs
The process for setting BSC and the key deadlines are summarised in Figure 4.
4-7 Remuneration of Spilled Energy
As previously explained, any customer defined in Section 3 drawing power from the transmission system will pay (in respect of its share of metered consumption at Connection Points to NG's transmission system in the relevant hour) the BSC to the PB.
However, some customers with embedded generation may spill energy to the grid. The detail of remunerating such spilled energy is in accordance with rules and guidelines determined by SERA from time to time.
4-8 Invoicing
The PB shall invoice any customer which pays for his consumption at the BSC on a monthly basis. The PB shall send BSC invoices to customers for any given month within 30 days after the month end.
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الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SER
Figure 4: Illustration of Process for Setting BSCs and the Key Deadlines
<table><tr><td>Action</td><td>01 – Oct</td><td>01 - Nov</td><td>01 - Dec</td><td>01 - Jan</td><td>01 - Feb</td><td>01 - Mar</td><td>01 - Apr</td><td>01 - May</td><td>01 - Jun</td><td>15 - Jun</td><td>01 - Jul</td><td>01 - Aug</td><td>01 - Sep</td><td>01 - Oct</td><td>01 - Nov</td><td>01 - Dec</td></tr><tr><td>Deadline for NG to provide the PB with final demand forecast</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Deadline for the PB to provide WERA with end-of-year deficit amount</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
<table><tr><td>Deadline for the PB to provide WERA with SRMC calculation</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Deadline for the PB to publish BSCs for the following year</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
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الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
Annex A: BSCs and SRMS Schedules
Table 3: Required Format for the Schedule of SRMC Charges
<table><tr><td></td><td>Jan</td><td>Feb</td><td>Mar</td><td>Apr</td><td>May</td><td>Jun</td><td>Jul</td><td>Aug</td><td>Sept</td><td>Oct</td><td>Nov</td><td>Dec</td></tr><tr><td>Off-peak</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Shoulder</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Peak</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
Table 4: Required Format for the Schedule of BSCs
<table><tr><td></td><td>Jan</td><td>Feb</td><td>Mar</td><td>Apr</td><td>Ma</td><td>Jun</td><td>Jul</td><td>Aug</td><td>Sep</td><td>Oc</td><td>Nov</td><td>Dec</td></tr><tr><td></td><td></td><td></td><td></td><td></td><td>y</td><td></td><td></td><td></td><td>t</td><td>t</td><td></td><td></td></tr><tr><td>Off-peak</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Shoulder</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Peak</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>
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الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
Annex B: Glossary and Abbreviations
<table><tr><td>Term</td><td>Definition</td></tr><tr><td>Actual BSC Revenues</td><td>Actual revenue earned from sales of energy at BSC, accounting for billed consumption.</td></tr><tr><td>Adjusted Q3 BSCs</td><td>New BSCs to apply in Q3, following application of the Mid-Year Adjustment.</td></tr><tr><td>Annual SRMC Revenue</td><td>Calculated from multiplying SRMC Charges by Demand and summing across all hours of the year and all customers.</td></tr><tr><td>AR:</td><td>Allowed Revenue, as determined by SERA to cover PB&#x27;s costs.</td></tr><tr><td>BSC(s)</td><td>Bulk Supply Charge(s).</td></tr><tr><td>BSC A</td><td>The PB&#x27;s AR, less revenues from non-BSC sales and any other sources.</td></tr><tr><td>Connection Point</td><td>Has the meaning given in the Grid Code.</td></tr><tr><td>Cost Recovery Mark-up</td><td>An adjustment to SRMC Charges to ensure recovery through BSC of the PB&#x27;s BSC AR. This value may be positive or negative, depending whether Annual SRMC Revenue is below or above BSC AR.</td></tr><tr><td>SERA</td><td>Water and Electricity Regulatory Authority.</td></tr><tr><td>Hourly BSC Quantity</td><td>An amount in kilowatt-hours that defines each customer&#x27;s liability to pay BSCs in respect of their demands for electricity in a particular hour.</td></tr><tr><td>Loss Factor</td><td>Annual targeted energy losses in NG&#x27;s transmission system as allowed by SERA.</td></tr><tr><td>MQ</td><td>Metered Quantity, expressed in kWh</td></tr><tr><td>Mid-Year Adjustment</td><td>An adjustment factor applying to Q3 BSCs to keep costs in line with revenues, in light of new cost and revenue information available during June of each year.</td></tr><tr><td>NG</td><td>National Grid of Saudi Arabia</td></tr><tr><td>PB</td><td>Principal Buyer</td></tr><tr><td>SAR</td><td>Saudi Arabian Riyals</td></tr><tr><td>System Services Payment</td><td>A payment from NG to the PB, to procure required system services.</td></tr><tr><td>SRMC</td><td>Short Run Marginal Cost.</td></tr><tr><td>TUoS</td><td>Transmission Use of System.</td></tr><tr><td>Updated Demand</td><td>An updated estimate of demand for electricity made in June each year.</td></tr><tr><td>Updated AR</td><td>An updated estimate of AR made in June each year.</td></tr><tr><td>(Calendar) Year</td><td>Gregorian year, starting from \( 1^{st} \) January</td></tr></table>
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الهييه السعوديه لتنظيم الكهرباء
Saudi Electricity Regulatory Authority
SERA
Annex C: Possible Future Developments
It may be appropriate to make changes to the Bulk Supply Charging Methodology as the market evolves. As the electricity industry progresses towards the achievement of a competitive electricity market, further gradual, systematic modifications could be made. A clear example relates to the change in the energy mix as the electricity system transitions towards greater use of renewable energy. This will disturb the economic signal that BSC should send to customers on how changes in the volume or timing of their consumption of electricity affect the PB's costs. In this case, the current BSC methodology should be modified to account for these changes.
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