4  Accruals and De-Accruals

4.1  Subject to paragraph 4.4 of Part 1 of this Payment Mechanism, where during the Contract Period the Authority requires the Service Provider to provide the Service to an increased or reduced number of units of Apparatus in accordance with Schedule 15 (Accrual and De-Accrual of Apparatus) the Monthly Unitary Charge shall be adjusted until the next Indexation Review Date by the sum calculated in accordance with the following formula:

Table 3: 'y' values for Accrual or De-Accruals

4.2  Where an Accrual or De-Accrual of Apparatus pursuant to Schedule 15 (Accrual and De-Accrual of Apparatus) is expected to cause an increase or decrease in aggregate electricity consumption by the Apparatus, the afc (as defined in paragraph 3.1) shall be varied by the addition or reduction of the forecast electricity consumption of each Accrued or De-Accrued unit of Apparatus (in kilowatt hours) calculated in accordance with the Balancing and Settlement Code Procedure 520 (or any successor procedure) to determine the energy consumption of un-metered Apparatus and the Burn Hours as appropriate to the use of such Apparatus.

4.3  The adjustment to the Monthly Unitary Charge shall take effect from the first day of the Month following the date on which the relevant Accrual and/or De-Accrual occurred.

4.4  Paragraphs 4.1 to 4.3 (inclusive) of Part 1 of this Payment Mechanism shall not apply:   

(a)  in respect of any inaccuracies identified from time to time between the number and types of Apparatus for which the Service Provider is responsible at the Service Commencement Date and the Inventory Reference Date, for which neither the Service Provider nor the Authority shall be compensated.  Provided that a single adjustment shall be made for each unit of Apparatus installed or removed by, or on behalf of, the Authority between the Inventory Reference Date and the Service Commencement Date, which shall be agreed between the Authority and the Service Provider as soon as reasonably practicable after the Service Commencement Date or determined pursuant to the Dispute Resolution Procedure, and for which the Service Provider or the Authority shall be compensated by an adjustment to the Monthly Unitary Charge in accordance with paragraph 4.1.  Such adjustment to be backdated, if necessary, to the Service Commencement Date;

(b)  to the extent that any Accrual or De-Accrual would result in the Service Provider either:

(i)  becoming responsible for units of Apparatus that require, or by reason of the condition of those units of Apparatus at the date on which it would Accrue would require Capital Expenditure to bring them into compliance with the Output Specification; or

(ii)  ceasing to be responsible for units of Apparatus that required Capital Expenditure yet to be expended by the Service Provider to bring them into compliance with the Output Specification,

and

(c)  to the extent that:

(i)  the net increase in the aggregate number of Apparatus which have been Accrued or De-Accrued in accordance with paragraphs 4.1 to 4.3 (inclusive) at any time since the Service Commencement Date is greater than [five per cent (5%)]7 of the total number of Apparatus as at the Service Commencement Date; or

(ii)  the net decrease in the aggregate number of Apparatus which have been Accrued or De-Accrued in accordance with paragraphs 4.1 to 4.3 (inclusive) at any time since the Service Commencement Date is greater than [two per cent (2%)]8 of the total number of Apparatus as at the Service Commencement Date,

provided that in the case of paragraph 4.4(c)(i), the parties may agree pursuant to the provisions of paragraph 1.14 of Schedule 15 (Accruals and De-Accruals) not to refer the matter to Schedule 16 (Change Protocol) but continue to apply the y values set out in Table 3 in paragraph 4.1 of Part 1 of this Payment Mechanism.

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7 Authority to insert appropriate percentage

8 Authority to insert appropriate percentage