1. RRC arrangements for Storage sites
1/5/18

2. Dual Reconciliation Mechanisms
Dual reconciliation mechanisms exists under mod 621 in the enduring arrangements for Storage.
Historic Capacity will not pay a top up charge
Any Fully Adjusted Entitlements in excess of the Historic Capacity will pay the capacity top up.
Reminder: Historic Contracts is defined as ‘...entry capacity... allocated before the Effective Date and in relation to RRC at Storage includes adjustments to available capacity (including transfers) executed up to and including the Effective Date.’

3. Options for treatment of Transfers (or other adjustments)
Registered Capacity only (i.e. transfers are not accounted for)
This was original rule
Continuous Tracking of fully adjusted entitlements
Adds complexity to commercial rules and systems.
Registered + tracking up to Effective Date.
Existing transfers are accounted for plus any over (approximately) the next year.
But avoids additional complexity on systems as no ongoing tracking.

4. Example (Storage > Oct 21) – Shipper A
Capacity
Amount
RegisteredHistoric
300
RegisteredNon-Historic
100
TransferHistoric (before ED*)
-50
TransferNon-Historic (after ED)
-20
Net entitlements
330
The general rule for sites in the enduring (post Oct 21) arrangements is to pay capacity reconciliation on the Fully Adjusted entitlements i.e. 330.
For Storage (Shipper B):
‘exempt’ qty = (historic contracts + historic adjustments)=250
Capacity RRC qty = max( ,0) = 80
*ED – Effective Date of the modification

5. Example (Storage > Oct 21) – Shipper B
Capacity
Amount
RegisteredHistoric
RegisteredNon-Historic
TransferHistoric (before ED*) 50
TransferNon-Historic (after ED) 20
Net entitlements 70
For Shipper B:
Fully Adjusted Entitlements = 70
‘exempt’ qty = (historic contracts + historic adjustments)=50
Capacity RRC qty = max(70-50,0) = 20
*ED – Effective Date of the modification

6. Dual Reconciliation Mechanisms - Conclusion
NG initial proposal was for only capacity allocated in an auction (i.e. primary holdings) to be included in the definition of historic contracts.
NG has expanded this to include historic transactions i.e. transfers, buy backs etc. completed before the Effective Date.
This will account for historic trades, and while it creates some additional work for NG, it avoids any ongoing additional requirements on systems.
This balances external feedback we have had regarding trading, and internal feedback we have had regarding the risk around system delivery.