Changes to the Network Emergency Co-ordinator (NEC) Safety Case resulting from Exit Reform UNC Workgroup 0412 Meeting – 1 st March 2012

2 Changes to the NEC Safety Case  Role of the NEC  NEC Safety Case  Impact of Exit Reform on existing NEC Safety Case  Changes to NEC Safety Case  Other Changes  Communication with Industry Participants

3 Role of the NEC  Required under the Gas Safety (Management) Regulations 1996 (GS(M)R) if there is more than one Transporter on the network.  The NEC is appointed to be an independent body whose obligation in an Network Gas Supply Emergency (NGSE) is to co-ordinate actions across the affected parts of the network to minimise the possibility of a supply emergency developing, and where one does develop, to minimise the safety consequences.  The NEC is independent from the commercial interests of industry participants.

4 NEC Safety Case  The NEC is required under GS(M)R to prepare a Safety Case.  The NEC Safety Case must demonstrate that adequate arrangements have been established to satisfy the NEC’s obligations under GS(M)R.  Any material changes to the NEC Safety Case must also be accepted by the HSE and must be accompanied by an adequate demonstration to show that the changes do not increase the risk of a NGSE occurring or, in the event of a NGSE being declared, its impact and duration.

5 Impact of Exit Reform on existing NEC Safety Case  Currently, curtailment of flow to consumers with interruptible supply contracts is used at to assist in reducing demand.  Emergency Interruption, as an action the NEC may authorise in the event of a Stage 1 (or higher) NGSE, is included in existing NEC Safety Case.  Exit Reform introduced via UNC Modifications 90 and 195AV.  Substantial reduction in number of interruptible consumers within Distribution Networks as from 1 st October 2011 (Mod 90).  No interruptible NTS consumers as from 1 st October 2012 (Mod 195AV).  Interruption will continue to be used in Stage 1.  Scale back of Off Peak Daily NTS Exit Capacity, which will be available from 1 st October 2012, is expected to be used as a commercial tool, in the event of a transportation constraint, prior to the declaration of an NGSE.

6 Impact of Exit Reform on existing NEC Safety Case  NEC Safety Case reviewed in light of Exit Reform changes.  A number of options for revising the NEC Safety Case considered by the NEC.  Extensive consideration and discussion between the NEC and HSE during 2009 and 2010 resulted in HSE agreeing to the principles for change i.e. the NEC’s proposal to adopt a four stage structure for managing a NGSE.  Preparatory work undertaken to revise NEC Safety Case and prepare demonstration to show, that following the implementation of Exit Reform, timely and effective demand reduction on the NTS and Distribution Networks remains.

7 Changes to NEC Safety Case  Reduction in number of possible NGSE stages from 5 to 4.  Removal of NTS Emergency Interruption from NGSE Stage 1.  Existing NGSE Stages 2 and 3 combined, i.e. NEC may authorise firm load shedding at NGSE Stage 2.  NGSE Stages 4 and 5 renamed to NGSE Stages 3 and 4 respectively.

8 Changes to NEC Safety Case Network Gas Supply Emergency Classification Gas Deficit: Insufficient Gas Supplies Available to the NTS Critical Transportation Constraint in the NTS Emergency StageGas Deficit EmergencyGSMR Monitor BreachCritical Transportation Constraint 1 (Potential)  Emergency Spec Gas  NTS Linepack  Distribution Network Storage  Emergency Interruption  Public Appeal 1  Instruct shippers & storage operators to amend storage flows  Emergency Interruption  Public Appeal 1  Emergency Spec Gas  NTS Linepack  Distribution Network Storage  Emergency Interruption  Public appeal 1&2 2  National Grid Gas plc’s participation in the OCM will be suspended  Maximise Supplies  Public Appeal 1  National Grid Gas plc’s participation in the OCM will be suspended  Maximise Supplies  Public Appeal 1  National Grid Gas plc will continue to participate in the OCM  Maximise Storage  Public Appeal 1 3  Firm Load Shedding 4  Allocation & Isolation 5Restoration

9 Changes to NEC Safety Case Network Gas Supply Emergency Classification Gas Deficit: Insufficient Gas Supplies Available to the NTS Critical Transportation Constraint in the NTS Emergency StageGas Deficit EmergencyGSMR Monitor BreachCritical Transportation Constraint 1 (Potential)  Emergency Spec Gas  NTS Linepack  Distribution Network Utilisation o Distribution Network Storage o Emergency Interruption  Public Appeals  Instruct shippers & storage operators to amend storage flows  Public Appeals  Emergency Spec Gas  NTS Linepack  Distribution Network Utilisation o Distribution Network Storage o Emergency Interruption  Public Appeals 2  National Grid Gas plc’s participation in the OCM will be suspended  Maximise Supplies  Firm Load Shedding  National Grid Gas plc’s participation in the OCM will be suspended  Maximise Supplies  Firm Load Shedding  Maximise Storage  Firm Load Shedding 3  Allocation & Isolation 4Restoration

10 Changes to NEC Safety Case  Continued differentiation between normal commercial arrangements (Stage 1) and NEC instructions (Stage 2 and higher).  Firm load shedding moved to Stage 2 to highlight it could be authorised by the NEC sooner than was the case prior to the introduction of Exit Reform.  Allocation and Isolation remains a distinct NGSE stage at request of DECC.  Public appeals can be authorised by the NEC at any stage.  Interruption remains unchanged as a possible Stage 1 action.

11 Changes to NEC Safety Case  Exercise Sage held in May 2011 to demonstrate firm load shedding of NTS consumers, following the implementation of Exit Reform, could be achieved in a timely and effective way.  Revised NEC Safety Case and corresponding demonstration submitted to HSE in September  HSE acceptance of revised NEC Safety Case expected imminently.  Changes discussed at meetings with the DNs

12 Other Changes  NEC Safety Case change will need to be reflected in Transporter’s safety cases.  Distribution Networks have progressed Safety Case revisions to reflect the implementation of UNC Modification 90.  To ensure consistency, changes to NGSE Stages will also need to be reflected in UNC Section Q (UNC Modification Proposal 412).

13 Communication with Industry Participants  The NEC has communicated with industry participants with regard to the changes to the NEC Safety Case resulting from Exit Reform.  Meetings where changes to the NEC Safety case have been discussed include:  NEC Safety Case Forum (Distribution Networks in attendance);  NEC Safety Case Working Group meetings (Distribution Networks in attendance);  E3 Alignment Group meetings (Distribution Networks in attendance);  Operational Forum (Shippers in attendance);  Exercise Saffron Briefing Pack (issued to industry participants including Shippers and Distribution Networks).