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Credit Scenarios – Modification 0335 Joanna Ferguson.

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Presentation on theme: "Credit Scenarios – Modification 0335 Joanna Ferguson."— Presentation transcript:

1 Credit Scenarios – Modification 0335 Joanna Ferguson

2 VAR Requirements 2 UNC V3.2.1(d): Sum of aggregate amount (other than Energy Balancing Charges) invoiced and unpaid PLUS average daily rate of invoices issued in previous month multiplied by 20 UNC V3.3.1(a): Issue of notice of 80% utilisation of VAR UNC V3.3.1(b): 100% VAR requires additional surety or surety in 2 business days Failure to provide additional surety or security enables Transporter to take action by way of sanctions to prevent growth or ultimately to terminate the User

3 Modification 0335 Impact 3 UNC V3.2.1(d): Sum of aggregate amount (other than Energy Balancing Charges) invoiced and unpaid PLUS average daily rate of invoices issued in previous month multiplied by 20 Modification 0335 creates a new transportation invoice from a Distribution Network to a User for an amount equivalent to the value of the LDZ Commodity Reconciliation and Energy Balancing Charge Therefore the 0335 invoice is subject to the normal UNC V3.3.1 definition of invoiced charges

4 Credit Example - Current 4 Based on NGN Maximum Unsecured Credit Limit Northern Gas NetworksShipper 1 (AAA rated)Shipper 2 (A rated) Credit Limit 11,500.00 Max Limit 29,000.00 11,630.00 Normal Sales 5,520.00 VAR 9,200.00 Average Peak VAR80% Peak of Max Allowed32%79% OK Credit limit maintained =<80%, no notices issued 50GWh: 12 monthsCommodity 1,150.00 Energy - - Total 1,150.00 New Sales 6,670.00 VAR 11,116.67 Average Peak VAR97% Peak of Max Allowed38%96% OK80% Notice 80% notice requirement will result in increased unsecured credit being awarded

5 Credit Example – Mod 0335 5 Based current Mod 0335 invoicing rules Northern Gas NetworksShipper 1 (AAA rated)Shipper 2 (A rated) Credit Limit 11,500.00 Max Limit 29,000.00 11,630.00 Normal Sales 5,520.00 VAR 9,200.00 Average Peak VAR80% Peak of Max Allowed32%79% OK Credit limit maintained =<80%, no notices issued 50GWh: 12 monthsCommodity 95.83 SAP = 45p/thermEnergy 5,514.71 Monthly 5,610.54 New Sales 11,130.54 VAR 18,550.90 Average Peak VAR161% Peak of Max Allowed64%160% OKAdd'l security req'd AA Shipper will result in increased unsecured credit A Shipper will be required ~£9m to lodge additional security


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