Enduring Offtake Arrangements (Including an alternative daily interruptible capacity release mechanism to facilitate use of spare capacity) Peter Bolitho

Off-peak interruptible capacity Business rules difficult to draft along side daily interruptible capacity. Main concerns about daily interruptible capacity: - Off-Peak users likely to have to buy firm capacity which may drive unnecessary system investment - Off-Peak users pay too much - Release mechanism – largely use-it-or-lose-it - Does not best facilitate use of “spare capacity” during periods when such capacity is available Realisation it easier to promote use of “spare capacity” through re-definition of release mechanism Theme Date Department

Release of Off-Peak Interruptible Capacity for existing exit points Max SPOR x 24 Baseline? (existing exit points) Daily Interruptible Capacity Capacity Holding Daily Firm Capacity Enduring Capacity Theme Date Department

Revised Daily Interruptible Release Mechanism The quantity to be offered will be determined as: A Use-it-or-Lose-It (UIOLI) amount - the difference between the Firm NTS Exit (Flat) Capacity holdings at the NTS Exit Point and the quantity of NTS Exit (Flat) Capacity that is expected to be utilised by Users for the purposes of facilitating gas flows (assessed from a rolling average over a thirty (30) Day period from D-36 to D-7 inclusive); Where the Forecast Total System Demand is less than 80% of the 1-in-20 peak day demand, the difference between the Maximum Supply Point Offtake Rate multiplied by 24 and the aggregate Firm Exit (Flat) Capacity holdings (where positive); and Any additional amount that National Grid NTS may make available at its discretion without jeopardising supplies to Firm NTS Exit (Flat) Capacity holders. Theme Date Department

Re-definition of Daily Interruptible Service would incorporate other key features of the Off-Peak service NG NTS required to publish by 15:00 hours forecast total system demand as a percentage of the 1 in 20 demand. User obliged to apply for Enduring Capacity in the July application widow at a level not less than the maximum overrun quantity in the last 12 months. ‘Ticket to ride’ principle enhanced as the sanctions for overrun are more serious Theme Date Department

Comparison with separate Off-Peak Interruptible Service Advantages ‘Ticket to ride’ principle enhanced Allocation on the basis of price where multiple users exist Easier to draft against the main proposal in terms of allocations and overruns. Disadvantages Prices greater than zero mean Off-Peak users pay too much (even greater contribution to fixed costs) May not be consistent with Regulation 1775 which requires TSOs to offer long-term interruptible services Removal of traditional interruptible status requires changes to NGG Safety Cases Theme Date Department

Could this approach be adopted in the Main Proposal? Theme Date Department