1. Mod 0273: Governance of Feasibility Study Requests to Support Changes to Network Exit Agreements – National Grid NTS Response

2. Mod 0273 Overview  Raised by E.ON UK  Focuses on Feasibility Studies required to change max flow / ramp rate changes to NTS NExAs, NTS new connections & DN equivalent processes  No published timescales for completion of Feasibility Study or associated Agreement  No indicative costs published  Proposes CUSC style formal timescales & costs to introduce:  3 month turnaround of Feasibility Study  Fixed costs (with option for users to opt for later reconciliation)  Proposed benefits are:  Improved transparency  Greater competition via increased flow rates

3. NG NTS Initial Views  There is confusion over the electricity model deployed  The 3 month Connection and Use of System Code (CUSC) Modification Application process employed in electricity does not include a feasibility/engineering study  Feasibility Study fees are not published in electricity  The gas process needs to be fully understood  In comparison to electricity, the number of new connections and Network Exit Agreement (NExA) changes are relatively few. Receiving quite a few enquiries in a relatively short period can cause workload planning difficulties.  The timescales in gas vary considerably depending on the complexity of the customer requirements/installation  Feasibility and Conceptual Design Studies are important as they are undertaken to meet legislative obligations

4. Electricity New Connections & Modifications - CUSC Process  A ‘Feasibility Study’ is typically undertaken to help determine the best location for a new connection - limited usage, unregulated service, costs are recovered, no delivery SLA  Fees (fixed & indicative) published for New Connections & Modifications but Feasibility Study costs are not published  Application process ‘clock starts’ when all documentation is received/approved & funds have been paid  Offer timescales: 28 days – 3 months Feasibility Study Formal application & Payment cleared Clock StartOffer Made Design Stage Acceptance (Optional) 3 Months Up to 6 months but no SLA

5. Gas Exit Connection Processes  For New Connections an indicative 20 week turn-around is published  Flexibility – the studies undertaken are tailored to suit the particular customer requirements  The costs/timescales of the analysis conducted is calculated accordingly  Typical study timescales and costs: CharacteristicTimescaleCost Simple changes/minimum connections3-6 months£10k to £50K Semi complex changes/medium size connections6-12 months£50K+ Complex changes/large connections12 months+£100K+

6. Why is it important we conduct studies?  Rapid load changes during start up and shutdown could affect the efficient and effective operation of the pipeline system  Trigger safety devices and cut off supply at the installation  Cause damage to National Grid equipment at installations such as pressure regulators, filters and orifice plate meters  Adversely affect other Users of the system (entry and exit points) in the vicinity  Legislation  Health and Safety at Work Act etc. 1974  Pressure Systems Safety Regulations (PSSR) 2000  Pipeline Safety Regulations (PSR) 1996

7. What is involved in conducting a study?  Influencing factors:  Customers don’t always know what they want!  Customers often experience difficulties in providing the information requested  Difficulties in agreeing Contractual terms (between Customer and NG)  Nature of the study  Contractor Procurement process  Workload planning – NG and Contractors