UNC modification proposal 0407 : Standardisation of notice periods for offtake rate changes for all National Grid NTS Exit Users

Transmission Workstream : 5 January 2012

Why is there a need for change?

• Proposal seeks to facilitate standard treatment for all Users with regards to the treatment of notice periods for offtake rate changes (for all NTS Users)

• WWU currently in discussions with potential new connectee to its system, but required pass through OAD terms into any new NExA contract , would negatively impact operational requirements of new site

• Current rules require LDZ aggregate offtake level can only change by 5% every 2 hours

• Knock on effect .......GDN has to utilise its storage capability to accommodate customers rate of offtake change.....this rule NOT a requirements for Users directly linked to NTS

Background – Legacy Rule

• GDNS have embedded (legacy) very large daily metered sites (VLDMCs) which are not governed by this 2 hour 5% rule......however the very nature of some embedded VLDMCs operations, typically dictate they need to change their rate of offtake by more than 5% with less than 2 hours notice.

– e.g. Any power station reacting to electricity demands/requirements may be unable to provide 2 hours notice when seeking to alter their rate of offtake.

• To comply with the rule, GDNs may be obliged to invest in storage requirements to comply with the OAD (UNECONOMIC)?

• Any ‘new/potential’ VLDMC may have better terms to connect to NTS than LDZ ...but may not of course have that choice due to locality restraints etc.

Potential Impacts on Shippers

• A shipper with a ‘new’ embedded VLDMC in an LDZ may be obliged to operate to a more onerous set of rules than a shipper with a Direct Connect connected to the NTS.

• Could ultimately lead to a potential new site not connecting or seeking to connect to NTS (instead of LDZ)

Governance (industry & WWU)

• Discussions scheduled for Offtake workstream (18 Jan) with intention to report back to Transmission Workstream?

• Report due to UNC panel in June 2012.

• WWU discussions with new site/shipper will monitor progress closely to enable commercial discussions

Summary

• Proposal seeks to provide a level playing field for all connectees for offtake rate changes to the NTS or LDZ system

• Ensures GDNs can comply with OAD without restricting ‘new’ VLDMC’s, or investing in additional (unnecessary)storage

• This proposal does not seek to change other OAD rules which manage rate changes at individual offtakes.

UNC modification proposal 0407 : Standardisation of notice periods for offtake rate changes for all National Grid NTS Exit Users

Transmission Workstream : 5 January 2012