1. UNC Modification Proposal 0373

2. Overview History: Modification Proposal 0273
Summary of Issues with current NTS connections process
AEP Connections Workgroup
Connections “Straw Man” – Overview
Modification Proposal 0373
Refinements of “Straw man”

3. History: Modification Proposal 0273
“Governance of Feasibility Study Requests to Support Changes to Network Exit Agreements”
Raised in response to concerns over unlimited timescales and costs for feasibility studies
Development process highlighted many opportunities for improvement in connections process
Mod withdrawn once established that feasibility studies only one part of a much bigger issue.

4. Summary of Issues with current NTS connections process
The physical connection enabling process is managed by National Grid NTS and, as such, is not subject to prescribed timescales, standard costing, or service levels.
The requesting party – shipper or developer – is uncertain of the costs it might incur in certain instances and the timing of the delivery of certain outputs which contribute to the overall process.
the processes which are currently external to the UNC lack structure and governance (includes for example; NExA, NEA, SCA)
Question of relevance and value of some of the existing reports / processes.
RESULT = Unreasonable risks placed on Shipper / Developer

5. AEP Connections Workgroup
Established to review the entire NTS Exit connections process and seek improvements through bi-lateral discussions.
AEP members met with NG NTS (Mike Thorne):
Constructive discussions
E.ON developed “straw man” for NTS (Exit) connections process, loosely based on Electricity transmission connections CUSC model.
AEP members and NG agreed “straw man” model was a good starting point for more detailed discussions.

6. Connections “Straw Man” Overview

7. Initial discussions
Customer (Shipper / Developer / DN) approaches National Grid NTS (NG)
with regards to a possible new (or change to existing) NTS connection:
Initial discussion between parties.
Exchange of information.
Informal exploration of options.
Determine whether ‘Full’ or ‘Minimum’ connection required (will determine next steps).

8. Optional Feasibility Study
Customer may choose this to explore their options further.
e.g. where multiple possible points of connection, alternative pipeline routes, etc.
Not proposed to apply specific timescales / costs here, due to ‘speculative’ nature of request.

9. Formal Application and Offer Process
Customer lodges application with NG for either a minimum connection or full connection.
Application fee paid by customer.

10. Application and Offer Process: Minimum Connection
After 3 months, NG provides a connection “Offer”. This includes:
conceptual design study report (or similar)
construction agreement.
Following receipt of Offer, customer has a 3 month acceptance period (to cover post-offer discussions and negotiation).
Total: 6 months

11. Application and Offer Process: Full Connection
After 6 months NG provides a connection “Offer”. This includes conceptual design study report (or similar)
route corridor for pipeline
construction agreement
Following receipt of Offer, customer has a 3 month acceptance period (to cover post-offer discussions and negotiation).
Total: 9 months

12. “Price, Program & Layout”
Format of Offer
For either Full or Minimum Connection, NG to provide Offer in the standard format of :
“Price, Program & Layout”

13. “Price” Fixed price of connection provided in Offer.
For Minimum connection - £30k?
For Full connection - based on price per kilometre of pipeline?
Payment schedule to be provided to customer [staged payment?]
Costs paid ‘up front’, not reconciled afterwards.
Fixed actual costs to be published and reviewed annually by NG.

14. “Program”
Effectively a record of key milestones for the project which need to be
completed by either party (customer and NG) and which should include as
a minimum:
When NG needs to apply for site to be in its licence (lead times, etc.).
When capacity needs to be booked by Shipper (if firm capacity needed / ad-hoc process?).
When NG has to order long-lead items.
By when NExA needs to be in place.

15. “Layout”
The detailed design works associated with the connection

16. Customer 3 month Acceptance Period
During acceptance period, but before it lapses, customer shall have the right to appeal to Ofgem if unhappy with terms offered by NG.
Under European law, have a right to refer any issues with connections to the regulator with determination required within 2 months [?]

17. Customer Revisions to Applications
If first gas day changes requiring change to connection, customer will need to re-submit application [re-application costs / process?].
NG reserves right to re-do the price, program (& layout if appropriate).

18. Modification Proposal 0373
100 Mods later..!
Although discussions with NG NTS were constructive, no changes or firm commitments were forthcoming
Proposes to bring NTS connections process under governance of the UNC
Uses “straw man” as starting point
Covers NTS Exit and Entry connections (including Gas Storage)
Expected to be a Development Mod to improve / refine as appropriate.

19. Refinements of Straw man
Conceptual Design Study report currently not delivering what it should:
Scope to reduce size / cost of report by only including site-specific info.
Need to agree format & content of report
NG need to define when a NG-initiated feasibility study is required.
NG need to consider what would ‘lapse’ and need to be revised within an offer if a fixed acceptance period is applied
How does this straw man fit with Entry NTS Connections process?