BALANCING - Snam · 2020-02-29 · Network Code Balancing 9 - 3 9 1) INTRODUCTION This chapter describes the methods used to administer the balancing regime, which aims to ensure

Network Code Balancing

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BALANCING

1) INTRODUCTION ......................................................................................................................................... 2

1.1) METHODS FOR DETERMINING THE ESTIMATIONS TO BE PUBLISHED ......................................................... 6 1.1.1) Other information concerning injection and re-delivery flows ..................................................... 8

1.2) COMMUNICATION OF INFORMATION TO THE SHIPPERS IN ACCORDANCE WITH ART. 32, PARAGRAPH 3 OF

REGULATION 312/2014 ........................................................................................................................................ 8 1.3) COMMUNICATION OF INFORMATION ON THE COSTS AND REVENUES OF THE BALANCING ACTIVITIES IN

ACCORDANCE WITH ART. 29 OF REGULATION 312/2014 ...................................................................................... 9 1.3.1) Communication of information pursuant to article 11 of the TIB ................................................. 9

2) PHYSICAL BALANCING ......................................................................................................................... 10

2.1) GAS EXCESS EMERGENCY ..................................................................................................................... 10 2.2) GAS SHORTAGE EMERGENCY ................................................................................................................ 11 2.3) RESPONSIBILITY .................................................................................................................................... 11

3) COMMERCIAL BALANCING ................................................................................................................ 11

3.1) TRANSPORTED GAS ACCOUNTING ......................................................................................................... 11 3.1.1) Network balance equation ........................................................................................................... 12 3.1.2) Shipper’s balance equation ......................................................................................................... 14 3.1.3) Transporter’s balance equation .................................................................................................. 17

3.2) “LOCALISED” GAS LOSSES..................................................................................................................... 18 3.2.1) Gas losses restoration ................................................................................................................. 18 3.2.2) Impact on the balance equation of the individual Shipper .......................................................... 19 3.2.3) Procedure for the calculation of gas losses ................................................................................. 19

3.3) DELIVERY AND REDELIVERY BALANCING ............................................................................................. 19 3.3.1) Calculation in energy units.......................................................................................................... 20 3.3.2) Measurement of network line-pack variation .............................................................................. 20

4) BALANCING SESSION ............................................................................................................................ 20

4.1) PROVISIONAL TRANSPORTATION BALANCE ........................................................................................... 21 4.2) DEFINITIVE TRANSPORTATION BALANCE .............................................................................................. 22 4.3) ALLOCATIONS ....................................................................................................................................... 23

4.3.1) Allocation rules at NN Entry Points ............................................................................................ 23 4.3.2) Allocation rules at NN Exit Points............................................................................................... 25 4.3.3) Allocation rules at Redelivery Points for Final Customers that are directly connected to the

transmission network .................................................................................................................................... 26 4.3.4) The allocation process at Redelivery Points connected to distribution networks ........................ 27 4.3.4.1) Allocation process for the provisional transportation balance ................................................... 27 4.3.4.2) Allocation process for the definitive transportation balance....................................................... 29

4.4) DAILY BALANCING CHARGES ................................................................................................................ 32 4.4.1) Imbalance Price........................................................................................................................... 32 4.4.2) Imbalance charges ....................................................................................................................... 34 4.4.3) Capacity overrun charges ........................................................................................................... 34 4.4.4) Exemption from capacity overrun charges .................................................................................. 37 4.4.5) Charge for lack of availability of locational STSP products by the Shipper ............................... 38

4.5) CHARGE PURSUANT TO ARTICLE 15.3.2 OF RESOLUTION 137/02 .......................................................... 38

5) ADJUSTMENT SESSIONS * .................................................................................................................... 38

5.1) DETERMINATION OF THE PHYSICAL DAILY ITEMS OF ADJUSTMENT ....................................................... 39 5.1.1) Points of Entry/Exit ..................................................................................................................... 40 5.1.2) Points of Re-delivery at the premises of the End Customers directly connected to the

Transmission network ................................................................................................................................... 40 5.1.3) Points of Re-delivery interconnected with distribution networks ................................................ 40 5.1.4) Missing or incomplete availability of data and information at the Re-delivery Points

interconnected with distribution networks .................................................................................................... 41 5.2) DETERMINATION OF THE ECONOMIC ITEMS OF ADJUSTMENT ................................................................ 41


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6) ‘PORTALE M-GAS’ .................................................................................................................................. 41

7) TEMPORARY PROVISIONS ................................................................................................................... 43

7.1) PROVISIONS GOVERNING THE ALLOCATION PROCESS AT THE REDELIVERY POINTS AND THE ADJUSTMENT

ACTIVITIES UP UNTIL DECEMBER 2012 ............................................................................................................... 43 7.2) PROVISIONS REGARDING ADJUSTMENTS TO THE MEASUREMENT AND ALLOCATION .............................. 45 7.3) PROVISIONS WITH REGARD TO LATE ADJUSTMENTS PURSUANT TO RESOLUTIONS ARG/GAS 182/09 AND

ARG/GAS 70/10 ................................................................................................................................................. 46 7.3.1) Determination of the physical item reconciliation ...................................................................... 46 7.3.2) Determination of correction and compensation charges ............................................................. 47

8) PROVISIONS FOR PREVIOUS ADJUSTMENT SESSIONS IN ACCORDANCE WITH

RESOLUTION 670/17 ......................................................................................................................................... 48

8.1) DETERMINATION OF THE PHYSICAL ADJUSTMENT ITEMS FOR THE PREVIOUS ADJUSTMENT SESSIONS .. 50 8.1.1) Entry/Exit points .......................................................................................................................... 51 8.1.2) Redelivery points for End Customers directly connected to the transmission network ............... 51 8.1.3) Redelivery points interconnected with distribution networks ...................................................... 51

8.2) DETERMINATION OF THE ECONOMIC ADJUSTMENT ITEMS FOR THE PREVIOUS ADJUSTMENT SESSIONS. 52 8.3) COMMUNICATION TO THE SHIPPERS IN ACCORDANCE WITH RESOLUTION 670/17 ................................. 54 8.4) SPECIAL PROVISIONS FOR DETERMINING THE MULTIANNUAL PREVIOUS ADJUSTMENT SESSION, PERIOD

2013-2016 ......................................................................................................................................................... 54


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1) INTRODUCTION

This chapter describes the methods used to administer the balancing regime, which aims to ensure that Snam Rete Gas’ network is operated in a safe and orderly manner and that costs are allocated correctly among Shippers. General principles of the balancing system Balancing is a key concept for the operation of the gas system: it is managed to reflect the real needs of the system taking into account the resources available to the Balancing Operator and it incentivises Shippers to balance the quantities of gas they inject into and withdraw from the network in an efficient manner. Shippers are responsible for balancing the quantities of gas they inject into and withdraw from the network in order to minimise any need for balancing actions by the Balancing Operator. Balancing has a two-fold meaning: physical balancing of the system, meaning the series of activities by which the

Transporter, via its Dispatching Centre, controls in real time the transportation flow parameters (such as gas flow and pressure) to ensure that, at any moment, gas is moved from injection to withdrawal points, safely and efficiently;

commercial balancing, meaning the set of actions by which Shippers balance the

quantities of gas they inject into and withdraw from the network, as well as all the activities necessary for the correct accounting and allocating of transported gas, and the financial charging system that motivates Shippers to maintain the balance between the quantities of gas injected and withdrawn.

Article 8.6 of the Legislative Decree defines the functions of the Transporter with respect to the physical balancing of the network: the Transporter is responsible for the correct technical operation of the network and for meeting the transportation requirements of the Shippers. The Transporter does not, however, own gas nor does it control quantities made available by Shippers at Entry Points, or withdrawn by Shippers at Redelivery Points: therefore, the Shipper is responsible for the balance between what it injects and withdraws, motivated through an appropriate charge system, to balance its injections and withdrawals. The Shipper, in compliance with Articles 21.3 (incompatibility of transportation and sales activities), 12.8 and 18.4 (modulation storage service as a responsibility of gas sellers) of the Legislative Decree, is also responsible for providing its own Final Customers with gas and the associated modulation they request and for the acquisition, from storage and transportation operators, of the capacity required to meet the demand of its customer portfolio. Without prejudice to the responsibility of Shippers to balance their positions regarding the quantity of gas injected into and withdrawn from the network, if Snam Rete Gas, in its capacity as Balancing Operator, feels that the action taken by the Shippers is not


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sufficient to balance the system, Snam Rete Gas will balance the system by taking non-discriminatory balancing actions aimed at maintaining the System within its operating limits and restoring a correct pressure level on the transmission network in line with the economic and efficient operation of the network itself. In particular, in accordance with Regulation 312/2014, art. 6, Snam Rete Gas can take balancing actions by: buying and selling short-term standardised products (STSP)1 with delivery on Gas

Day G or the next Gas Day G+1; using balancing services.

The actions indicated above are taken in the following order of priority:

1. Purchase and sale of short-term standardised products at the balancing market platform. To this aim, the Transporter gives priority to the use of products with delivery on the same Gas day: giving priority to title type STSP products; using locational STSP products. The Transporter uses this product when, to keep

the transmission network within its operating limits, changes to the gas flows are necessary at given Entry/Exit Points of the network and/or starting from a given time on the Gas day. If recourse is made to this kind of product the Transporter informs GME and publishes the request on its Internet site as soon as it sees the need and with an advance of at least two hours or with a lesser advance if necessary. The communication contains:

the Entry and/or Exit Point or Points where the programmed flows need to be modified;

the starting time for the requested flow modification; the temporal timeframe for the offer selection session, according to the

procedures agreed with the GME; the indication of whether the offer is or is not suitable to manage physical needs

encountered on the Transporter's network. 2. Balancing services. Balancing services are services supplied to the Transporter on the

basis of a gas supply contract, aimed at offsetting the short-term fluctuation in the demand or supply of gas if the short-term standardised products cannot adequately balance the system. This service is therefore only used if the STSP products are not or will not be able to provide the effect necessary to maintain the network within its operating limits or if there is no market liquidity. To this aim, the use of these services is based in particular on assessments of the reaction times of the balancing services with respect to those of the STSP products available, the estimated cost of the purchase and the use of the balancing services and the effect that their purchase and use may have on the procurement of balancing resources at the balancing market platform. If during the Gas Day balancing services are required the Balancing Operator informs the Authority. In accordance with the same Regulation 312/2014 and the TIB, the balancing services are purchased in accordance with market criteria through a transparent and non-discriminatory public tender procedure. The Transporter arranges and publishes on

1 Indicated in Regulation 312/2014, art. 7. N.B. Due to the characteristics of the Italian system, Snam Rete Gas does not use short-term standardised products other than title and locational products.


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its Internet site following approval by the Authority, the procedures concerning methods and conditions to access these services, including, if foreseen, the impact on the Unbalancing Price as detailed in the subsequent paragraph 4, as well as the tender procedure. Once approved, the above procedures constitute an attachment to the Network Code.

In order that within the Gas Day the shipping network is kept within its operating limits, the Transporter performs the actions as described in the subsequent paragraph 2. In assessing the balancing actions to be taken, Snam Rete Gas takes account of: - the withdrawals from the transmission network during and at the end of the Gas day

in relation to which, any balancing actions are assessed; - latest data on:

i. the quantities confirmed by the Shippers within the scope of the process for programming and reformulating the daily transportation programme indicated in Chapter 8, paragraphs 6.6 and 6.7;

ii. the quantities allocated; iii. the gas flows measured;

- the pressure level on the transmission network; - the level of the linepack on the network. For the procurement of short-term standardised products (STSP)2, the Balancing Operator uses the market platform provided and managed by the GME (MGAS Platform3). In order to regulate the physical flows, when different compared to the overall programmed quantities at the Stogit Storage hub even pursuant to the subsequent paragraph 2, the Balancing Operator uses the market platform provided and managed by the GME. To this end the Shipper can offer the Balancing Operator within the context of the GME Platform, the quantities of gas of its own storage resources within the maximum limit set and communicated by the Stogit Storage Company.4 During the course of Gas Day G+1, Snam Rete Gas informs GME of the value of the term SopT relative to the previous Gas Day, along with the corresponding offer price for the purpose of the selection of the quantities of gas made available by the Shippers at the Stogit storage hub within the context of the session of negotiation of the stored gas at the GME Platform. The price of the offer of the Balancing Operator for the quantities of gas stored at the GME Platform shall be defined by a special procedure and forwarded to the Authority.

2 Indicated in Regulation 312/2014, art. 7. N.B. Due to the characteristics of the Italian system, Snam Rete Gas does not use short-term standardised products other than title and locational products. 3 as well as the Platform for the negotiation of locational products and the sale of stored gas made available and managed by the GME, during the transitional operation period of the markets detailed in resolution 312/16, paragraph 2.1. 4 as well as in compliance with its own purchase limitations restricted to the transitional market operation period as detailed in resolution 312/16. By purchase limit we here refer to the difference between the MEPSuk and EPSuk terms pursuant to Chapter 5, paragraphs 1.4.1. and 1.4.3. that fall under the Shipper's area of competence.


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Information on the System status and information for Shippers

For the purpose of balancing of Shippers’ position, the Transporter, in its capacity as Balancing Operator, publishes every day on his website:

- information on the System status with reference to the same Gas Day G and the following ones, as described in paragraph 1.1 below;

- using a special function, information on injections and withdrawals as described in paragraph 1.2 below.

The Transporter makes available more information based on the trend of the operating flows at the Significant Points indicated in Regulation 715/2009 and line-pack variations on an hourly basis.

In addition, Snam Rete Gas: - Adjusts the economic items with the Shipper to cover the latter party’s imbalance; - Organises and manages the guarantee system covering the system’s exposure to the

Shipper. Finally, Snam Rete Gas sends GME the list of Shippers authorised to operate at the MGAS Platform together with the information enabling the GME to select offers of short-term standardised products at this platform.

1.1) Methods for determining the estimations to be published

Pursuant to Article 6 of Resolution 137/02, and in application of Regulation 312/2014, starting from the beginning of each Gas Day G, the Transporter will publish on its website and update once an hour5 until the end of this Gas day information relating to:

1. the estimation of the Expected System Imbalance at the end of the Gas Day G;

2. the estimation of the value expected for the energy present on the network (linepack) at the end of Gas Day G.

3. the estimation of possible overruns between schedules at Entry Points and Exit

Points interconnected with foreign import pipelines, with regasification terminals and the quantities expected in delivery or redelivery at the same points at the end of the Gas Day G;

4. the estimated quantities of gas expected for redelivery on Gas Day G and on Gas Day

G+1 and G+2 relating to:

the interconnection complex with other transmission networks and Redelivery Points interconnected with distribution networks,

the Redelivery complex which supplies the Final Customer directly connected to the transmission network of Snam Rete Gas.

In order to estimate the parameters referred to in points 1), 3) and 4), the Transporter, considers the following information:

5 until 30 September 2016, on an hourly basis only for the 10.00 – 22.00 period.


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a) the predicted quantities of gas injected into the System on the Gas Day at the Entry Points from national natural gas fields and biomethane production plants and the Entry Points interconnected with foreign pipelines and LNG terminals, taking into account the information provided by the interconnected operators;

b) programming by Shippers and the Transporter of gas quantities in delivery and redelivery on the Gas Day;

c) the predicted quantities of gas for redelivery on Gas Day, determined with forecasting systems of the demand used at the Dispatch Centre and described in Chapter 2, taking into account any information received by Terna.

The estimation of the Expected System Imbalance at the end of Gas Day G referred to in point 1) is determined as the difference between the total quantity of gas, expressed in energy units, expected to be injected in the transmission network for Gas Day G and withdrawn from the Points interconnected with the storage hubs and foreign pipelines, on the basis of the latest information (programmes) communicated in accordance with Chapter 8 by all the Shippers and the Transporter and the quantity of gas, expressed in energy units, expected to be withdrawn by all Shippers on Gas Day G calculated using the demand forecasting systems used in the Dispatch centre at the Redelivery Points indicated in paragraph 4). For the purpose of establishing the Imbalance terms foreseen by the System, one also considers the quantities of gas handled by the Transporter, including the variation to the programmed linepack. The estimated linepack value pursuant to point 2 is established by excluding any quantities required by the Storage Companies described under the subsequent paragraph 2. The estimation of the overruns referred to in point 3) is determined as the difference between the forecasts of the quantities in delivery as referred to in point a) and the sum of the schedules carried out by the Shipper at the Entry Points interconnected with foreign import pipelines and LNG terminals. The estimation of the quantities referred to in point 4) is determined using the methods published on the Transporter’s website. Pursuant to TIB paragraph 11.2, Snam Rete Gas, as Balancing Operator, shall also publish on its website, by 9.00 on each Gas Day G, the expected value of the linepack at the end of the same Gas day according to the Transporter's program. Furthermore, in accordance with Resolution ARG/gas 45/11 and in application of Regulation 312/2014, Snam Rete Gas in its capacity as Balancing Operator, based on the information received from the Storage Companies with reference to Gas Day G and G+1, publishes on its website on Gas Day G-1:

a) total withdrawal/injection capacity allocated to transport companies for the balancing of the network;

b) total withdrawal/injection capacity allocated to storage service users (adjusted based on the adjustment factors referred to in the Storage Code), net of the capacity referred to in letter a) above;


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c) total withdrawal/injection capacity referred to in letter a) subject to booking by transport companies on the basis of the latest formulation of storage capacity booking;

d) total withdrawal/injection capacity referred to in letter b) subject to booking by storage users based on the latest formulation of storage capacity booking;

e) the estimation of the Expected System Imbalance for the next Gas Day G and G+1 determined as described previously.

1.1.1) Other information concerning injection and re-delivery flows

Pursuant to the RQTG, the Transporter shall publish on its website: by the 15th day (or the previous working day if Saturday or holiday) in month M-

1, an estimate for each month M, of the volumes to be injected and in redelivery with weekly details for each point of the transmission network;

by the end of the second business day of the previous week for each week, a weekly estimate of the volumes to be injected and in redelivery with daily details for each point of the transmission network.

These values shall be determined on the basis of the quantities programmed by the Shippers within the planning pursuant to Chapter 8.

1.2) Communication of information to the Shippers in accordance with art. 32, paragraph

3 of Regulation 312/2014 Starting from the beginning of the Thermal Year 2015-2016, together with the above, Snam Rete Gas, through its information systems, publishes every day the information indicated in Chapter VIII, article 32, paragraph 3, of Regulation 312/2014, in accordance with the methods and terms indicated here below:

- before 1 p.m. on each Gas Day G, the Transporter provides Shippers that hold capacity at Points with Non-Daily measurements with the forecasts for the withdrawals, for each of their Points, at the end of the next Gas Day (Gas Day G+1). These forecasts are determined, for each Shipper, on the basis of the standard withdrawal profiles established by the TISG and, in the presence of more than one Shipper on the Point, applying the allocation rules indicated in paragraph 4.3 below. In accordance with Regulation 312/2014, Points with Non-Daily measurements are intended to mean the Points on the transmission network at which the quantities of gas are detected and measured less than once per Gas Day;

- before 2 p.m. on each Gas Day G, the Transporter provides: a) Shippers holding capacity at Points with Non-Daily measurements with the

forecasts of the withdrawals, for each of their Points, at the end of Gas Day G. These forecasts are determined using the same methods as those described in the previous paragraph and on the basis of the latest available information;

b) Shippers holding capacity at Points with Intraday measurements with the measurements of the injection and withdrawal operations, for each Point, for the period between 6 a.m. and 12.p.m. on Gas Day G, in the presence of more than one Shipper on the Point, applying the allocation rules indicated in paragraph 4.3 below. In accordance with Regulation 312/2014, Points with Intraday measurements are intended to mean Points on the transmission


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network at which the quantities of gas are detected and measured at least twice per Gas Day;

- before 6 p.m. on Gas Day G, the Transporter provides: c) Shippers holding capacity at Points with Non-Daily measurements with an

update of the forecasts indicated under letter a) above for their withdrawals; d) Shippers holding capacity at Points with Intraday measurements with the

measurements of their injections and withdrawals for the period between 6 a.m. and 4 p.m. on Gas Day G, in the presence of more than one Shipper at the Point, applying the allocation rules indicated in paragraph 4.3 below.

For Points with Intraday measurements: i) at which the quantity of gas allocated to each Shipper is equivalent to the quantity

booked during the programming/reformulating process indicated in paragraph 6 of Chapter 8, in place of the aforesaid measurements, Snam Rete Gas provides the Shippers holding capacity at these Points with the last confirmed quantity for Gas Day G;

ii) if measurements are not received in time to make the information available within the times indicated in letters b) and d) above, Snam Rete Gas will provide the Shippers with an estimate of the quantities they have injected/withdrawn on the basis of the latest measurement information available.

With regard to the information and data published as indicated in paragraphs 1.1 and 1.2, Snam Rete Gas exclusively ensures that the information and data is made available to Shippers in such a way as to allow non-discriminatory access under conditions of normal use. Snam Rete Gas therefore does not assume any responsibility to Shippers or to any third party in relation to the accuracy of the information and the forecast data published.

1.3) Communication of information on the costs and revenues of the balancing activities

in accordance with art. 29 of Regulation 312/2014 In accordance with Regulation 312/2014, Snam Rete Gas publishes on its website: a) during each month, with reference to the month before the previous month, the costs

and revenues resulting from the application of the imbalance charges indicated in this Chapter 9, paragraph 4.4.2;

b) during each month, with reference to the month before the previous month, the total cost and revenue resulting from the application of the balancing actions; and

c) at the start of each Thermal Year, with reference to the previous Thermal Year, the information on the costs, frequency and quantity of balancing actions taken and information on the balancing services purchased and related costs borne.

1.3.1) Communication of information pursuant to article 11 of the TIB

Pursuant to the TIB, article 11, Snam Rete Gas shall publish on its Internet website: - on a daily basis, the value taken on by the terms of the Transporter's balancing equation 𝑆𝑇, 𝛥𝐿𝑃𝑐 and, in aggregate form, of the C, PE and GNC quantities, updating them subsequent to the publication of the final transportation balance.

- on a quarterly basis, the values produced by the application of the performance

indicators found in the TIB, article 9, along with the economic value of the


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relative Ik incentives providing the daily and monthly detail, with reference to the quarter for which a final balance is available as detailed by subsequent paragraph 4.

2) PHYSICAL BALANCING In compliance with Article 8.6 of Legislative Decree 164/00, the Transporter controls the gas flows and all ancillary services necessary for the operation of the pipeline system, including correct network setup and the physical balancing of the system. In order to keep the overruns between injections and withdrawals (which occur every Gas Day, also by effect of unforecast weather conditions) within the System’s operating limits, the Balancing Operator: - operates using the instruments and in the order of priority indicated in Regulation

312/2014 described in paragraph 1 above, in order to pursue a balance between injections and withdrawals at the end of the Gas Day;

- uses storage capacity available at the storage company for hourly modulation with a view to managing the injection and withdrawal profile of the Gas Day. In addition, the company uses the storage capacity available at the storage company for the operational management of its gas volumes (such as consumption, leaks, GNC and line-pack), programming it within the terms of the previous Chapter 8;

- may request that each Gas Day G, for the same Gas Day, the Storage Company modify the physical flows compared to the aggregate value of the storage programs carried out pursuant to the previous Chapter 8, while complying with the overall programming constraints foreseen by the Storage Company.6

In order to ensure the physical balancing of the network on the Gas Day, when withdrawals exceed injections and the instruments indicated above have been used up, the Transporter takes the emergency measures laid down by the Ministry of Economic Development. In this case, the Transporter gains access to the strategic reserve of the Storage Companies.

Two cases of physical balancing in emergency conditions are now described. They deserve a specific mention, given the specificity of their nature.

2.1) Gas excess emergency If the overrun between withdrawals and injections on the Gas Day is such that it increases the pressure on the transmission network to a level that is not compatible with the System’s operating limits and its safe management, the Transporter, having performed the following balancing operations described above and assessed the System’s limits - insofar as the measures above are not available and/or sufficient – will reduce the programmed quantities at one or more Entry Points interconnected with foreign import pipelines, selecting them on the basis of priority criteria. These are related to operational conditions like but not limited to pressures approaching values close to safety limits, within the area supplied by the same Entry Point: if the operational conditions are such that no priority criteria is dictated, Snam Rete Gas will reduce proportionally all quantities programmed by Shippers, at all Entry Points

6 Stogit, where the TSO has its storage contract.


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interconnected with foreign import pipelines, with the exception of Shippers who withdraw natural gas only for transport across national territory in order to export it. The Transporter will determine the minimum reduction of daily quantity that is globally necessary for the relevant Gas Day at the selected Entry Points of the National Network selecting and applying an equal reduction percentage of the effective withdrawals of each Shipper. In accordance with the Network Code, each Shipper delegates the Transporter with the responsibility of communicating such reductions to foreign Transportation Companies, inter connected upstream of the Transporter’s network. When this situation occurs, Snam Rete Gas will not apply any balancing charge, when calculating the balance for each affected Shipper, in case of gas excess emergency.

2.2) Gas shortage emergency In the case of gas shortage emergency situations, which prejudice the safe operation of the transmission system, such as: “service” emergencies (for example, total or partial unavailability of pipelines,

compressor stations, or other auxiliary plants on Snam Rete Gas’ network); gas emergencies (for example, insufficient gas supply coverage as a result of severe

weather conditions or failure of one or more supply sources of the national gas system;

if the balancing operations are not sufficient to guarantee the System’s safety, in accordance with this document and with what is provided for in Article 8.7 of the Legislative Decree, Shippers explicitly delegate to the Transporter the actions described in the Chapters 21 “Service emergencies” and 22, “Procedure for general emergency in order to restore normal system operations as quickly as possible.

2.3) Responsibility In view of the information given above, the Transporter will not be held responsible, except for cases described in paragraph 2.1 of the chapter entitled “Parties’ Liabilities”, for any possible technical and/or economic consequences borne by Shippers as a result of the physical balancing actions undertaken by the Transporter within the pipelines, general and particular, described above.

3) COMMERCIAL BALANCING With regard to the balancing activity described herein, the provisions and procedures set out in the convention signed by Snam Rete Gas and the GME in accordance with Resolution 525/2012/R/gas, apply to the GME in its capacity as a Shipper established by law.

3.1) Transported gas accounting

The accounting formulae for transported gas and the methods for the treatment of imbalance quantities, which are described below, allow Snam Rete Gas to reconstruct the gas quantities corresponding to each Shipper in order to provide for the proper allocation and accounting of gas and the correct balancing costs among Shippers on the

basis of actual use.


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Listed below are the formulae for the calculation of each Shipper’s daily and monthly, imbalance terms. Paragraph 4.4 illustrates the methods of treatment of the imbalance terms.

3.1.1) Network balance equation

GNCLPPECPSI C

Network injections (I) The energy injected into the pipeline network of the Transporter is the sum of the quantities injected by Shippers and the Transporter (for internal consumption of the transportation system) at the Entry Points of the National Network, i.e. imports, national natural gas fields and biomethane production plants (including the PIV), and regasification plants. The quantities are obtained from the product between the volume of gas measured applying the allocation procedures described in paragraph 4.3 below, and the relevant Gross Calorific Value (“PCS”). The term also takes into account the energy injected into the Transporter’s network at the interconnected points with other transmission networks on the national territory.7 Storage gas (S) Energy related to the storage component is obtained from the sum of quantities physically delivered (positive) or injected (negative) from each storage field. Measurements relating to withdrawn and injected gas quantities are taken at each storage field: the result is represented by the sum of these measurements. Network withdrawals (P) The energy withdrawn by Shippers is the sum of quantities withdrawn by each Shipper at the Redelivery Points and at the interconnection points for exportation as well as the transmission networks operated by other operators.8 In particular, the energy in question is obtained as the sum of: the product between the measured volume and the related PCS, for each metering

station through which the gas owned by just one Shipper flows and the product of the allocated volume and the related PCS, for measurement plants

shared by Shippers; product of the measured volume and the related PCS, for each biomethane

production plant connected to the distribution network or to another transmission network.

7 The quantities from biomethane production plants at other transmission/distribution networks are considered as part of

the input into the Virtual Entry Point. 8 The quantities from biomethane production plants at other transmission/distribution networks are considered as part of

the withdrawals at the Redelivery/interconnection point of Snam Rete Gas’s network upstream of the network where that production is located.


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Consumption (C) The energy withdrawn by the Transporter in relation to the consumption of its own compressor stations, is calculated as the sum of products of the daily measured volumes and relevant PCS of the related Homogeneous Area, for all compressor stations in the Transporter’s pipeline network: the consumption of non-combusted gas is added to this, calculated on the basis of the operating pressure, volume of the plant, and capacity data of the single compressors, provided by the manufacturer, and the internal consumption (measured every month). The energy used for preheating the reduction/regulation plants is also counted. Where not measured, this energy is determined using the diagram entitled “pressure – enthalpy for pure methane gas”, included in Attachment 1 of the Attachment “Sizing of REMI plants”. The value for the quantity of energy is calculated as a function of operational conditions (gas pressure and temperature), PCS and volumetric mass relative to the Homogeneous Area, and the volume of gas flowing through the plant. Losses (PE) The term PE represents gas losses from the network, expressed in energy units, such as: leakage from regulation valves, calculated using a statistical method in which

appropriate “emission factors” (representing the average value of gas emission for each single class of equipment or parts of a plant, expressed in m3/year) are multiplied by corresponding “activity factors” (equipment and plants identified as emission sources). The monthly average PCS, of the gas injected in the network. will be associated to these volumes. This methodology has been developed and patented by the Gas Research Institute (GRI) in collaboration with the American Environmental Protection Agency and has been adapted by Snam Rete Gas to its own plant configuration;

gas losses that occur during maintenance works on the network, calculated on the basis of the pressure at which the gas flowed out and the volume of the relevant piece of pipe. In order to define the energy unit, the associated PCS is the one relevant to the Homogeneous Area.

The term does not include the localised gas losses, which are described in paragraph 3.2.

Delta Line-pack (LPC) The delta line-pack term is the difference between the energy present in the network at the beginning of the Gas Day G+1 and the amount present at the same time on Gas Day G. The term is determined using the measurement of the network volume and the pressure, according to the methods detailed in paragraph 3.3.2. Unaccounted-for-gas (GNC) The term “Unaccounted-for gas” (“GNC”) is the result of the network balance equation. This term represents non-determinable energy due to measurement uncertainty: as such, it is an accounting “adjustment” that could be either positive or negative in a non-systematic way. The term includes the “localised” losses if they do not prevent gas withdrawals by Shippers (“system” losses).


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3.1.2) Shipper’s balance equation The k-th9 Shipper’s balance equation takes into account all the gas injected and withdrawn during the Gas Day by the Shipper, as well as the amount due to the Transporter to cover its own use, network losses and unaccounted gas as per RTTG and Resolution ARG/gas 192/09 of the Authority.

KKK

N

KKK DSGSPTSI

Injections (IK) The energy injected into the network by the single Shipper is the sum of all quantities of natural gas/biomethane injected at the Entry Points of the National Network.10 These quantities are calculated as the product of the volume measured, or determined according to allocation procedures described in paragraph 4.3, and the corresponding PCS. For Entry Points interconnected with regasification terminals, the values are communicated by Regasification Companies in accordance with the terms set forth in paragraphs 4.1) and 4.2).11 Applicable only to Regasification Companies, pursuant to resolution 297/2012/R/gas, the term IK is stated net of the amounts redelivered and communicated for the purposes of nomination/allocation for Shippers at the Entry Point interconnected with the Regasification Terminal. This quantity represents the amount of gas required to cover own consumption recognised in nature to Snam Rete Gas. Withdrawals (PK) The energy withdrawn by each Shipper is obtained by summing the quantities withdrawn at the Exit Points from the National Network at interconnections with export pipelines and with transmission networks operated by other operators and at Redelivery Points on the Regional Network.12 The total energy withdrawn is the sum of: the product between the measured volume and the corresponding PCS, for each

metering station through which the gas owned by just one Shipper flows and the product of the allocated volume and the corresponding PCS relating to

measuring plants shared by Shippers; product of the measured volume and the related PCS, for each biomethane

production plant connected to the distribution network or to another transmission network.

9 Pursuant to and by effect of Resolution no. 137/02, as amended by resolution 297/2012/R/gas, the Storage and Regasification Companies are Shippers. 10 The quantities from biomethane production plants at other transmission/distribution networks are considered as part of the input into the Virtual Entry Point. 11 Including any quantities of gas selected by the GME at the MGAS Platform as locational STSP products. 12 The quantities from biomethane production plants at other transmission/distribution networks are considered as part of the withdrawals at the Redelivery/interconnection point of Snam Rete Gas’s network upstream of the network where that production located.


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The gas charged for own use, gas losses and unaccounted for gas (GS)

The term GSK is the quantity of gas paid by the Shipper to the Transporter to cover own

use, gas losses and unaccounted for gas, equal to:

'

1

KGNCPE

n

E

EFUEL,EK PγγIγGSK

where:

FUEL,Eγ is the percentage to cover own use approved by the Authority for each Entry

Point E (excluding the interconnections with storage hubs);

PEγ is the percentage to cover gas losses approved by the Authority;

GNCγ is the percentage to cover unaccounted gas approved by the Authority;

KEI is the energy injected by the Shipper at each Entry Point E, excluding

interconnections with storage hubs, as well as the Points interconnected with regasification terminals for all Shippers other than the Regasification Company itself. For the Regasification Company, the term

KEI is the total quantity of LNG

injected into the network;

'

KP is the energy withdrawn by the Shipper at the Redelivery Points of the Regional

Network (excluding points interconnected with exportation and with transmission networks operated by other operators).

The operational procedure for the quantity management referred to at term GSK are published on the Snam Rete Gas website. Storage gas (SK) The term SK is the quantity of gas injected/withdrawn from storage by k-th Shipper on Gas Day G, corresponding to the sum of the scheduled gas quantities being injected or withdrawn from the storage hubs, as communicated by the Storage Companies on the basis of information received from each k-th Shipper.13

The term SK registered in the balance equation for Gas Day G is considered definite and may not be subject to any revisions (nominated = allocated). Applicable only to the Storage Company, pursuant to Resolution 297/2012/R/gas, the term SK is stated net of the amounts redelivered and communicated for nomination purposes for Shippers at the Entry Point interconnected with the Storage Company, in accordance with the provisions of Chapter 8. The Imbalance term (DSK) The term DSK is the imbalance of the k-th Shipper and is the result of that Shipper’s balance equation.

13 Including any quantities of gas selected by the GME at the MGAS Platform as locational STSP products.


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In the event of early termination of the Transportation Contract in accordance with Chapter 5, paragraph 1.4.5, any economic items (including those related to gas purchased at the Virtual Trading Point) and the amounts deriving from quantities of natural gas/biomethane injected into the network by the Shipper concerned by the termination of the Transportation Contract in the period following the effective date of the termination, will be subject to economic adjustment and will be considered by Snam Rete Gas for the compensation of any economic items owed to the Shipper by the Balancing Operator, in accordance with the provisions of Chapter 18.

Gas Transactions at the Virtual Trading Point (TN

K )

The term T N

K is the net balance of the gas transactions (positive = gas purchase),

expressed in energy, carried out by the Shipper at the Virtual Trading Point using the appropriate IT platform made available by the Transporter in accordance with the terms and methods approved by the Authority and available on the Transporter’s website, and the gas transactions performed by the same Shipper at the MGAS Platform, registered at the Virtual Trading Point.

The term T N

K is obtained by taking the sum of the quantities purchased/sold by the

Shipper from/to other parties at the Virtual Trading Point. The term T N

K is given by:

M

K

PSV

K

N

K TTT T GNL

KCOMP

+ T GSE

K +T GSE

KCorr

gas transactions on Gas Day G-1 and G (T PSV

K )

The term T PSV

K is the net balance of the gas transactions (positive = gas purchase),

expressed in energy, nominated by the Shipper on Gas Day G-1 (1st session) and/or communicated and taking effect on Gas Day G (2nd session) at the Virtual Trading Point;

the transactions concluded by the GSE - national grid operator(TGSE

K )

The term TGSE

K represents, for the k-th Shipper that has capacity at the Entry Points from biomethane production plants, the result - expressed in energy - of the exchanges/sales of biomethane made by GSE with that Shipper, during the corresponding sessions (1st and 2nd session). For this purpose, the GSE must record the purchases/sales transactions at the Virtual Trading Point on the basis of the quantities of biomethane owned by the aforesaid k-th Shipper injected into the respective Entry Points from biomethane production plants;

the corrective transactions by the GSE - national grid operator (TGSE

KCorr )

The term TGSE

KCorr represents for the k-th Shipper, the possible deviations, for every Gas Day G of month M, between the energy allocated to the k-th Shipper on the basis of the measurement report of the quantities injected into the network by each biomethane production plant and the energy programmed at the PSV. To this end, the GSE can make corrective transactions at the Virtual Trading Point within the 18th


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calendar day of the month M+1. If it falls on a Saturday or holiday this deadline is postponed to the first subsequent working day.

Shippers acknowledge that Snam Rete Gas is not responsible for the records made by

the GSE in relation to the quantities involved in transactions TGSE

K and TGSE

KCorr .

the transactions T GNL

KCOMP

T GNL

KCOMPis, for the k-th Shipper, the result, expressed in energy, of the

exchanges/transfers of gas carried out with other parties (excluding the Regasification Company and the Transporter) at the Virtual Trading Point (3rd session). These exchanges/transfers of gas may be carried out in cases where at least one of the counter-parties is the user of the regasification service. These exchanges/transfers are related exclusively to the overruns of daily programmes of month M communicated by the Regasification Company in accordance with the provisions of Chapter 8 and are, for the Shipper to whom the regasified LNG is delivered, with the opposite sign, in absolute value, less or equal to the value of the overruns determined by the Regasification Company on each Gas Day G of month M.

The balance of the transactions concluded in the MGAS Platform, T M

K14

The term M

KT is the net balance of the gas transactions (positive = gas purchase),

expressed in energy, concluded by the k-th Shipper with the GME at the MGAS Platform and registered at the Virtual Trading Point by the GME as part of the corresponding sessions (1st and 2nd session).

3.1.3) Transporter’s balance equation

RESID

BILLPGNCPECGSTSI CT

N

TTT

where:

n

K

KT GSGS1

The gas injected by the Transporter (IT). This term refers to the quantity of gas, expressed in energy, injected into the Entry Point by the Transporter, excluding the interconnections with the storage. The Transporter’s storage (ST) The term ST is the quantity of gas injected/withdrawn from storage by Snam Rete Gas on Gas Day G, as calculated by:

14 The term (TM

K ) also includes the net balance of the transactions of STSP locational products completed within the

context of the transitory market framework as detailed in paragraph 2.1 of resolution 312/16.


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op

TTT SSNS

where: The term SNT represents the quantity of gas programmed by the Transporter in immission or emission from the storage hub;

the term op

TS stands for the difference between the overall quantity of energy

issued/injected on Gas Day G from the Stogit storage hub and the overall energy programmed by the Shippers and the Transporter at the same storage hub in accordance with the previous Chapter 8.

Gas Transactions at the Virtual Trading Point (T N

T )

The term T N

T is the net balance of the gas transactions (positive = gas purchase),

expressed in energy, obtained by the sum of: the quantities purchased/sold by the Transporter from/to other Shippers and/or

other parties at the Virtual Trading Point ( PSV

TT ),

the net balance of any transactions concluded by the Transporter with the GME at

the MGAS Platform (M

TT ), registered at the Virtual Trading Point;

the net balance of the transactions concluded by Snam Rete Gas in its capacity as

Balancing Operator at the MGAS Platform (M

RdBT )15 with the GME for balancing the

system, registered at the Virtual Trading Point.

M

RdB

M

T

PSV

T

N

T TTTT

The System residual Balance term (𝐵𝐼𝐿𝑅𝐸𝑆𝐼𝐷) The term (𝐵𝐼𝐿𝑅𝐸𝑆𝐼𝐷) is the total value of the share of resources equal to:

𝐵𝐼𝐿𝑅𝐸𝑆𝐼𝐷 = - (∑ 𝐷𝑆𝑘

𝑛𝑘=1 )

3.2) “Localised” gas losses 3.2.1) Gas losses restoration

The Transporter will restore, at its own expense, all localised losses that occur on its pipeline network, except for cases of Force Majeure, as described in the chapter entitled “Parties’ Liabilities”. If the localised loss has occurred along a part of the network such that it becomes impossible for the Shipper to withdraw gas, the Transporter will provide financial compensation to the Shipper, upon presentation by the Shipper of adequate documents, certifying the cost of the undelivered gas. Snam Rete Gas will refund the amount within 30 days after the receipt of the invoice.

15 The term (T M

T ) includes the net balance of the transactions of STSP locational products completed within the transitory

market setting pursuant to paragraph 2.1 of resolution 312/16.


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Snam Rete Gas can, as an alternative form of compensation, agree with the Shipper to restore the gas. In this case, Snam Rete Gas and the Shipper will negotiate the terms under which the gas will be provided. The Shipper will anyway be required to pay the transportation tariff related to the gas that was lost, and then later provided.

3.2.2) Impact on the balance equation of the individual Shipper A localised gas loss in a “dedicated” stretch of the network i.e. close to one or more Redelivery Points, can result in it becoming impossible for the Shipper to withdraw the nominated quantity of gas. In order to avoid any adverse commercial impact on the Shipper’s balance, the Transporter will include in the Shipper’s balance equation, in addition to the term for gas withdrawn, a term for gas lost (GPK). In this case, the balance equation will be:

KKKK

N

KKK DSGSGPPTSI

where GPK is “localised” losses attributable to the Shipper. If the gas loss affects a stretch of the network used by more than one Shipper, the lost gas will be assigned amongst those Shippers and highlighted in the relevant balance equations. The Transporter will share the quantity of gas in proportion to the quantities nominated by Shippers for the Gas Day on which the loss occurs with reference to the Redelivery Points at which redelivery of gas has not been possible.

3.2.3) Procedure for the calculation of gas losses The calculation procedures used by the Transporter to estimate gas losses in case of pipeline breakage (as well as in case of works, such as installations of new pipes) are summarised below. The description of formulas used to calculate gas leakage in case of pipeline breakage are provided in Attachment 9/B. The amount of gas lost will be determined on the basis of the pipe diameter, working pressure of the pipe where the loss occurs, size of the pipe break or flaw (diameter of the breakage) and the duration of the leak. This volume is then associated to the PCS of the Homogeneous Area in which the loss occurs, thereby expressing the loss in energy units.

3.3) Delivery and redelivery balancing The Transporter will, at the end of each Gas Day, calculate the balance for each delivery and redelivery for each Shipper, applying the equations described above. The calculation is based on measurements of gas volume and PCS taken at: network injection points; network withdrawal points; interconnections with the storage system; compressor stations The calculation also includes the change in network line-pack.


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3.3.1) Calculation in energy units In accordance with this document, the quantities of gas injected or withdrawn from the network are expressed in energy units, MWh with three decimal figures, obtained as the product between the measured volume (see the chapter entitled “Gas measurement”) and the Gross Calorific Value (PCS, defined in the chapter entitled “Gas quality”) using the conversion references published on the Transporter’s website.

3.3.2) Measurement of network line-pack variation The variation in network line-pack is calculated for the Gas Day on the basis of pressure measurements taken across the network where the volume is known. The volume determined as described below, is then multiplied by the gross calorific value of the gas

injected into the network in order to express the term LP in energy units. The calculation procedure involves determining: 1) the volume of the remotely controlled network16; 2) the pressure measurements via telemetry; 3) the calculation of the product between the pressure variation and the associated

network volume. The pressure measurement system has a specific procedure for the automatic correction of data when data is not available or is erroneous, for example as a result of instrument failure. The result of the line-pack calculation is used at the end of each Gas Day in the calculation of the definitive balance.

4) BALANCING SESSION Snam Rete Gas manages:

a) pursuant to Art. 1 of resolution 619/2013/R/gas, each Gas Day G+1, the provisional balancing session, into which the daily gas flows of the Transmission network are provisionally allocated with reference to the previous Gas Day G (Provisional Transportation balance);

b) Pursuant to Article 8 of the TISG, every month M+1 the Balancing Session for month M, at which the daily gas flows of the Snam Rete Gas transmission network are definitively determined and allocated with reference to month M. (Definitive Transportation balance)

The calculation of the physical amounts of gas transported (provisional transportation balance) on a daily basis is used to define the position of the Shipper in relation to the balancing service. The monthly calculation of the definitive physical amounts of gas transported on a daily basis (definitive transportation balance) contributes to the definitive allocation of these amounts and the determination of the relevant charges for the transportation service and the balancing service.

16 It is assumed that all line-pack variation occurs within the remotely controlled stretch of the network, as the remainder of the network is operated at nearly constant pressure.


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For the purposes of the fulfilment of the information obligations provided for in Title 7, paragraph 2, of the TISG and Article 1 of the resolution 619/2013/R/gas, the Transporter uses the functions of the information system provided for this purposes to the Shippers.

4.1) Provisional transportation balance

The energy quantities which are the subject of the balance are determined during each Gas Day, i.e. in the period from 6.00 am of each calendar day to 6.00 am of the following calendar day. The Transporter will make a provisional Shipper balance available to each Shipper, by 11.30 am of the Gas Day following that to which the balance refers. Since daily measurements are not available for all network points, the balance for Gas Day G that the Transporter determines Gas Day G+1 and makes available to Shippers and Storage Companies, for the gas flows relevant to them, is unavoidably indicative and provisional. The accuracy of the provisional balance depends upon: the characteristics of the equipment at metering stations owned by third parties; the number of plants that are telemetered; the period within which the measurement and allocation data is received (for

example this is the case of the Redelivery Point interconnected with distribution networks, where the data is only communicated at the end of the month).

Every month, Snam Rete Gas will communicate to each Shipper:

- by the beginning of the month, the allocation rules applied at the measurement facilities used;

- by the end of the month, the type of measurement plants used in the previous month M-1. s.

In the event of unavailability of the measurement data for the purposes of the provisional Transportation balance, Snam Rete Gas will use the appropriate estimated values of the quantities injected/withdrawn at the Point. For this purpose the Transporter shall use withdrawal data from the corresponding days:

- of the previous year, taking into account the climatic trend, for the points subject to thermal insulation;

- of the previous week or the month before the previous month, for points not subject to thermal insulation.

Only for Points of Re-delivery that fuel power plants will Snam Rete Gas use the operational measurement (telemetry) detected in the first application, for the purposes of managing the network, from the physical Dispatch Centre of Snam Rete Gas; where this is not available, Snam Rete Gas proceeds according to the foregoing concerning Points subject to thermal insulation.


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In any case, for the purposes of the estimation, the Transporter shall evaluate the use of the data and the most appropriate procedures based on historical withdrawal trends at the point and the information in its possession. With reference to biomethane production plants connected to distribution networks/other transmission networks, Snam Rete Gas shall consider the quantity measured at the biomethane production plant as reported by the Distribution/Transmission Company. If the data is not available, Snam Rete Gas will consider the last quantity programmed by the Shipper at the relevant Entry Point, in accordance with Chapter 8. Snam Rete Gas assumes no liability in respect of the Shipper and of third parties as to the accuracy, correctness, punctuality and completeness of the information reported to the Distribution companies/other Transmission companies. If at a biomethane production plant connected to the distribution network/other transmission network, transport capacity is not assigned, Snam Rete Gas will not take charge of any quantities injected at the biomethane production plant that the Distribution/Transmission Company may report. In this case Snam Rete Gas does not assume any liability in respect of the Shipper and/or of third parties for any consequences resulting from Snam Rete Gas’s failure to take charge of data. Rules to manage the information flows described in this paragraph relating to biomethane production plants connected to the distribution network/other transmission network are set out in the procedures prepared by Snam Rete Gas and made available on its Internet site.

4.2) Definitive transportation balance The Transporter makes the gas transportation balance available to Shippers no later than the 28th day of the month following that to which the balance refers. The balance is calculated on the basis of validated measurement data. If this day falls on a Saturday, Sunday or public holiday the deadline is postponed to the next working day. Snam Rete Gas makes the accounting information regarding the gas transported available to each Shipper via its website. Shippers have 2 (two) working days after the receipt of the balance to inform Snam Rete Gas of requests for the correction of the balance data made by Snam Rete gas during its preparation. To this end, a computer system is available on the Snam Rete Gas website (called Portal OBS) for the presentation of observations relating to the final balance. The rule whereby the submission of incomplete documentation and/or documents that do not comply with the form and methods indicated by Snam Rete Gas entails the rejection of the request remains valid. Snam Rete Gas shall send the requesting Shipper, within 2 working days of receipt of its correction request, a notice containing the following information: date of receipt of the request; the name and address of the Transporter's contact persons; the acceptance or rejection of the application and the grounds thereof; if the request is accepted, the estimated date of making available to the new balance.


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If errors are found, Snam Rete Gas will recalculate the transportation balance, which at this point becomes definitive (definitive transportation balance). Definitive balances will be communicated to Storage Companies, where Shippers have storage accounts, to allow them to undertake their own processing of the data. Once the definitive transportation balance has been determined, the measurement and/or allocation values will be considered definitive and, for the purposes of invoicing the transportation service, no further editing will be allowed. Other potential corrections to measurements and/or allocations after the calculation of the definitive balance will be considered by the Transporter for the sole purpose of economic adjustment as part of the Adjustment Sessions described in paragraphs 5 and 8 below. The Transporter will also make available to the Shipper, by the deadline for the provision of the definitive transportation balance, the series of daily temperatures and the volume of base consumption, necessary for the calculation of the balance.

4.3) Allocations Each metering station where the gas flowing belongs to more than one Shipper, requires an allocation procedure to share the gas among Shippers that inject or withdraw at that point. At each shared point, the Transporter, irrespective of the allocation procedure used, internally allocates the gas measured.

4.3.1) Allocation rules at NN Entry Points

Entry Points connected to foreign import pipelines At each NN Entry Point connected to foreign import pipelines where the metering station is shared by more than one Shipper, the Transporter will allocate to each Shipper the quantities of gas that actually flowed, in order to calculate the definitive balance. The gas is allocated on the basis of rules previously defined and signed by Shippers. The Transporter must receive these allocation rules no later than 3 working days prior to the requested effective date of the rules. Snam Rete Gas must receive any modifications to the specified allocation rules within the same deadline. In the case of capacity trading at these Points, the deadline for the above-stated requests and relative effective date are those specified in paragraph 1.1.3 of the chapter entitled “Capacity trading and transfer”. In order to calculate the provisional balance, as described in paragraph 4.1 above, the value allocated will be determined using the pro-rata criteria on the nominated quantities. In the event that Shippers do not send to Snam Rete Gas, within the specified deadline, the allocation rules at the shared Entry Point, the Transporter will assign to Shippers the

total measured quantity, in proportion to the nominated programmes of the


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relevant Gas-Day. Snam Rete Gas will also apply the rules of the chapters entitled “Parties’ Liabilities” and “General provisions”. Injection points from national natural gas fields and biomethane production plants For each Entry Point from national natural gas/biomethane production fields, for the purposes of calculating the definitive balance, a Gas Producer, chosen from among the operators on the production plants under the Point in question (or, alternatively, an authorised person in possession of an appropriate proxy signed by all Shippers present at the relative Entry Point), arranges for distribution and communicates, no later than the 9th day of the month following the month to which the data refers (in the case of a Saturday or public holiday the date is brought forward to the first previous working day) the monthly volume of gas injected into the Transporters’ network on the basis of allocation rules agreed between the interested Shippers. In relation to the Entry Point from biomethane production plants connected to a distribution network/other transmission network, the monthly quantity of gas injected shall be reported by the corresponding network manager within the same deadline to Snam Rete Gas and to the GSE for recording at the PSV of any corrective transactions as set out in the previous paragraph 3.1.2. Snam Rete Gas assumes no liability in respect of the Shipper and of third parties as to the accuracy, correctness, punctuality and completeness of the information reported to the manager of the distribution network/of other transmission network. Should Snam Rete Gas receive data about the daily volume of gas injected by Shippers at each injection point under the Entry Point of the National Network, no later than the 9th day of the month following the month to which the data refers (in the case of a Saturday or public holiday the date is brought forward to the first previous working day), this data will be used for the daily allocations to Shippers involved. In the event of non or partial receipt within the set times of the daily data in question, the Transporter, on the basis of the monthly volume, will calculate for each Entry Point of the National Network, the monthly percentage quantities of allocated energy used for the daily allocation relating to the Shippers involved. In the event of non-communication by the operator or qualified operator of the sharing among Shippers of the monthly volume injected, Snam Rete Gas will use the percentage of said Entry Point of the previous month to allocate the gas injected by each Shipper or, failing that, it shall attribute the total quantity measured to each Shipper present on the Point in equal parts. These quantities (monthly/daily) are converted into energy using, for each production field belonging to the same point in question, the PCS certified by the Gas Producer mentioned above or, if such an agreement is made, by Snam Rete Gas. Snam Rete Gas assumes no liability in respect of the Shipper and of third parties as to the accuracy, correctness and completeness of the certifications and declarations provided for this purpose by the those parties. For the purposes of preparing the provisional balance referred to in paragraph 4.1 above, the value allocated will be determined on a pro rata basis according to the quantities programmed by each Shipper pursuant to Chapter 8.

If a biomethane production plant connected to distribution network/other transmission network is shared among multiple Shippers, to calculate the provisional budget and the

final budget, a Shipper identified among those present on the point shall report


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to Snam Rete Gas the agreed allocation rule as well as any variations within the 28th of the month preceding the month of entry into force thereof. In the event of failure to reach agreement between the Shippers within the same deadline, a Shipper among those present on the point may send to Snam Rete Gas a declaration of the biomethane producer attesting the allocation rule for the quantities injected. On the basis of such information, the Transporter must allocate the quantities of gas carried. If the communication of the allocation rule at the biomethane production plant does not reach Snam Rete Gas within the set deadline, the Transporter shall attribute the total quantity measured to each Shipper present on the national production in equal parts. In the event of early termination of the Transportation Contract with the Shipper who holds the capacity booked at the Entry Point in accordance with Chapter 19 and Chapter 5, paragraph 1.4, Snam Rete Gas highlights this to the Producing party to allow for the revision of the allocation rules agreed upon by the Shippers involved and, for biomethane production plants connected to a distribution network/other transmission network, to the GSE and to the manager of the network concerned. In all cases of early termination of the Transmission Contract with the Shipper who owns capacity at Entry Points from biomethane production plants, Snam Rete Gas shall also inform the Authority for any related actions. Without prejudice to the provisions of Chapter 10, paragraph 5.2. Rules to manage the information flows described in this paragraph relating to biomethane production plants connected to the distribution network/other transmission network are set out in the procedures prepared by Snam Rete Gas and made available on its Internet site. Regasification system From 1 November 2013, for Entry Points interconnected with regasification terminals, for the purposes of determining the quantity of gas allocated to each Shipper in month M, the data communicated by the Regasification Company to the Transporter by 4.30 pm on the second working day of month M+1 will be considered.

Storage system At the Storage Hubs, the Transporter allocates a quantity of gas to each Shipper equal to

term KS referred to in paragraph 3.1.2 above, determined in accordance with the same

paragraph for Gas Day G+1. Once determined, the allocation is deemed to be definitive and not subject to modification. Virtual trading point The allocated quantity for each Shipper at the Virtual Trading Point is equal to the term

T N

K , as shown by the gas transaction carried out by the Shipper.

4.3.2) Allocation rules at NN Exit Points

For the allocation rules at the Exit Points of the National Network located at the exportation points, refer to those indicated in the previous paragraph 4.3.1 – paragraph entitled “Entry Points connected to foreign import pipelines”. At the “virtual” NN Exit Points, for the purposes of both the provisional and the definitive balance, the allocation rule for each Shipper is defined as the sum of the


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quantity of gas measured and/or allocated at the Redelivery Points served by the Shipper corresponding to the Withdrawal Area: the values obtained in this way will be used during each Gas Day to verify any overrun at the NN Exit Points. For the redelivery points of the other transmission networks interconnected with the Snam Rete Gas network, the quantities communicated for this purpose are considered valid by the relevant Transport Company. For the purposes of calculating the definitive balance, interconnected Transport Companies communicate data pertaining to each Shipper concerned for the month M by the 23rd of the following month, via the ‘Portale M-GAS’. Any difference between the quantities measured at the interconnection points and the sum of the Shipper’s quantities in application of resolution ARG/gas 192/09 is attributed to the interconnected Transport Company.

4.3.3) Allocation rules at Redelivery Points for Final Customers that are directly connected to the transmission network

Agreement between Shippers For each Redelivery Point shared between several Shippers for Final Customers directly connected to the Snam Rete Gas transmission network, for the purposes of determining both the provisional balance and the definitive balance, the Shippers concerned are obliged to inform the Transporter of the allocation rule to be applied to the transported gas, selected from those included in Attachment 9/A and signed by all Shippers present at the shared Redelivery Point. The information must be provided before the start of the Thermal Year via Snam Rete Gas’s information system, ‘Portale M-Gas’, by the due date for the changes, under penalty of inadmissibility of the same and the application of the provisions of the paragraph “Non- Agreement between the Members or non-submission of data.” Any changes to the allocation rule adopted by Shippers at the shared Redelivery Point must be submitted to the Transporter – under penalty of inadmissibility and the application of the provisions of the below paragraph “Non-agreement between Shippers or non-communication of data” – in accordance with the same procedures described above, not later than the 28th of the month preceding the month to which the allocation refers. The duration of the new allocation rule should be equal to one calendar month (or multiples). Where a “value” allocation rule has been agreed at the shared Redelivery Point for the purposes of the provisional balance, the Transporter will allocate the quantities of gas measured on Gas Day G of month M between the various Shippers present at the Point in proportion to the transport capacity attributed with reference to month M. Non-agreement between Shippers or non-communication of data In the case where, at a shared Redelivery Point: 1. no allocation rules have been agreed; or


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2. data is not sent to Snam Rete Gas within the specified time-scale and format, Snam Rete Gas will allocate the gas quantities measured on Gas Day G of month M to the various Shippers present in proportion to the transport capacity assigned with reference to month M.

4.3.4) The allocation process at Redelivery Points connected to distribution networks For the purposes of the provisions of this section, at each Point of Re-delivery interconnected with the distribution networks, identifies the following Parties Operating:

Distribution Company; shippers of the distribution service; Shippers. For biomethane production plants connected to distribution networks, for each Gas Day G of month M, Snam Rete Gas shall allocate at the Redelivery Point upstream of the network in which the production is located the quantity measured at the biomethane production plant as reported by the Distribution/Transmission Company, to prepare the final budget set out in the previous paragraph 4.2. In all cases of unavailability of the data from the Distribution/Transmission Company, Snam Rete Gas will consider the last quantity programmed by the Shipper at the relevant Entry Point, in accordance with Chapter 8. To this end, the Shippers acknowledge that Snam Rete Gas is not responsible for programmes, data and information reported by Shippers, network operators or third parties.

4.3.4.1) Allocation process for the provisional transportation balance

Pursuant to the provisions referred to in resolution 619/2013/R/gas, for the purposes of determining the provisional balance referred to in paragraph 4.1 above, Snam Rete Gas will allocate to Shippers at the Redelivery Points interconnected with distribution networks the volumes of gas detected/determined on Gas Day G of month M in proportion the quantities pertaining to the Shipper based on:

a) the data determined and notified by the Distribution Companies pursuant to Article 1 of the resolution 619/2013/R/gas, concerning the sum of annual withdrawals (CA), referred to in Article 4 of the TISG, aggregated by standard withdrawal profile provided by TISG, by each Shipper of the distribution service and by each Point of Re-delivery;

b) information submitted to Snam Rete Gas by Parties Operating at the Point of Re-delivery in the context of the "mapping" of commercial relations, pursuant to article 21 of the TISG;

c) the daily quantity of gas detected/determined at each Point of Re-delivery. With reference to the data referred to in paragraph a) above, the Transporter will use the information provided by the Distribution Companies through the M-Gas Portal before the beginning of the Thermal Year, no later than the fourth-last day of the month of September each year, and subsequent updates, if submitted via the M-gas Portal, by the fourth-last day of each month M-1 with effect from month M.


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Based on the most up-to-date information submitted by the Distribution Companies in accordance with the terms described above, Snam Rete Gas performs, for each month M and for each Point of Re-delivery, the profiling on a daily basis of the annual withdrawals of each Shipper of the distribution service at the Point of re-delivery, as described in Attachment 9/E, section 1. With reference to each Gas Day D of the month M, in accordance with the terms set out in section 4.1 above and as described in Attachment 9/E, section 2, Snam Rete Gas for each Point of Re-delivery:

i. on the basis of the "mapping" of commercial relationships between Parties Operating at the Point of Re-delivery, determines the daily quantity pertaining to each k-th Shipper, starting from the daily data determined by the Shippers of the distribution service based on the information submitted by the Distribution Companies;

ii. determines the difference between the quantity of gas detected/determined and the sum of the quantities referred to in the previous paragraph i, allocated to the Shippers;

iii. determines the provisional daily withdrawal of each Shipper by dividing the difference referred to in paragraph ii to all Shippers, in proportion to the quantities determined in paragraph i.

If the Distribution Company, with reference to the Point of Re-delivery, does not provide the data concerning the annual withdrawal for one or more Shippers of the distribution, for the purpose of determining the Shipper's provisional transport balance at that point, Snam Rete Gas shall divide the volumes of gas detected/determined in Gas Day G of the month M considering the transport capacity that is allocated at the same point restricted to that Shipper, recalculated on based on average use coefficients. In the event of a lack of valid correspondence is found in the commercial sector at a Point of re-delivery and up to the complete definition of valid correspondence at that Point within the term referred to in Attachment A to determination 28 March DMEG/PFI/5/2013, for the purposes of determining the provisional transportation balance of the Shipper, Snam Rete Gas divides the volumes of gas detected/determined on Gas Day G of month M in proportion to the transportation capacity allocated to each Shipper at the Point, recalculated based on average use coefficients. The average use coefficients referred to above, published on the website of the company responsible for balancing and valid for all Shippers, are determined annually by the end of July, based on the average use of capacity in the last two concluded Thermal Years, and are distinguished by month, by type of withdrawal determined according to the ATECO code of the Point of re-delivery (civil, thermoelectric, industrial and other uses, automotive) and for continuity of the withdrawal. The coefficients take into account any characteristics of continuity of the withdrawals of the Point of re-delivery. The Shippers declare under their own responsibility that the Point of re-delivery of their competence is not characterised by continuity of withdrawals. 17 The declaration shall be transmitted simultaneously with the information referred to in section 6.3.5 of Chapter 5). Failure by the Shipper to submit this

17 [Uninterrupted 7-day withdrawals].


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declaration implies that the Point of re-delivery will be considered characterised by the continuity of the withdrawals for the determination of the PA. It is understood that Snam Rete Gas will not accept any liability to the Shipper and/or third parties about the correctness and completeness of the data transmitted by the Distribution Company. 4.3.4.2) Allocation process for the definitive transportation balance In accordance with the regulations established in the TISG, at each shared Redelivery Point connected to the distribution networks, Snam Rete Gas will allocate to Shippers the quantity of gas withdrawn daily, determined for each day of month M to which the allocation refers, by means of a bottom-up process, based on:

a) the data allocated for each user of the distribution service as communicated by

the Distribution Company, broken down by day or by month, in accordance with article 24 of the TISG, and received by the deadline indicated in the same article 24 of the TISG and, in any case, not after the 19th day of the following month M+1;

b) information received by Snam Rete Gas from Parties Operating at the Redelivery Point for the purposes of “mapping” the commercial relationships, in accordance with article 21 of the TISG.

In application of the provisions referred to in articles 10, 11 and 12 of the TISG, starting from 1 January 2013 at Redelivery Points for which the Distribution Company has communicated the allocation data with daily and monthly details or only monthly, Snam Rete Gas will allocate to Shippers the quantities of gas withdrawn daily according to the process indicated below: 1. for the purposes of reconciling on a monthly basis the data provided by the

Distribution Company with the quantity measured at the Redelivery Point, determines the difference between the monthly quantity measured at the Redelivery Point and the sum of the monthly quantity allocated to distribution service users (equal to the sum of the withdrawals, measured monthly and broken down by day, and the withdrawals measured monthly and semi-annually/annually, aggregated by withdrawal profile) and the quantity allocated to the Distribution Company for own consumption, and allocates it to distribution service users according to the procedures set out in Appendix 9/C, paragraph 1;

2. on a daily basis, carries out profiling of the withdrawals measured monthly and

semi-annually/annually, communicated by the Distribution Company and aggregated for each user of the distribution service, applying the standard withdrawal profiles as referred to in Article 7 of the TISG, associated with the data from the Distribution Company itself;

3. determine the quantities to allocate for each type of withdrawal and for each user of

the distribution service on a daily basis in accordance with the procedure described in Attachment 9/C, paragraph 2;


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4. determine the daily quantity of each user of the distribution service, from the daily

data allocated for the user of the distribution service as resulting from the previous point 3 on the basis the “mapping” of the commercial relationships between the Parties Operating at the Redelivery Point, in accordance with the procedures described in Attachment 9/C, paragraph 3.

Lack of availability of information regarding the commercial chain (“mapping”) In case there is no correspondence in the commercial chain with regard to one or more users of the distribution service at the Redelivery Point, Snam Rete Gas will activate, according to the provisions set out in Resolution 382/2013/R/gas, the Default Transportation Service and allocate to the Temporary Supplier referred to in Chapter 5, paragraph 10, the volumes of gas attributable to that user of the distribution service, applying the allocation process described in this paragraph. In case there is no correspondence in the commercial chain for a Shipper at the Redelivery Point, Snam Rete Gas will not allocate any amount of gas to that Shipper, except where information relating to the commercial chain is not available at the Redelivery Point due to the total absence of users of the distribution service on the M-GAS Portal. In this situation, for each day of month M, Snam Rete Gas will allocate to Shippers with capacity at the Point the quantity measured in proportion to the capacity assigned to the Shippers at the Redelivery Point. In the absence of a Temporary Supplier, with regard to the aforementioned case, the provisions of Chapter 5, paragraph 10.7 will apply pursuant to Resolution 249/12 concerning the Default Transportation Service.

Incomplete communication or failure by the Distribution Company to communicate the allocation data at the Redelivery Point interconnected with distribution networks If the Distribution Company does not communicate the allocation data for one or more users of the distribution service, or communicates this data after the deadline set out in the “Allocation Process”, Snam Rete Gas determines for each user of the distribution

service and for each type of withdrawal profile the monthly consumption PROFUdD

MC , for

month M in accordance with the procedure described below.

i) In the first instance, Snam Rete Gas applies the following formula:

iMG

GPROF

MG

GPROFPROFUdD

iM

PROFUdD

Mv

v

CC,%

,%,, i = 1, 2, 3

where:

PROFUdD

iMC ,

is the last allocation date for the user of the distribution service

communicated by the Distribution Company after 1 February 2013 and, in any case, within the last three months;


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GPROFv ,%

is the percentage value of the standard withdrawal profile PROF for

each Gas Day G, referred to in article 5 of the TISG.

Subsequently, Snam Rete Gas reconciles the data provided, in accordance with Resolution 229/2012/R/gas, using the method set out in point 1 of this paragraph 4.3.4.

In the presence of data for users of the distribution service measured monthly and broken down by day, Snam Rete Gas uses as allocation data the data for the corresponding day of the last seven calendar days of the last month for which the Distribution Company has communicated data and, in any case, within the last three months.

ii) In the absence of data for CM-i, Snam Rete Gas uses the data communicated by

the user of the distribution service, where applicable, transmitted according to the instructions communicated by Snam Rete Gas through the functionality of its website and within the timeline set out in article 24 of the TISG, it being understood that Snam Rete Gas does not assume any liability, even in respect of third parties, for the accuracy and completeness of the data transmitted by the user of the distribution service.

iii) In the absence of the data referred to in i) and ii), Snam Rete Gas will:

a) determine the difference between the measured value at the Redelivery Point and the sum of the data for the users of the distribution service transmitted by the Distribution Company;

b) where the difference referred to in letter a) has a positive value, allocate this difference equally across the users of the distribution service for which no data were provided by the Distribution Company, and reconcile the data provided, pursuant to Resolution 229/2012/R/gas using the method set out in point 1 of this paragraph 4.3.4, allocating a ‘default’ profile to those users of the distribution service, understood as profile C3 as set out in Attachment A to the TISG, with withdrawal class and climate zone belonging to the Redelivery Point;

c) where the difference referred to in letter a) has a negative value, allocate the difference to users of the distribution service for which data were provided by Distribution Company, by means of the reconciliation of the data provided, in accordance with Resolution 229/2012/R/gas, using the method set out in point 1 of this paragraph 4.3.4, and assign zero withdrawal values to users of the distribution service for which no data were provided by the Distribution Company.

The provisions contained in this paragraph will apply with effect from the balancing session for the month of January 2014. Up to that point, the provisions of paragraph iii) above shall apply, without prejudice to the subsequent reassessment in accordance with the procedures described in this paragraph. Publication of the documentation


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The documents related to the functional procedures used in the application of the allocation process at shared Redelivery Points that are interconnected with distribution networks are made available and updated on the Snam Rete Gas website (www.snam.it).

4.4) Daily balancing charges

On the basis of the gas quantities attributed to the k-th Shipper as resulting from the definitive balance, the Balancing Operator adjusts the economic items for each Gas Day on the basis of the daily imbalance DSk of the same Shipper valued at the Sale/Purchase Imbalance Price of the Gas Day, as laid down in paragraph 4.4.2 below. Limited to the transitory market operation period as detailed in Resolution 312/16, paragraph 2.1, Snam Rete Gas, with reference to each Gas Day, also performs the adjustment of the economic items relative to:

- settlement values for 𝑇𝑘𝑀 transaction of locational SPST products performed by the

Shipper, valued at the remuneration price foreseen by the TIB, article 6, communicated by the GME to the Balancing Operator; _ settlement value of the offers accepted by the Shippers for the sale and purchase of stored gas volumes, valued at the remuneration price foreseen by the TIB, article 7, communicated by the GME to the Balancing Operator.

The settlement of the above economic items takes place according to the methods and terms foreseen in the subsequent chapter 18.

4.4.1) Imbalance Price

a) Sale Imbalance Price Psbil_sell,G

In accordance with Regulation 312/2014, art. 22.2, letter a, and of the TIB, article 5, the Sale Imbalance Price Psbil_sell,G is equal to the lowest value between:

i. the value of the term 𝑃𝐺,𝑠𝑒𝑙𝑙𝑇𝑆𝑂 , and

ii. the Mean Remuneration Price on Gas Day G, �̅�𝐺, net of the term 𝑆𝐴𝐺: ( �̅�𝐺 − 𝑆𝐴𝐺)

where:

𝑃𝐺,𝑠𝑒𝑙𝑙𝑇𝑆𝑂 the lower of the sale offer prices for STSP title products and, only in the

cases foreseen by TIB, paragraph 2.3 letter e), sub ii), of Snam Rete Gas locational products, in its role as Balancing Operator, with delivery on Gas Day G, selected at the MGAS Platform;

�̅�𝐺, Mean Remuneration Price of Gas Day G is the price communicated by the GME to the Balancing Operator expressed in €/MWh rounded to the third decimal figure, determined as the weighted mean of the prices of the offers of title STSP products selected at the MGAS Platform, as well as locational product but only in the cases foreseen by TIB, paragraph 2.3 letter e) sub ii), with delivery on Gas Day weighted on the basis of the gas quantities, in energy units, associated with each offer selected;

𝑆𝐴𝐺 represents, for each Gas Day G, the value of the small adjustment, set at 0,108 €/MWh.

http://www.snam.it/


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b) Purchase Imbalance Price, Psbil_buy,G

In accordance with Regulation 312/2014, art. 22.2, letter b, and TIB, articles 1 and 5, the Purchase Imbalance Price, Psbil_buy,G is equal to the highest value between:

the value of the term 𝑃𝐺,𝑏𝑢𝑦𝑇𝑆𝑂 and

the Mean Remuneration price of the Gas Day G, �̅�𝐺, taking account of the 𝑆𝐴 term:

( �̅�𝐺 + 𝑆𝐴𝐺)

Where:

𝑃𝐺,𝑏𝑢𝑦𝑇𝑆𝑂 is the highest of the purchase offers of STSP title products and, in the sole

cases foreseen by TIB, paragraph 2.3 letter e, sub. ii), by Snam Rete Gas locational products in its role as Balancing Operator, with delivery on Gas Day G, selected at the MGAS Platform;

�̅�𝐺 and 𝑆𝐴𝐺 are the Mean Remuneration Price of Gas Day G and the small adjustment value indicated in this paragraph, ‘Sale Imbalance Price’ section, letter b, point ii.

Pursuant to the TIB, article 5, if, on a Gas Day G, the GME communicates to Snam Rete Gas that the offers accepted for STSP title products at the MGAS Platform with delivery on the same Gas Day G are lower than 2000 MWh overall, the Mean Remuneration Price �̅�𝐺, for determining the Purchase/Sale Imbalance Prices is equivalent to the Mean Remuneration Prices of the previous thirty days. With reference to the month of October 2016, if no information is received for one or two day, instead of these prices, the remuneration prices applied shall be those of the PB-Gas platform, session G+1 of those day, unless different indications are received from the Authority.

c) Special provisions for determining the Imbalance Price

In emergencies such as those described in paragraphs 2.1 and 2.2 above (emergencies due to an excess/shortage of gas) in place of the values indicated under letters a) and b) above, the Imbalance Price is equivalent to the charges established by the Authority, as defined in TIB, article 5, paragraphs 5.3 and 5.4. - the Imbalance sale price, Psbil_sell,G is equal to 0 (zero) €/MWh if in the instances reported in the previous paragraph 2.1), during Gas Day G gas network immission reduction measures have been taken at the Entry Points connected with abroad, according to the methods described in the same paragraph; - the Imbalance purchase price, Psbil_buy,G shall amount to 82.8 €/MWh if on Gas Day G the measures described in the Decree of the Ministry of Economic Development of 19 April 2013, Attachment 2, paragraph 4.2.3 have been activated.

The Balancing Operator applies the charges in relation to any overrun between the capacity assigned to the k-th Shipper and capacity this Shipper has used.


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The invoicing procedure of the economic items as well as the charges referred to in this paragraph are described in Chapter 18.

4.4.2) Imbalance charges

In accordance with Regulation 312/2014, each month in relation to the month corresponding to the definitive balance, on the basis of the daily volume series of the term DSK(i) as described in the previous paragraph 3.1.2), the Transporter:

a) if DSK (i) < 0, applies to the k-th Shipper a charge CSB equal to:

CSB =|𝐷𝑆𝑘(𝑖)| ∙ 𝑃𝑠𝑏𝑖𝑙𝑏𝑢𝑦.𝐺

b) if DSK (i) > 0, pays to the k-th Shipper a charge CSB equal to:

CSB =|𝐷𝑆𝑘(𝑖)| ∙ 𝑃𝑠𝑏𝑖𝑙𝑠𝑒𝑙𝑙,𝐺

where the terms 𝑃𝑠𝑏𝑖𝑙𝑏𝑢𝑦.𝐺 and 𝑃𝑠𝑏𝑖𝑙𝑠𝑒𝑙𝑙,𝐺 are the Purchase Imbalance Price and the Sale

Imbalance Price, respectively, indicated in paragraph 4.4.1), letters a) b) and c) above.

4.4.3) Capacity overrun charges In compliance with the provisions of Articles 17.5, 17.7, 17.8 and 17.9 of Resolution 137/02, if a Shipper uses, during the Gas Day, capacity greater than that assigned at each point, it incurs overrun charges, as defined in the following table.

Tolerance Remuneration

1 Entry/Exit Points interconnected with the foreign pipelines, with the

exception of Exit Points at Bizzarone and San Marino *

- G

iK CGSC )(max125,1

2 Entry Points from national natural gas fields

%4KSC A

iK CMSC )(max125,1

3 Exit Points other than Exit Points interconnected with storage and Exit Points interconnected with

foreign pipelines at Gela*, Mazara del Vallo*, Tarvisio, Gorizia and

Passo Gies**

%5SCk

%15%5 KSC

%15KSC

Not applicable A

iK CMSC )(max125,1 A

iK CMSC )(max5.1

4 Redelivery Points which supply thermoelectric power plants

- G

iK CGSC )(max1,1

5 Redelivery Points connected to natural gas distribution plants for automotive purposes (for the first

90 days of overrun even if not consecutive)

%50kSC

%50KSC

Not applicable A

iK CMSC )(max1.1


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6 Redelivery Points other than Redelivery Points which supply thermoelectric power plants and Redelivery Points connected to

natural gas distribution plants for automotive purposes (from the 91st

day of overrun)

%10SCk

%10KSC

Not applicable AiK CMSC )(max1,1

* Pursuant to 914/2017/R/gas resolution. ** Pursuant to resolution 512/17, the overrun fee at the Withdrawal Areas underlying Redelivery Points connected to the thermal power plants is equal to 1.1 times the amount of the annual capacity fee readjusted on a daily basis multiplied by the daily multiplication coefficient as detailed in Resolution 512/17 and the lesser between: - the overrun recorded on the Gas Day at the Withdrawal Area; - the overrun recorded on the Gas Day at the underlying Redelivery Point connected to the thermal power plant. To the additional overrun quota at the Withdrawal Area one applies the provisions of point 4 of the table. Pursuant to Resolution 487/17, the overrun fee at the Withdrawal Area underlying the Redelivery Points connected to the natural gas distribution plants for automotive purposes is equal to the annual capacity fee readjusted on a daily basis multiplied by the lesser between: - the overrun recorded on the Gas Day at the Withdrawal Area; - the overrun recorded on the Gas Day at the underlying Redelivery Points connected to the natural gas distribution plants for automotive purposes; - 50% of the capacity booked at the underlying Redelivery Points connected to the natural gas distribution plants for automotive purposes; To the additional overrun quota at the Withdrawal Area one applies the provisions of point 4 of the table. where:

- SCK = the difference, on a daily basis, between capacity used by k-th Shipper and the capacity assigned at the relevant Point (overrun);

- max SCK(M) = the maximum overrun of k-th Shipper registered during the month M, at the relevant Point (greater than tolerances in case of Exit and Redelivery Points);

- SCK(G) = the overrun of k-th Shipper registered during the Gas Day D, at the relevant Point;

- A

iC= the unitary annual capacity fee at the relevant point;

- M

iC = the product of the annual unit capacity charge at the i-th relevant Point

adjusted on a daily basis, the number of days of the relevant month and the monthly coefficient multiplicative referred to RTTG, considering the auction prize logged in the relevant booking process;

- G

iC is equal to:

a) the product of the annual unit capacity charge at the n-th relevant Point adjusted on a daily basis and the daily multiplication coefficient as indicated in Resolution 512/17, only for Redelivery Points connected to thermal power plants;


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b) the product between the unit annual capacity fee at the nth Point in question adjusted on a daily basis and the daily multiplication coefficient referred to RTTG, considering the auction prize logged in the relevant booking process, for the Entry/Exit Points interconnected with the foreign pipelines, with the ecception of Exit Points of Bizzarone and San Marino.

c) the annual unit capacity fee at the Redelivery Point readjusted on a daily basis for the Delivery Point connected to natural gas distribution plants for automotive purposes directly connected to the Snam Rete Gas distribution network, only for the first 90 days of overrun, even if non consecutive.

For the purpose of applying the dispositions detailed in Resolution 487/17, the Shipper that, pursuant to Chapter 5, has certified a functional capacity quota to feed natural gas distribution plants for automotive purposes connected to the distribution network, communicates the daily quantities of gas related to the supply of each natural gas distribution plant for automotive purposes connected to the distribution network. This communication is made by the Shipper, under its own responsibility, via the functional tools provided on the Transporter's Internet website and according to the terms indicated therein. Up until the computer systems become available, the communiation is made by the Shipper by means of a notarised affidavit, according to the timelines and procedures made available by Snam Rete Gas on its own Internet website18. Snam Rete Gas will not assume any responsibility towards the Shipper and third party subjects regarding the truthfulness, correctness and completeness of the information supplied to this end by the Shippers. Snam Rete Gas shall proceed to calculate the overrun fee at the Withdrawal Area related to the Redelivery Point connected to thermoelectric plants and Redelivery Points connected to natural gas distribution plants for automotive purposes establishing: 1) the quota related to the underlying Redelivery Points connected to natural gas distribution plants for automotive purposes according to the procedures detailed in Resolution 487/17; 2) the quota related to the underlying Redelivery Points connected to thermoelectric power plants according to the procedures detailed in Resolution 512/17. The other Transportation Companies provide Snam Rete Gas with the information required to calculate the overrun fees at the Withdrawal Areas pursuant to resolutions 487/17 and 512/17 according to the terms and conditions set out in the appropriate procedure published on the Transporter's Internet website. Snam Rete Gas will not assume any responsibility towards the Shipper and third party subjects regarding the truthfulness, correctness and completeness of the information supplied to this end by other Transportation Companies. Snam Rete Gas shall provide indications of the date on which the computer systems will be ready to apply the dispositions pursuant to Resolutions 487/17 and 512/17 at the Redelivery Point connected to the thermal power plants or the natural gas distribution plants for automotive purposes connected to networks other than that of Snam Rete Gas

18 See www.snamretegas.it


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and the related Withdrawal Areas. Until such computer systems are available, the information referred to in this chapter shall be communicated by the operators according to the procedures detailed on Snam Rete Gas' website. It is understood that only communications received according to the procedures and terms published by the Transporter will be taken into consideration. On first application, the revision of the overruns pursuant to resolutions 487/17 and 512/17 and the calculation of the relative settlements shall be carried as soon as the computer systems are available and in any case by and not beyond the invoicing period related to the final financial statements of the Thermal Year 2017/2018. It is understood that the Shippers are required to pay the overrun fees invoiced by the Transporter, as described in the special procedure published on the Transporter's Internet website. For the Entry Points from the biomethane production plants, the deviation fees established by the Authority will be applied. Charges at Entry Points connected to foreign import pipelines and national production are not levied in case of dispositions adopted by the Ministry of Production Activities, in compliance with Article 8.7 of Legislative Decree 164/00. The tolerance thresholds at Exit and Redelivery Points should be treated as progressive levels. In order to check for overruns referred to in this paragraph, the Transporter uses the actual Gross Calorific Value, as defined in the chapter entitled “Gas quality”.

4.4.4) Exemption from capacity overrun charges In compliance with the provisions set out in Articles 17.12 and 17.13 of Resolution 137/02, as integrated by Resolution 41/05, the overrun charge referred to in Article 17.9 of Resolution 137/02 is not due if the overrun concerns a Redelivery Point used to fill the tanker lorries that are to supply natural gas by means of an alternative service and for the part of the capacity actually used for this alternative service, if the transport or distribution service is reduced/suspended for: system maintenance and expansion; operations on the networks due to works attributable to third parties; operations on the networks associated with service emergencies; other operations performed by Snam Rete Gas for transport system needs. Other cases, such as the supply in advance by means of tanker lorries and operations associated with the creation of new connections are excluded. In order to obtain exemption from payment of the overrun charge in accordance with the method indicated below, the Shipper must submit the following documentation to Snam Rete Gas proving:

the Redelivery Point where the lorries used for the operation were filled up;

the day (or days) on which they were filled up;

the daily volume loaded at the Redelivery Point concerned;


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date, place and type, of those indicated above, of the operation on the transmission network that requested the work by means of the alternative service: if the alternative service provided is due to reduction/suspension of the distribution service, the Shipper must submit the documentation issued by the Distribution Company concerned.

Snam Rete Gas has drawn up and published on its Internet site the form to be used in the cases set out in this paragraph. Following the receipt of suitable documentation relevant to the object, Snam Rete Gas will, for the day (or days) concerned, excluding the volume redelivered by the Shipper at the Redelivery Point concerned, exclusively with a view to determining any overrun charges, the amount corresponding to the amount of gas necessary for the operation indicated, issue the credit note within the strictly necessary times for the invoice of the corresponding overrun charge, made available in accordance with the provisions set out in the “Invoicing and Payment” chapter, including the provisions set out in the last clause of paragraph 5. It remains understood that, for any overruns that have taken place at the same Redelivery Point during the course of the same month and not attributable to the cases in hand, the overrun charge will be applied without any form of exemption.

4.4.5) Charge for lack of availability of locational STSP products by the Shipper

If the k-th Shipper, for which offers of locational STSP products have been accepted at the MGAS Platform of the GME, fails to make available the corresponding quantities of gas at the Points of the transmission network to which such offers relate, subject to the registration of the transactions at the Virtual Trading Point as described in paragraph 3.1.2), Snam Rete Gas will apply a charge approved by the Authority.

4.5) Charge pursuant to Article 15.3.2 of Resolution 137/02 In respect of the provisions set out in Article 15.3.2 of Resolution 137/02, as integrated by Resolution 6/05 if, within a Gas Day of the Peak Period, the Shipper makes withdrawals of gas for values above the limit of 10% of the capacity granted at the Redelivery Points for which the booking for withdrawals in the Off-Peak Period has been assigned, Snam Rete Gas applies, in place of the reduction set out in article 13.4 of the RTTG (equivalent to 30% of the annual regional capacity amount CRr) a yearly charge CR’ equivalent to 1.3 - CRr: when this occurs, Snam Rete Gas will issue the corresponding debit note to balance the difference due.

5) ADJUSTMENT SESSIONS *

The following section describes the manner in physical and economic items are handled after the closing of the Balancing session referred to in section 4 above, for the purposes of its economic regulation. Items at the points of interconnection with the networks of other Transportation companies are included, where communicated by the latter in accordance with the timescales established in this section. The provisions laid down in paragraph 8 below on the Previous Adjustment Sessions indicated in Resolution 670/17 remain valid.

* Paragraph 5 being updated for the transcription of the provisions laid down in resolution 72/2018/R/gas


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Pursuant to Article 15 of the TISG for the purposes of the related adjustment, Snam Rete Gas manages two dedicated adjustment sessions on an annual basis using the M-GAS portal for the fulfilment of the information obligations provided for in Title 7, Section 3, of the TISG.

In the Annual adjustment session, that takes place by 31 October (if this is a Saturday

or public holiday, that date is postponed to the next working day) of each year, the measurement data available to the Transporter are considered or those communicated by the Distribution Company and by other transportation companies by 31 July of the year in which the Session take place, with reference to the previous year. To this end, the new measurement data available to Snam Rete Gas up to July of the year in which the Session takes place are included as part of the session.

In the Multi-annual adjustment session, that takes place by 31 May (if this is a

Saturday or public holiday, that date is postponed to the next working day) of each year, the measurement data relating to the previous year available to the Transporter are considered or those communicated by the Distribution Company and by other transportation companies by 28 February of the year in which the Session take place, with reference to the previous years from the second to the fifth. To this end, the new measurement data available to Snam Rete Gas up to February of the year in which the Session takes place are included as part of the session.

Snam Rete Gas makes the information about the Annual adjustment session and the Multi-annual adjustment sessions referred to in paragraph 30.1 of the TISG available to Shippers through the platform made available by Snam Rete Gas.

5.1) Determination of the physical daily items of adjustment

Daily physical items of adjustment is understood, pursuant to TISG, as the difference between the physical items given in the Balancing session or in the previous Adjustment session and the physical item determined based on the new measurement data available at the time when the Adjustment Session takes place. For each Gas Day G of the year pertaining to the Adjustment session, Snam Rete Gas determines the daily physical item of adjustment pertaining to the k-th Shipper Directly concerned UDI SA. As the sum of the daily physical item of adjustment, referred to in sections 5.1.1, 5.1.2 and 5.1.3, allocated to them:

𝛥𝑄𝐾,𝐺𝑠𝑎 = ∑ (𝛥𝑄𝑃𝑑𝐸/𝑃𝑑𝑈,𝐾,𝐺

𝑠𝑎

𝑃𝐸,𝑃𝑈

) + ∑(

𝑃𝐷

𝛥𝑄𝑃𝐷−𝑚𝑖𝑠,𝐾.𝐺𝑠𝑎 ) + ∑(𝛥𝑄𝐶𝐺,𝐾,𝐺

𝑠𝑎

𝐶𝐺

)

UDISA is understood as any party is entitled to a transportation capacity at the Point with reference to month Merr that contains the daily physical item of adjustment. If at the time of the performance of the Adjustment session, the party entitled to a transportation capacity at the Point concerned in month Merr is no longer counterpart of the Transportation Contract, but has completed a succession from another party (for example,

following a company merger), the two conditions mentioned above are


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9

considered to be satisfied by the latter succeeding party. In this case, the items are considered in the context of the EPSuk term referred to in Chapter 5 for that party. In the case of succession of another party that has not already been communicated to Snam Rete Gas in the manner described in this section, Shippers shall notify the Transporter within the term of 1 March and of 1 August of each year (if it falls on a Saturday or public holiday, the term is postponed to the next working day), the information needed for purposes of correct identification of the UDISA. To this end, Snam Rete Gas makes the appropriate forms available on its website. The physical items thus determined are subject to economic valuation based on their Imbalance Price (purchase/sale, if different) relating to the day referring to the daily physical item of adjustment (economic items of adjustment). The economic items described according to that described are subject to billing or accreditation according to the method described in Chapter 18, section 4.

5.1.1) Points of Entry/Exit

Snam Rete Gas makes any adjustments to the measurement data in correspondence with Entry Points (PdE) and Exit Points (PdU) from the RN interconnected with foreign gas pipelines. The methods of determination of the daily physical item of adjustment pertaining to the k-th UDISA, 𝛥𝑄𝑃𝑑𝐸/𝑃𝑑𝑈,𝐾,𝐺

𝑠𝑎 , and the method for allocating it to each of the UDISA are the

same as described in section 5.1.2.

5.1.2) Points of Re-delivery at the premises of the End Customers directly connected to the Transmission network For each Gas Day of the year pertaining to the session of adjustment and for each Point of re-delivery at the premises of the End customers directly connected to the Transmission network, Snam Rete Gas, as a result of new measurement data becoming available, shall determine the daily physical item of adjustment pertaining to the k-th Shipper,𝛥𝑄𝑃𝐷−𝑚𝑖𝑠,𝐾.𝐺

𝑠𝑎 , in accordance with the procedures described in Attachment 9/D,

section 1.1. 5.1.3) Points of Re-delivery interconnected with distribution networks

At each Point of re-delivery interconnected with the distribution network and with reference to every Gas Day G of the year pertaining to the Adjustment session, Snam Rete Gas shall determine the daily physical items of adjustment pertaining to the k-th Shipper 𝛥𝑄𝐶𝐺,𝐾,𝐺

𝑠𝑎 , based on:

a) the availability of any new measurement data at the Point of re-delivery; b) the daily data determined and communicated by the Distribution Company,

pursuant to paragraph 28.1 of the TISG, through the M-GAS portal by 31 July of the same year in which the annual Adjustment session is carried out and by 28 February of the same year in which the multi-annual Adjustment session is carried out.

Snam Rete Gas determines the corresponding daily physical item of adjustment pertaining to the k-th Shipper 𝛥𝑄𝐶𝐺,𝐾,𝐺

𝑠𝑎 , in accordance with the methods described in

Attachment 9/A, section 2.


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To this end, in all cases where the value of the overall quantities communicated by the Distribution Company does not match the value of the quantity measured at the Point of Re-delivery, prior to the application of the provisions in the cited section 9 of Attachment 9/D, the Transporter will divide that difference to the Shippers of the distribution service at the same Point in proportion to the data provided by the Distribution Company.

5.1.4) Missing or incomplete availability of data and information at the Re-delivery Points interconnected with distribution networks

Missing or incomplete communication of the daily allocation data referred to in paragraph 28.1 of TISG by the Distribution Company. If the Distribution Company, according to the terms and procedures described above under paragraph b), does not provide the daily data referred to in paragraph 28.1 of the TISG relating to one or more Gas Days of a month to one or more Shippers of the distribution service, Snam Rete Gas will not use the data provided by the Distribution Company for that month and will use instead of that data, for the purpose of determination of the daily physical items of adjustment for every day of that month, the daily data allocated per Shipper of the Distribution service resulting from the Balancing session or from the previous Adjustment session and to determine the daily quantity pertaining to each Shipper in accordance with the same methods shown in Attachment 9/D.

5.2) Determination of the economic items of adjustment In the context of the Adjustment session of the pertinent year, in relation to the daily physical item of adjustment𝛥𝑄𝐾,𝐺

𝑠𝑎 referred to in section 5.1 above, attributed to each

Shipper UDISA, Snam Rete Gas shall apply or recognise an adjustment charge Cagg equal to the product between the daily physical item of adjustment and its Imbalance Price that was recorded on the day subject to adjustment. The invoicing of the economic items is made in the manner and in the terms referred to in Chapter 18, section 4.1.6).

6) ‘PORTALE M-GAS’ Snam Rete Gas makes its ‘Portale M-GAS’ available to Shippers, Distribution Companies and users of the distribution service, which can be accessed via the Snam Rete Gas website in accordance with the documentation and procedures contained therein, for the purposes of managing the data and information used for performing the Balancing Session and the Adjustment sessions referred to in sections 4 and 5.. Snam Rete Gas does not assume any liability, even in respect of third parties, for the completeness, accuracy and veracity of the data and information communicated to the company in accordance with the procedures described in this Chapter for the proper functioning of the Balancing Session and the Adjustment sessions. The Shippers assume all responsibility regarding the completeness, accuracy and veracity of the data reported by them in accordance with the procedures described in

this Chapter. The Shippers also acknowledge that, for the purposes of the


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proper functioning of the Balancing Session and the Adjustment sessions referred to in this Chapter, Snam Rete Gas will use data and information received from third parties. Therefore, the Shippers expressly release Snam Rete Gas from any liability as regards the completeness, accuracy and veracity of the data and information submitted pursuant to this Chapter, as well as any request for compensation made for any reason whatsoever, even by third parties, in relation to the inaccurate, incomplete or untruthful nature of the information/data communicated by the company. These provisions also apply to the transmission of data and information within the meaning of paragraphs 7 and 8 below. The table below summarises the activities carried out by the aforementioned parties via the ‘Portale M-GAS’. Activities of Distribution Companies Pursuant to Article 9.1 of Resolution 138/04, as amended by the Authority, by the 17th working day of month M-1 with reference to month M, the Distribution Company makes available, for each Redelivery Point within the scope of its responsibilities, the list of users of the distribution service operating at that Point. Pursuant to Article 24 of the TISG, in month M+1, within the period referred to in paragraph 4.3.4, letter a), the Distribution Company makes available to Snam Rete Gas the data allocated to each user of the distribution service for the month M. Pursuant to Article 28.1 of the TISG by 31 July of the year in which the Annual adjustment session takes place and by 28 February of the year in which the multi-annual adjustment session takes place, the Distribution Company shall notify Snam Rete Gas of the allocation data concerning the previous year and the years from the second to fifth previous year, respectively. In accordance with Resolution 670/17, the Distribution Companies also send the information and data indicated in paragraph 8 below. Activities of Shippers that are users of the transportation service Pursuant to paragraph 21.2 of the TISG, by the penultimate working day of month M-1 with reference to month M, each Shipper defines or updates, for each Redelivery Point at which it owns transmission capacity, the list of users of the distribution service, including those made available at the same Redelivery Point by the Distribution Company within the period mentioned above, enabled to establish a valid commercial relationship in month M. The updated data relating to the Redelivery points at which the user is the holder of transportation capacity as a result of the assignment, transfer or sale of transportation capacity referred to in Chapters 5 and 7, are made available on the ‘Portale M-GAS’ from 12 pm on the third calendar day following the 14th day of month M-1 with reference to month M. Activities of the users of the distribution service


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Pursuant to paragraph 21.3 of the TISG, by the last working day of month M-1, each user of the distribution service selected by one or more Shippers as described above, defines or updates the commercial correspondent relationships with such Shippers valid for month M, indicating the distribution rules in the event of the existence of correspondent relationships with more than one Shipper at the same Redelivery Point. The distribution rules that the user of the distribution service may indicate are, for each Point, alternatively and exclusively one of the following two rules: Percentage (distribution based on fixed percentages); Rank (distribution according to defined priorities and set value limits).

7) TEMPORARY PROVISIONS The following provisions of the Network Code, pursuant to Resolution 229/2012/R/gas, are valid and apply only to the period necessary for the determination of the definitive balances, as well as the physical and economic items for the period prior to 1 January 2013.

7.1) Provisions governing the allocation process at the Redelivery Points and the adjustment activities up until December 2012 In accordance to the provisions established by the Authority in Resolution no. 138/04 as amended, Snam Rete Gas allocates to Shippers at each shared Redelivery Point interconnected with distribution networks, the quantities of gas withdrawn daily, in accordance with article 20, paragraph 1, of said Resolution. The quantities of gas allocated to users of the transmission network at shared Redelivery Points interconnected with distribution networks are determined, for each day of the month subject to allocation, by means of a “bottom-up” process, based on: a) The allocation data for user of the distribution service, as communicated by the

Distribution Company and received by Snam Rete Gas within five working days and, in any case, no later than the 9th day of the month following the month to which the data refers, pursuant to article 29, paragraph 1 of Resolution no. 138/04;

b) the information received by the Distribution Company itself and by parties engaged in sales activities for the purposes “mapping” the commercial relationships between parties operating in various capacities at the Redelivery Point, pursuant to the provisions of articles 10 and 13 of the same Resolution no. 138/04, within the terms indicated in the functions offered by Snam Rete Gas.

The parties working in various capacities at the Redelivery Point consist of:

users of the distribution service; parties engaged in sales activities, which directly or indirectly supply natural gas

to users of the distribution service and which, in turn, have natural gas as part of contracts concluded with other parties engaged in sales activities;

Shippers.


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Pursuant to the provisions of Article 29, paragraph 2 of Resolution no. 138/04 and ARG/gas 27/10, from 1 October 2010 until 31 December 2012, in correspondence with the Redelivery Points of the RR interconnected with distribution networks for which the Distribution Company has communicated allocation data broken down by day and month or only by month, Snam Rete Gas allocates to users of the transmission network of the quantities of gas withdrawn daily according to the following procedures: 1. performs daily profiling activities on the monthly allocation data communicated by

the Distribution Company for each user of the distribution service, applying the standard withdrawal profiles referred to in Resolution 319/2012/R/gas, Attachment A, associated with the allocation data by the Distribution Company itself;

2. verifies the correspondence between the data communicated and the profiles mentioned in paragraph 1 above and the quantities measured daily at the Redelivery Point and establishes the quantities to be allocated for each type of withdrawal and for each user of the distribution service on a daily basis, according to the process described in Attachment 9/C;

3. determines the daily quantity for each Shipper, on the basis of the daily allocation data for each user of the distribution service, as described in paragraph 2, based on information received from the Distribution Company and from parties engaged in sales activities for the purposes “mapping” the commercial relationships between parties operating in various capacities at the Redelivery Point, pursuant to the provisions of articles 10, 13 and 14 of Resolution no. 138/04.

In the presence of allocation data provided by the Distribution Company, broken down by day or by month, Snam Rete Gas, before performing the profiling activities on the monthly allocation data referred to in paragraph 1 above, verifies that, on each Gas Day G, the daily quantities communicated by the Distribution Company do not exceed the daily measurement at the Redelivery Point. In the event that, on a given Gas Day G, the quantity measured at the Redelivery Point is less than the total of the daily quantities communicated by the Distribution Company, Snam Rete Gas will share out the difference in proportion to the quantities reported. Allocation process for the provisional transportation balance For the purposes of establishing the provisional balance referred to in paragraph 4.1 above, Snam Rete Gas allocates the volumes of gas measured/determined to users of the transport network at interconnected Redelivery Points. These volumes are allocated in proportion to the planned quantities identified by the Shippers in accordance with Chapter 8. Distribution rules The distribution rules that the user of the distribution service can apply are:

Percentage (allocation based on fixed percentages); Rank (division according to defined priorities and set limit values).

Replacing the estimated data with measured data Where the Distribution Companies communicate new allocation data, the adjusted data in accordance with Resolution no. 138/04 will be accepted by Snam Rete Gas, as reported

by the Distribution Companies, to the extent provided in paragraph 7.2.


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Non-availability of information regarding the commercial chain (“mapping”) In relation to the non-availability of information regarding the mapping of commercial relationships, the provisions set out in paragraph 4.3.4 apply. Failure by the Distribution Company to communicate the allocation data and/or mismatch between the data reported by the Distribution Company and the volumes measured at the Redelivery Point interconnected with shared distribution networks Until 31 December 2012, where the monthly total of the quantities communicated by the Distribution Company, pursuant to Article 29 of Resolution no. 138/04, is less than 90% of the monthly quantity measured at the Redelivery Point, Snam Rete Gas will allocate the daily quantity measured in proportion to the Shippers’ transportation programmes; where transportation programmes are not available for one or more Shippers, the allocation will be made in proportion to the transportation capacity assigned to the Shippers at the Redelivery Point. In other cases where differences occur between the monthly total of the quantities communicated by the Distribution Company and the monthly total measured at the Redelivery Point, Snam Rete Gas will: d) use the most recent data in its possession, for users of the distribution service for

which allocation data have not been received;

e) distribute among the users of the distribution service the difference between the quantity measured at the Redelivery Point and the new total allocation data, determined by adding the data provided by the Distribution Company and the data mentioned in the preceding paragraph, primarily in proportion to the estimated monthly withdrawals excluding, for the period from October to April, the types of withdrawal associated with technological use without a thermal component, as necessary, in proportion to the withdrawals excluded from priority (in order of monthly and then daily measurement).

7.2) Provisions regarding adjustments to the measurement and allocation

Measurement errors, both negative and positive, or resulting from the application of the allocation rules, require adjustments to be made to the quantity of energy wrongly determined or allocated until the revision of the definitive balance related to the month of December 2012. Where errors are confirmed, the Transporter will replace the incorrect value with the new correct value. Each month M, in addition to the definitive balance for month M-1, the Transporter implements the procedure to revise the measures and/or allocations for month M-3, and proceeds to invoice the adjustments. Shippers will have 2 (two) working days following the availability of the relative reconciliation to communicate to the Transporter any corrections made due to clear errors made by Snam Rete Gas during its preparation. Snam Rete Gas will make an IT system available on its own website (OBS Portal) for the presentation of observations to the revised definitive balance in accordance with information provided in this

paragraph.


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Once the aforementioned audit procedure has been completed, the measurements and/or allocations will be considered definitive and not subject to any further modification, for transport invoicing purposes. These values will be communicated to the relevant Shippers and system operators.

7.3) Provisions with regard to late adjustments pursuant to Resolutions ARG/gas 182/09 and ARG/gas 70/10 Pursuant to resolution 229/2012/R/gas, the provisions of this paragraph shall apply to any adjustments relating to the period up to 31 December 2012. With effect from 2015, the sessions referred to in this section will be included, until they are completed, in the context of the Multi-annual adjustment sessions adjustment referred to in section 5 above. Snam Rete Gas will make a timetable available in relation to the last late Adjustment Sessions. In accordance with the Authority Resolutions ARG/gas 182/09 and ARG/gas 70/10, any measurement errors, which exceed or fall short, at the RN Redelivery points, detected after the closing of the measurement revision and the allocation for month M-3 described in the previous paragraph 7.2, are the subject of correction for the purposes of the reconciliation and economic compensation in accordance with the procedure described in this paragraph. The reconciliations and economic compensations are determined in the course of each year within two specific Sessions. In the 1st Correction Session which takes place no later than 5th July (if this is a

Saturday or public holiday the deadline will be brought forward to the last working day) of each year, the measurement errors considered are those up to May of the year in which the Session is held, verified in the period between the Reference Month of the 1st Session and the 60th month prior. The reference month of the 1st Session (MrifI) is February of the same year in which the 1st Session is carried out

In the 2nd Correction Session, which takes place no later than 5th January (if this is

a Saturday or public holiday the deadline will be moved to the next working day) of each year, the measurement errors considered are those up to November of the year preceding that in which the Session is held, verified in the period between the Reference Month of the 2nd Session and the 60th month prior. The Reference Month of the Session is August of the year preceding the deadline for holding the 2nd Session.

Snam Rete Gas makes available on its website the timetable of the Sessions referred to in this paragraph from 2014 up until the conclusion of the activities relating to the application of the provisions of Resolutions ARG/gas 182/09 and ARG/gas 70/10.

7.3.1) Determination of the physical item reconciliation

After a measurement error has been established as described above, Snam Rete Gas will determine the corresponding physical item reconciliation PFC


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PFC = Prett – Perr

where: - Perr is the quantity of gas known to have been withdrawn at the Redelivery Point in

the reconciliation balance of month Merr in which the measurement error occurred; - Prett is the quantity of gas which is known to have been withdrawn in the same

month Merr, on the basis of the new Measurement Report as referred to in paragraph 7 of Attachment 10/A.

The physical item reconciliation PFC is attributed to the Shipper Directly Involved, within the corresponding Correction Session. The term “Shipper Directly Involved” indicates the party that satisfies both of the following conditions: - is holder of the transportation capacity at the Redelivery Point in month Merr in

which the measurement error occurred and - is a Shipper in the Reference Month Mrif of the Session in which the error was

considered. If, when the Correction Session is held the party entitled to the transport capacity for month Merr is no longer the counterparty of the Transportation Contract since this has been passed on to another party (for example following a company takeover), the two aforementioned conditions will be satisfied by the succeeding party. The Shippers communicate to the Transporter, no later than 1st June and 1st December of each year (if this date is a Saturday, the deadline is moved to the next working day) the information needed for the purpose of the correct identification of the Shipper Directly Involved. To this end, Snam Rete Gas publishes the appropriate forms on its website. If the Shipper Directly Involved is not identified, and until a new Shipper is identified, within the period of five years (60 months) described in paragraph 7.3, the physical item reconciliation will not be considered for the purposes of determining the charge as referred to in paragraph 7.3.2. Regarding Redelivery Points shared between a number of Shippers, Snam Rete Gas will determine the physical item described above applying the same allocation rule as for the month Merr, where applicable. In accordance with Resolution ARG/gas 70/10 for the purposes of determining the charges referred to in paragraph 7.3.2, Redelivery Points shared between a number of Shippers will not be considered in all cases in which the determination of the respective physical items indicates the recalculation of the allocations on the basis of communications by the respective Distribution Companies interconnected, or on the basis of rules deriving from the “Value without compensator” referred to in Attachment 9/A.

7.3.2) Determination of correction and compensation charges

Correction charges


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Within the corresponding Correction Session, in relation to the i-th physical item reconciliation (PFC) referred to in the previous paragraph 7.3.1, Snam Rete Gas applies a correction Charge Crett to the Shipper Directly Involved, equal to:

errMRii IPFCCrett

where:

errMRI is the index IR relating to month Merr, determined and published by the

Authority; the coefficient ε takes on the value of:

- 112950

n/, , in cases in which the i-th physical party is positive; or

- 120301 n/, , in cases in which the i-th physical party is negative;

n is the number of the month between month Merr and the Reference Month Mrif of

the relative Session.

The fee is corrected and invoiced in accordance with the procedure describe in Chapter 18, paragraph 4. Compensation charges Within the corresponding Correction Session, and when the correction charges are determined, Snam Rete Gas applies a correction compensation CcompK to each Shipper holding booked capacity in the Reference Month including the Shipper Directly Involved, equal to:

i

MK

KK Crett

P

PCcomp

rif

where:

- PK is defined in paragraph 3.1.3; - Mrif is the Reference Month of the relative Session.

The correction and compensation charges are subject to the issuing of invoices or credit notes in accordance with the procedure described in Chapter 18, paragraph 4.

8) PROVISIONS FOR PREVIOUS ADJUSTMENT SESSIONS IN ACCORDANCE WITH RESOLUTION 670/17 A Previous Adjustment Session is intended to mean each of the annual and multiannual adjustment sessions with reference to years 2013 to 2019.


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The following paragraph describes the methods used to manage the physical and economic items with reference to the Previous Adjustment Sessions after the closure of the Balancing session indicated in paragraph 4, for the purposes of the economic settlement. They include the information indicated in Resolution 670/17, subsection 6.1, letters a) and b) at the interconnection points with the networks of the other transporters, where communicated by the latter within the times indicated below. Snam Rete Gas manages two dedicated adjustment sessions on a yearly basis, using its information systems to fulfil the obligations of the Transporter indicated in Resolution 670/17:

a) The Annual Previous Adjustment Session, the results of which are made available by Snam Rete Gas by 31 October (if a Saturday or holiday, this term is put back to the next working day) of each year, considers the measurement data available to the Transporter or communicated by the Distribution Company and by the other Transporters by 31 July of the year in which the Session is performed, with reference to the previous year. To this aim, the new measurement data available to Snam Rete Gas up to the month of July of the year in which the Session is performed are included in the Session.

b) The Multiannual Previous Adjustment Session, the results of which are made available by Snam Rete Gas by 31 May19 (if a Saturday or holiday, this term is put back to the next working day) of each year, considers the measurement data of the previous year available to the Transporter or communicated by the Distribution Company and the other Transporters by 28 February of the year in which the Session is performed, with reference to the previous years from the second to the fifth. To this aim, the Session includes the new measurement data available to Snam Rete Gas up to the month of February of the year in which the Session is performed.

The information on the annual Previous Adjustment Session and the multiannual Previous Adjustment Sessions is made available to the Shippers through the IT platform made available by Snam Rete Gas. All the provisions concerning the operators’ responsibilities indicated in paragraph 6 above remain valid. The Shippers have 5 (five)20 working days after this term to communicate to Snam Rete Gas any requests for correction of their values due to manifest material errors by Snam Rete Gas in its preparation. This communication is made by the Shipper through the function of the Transporter’s web site and using the methods contained in it. The rule whereby the submission of incomplete documentation and/or documents that do not comply with the form and methods indicated by Snam Rete Gas entails the rejection of the request remains valid. Within 5 (five)20 working days of the term for the communication of requests for correction, Snam Rete Gas will send the requesting Shipper a communication containing the same information laid down for requests submitted in the final transport balance,

19 Without prejudice to the provisions laid down for the multiannual Previous Adjustment Session, period 2013 2016, in paragraph 8.4 below 20 For Previous Adjustment Sessions different from those indicated in point 2 of Resolution 220/2018/R/gas, times sub judice at the Authority.


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described in paragraph 4.2 above. After this term21, Snam Rete Gas will make available the results of the previous Adjustment Session, which will be considered final and not

subject to further modification (final results). If any manifest material errors are found, Snam Rete Gas will recalculate the quantities due to the Shipper. The new quantities will be communicated to the Shippers concerned and the system operators for the aspects that concern them. The economic items determined as described in paragraph 8.2 below are settled through the issue of invoices and credit notes in accordance with the methods described in Chapter 18, paragraph 4.1.6.

8.1) Determination of the physical adjustment items for the Previous Adjustment Sessions Daily adjustment item for the Previous Adjustment Session is intended to mean the physical item determined on the basis of the new measurement data available at the time when the Previous Adjustment Session is performed. With reference to each month of the year of the Previous Adjustment Session, on the basis of the new data available, Snam Rete Gas redetermines the daily physical items of gas, indicated in paragraphs 8.1.1, 8.1.2 and 8.1.3, referring to each Directly Interested

Shipper, UDISA. UDISA is intended to mean each person that has been assigned a transport capacity with reference to the month in which the daily physical item (Merr) lies, including the persons who are no longer Shippers at the time of the settlement of the corresponding economic adjustment items. If, when the Previous Adjustment Session is performed, the person who has been assigned transport capacity at the Point concerned in the month Merr is no longer a counterparty of the Transport Contract, but has completed a succession of another entity (for example, following a merger), the two conditions indicated above are considered satisfied by the later succeeding entity. In this case, the items are considered within the scope of the term EPSuk indicated in Chapter 5 for that entity. For the succession of another entity not yet communicated to Snam Rete Gas following the methods described in this paragraph, Shippers communicate the information necessary to identify the UDISA to the Transporter, by 1 March for multiannual Previous Adjustment Sessions, and 1 August, for annual Previous Adjustment Sessions, of each year (if it is a Saturday or holiday, the term is put back to the next working day. To this aim, Snam Rete Gas makes the relevant forms available on its web site. Subsequently, on the basis of the physical items determined in this way and the information sent by the other transporters, for each day of the Previous Adjustment

Session, Snam Rete Gas calculates the daily value of the term 𝐷𝑆𝐾𝑎𝑔𝑔

of the k-th UDISA determined as the algebraic sum of all the physical items calculated or recalculated in the Previous Adjustment Session.

21 Re-calculation times depending on the checks following any requests recevied.


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8.1.1) Entry/Exit points

Snam Rete Gas makes any necessary corrections of the measurement data at the Entry Points (PdE) and Exit Points (PdU) of the national network. The methods for determining the daily physical adjustment items of the k-th UDISA within the scope of the Previous Adjustment Sessions, and the methods for attributing them to each of the UDISA are the same as those described with reference to the Previous Adjustment Sessions, in Attachment 9/D, paragraph 1, for the Redelivery Points at the Final Customers directly connected to the transmission network.

8.1.2) Redelivery points for End Customers directly connected to the transmission network For each Gas Day G of the year of the Previous Adjustment Session and each Redelivery Point at End Customers directly connected to the transmission network, following the availability of a new measurement, Snam Rete Gas determines the daily adjustment physical item of the k-th UDISA, as described in Attachment 9/D, paragraph 1.

8.1.3) Redelivery points interconnected with distribution networks For each month of the year of the Previous Adjustment Session, Snam Rete Gas determines the daily quantity of gas withdrawn from the transmission system of the UDISA as laid down in the final transport balance indicated in Annex 9/C on the basis of:

c) The availability of any new measurements at the Redelivery Point;

d) The data determined and communicated by the Distribution Company via the M-GAS portal by:

31 July of the year in which the annual Previous Adjustment Session is performed with reference to the previous calendar year, or

28 February of the year in which the multiannual Previous Adjustment Session is performed with reference to the second, third, fourth and fifth previous calendar year.

In application of Resolution 670/17, subsection 4.4, the Distribution Company can correct the data communicated through the M-GAS portal by the twentieth day of the calendar after the terms indicated above. 22

The methods and terms for collecting the information from the operators indicated in this paragraph are defined by Snam Rete Gas and made available through the functions of its web site.

Missing or incomplete data and information at the Redelivery Points interconnected with the distribution networks

If the Distribution Company fails to communicate or only partially communicates the data and information at the Redelivery Points interconnected with distribution networks in accordance with the methods and times laid down by the Transporter, it will be considered as a failure to fulfil the information obligations laid down in Resolution 670/17, subsection 1.2.

22 With reference to the multiannual Previous Adjustment Session, period 2013-2016, by the tenth working day after 15 March 2018.


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If the Distribution Company has failed to communicate or has only partially communicated, in accordance with the methods and terms established, the data concerning one or more Gas Days of a month, for one or more months, for one or more users of the distribution service, Snam Rete Gas will not use the data provided by the Distribution Company and will use, in place of this data, to determine the daily physical adjustment items for all the days of these months, the information following its order of priority: i. If available, the data concerning the users of the distribution service as

communicated by the Distribution Companies in the latest adjustment session performed, assigning the unmeasured withdrawal with daily details to the category with a reading frequency of less than once a month;

ii. If available, the data as communicated by the user of the distribution service for the aspects that concern him within the same timeframe put at the disposal of the Distribution companies to correct the data;*

iii. Lastly, the data concerning the user of the distribution service coming from the result of the Balancing Session.

Snam Rete Gas determines the daily quantity of each UDISA for the interconnection points with distribution networks using the methods indicated in Attachment 9/C.

8.2) Determination of the economic adjustment items for the Previous Adjustment Sessions With reference to the Previous Adjustment Sessions, in accordance with Resolution 670/17, Snam Rete Gas determines the economic adjustment items in accordance with the process indicated below: 1) For each year of the Previous Adjustment Session, taking account of the information

sent by the other transportation companies in accordance with Resolution 670/17, subsection 6.1, letters a) and b), Snam Rete Gas determines:

i) The daily term 𝐶𝑘,𝐺𝑎𝑔𝑔,𝐷𝑆𝑘

of the k-th UDISA equal to the product of the term 𝐷𝑆𝑘𝑎𝑔𝑔

determined in paragraph 8.1 above and the imbalance price applied on the same day, including the small adjustment where applicable;

ii) For the Redelivery Points interconnected with distribution networks, the term:

𝐶𝑘,𝑎,𝑃𝑑𝑅𝑎𝑔𝑔,𝐼𝑂

= �̅�𝑟,𝐴 ∙ ∆𝑘,𝑃𝑑𝑅,𝐴𝐼𝑂

where:

- �̅�𝑟,𝐴 is arithmetic mean extended to each reference year of the Previous Adjustment Session: o for the period before 1 October 2016, of the daily remuneration price

of the exchanges concluded on the GME balancing platform, session G+1; or

o for the period starting on 1 October 2016, of the daily Mean Remuneration Price indicated in paragraph 4.4.1, �̅�𝐺 above;

- ∆𝑘,𝑃𝑑𝑅,𝐴𝐼𝑂 is calculated in accordance with Resolution 670/17, subsection

2.2, as:

*It is understood that the data concerning the distribution use is considered exclusively if no data is sent by the Distribution company, in the current or previous adjustment session, as described in this paragraph.


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9

∆𝑘,𝑃𝑑𝑅,𝐴𝐼𝑂 = (

𝛾𝐴,𝑃𝑑𝑅,𝑟𝑖𝑐

1 + 𝛾𝐴,𝑃𝑑𝑅) ∙ ∑ 𝑃𝑘,𝑃𝑑𝑅,𝐺

𝐴

𝑛𝑎

𝐺=1

where:

o 𝑃𝑘,𝑃𝑑𝑅,𝐺𝐴 , the total daily withdrawals on Gas Day G attributed as

indicated in paragraph 8.1 above, coming from the Previous Adjustment Session, to the k-th UDISA at the Redelivery Point interconnection with distribution network, calculated using the methods laid down in attachment 9/C;

o 𝛾𝐴,𝑃𝑑𝑅,𝑟𝑖𝑐, the term indicated in point 1 of the Authority’s resolution 782/2017/R/gas;

o 𝛾𝐴,𝑃𝑑𝑅, the annual correction factor indicated in Attachment 9/C with

reference to the year of the Previous Adjustment Session; o na, the number of days of the year of the Previous Adjustment

Session.

2) Subsequently, Snam Rete Gas determines with reference to each year of the Previous Adjustment Session:

a) The term ∆𝐶𝑘,𝑎𝑎𝑔𝑔,𝐷𝑆𝑘

of the k-th UDISA defined as:

∆𝐶𝑘,𝑎𝑎𝑔𝑔,𝐷𝑆𝑘

= ∑ ∆𝐶𝑘,𝑚𝑎𝑔𝑔,𝐷𝑆𝑘

12

𝑚=1

where:

∆𝐶𝑘,𝑚𝑎𝑔𝑔,𝐷𝑆𝑘

= ∑[𝐶𝑘,𝐺𝑎𝑔𝑔,𝐷𝑆𝑘

− 𝐶𝑘,𝐺(𝑎𝑔𝑔,𝐷𝑆𝑘)−1

𝐺

] ∀ month m

b) the term ∆𝐶𝑘,𝑎𝑎𝑔𝑔,𝐼𝑂

of the k-th UDISA defined as:

∆𝐶𝑘,𝑎𝑎𝑔𝑔,𝐼𝑂

= ∑[𝐶𝑘,𝑎,𝑃𝑑𝑅𝑎𝑔𝑔,𝐼𝑂

− 𝐶𝑘,𝑎,𝑃𝑑𝑅(𝑎𝑔𝑔,𝐼𝑂)−1

]

𝑃𝑑𝑅

The differences indicated under letters a) and b) are calculated with respect to the amounts determined previously following the: Corresponding balancing session, in the case of an annual balance procedure;23 Previous adjustment session, in relation to the annual balancing procedures for

the second, third, fourth and fifth previous calendar years.

3) Finally, for the Previous Adjustment Session, Snam Rete Gas applies or recognises

the k-th UDISA the adjustment charges ∆𝐶𝑘𝑎𝑔𝑔,𝐷𝑆𝑘

and ∆𝐶𝑘𝑎𝑔𝑔,𝐼𝑂

determined as the sum

of all the annual items indicated in point 2) for the years concerned. The economic items are invoiced in accordance with the methods and terms indicated in Chapter 18, paragraph 4.1.6.

23 With reference to the term 𝐶𝑘,𝑎,𝑃𝑑𝑅

(𝑎𝑔𝑔,𝐼𝑂)−1, set to zero.


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9

8.3) Communication to the Shippers in accordance with Resolution 670/17 For each Previous Adjustment Session, within the terms for providing the results indicated in paragraph 8, letter a) and b) above, Snam Rete Gas: i. provides each Shipper, for each year of the Previous Adjustment Session, with

details on the physical items for every user of the distribution service, the results of the procedure indicated in paragraph 8.1 above;

ii. provides each Shipper, for each year of the Previous Adjustment Session, with the

term ∆𝑘,𝑃𝑑𝑅,𝐴𝐼𝑂 indicated in paragraph 8.2 above, with details for every user of the

distribution service, determined pro rata with respect to the withdrawals calculated in the Previous Adjustment Session;

iii. publishes on its web site the quantity of daily gas measured at each Redelivery Point interconnected with distribution networks and the value of parameters 𝛾𝐴,𝑃𝑑𝑅 and 𝛾𝐴,𝑃𝑑𝑅,𝑟𝑖𝑐.

8.4) Special provisions for determining the multiannual Previous Adjustment Session,

period 2013-2016

In order to activate new methods for determining Previous Adjustment Sessions, by 31 December 2017, Snam Rete Gas provides users of the distribution service on the M-GAS portal the data communicated previously by the Distribution Companies to determine the adjustment sessions as resulting exclusively from the application of the default rules laid down in paragraph 8.1.3, subsection i), above. Exclusively for the first multiannual Previous Adjustment Session (years 2013-2016), the term by which Snam Rete Gas provides the results of the session is set to 18 June 2018 in place of the term indicated in paragraph 8, letter b), above. The balances indicated in paragraph 8.2, point 2, above on the multiannual Adjustment Session, years 2013-2016, will be determined with reference to the results of the respective balancing sessions.

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BALANCING - Snam · 2020-02-29 · Network Code Balancing 9 - 3 9 1) INTRODUCTION This chapter describes the methods used to administer the balancing regime, which aims to ensure