Background IECR describes methodology to be applied by Transco NTS for release of incremental capacity i.e. above obligated capacity in place since July 2002 Special Condition C15 paragraph 2 of NTS GT Licence: “…licensee shall before 1st July of each formula year prepare and submit for approval by the Authority an IECR methodology statement…”
Proposed Amendments -Summary Housekeeping Changes New Licence References Section 2 “Incremental Investment Costs” Pipeline Costs Updated Section 3 “Cost Calculation” clarifications No Change to Methodology Clarification of Investment Lead Times - “three years or more”
Investment Lead Time -Issue Three year lead time typically sufficient to physically deliver incremental capacity Exceptional circumstances beyond NGT’s control may require more than three year lead time: planning permission construction challenges unexpected requested volumes Fixed 3 year lead time likely to give rise to inappropriate costs for NGT and Industry Can we clarify when more than three year lead time appropriate?
Investment Lead Time -Proposal If known pre-auction that greater than 3 years required NGT to propose revised lead time to OFGEM indicating reasons Ofgem could consult users with UCA proposal If agreed, required lead time included in auction tender If known post-auction that longer lead time required NGT to propose revised lead time to OFGEM as part of proposal to release incremental capacity indicating reasons process follows Special Condition C8B 14(5)(b) of GT Licence
Consultation Responses requested by 24 th June 2005 to Nick Pittarello NGT House Warwick Technology Park Gallows Hill Warwick CV34 6DA Email: Nick.Pittarello@ngtuk.com