2 hour / 5% Rule Bethan Winter

2 hour / 5% Rule 2 hour / 5% rule currently defined in OAD: Section I; 2.3.3 and 2.3.4 Believed to have been included to replace the old 2 hour / 5% rule in the Operating Agreement between the National and Area Control Centres before Network Sales New wording is ambiguous and implementation may be in- efficient and could drive the wrong behaviours Not clear what benefit the revised rule provides to UKT

Background – Legacy Rule 5% restriction was based on changes to the end of day position from which hourly intake was derived Believe the purpose was to allow wider industry including shippers time to revise NTS inputs so that NTS remained in balance Changes to flex not considered as these have zero impact on the end of the day position Separate rules for flex in that it could only be reduced within-day In some LDZs embedded VLDMCs were also excluded from the 5% restriction Most DN systems currently provide functionality to work to the original interpretation of the rule, therefore not compliant with OAD

Impacts of the Change Only smaller changes can be achieved within the gasday Flex isn’t excluded from the rule: this reduces our ability to manage it efficiently All LDZ VLDMCs are treated as part of the LDZ Intake: LDZ VLDMCs may need to give more notice than NTS VLDMCs where they are a large percentage of the DN load, even where the NTS capacity was booked for them using the same process as for NTS VLDMCs ie 24 x hourly maximum quantity

Example This chart assumes a flat intake was planned

Summary The 2 hour / 5% rule in OAD changes the ability for the DNs to manage their LDZ efficiently and compliance with it may require: Investment in new systems and processes for operation Investment in new processes for Network Planning Investment in additional LDZ storage And lead to: Reduced flexibility for LDZ VLDMCs compared with NTS VLDMCs

Next Steps Propose that a modification is raised to clarify the wording in OAD to the currently used interpretation Applies to End of Day intake May exclude embedded VLDMC