Exit Overruns in the Enduring Regime - draft MOD principles Transmission Workstream – 5th August 2010

Background Issue was discussed at July Transmission Workstream: Highlighted an issue where repeated exit overruns could result in cumulative deemed enduring applications in excess of the Users highest historic exit overrun: Agreement reached that cumulative issue was an unintended consequence Concern at Y+4 fixed lead time National Grid to progress solution/business rules

Current deemed application rules UNC B3.2.25 “Where a User incurs an Overrun charge on a quantity greater than 100,000 kWh in any 12 month period (ending March 31st) they are deemed to have made an enduring application in the following July window (effective Y+4) for the highest overrun quantity for that User at that exit point in that 12 month period”. Note this is in addition to the overrun charge mechanism (conceptually similar to Entry)

Draft UNC MOD initial thoughts Cumulative issue addressed by: Taking into account historic chargeable exit overruns that resulted in a “deemed application” e.g. History is only taken into account where the highest exit overrun being assessed occurs prior to the lead time of the previous “deemed application” for that same User at that same Exit Point. Example follows. talk around why for 2nd bullet. i.e principle is that post lead time any overruns occurring would be measured against users capacity entitlement, inclusive of that resulting from previous deemed applications.

Draft UNC MOD initial thoughts Example:

Draft UNC MOD initial thoughts Y+4 lead time At July workstream concerns were raised around the fixed Y+4 lead time Draft MOD brings lead time principals for Deemed Enduring applications in line with “normal” enduring applications as detailed in UNC and the ExCR methodology statement (to be updated in the future to take into account deemed applications) Potentially allows early release of incremental (and unsold baseline where incremental is triggered) Also potentially provides scope to extend lead time if necessary