Mod 0273 Overview

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 Formal application & Payment cleared • 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 Design Stage Acceptance (Optional) Clock Start Offer Made Up to 6 months but no SLA 3 Months 3 Months

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:

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