1. Wales & West Utilities Mod 0671 User Commitment
1st November 2018
Wales & West Utilities Mod 0671 User Commitment

2. Background
The current process allows a User to request additional Firm Exit Capacity
It also allows a User to reduce its Exit Capacity
When an increase is request that would result in NTS having to release additional Incremental Obligated Exit Capacity then NTS can consider substitution (Exit Capacity Substitution and Revision Methodology Statement paragraph 32)
Exit Capacity Substitution and Revision Methodology Statement will need amending post mod 0621 as paragraph 35 will need amending.

3. The problem There are two problems
A User cannot suggest a flow exchange between two offtakes it has to request an increase and decrease separately, the process doesn’t really allow for Users who want to optimise for commercial or operational reasons. These may will be between two adjacent offtakes on the same leg of the NTS.
User commitment remains at an offtake even if the capacity has moved to another offtake
These mean that it is both risky and probably not commercially viable to try and move Firm Exit Capacity between offtakes
The first problem could be solved by a new process
The second problem could be solved by changes to the User Commitment regime for flow exchanges
We are not proposing a fundamental review of User Commitment

4. New process
The User would be able to propose a capacity exchange between two offtakes during July to September window
NTS would analyze this to see if it was possible without additional NTS investment
If so then any existing User Commitment would move with the capacity exchange

5. User commitment
If Incremental Obligated Exit Capacity is provided then the User Commitment applies to the whole of the Firm Exit Capacity at that offtake.
This can rapidly build up into a big User Commitment that means a User gets no benefit from offering Firm Exit Capacity reductions because they still have to pay the User Commitment. This potentially leads to inefficient hoarding of capacity meaning other Users cannot make use of it.

6. User commitment an example 2018
BASELINE:
Application Year
Offtake A B C D
Total
2018
Required UC
Capacity charged for
Annual
Y+1
18/19 10 40
Y+2
19/20
Y+3
20/21
Enduring
Y+4
21/22
Y+5
22/23
Y+6
23/24
Y+7
24/25

7. User commitment an example 2019
REQUIREMENT TO MOVE FLOWS FROM B TO A from 2021
Application Year
Offtake A B C D
Total
2019
Required UC
Capacity charged for
Annual
Y+1
19/20 10 40
Y+2
20/21
Y+3
21/22 11 9
Enduring
Y+4
22/23
Y+5
23/24
Y+6
24/25
Y+7
25/26

8. User commitment an example 2020 and beyond
REQUIREMENT TO MOVE FLOWS FROM A TO B and D from 2023, slight increase in C
Application Year
Offtake A B C D
Total
2020
Required UC
Capacity charged for
Annual
Y+1
20/21 10 40
Y+2
21/22
Y+3
22/23 11 9
10.1
40.1
Enduring
Y+4
23/24
9.5
10.5
41.1
Y+5
24/25
Y+6
25/26
Y+7
26/27
2021
User Commitments exist at all offtakes and no benefit of releasing any capacity until 2026