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Incremental Entry Capacity Release Methodology Statement Review 2005

Incremental Entry Capacity Release Methodology Statement Review 2005. Transmission Workstream - 15th June 2005. Background. IECR describes methodology to be applied by Transco NTS for release of incremental capacity i.e. above obligated capacity in place since July 2002

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Incremental Entry Capacity Release Methodology Statement Review 2005

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  1. Incremental Entry Capacity Release Methodology Statement Review 2005 Transmission Workstream - 15th June 2005

  2. Background • IECR describes methodology to be applied by Transco NTS for release of incremental capacity i.e. above obligated capacity • in place since July 2002 • Special Condition C15 paragraph 2 of NTS GT Licence: “…licensee shall before 1st July of each formula year prepare and submit for approval by the Authority an IECR methodology statement…”

  3. Proposed Amendments-Summary • Housekeeping Changes • New Licence References • Section 2 “Incremental Investment Costs” • Pipeline Costs Updated • Section 3 “Cost Calculation” clarifications • No Change to Methodology • Clarification of Investment Lead Times - “three years or more”

  4. Investment Lead Time-Issue • Three year lead time typically sufficient to physically deliver incremental capacity • Exceptional circumstances beyond NGT’s control may require more than three year lead time: • planning permission • construction challenges • unexpected requested volumes • Fixed 3 year lead time likely to give rise to inappropriate costs for NGT and Industry Can we clarify when more than three year lead time appropriate?

  5. Investment Lead Time-Proposal • If known pre-auction that greater than 3 years required • NGT to propose revised lead time to OFGEM indicating reasons • Ofgem could consult users with UCA proposal • If agreed, required lead time included in auction tender • If known post-auction that longer lead time required • NGT to propose revised lead time to OFGEM as part of proposal to release incremental capacity indicating reasons • process follows Special Condition C8B 14(5)(b) of GT Licence

  6. Consultation • Responses requested by 24th June 2005 to Nick Pittarello NGT House Warwick Technology Park Gallows Hill Warwick CV34 6DA • Email: Nick.Pittarello@ngtuk.com

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