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0350 – Combining the NTS entry capacity and exit capacity credit checks

0350 – Combining the NTS entry capacity and exit capacity credit checks. Chris Shanley. Background (1). Modification Proposal 0246/0246A/0246B ‘quarterly NTS Entry Capacity User commitment ’ – raised May 2009 & rejected 3 rd June 2010.

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0350 – Combining the NTS entry capacity and exit capacity credit checks

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  1. 0350 – Combining the NTS entry capacity and exit capacity credit checks Chris Shanley

  2. Background (1) • Modification Proposal 0246/0246A/0246B‘quarterly NTS Entry Capacity User commitment’ – raised May 2009 & rejected 3rd June 2010. • Modification Proposal 0261‘Annual NTS Exit (Flat) Capacity Credit Arrangements’ - raised July 2009 & implemented 1 January 2010. • Removed a User’s ability to allow their Annual NTS Exit (Flat) Capacity to lapse. • Consent to Modify C037 was subsequently raised to clarify aspects of 0261 legal text, however Panel recommended that it would be better addressed by a Mod proposal.

  3. Background (2) • Modification Proposal 0332 ‘Removal of a Users’ ability to allow Quarterly NTS Entry Capacity to lapse’ - raised 8 September 2010, discussed and developed at Transmission Workstream. • Analysis requested on the option of combining the entry and exit capacity checks - highlighted that four shippers would be required to provide an extra £14.75m credit/security. • Consensus that there is merit in combining the two credit calculations in to one process as it would reduce the risk from a User default and simplify the admin arrangements. • 0332 withdrawn and 0350 raised - 24th November 2010

  4. 0350: Combining the NTS entry capacity and exit capacity credit checks • Combine the NTS entry and exit capacity credit checks • Amend V3.3.4 to include next 12 months of NTS entry capacity as well as exit capacity • Remove B2.2.15 & B2.2.16 as the purpose of these sections is replaced by the above change • Removal of these sections means that an entry User will no longer be able to defer their registered quarterly NTS entry capacity • Add further clarity to the legal text implemented by 0261 by considering the text changes included in Consent to Modify C037.

  5. Benefits of proposal Advantages • May discourage speculative auction bidding, thus reducing the risk of inefficient system investment • Will reduce the risk of increased Entry Capacity Commodity charges to the shipper community from: • A User signalling and being allocated capacity that is subsequently allowed to lapse. • A User providing insufficient credit to cover their total Entry and Exit Capacity commitment. • Reduces UNC Parties’ administrative burden of monitoring two separate credit arrangements. Disadvantages • Single ASEP user would not have the option of allowing Quarterly NTS Entry Capacity to lapse

  6. Implementation • It is proposed that 0350 is implemented on 1st of the month following the Authority’s decision to allow for any necessary changes to the administration processes. • i.e. If direction received 15th January, 1 calendar month after is 15th February, and the 1st of the month after that is 1st March, therefore implementation in this example would be 1st March

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