Incremental Entry Capacity Release Methodology Statement Review 2005

Transmission Workstream - 15th June 2005

Background

IECR describes methodology to be applied by Transco NTS for release of incremental capacity i.e. above obligated capacity

in place since July 2002

Special Condition C15 paragraph 2 of NTS GT Licence:

“…licensee shall before 1st July of each formula year prepare and submit for approval by the Authority an IECR methodology statement…”

Proposed Amendments-Summary

Housekeeping Changes New Licence References

Section 2 “Incremental Investment Costs” Pipeline Costs Updated

Section 3 “Cost Calculation” clarifications No Change to Methodology

Clarification of Investment Lead Times - “three years or more”

Investment Lead Time-Issue

Three year lead time typically sufficient to physically deliver incremental capacity

Exceptional circumstances beyond NGT’s control may require more than three year lead time:

planning permissionconstruction challengesunexpected requested volumes

Fixed 3 year lead time likely to give rise to inappropriate costs for NGT and Industry

Can we clarify when more than three year lead time appropriate?

Investment Lead Time-Proposal

If known pre-auction that greater than 3 years required NGT to propose revised lead time to OFGEM indicating reasons Ofgem could consult users with UCA proposal If agreed, required lead time included in auction tender

If known post-auction that longer lead time required NGT to propose revised lead time to OFGEM as part of proposal to release

incremental capacity indicating reasons process follows Special Condition C8B 14(5)(b) of GT Licence

Consultation

Responses requested by 24th June 2005 to

Nick Pittarello

NGT House

Warwick Technology Park

Gallows Hill

Warwick

CV34 6DA

 

Email: Nick.Pittarello@ngtuk.com