1. AQ Appeals and the BTU form Chris Warner

2. 2 AQ Appeals and the BTU form  Presentation reflects NGD’s view of UNC regime as drafted and is intended to explain why it was constructed in that way.  Procedures and approach largely unchanged since start of Network Code other than enhancement of Isolation and Withdrawal regime at RGMA.

3. 3 AQ Appeals and the BTU form  Issue driver – Shipper aspiration? to limit transportation charge exposure for ‘vacant’ sites not consuming gas albeit with the User retaining ownership (Supply Point registration).  UNC addresses this scenario in clear methodical steps – regime developed over several years.  DNO view - Reduction of AQ to a low value (e.g. 0 or 1) as a means to avoid relevant (all) transportation and energy charges via the BTU form for vacant sites while SMP is live and Shipper retains registration is not permissable.

4. 4 AQ Appeals and the BTU form  Annual Quantities (AQs) derived from Meter Readings which prima facie evidence of actual energy Consumption.  AQ appeals based on:  Alternative Meter Readings reflecting previous 12 months consumption, or  Where there is a change in the basis on which gas is consumed then the BTU form may be used: – User needs to provide evidence (in the form of detailing plant and consumption rates) as to the genuine AQ value had the equipment been in place for the duration of the retrospective review period.

5. 5 AQ Appeals and the BTU form  Vacant properties not within scope of above provisions (albeit if no gas consumed, after 12 month period, AQ review process may result in substantial reduction in AQ).  Remedies in place to provide solution.  Isolation (ceases energy allocation and energy/commodity charges).  Withdrawal (ceases Registration and Capacity & Customer charges).

6. 6 AQ Appeals and the BTU form  RGMA. Purpose: to enable I&W while leaving meter connected (disabled). MaMCoP identifies acceptable methods.  Mod 0675. Where meter connected: User must disconnect within 12 months otherwise DNO will disable supply and charge.  Where meter disconnected: GSIU 1994 effective.  NC Modification 0675 Ofgem Decision July 2004.  “Whilst it appears entirely pragmatic for meters to remain in place, where gas is no longer required for a short time, Ofgem is keen to ensure that meters do not remain connected and left in premises inappropriately, or for a long period of time, simply to avoid the costs of disconnection and removal. This could have implications for the transportation of gas and safety more generally”.

7. 7 AQ Appeals and the BTU form  UNC Modification 0172 Ofgem Decision April 2008.  “In accepting Modification 0675 we noted that whilst it appeared pragmatic for meters to remain in place where gas is no longer required for a short time, we were keen to ensure that meters do not remain connected and left in premises inappropriately or for a long period of time, simply to avoid the costs of disconnection and removal”.  Where Supply Meter Point is Live – notional reservation of capacity for which appropriate liability should be borne (cost reflectivity).  User obligations to procure meter readings/emergency contacts, etc, remain.

8. 8 AQ Appeals and the BTU form  Summary:  Scope of G1.6.13 does not contemplate (and was never intended to) a scenario where a premise is unoccupied  Where a premise is vacant, the BTU form should not be used to:  Reduce an AQ more quickly than would be achieved by submitting reads in accordance with the UNC ‘AQ review’ provisions  Change the AQ in circumstances where there has been no change in plant which results in a change in the basis on which gas has been consumed

9. 9 AQ Appeals and the BTU form  Concerns if reduction in AQ to 1 were permitted for vacant sites:  Commercial and physical regimes not matched.  Capacity charges incurred over a 12 month period. New regime would result in immediate cessation of charge while physical capacity remains available.  Potentially not as safe as current situation.  Safeguards not clear– potential for misallocation could increase?  Arguably not pro-competitive (Previous Workstream discussion that Shippers retaining ownership benefit from e.g.‘right to object’ – so if they require relief from charge liability they should Withdraw).