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UNC0376A - Increased Choice when applying for NTS Exit Capacity – User Pays initial thoughts Review Group 029111 August 2010 Transmission Workstream 01.

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Presentation on theme: "UNC0376A - Increased Choice when applying for NTS Exit Capacity – User Pays initial thoughts Review Group 029111 August 2010 Transmission Workstream 01."— Presentation transcript:

1 UNC0376A - Increased Choice when applying for NTS Exit Capacity – User Pays initial thoughts Review Group 029111 August 2010 Transmission Workstream 01 September 2011

2 MOD 0376A - Background  General support to principles of UNC0376/0376A  Potentially benefits all NTS Exit (Flat) Capacity holders by enhancing the flexibility of both the Adhoc Application Process and the Annual Application Process  Potentially benefits National Grid NTS through more efficient investment decisions

3 User pays  MOD 0376A is a User pays proposal  Changes to xoserve systems  Costs around £128k to £190k  MOD is unusual for a non-zero cost User pays proposal in that:  All NTS Exit (Flat) Capacity holders potentially benefit  i.e. potentially benefits DNO and Shipper Users equally  Current User pays arrangements require apportionment of costs to Shipper Users and Transporters separately

4 National Grid NTS view  Need to demonstrate appropriate apportionment of costs to all parties benefiting from the proposal  National Grid NTS is considering 2 options:  Option 1 – Simple apportionment  50% Transporters  50% Shipper Users  Shipper Users apportionment based on current NTS Exit (Flat) Capacity Holdings  Option 2 – DNO’s treated as Users  25% National Grid NTS  75% apportioned to DNO/Shippers based on NTS Exit (Flat) Capacity holdings

5 Option 2  Proposed apportionment is one based on each User’s (Shipper and DNO) NTS Exit Capacity holdings as at 1 st October 2012  Apportionment of costs based on:  ratio of aggregate DNO Users NTS Exit (Flat) Capacity holdings to aggregate Shipper Users NTS Exit (Flat) Capacity holdings  Resulting DNO User proportion is added to the 25% NTS allocation to form the total “Transporter” User Pays allocation of costs  Example follows...

6 User pays apportionment example Based on Users current NTS Exit (Flat) Capacity holdings (1 st October 2012) System costs £190,000 Total NTS Exit (Flat) Capacity holdings8,640GWh Shipper Users NTS Exit (Flat) Capacity holdings3,759GWh DNO Users NTS Exit (Flat) Capacity holdings4,881GWh National Grid NTS apportionment (25%)£ 47,500 Shipper Users190000 - 47500 *3,759/8,64 0 =£61997.432.63Shipper Users DNO Users*4,881/8,64 0 =£80502.6 National Grid NTS=£47500.0 67.37Transporters

7 Users Pays  UNC0376 not raised as User Pays (although mod did state that if costs were identified they would be recovered via the User Pays process)  NG requested a ROM from xoserve prior to SSE raising UNC0376 – based on 2 principal changes to Adhoc & Annual Application process (can be applied to both UNC0376/A)  Initial view from xoserve was zero cost, subsequently queried by NG  xoserve revised costs to be between £128k to £190k comprising:  User Pays costs (i.e. estimated NG resource costs)  Analysis & Testing of scenarios  Changes to the two reports already identified as being impacted


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