Modification 0454

1. Modification 0454 Transmission Workgroup 6th March 2014

2. Final Mod Report – Ofgem request • Ofgem has sent the Final Modification Report 0454 back to the Modification Panel and requested that the Report be amended following consideration of 3 issues: • The provision of sufficient evidence or criteria to justify the release of discretionary capacity to certain users on an exclusive basis in the light of NGG’s obligation not to discriminate between users. • The criteria used to determine what (as in its source) and how much discretionary capacity will be available for use as LTNF (and not made available for other users, if that is the case). • The criteria for determining when the LTNF buyback option will be exercised, and in particular the order in which it will be exercised compared to other products that are subject to curtailment.  • We have set out our thoughts to help facilitate discussion…..

3. Issue 1 – NG initial view The provision of sufficient evidence or criteria to justify the release of discretionary capacity to certain users on an exclusive basis in the light of NGG’s obligation not to discriminate between users. • The purpose of modification 0454 is to address a specific industry concern where a User has committed to incremental firm capacity but their own project will be ready ahead of the date that the firm NTS capacity will be available. The product is made available to Users who are affected by these circumstances. • This is to provide more project certainty to customers • It is a temporary non-firm product that will be available only until the relevant firm capacity release date • The product is available to the party that has triggered incremental capacity • During the original workgroup development discussions took place regarding whether the product should be available to all Users and the feedback was that ‘it should be restricted to those requesting firm capacity to support the new connection’ • This mod is a practical response to customer requests for a solution to a set of specific circumstances, which could be implemented straight away • If we were to change the foundation criteria of this (i.e. unlimited access) then this modification and solution may no longer be appropriate

4. Issue 2 – NG initial view The criteria used to determine what (as in its source) and how much discretionary capacity will be available for use as LTNF (and not made available for other users, if that is the case). • Quantity: • Criteria = “Do we expect that we will interrupt the LTNF Capacity every day of the period?” • If Yes: LTNF Capacity will not be available • If No: the level of LTNF Capacity requested will be made available (note this cannot be in excess of the relevant incremental signal). • Source: • It is in essence an interruptible product; it is sold in addition to all existing capacity products • This will not have any impact on our obligation to release existing capacity products or on any customers’ existing long term / firm holding

5. Issue 3 – NG initial view The criteria for determining when the LTNF buyback option will be exercised, and in particular the order in which it will be exercised compared to other products that are subject to curtailment.  • A constraint will be identified and managed consistent with current UNC rules / processes and the SMPS • Daily Interruptible/Off-peak Capacity will be curtailed first • The LTNF Buyback Option will then be considered alongside any other offers for Firm Capacity ( i.e. offers taken off in price order as per the SMPS)