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Warsaw, 16 October 2012

TNC New Contract Model. Warsaw, 16 October 2012. the system , that connects. Conclusion of Contracts Contracted Capacity Allocation(CCA), Capacity Allocation (CA) Contracted Capacity Allocation Auction; Bundled Product. Contracted Capacity Allocation for DAY AHEAD Services.

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Warsaw, 16 October 2012

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  1. TNC New Contract Model Warsaw, 16 October 2012 the system,that connects

  2. Conclusion of Contracts • Contracted Capacity Allocation(CCA), Capacity Allocation (CA) • Contracted Capacity Allocation • Auction; • Bundled Product. • Contracted Capacity Allocation for DAY AHEAD Services. • Change of Supplier. the system,that connects

  3. Conclusion of Contracts the system,that connects

  4. Transmission Contract CA CCA/CA • All transmission contracts will be framework contracts. PP CONTRACT • Among the transmission contracts, the interoperator transmission contract (ITC) with the SSO or DSO can be identified. • Each framework contract will have separate CCA or CA concerning specific points. 4 the system,that connects 4

  5. Transmission Contract Transmission contracts are concluded for an indefinite term. Contracted capacity allocation (CCA) nd capacity allocation (CA) is performed for a maximum 4 years. • In the moment of concluding the transmission contract and submitting the financial security the right is conveyed to use the capacity on: • the Virtual Point Gas Exchange; • OTC Virtual Point. 5 the system,that connects 5

  6. Contracted Capacity Allocation(CCA), Capacity Allocation (CA) the system,that connects

  7. CCA/CA DSO2 FPWYFC MFPWYDSO GAZ-SYSTEM S.A. Minedenitration MFPWYSSO FPWYR UGS FPWE MFPWESSO FPWE ONTRASTGPS The Network User orders the capacity The DSO or SSO order the capacity 7 the system,that connects 7

  8. CCA/CA Physical entry and exit points – points with a concrete location where the quantity and quality of the gaseous fuel is measured. Locations where contracted capacity allocation takes place (contracted capacity). The entity authorised to the capacity at the FPWE or FPWY is called the Network User. Confirmation of contracted capacity allocation is an annexe to the transmission contract or the interoperator transmission contract (ITC) - contracted capacity allocation "CCA.” A Tariff fee is charged for use of the FPWE/FPWY. Gas quality settlements are performed at the FPWE/FPWY. 8 the system,that connects 8

  9. CCA/CA WPWY Virtual Point PWYFC DSO2 WPWYDSO WPWE GAZ-SYSTEM S.A. WPWYSSO Mine denitration PWYR PWE UGS WPWESSO PWE ONTRASTGPS 9 the system,that connects 9

  10. CCA/CA Entry and exit points take part in the transmission of gaseous fuel. For the entry and exit points: nominations are made, allocation of the quantity of the gaseous fuel is performed, imbalancing is ascertained. The entity authorised to use the entry or exit point is called the Shipper. Confirmation of the right to use the give entry or exit point is the capacity allocation (CA). Use of the contract points, including the Virtual Point, is free of charge. 10 the system,that connects 10

  11. Transmission Contract OTC Gas Exchange TSO DSO PWYSSO PWESSO Exit Pointfrom DSO PWYDSO PWE PWYFC An entity introducing the gaseous fuel from other transmission systems or mines that wants to sell it at a Virtual Point should: Enter into a transmission contract with GAZ-SYSTEM S.A. The contract entitles to capacity at the WPWEGG/WPWYGG and WPWEOTC/WPWYOTC (CA). To obtain CCA/CA for FPWE/PWE. 11 the system,that connects 11

  12. Transmission Contract OTC Gas Exchange TSO DSO PWYSSO PWESSO Exit Pointfrom DSO PWYDSO PWE PWYFC The entity being connected to the transmission system that wants to purchase gaseous fuel at the Virtual Point should: Enter into a transmission contract with GAZ-SYSTEM S.A. The contract entitles to capacity at the WPWEGG/WPWYGG and WPWEOTC/WPWYOTC (CA). Obtain CCA/CA for FPWYFC/PWYFC. 12 the system,that connects 12

  13. Transmission Contract OTC Gas Exchange TSO DSO PWYSSO PWESSO Exit Pointfrom DSO PWYDSO PWE PWYFC The entity being connected to the distribution system that wants to purchase gaseous fuel at the Virtual Point should: Enter into an distribution contract with the DSO. Enter into a transmission contract with GAZ-SYSTEM S.A. The transmission contract entitles to capacity at the WPWEGG/WPWYGG and WPWEOTC/WPWYOTC . Obtain capacity allocation (CA) for the PWYDSO to the distribution zone , to which they are connected. 13 the system,that connects 13

  14. Transmission Contract OTC SSO Gas Exchange PWESSO PWYSSO TSO DSO PWE Exit Pointfrom DSO PWYDSO PWYFC An entity that wants to transport gaseous fuel to or from the storage facility should: Conclude an agreement with the SSO. Enter into a transmission contract with GAZ-SYSTEM S.A. Obtain capacity allocation (CA) for the points PWYSSO and PWESSO 14 the system,that connects 14

  15. Contracted Capacity Allocation (CCA) Auction; Bundled Product. the system,that connects

  16. Contracted Capacity Allocation (CCA) The introduction of auction mechanisms at the connections with other gas systems in the EU, which makes it possible for the most interested entities to enter the market and may ensure the operator additional means for the development of those connections. Implementation of the capacity allocation procedure via an auction based on rules resulting from the draft Network Code on Capacity Allocation (CAM NC) prepared by ENTSO’g based on Directive 2009/73/EC. The simplification of the procedure of changing the seller of the gaseous fuel and increasing its efficiency for customers wanting to select a new seller. 16 the system,that connects 16

  17. Contracted Capacity Allocation (CCA) • Contracted capacity allocation (contracted capacity) is dedicated separately to FPWE and FPWY. • The contracted capacity allocation procedure – contracted capacity allocation and the change in contracted capacity takes place in a "time window.” • If the demand for capacity (contracted capacity) exceeds the technical capacity, the capacity is allocated. 17 the system,that connects 17

  18. Period for submission of applications in capacity allocation procedure AUCTION TSO published information on: The Contracted Capacity Allocation (CCA) The Auction The Allocation by the Final Customer Contracted Capacity Allocation (CCA) - Auction 1 March Registration on the auction platform 15 March The TSO published information on the capacity allocation within the auction during 5 working days from the completion of the auction 15 May Submission by the participants of the procedure signed CCA along with the financial security 31 May 1 working day of June 4 working day of June 30 June 18 the system,that connects 18

  19. Contracted Capacity Allocation (CCA) - Auction • The auction is conducted on an internet platform. • The auction procedure ensures complete anonymity of the procedure participants. • The only entities that can take part in the auction are: • Those that concluded a transmission (framework) contract, • Those that were informed by Gaz-System S.A. of having exceeded the available capacity and of the necessity of conducting the auction, • Those that registered on the website (platform) and obtained a login. • The auction procedure has a multi-step format. 19 the system,that connects 19

  20. Contracted Capacity Allocation (CCA) - Auction • Auction Organisation: • The Price Tariff as the Starting Point – the object of the auction is only an auction premium; • The prices will be called out in an offer windowuntil the total submitted quantity bids will be smaller than and equal to the quantity of the capacity offered by the TSO; • Rising prices – increase in set price steps; • Small and large price steps are defined for each product included in the allocation procedure; 20 the system,that connects 20

  21. Contracted Capacity Allocation (CCA) - Auction Price Steps - determine the size of the mark-up for the tariff fee Small Price Steps 1 cent per kWh/h Large Price Steps 1 cent per kWh/h Annual Products Annual Products 10 2 0.5 2.5 Quarterly Products Quarterly Products 1 0.2 Monthly Products Monthly Products 21 the system,that connects 21

  22. Contracted Capacity Allocation (CCA) - Auction Price Stage Q4 If the total amount of the quantity bids is at the very start smaller or equal to the quantities of offered capacity, the capacities are sold and will be allocated respectively to all the bids made, in their full quantity at the tariff price. Available Capacity Shipper 1 Shipper 2 Total 5 150 4 150 3 150 2 150 1 150 100 50 150 22 the system,that connects 22

  23. Contracted Capacity Allocation (CCA) - Auction • If on the first day of the auction the quantity of the capacity in the submitted bids is greater than the quantity offered at the auction, the next offer windows will be open – each with a large step price mark-up. • If the total quantity of the capacity in the submitted bids after closing of the offer window is equal to the offered quantity, the auction is closed. The capacity will be awarded pursuant to the quantity bids submitted throughout the duration of the offer window at a price with a mark-up in relation to the tariff price. Price Stage Q4 Available Capacity Shipper 1 Shipper 2 Total 5 150 4 150 3 150 2 150 100 50 150 1 150 150 50 200 23 the system,that connects 23

  24. Contracted Capacity Allocation (CCA) - Auction Price Stage Price Stage Q4 Q4 avail. cap. avail. cap. S1 S1 S2 S2 Total Total 5 4 150 150 4 3 150 150 50 50 100 3 150 50 50 100 2/3 150 100 40 140 2 150 100 100 200 2 150 100 100 200 1 150 150 150 300 1 150 150 150 300 24 the system,that connects 24

  25. Contracted Capacity Allocation (CCA) - Auction • The submitted bids can be replaced with new ones until each offer window is closed. • Once the offer window is closed, the submitted bids are binding until the time another offer window opens. • In given offer windows the quantity offers may be the same or may be reduced (down to 0) in relation to the offer directly preceding that one, however, they cannot be higher. 25 the system,that connects 25

  26. Contracted Capacity Allocation (CCA) - Auction The object of the auction is the Sos fee. the fee is paid monthly. Due to this consisting of management of contractual congestion, the TSO charges a fee which is calculated as follows: OZO = Sos * Mp * T where: OZO - fee for management of contractual congestion [PLN] Sos - fee rate for the management of contractual congestion [PLN/(kWh/h)h] Mp - capacity (contracted capacity) allocated within the auction [kWh/h] T - number of hours in the settlement period [h] 26 the system,that connects 26

  27. Contracted Capacity Allocation (CCA) - Auction Auction of bundled capacity Lasów • the same quantity of capacity is acquired on both sides of the point (within one transaction on a common platform) by the same entity but • two separate contracts with two TSOs • two separate nominations Entry Exit • Contract • Nomination • Contract • Nomination 27 the system,that connects 27

  28. Contracted Capacity Allocation (CCA) - Auction Offered for 3 quarters 0 2012 2013 2014 2015 2016 2017 2018 The first auctions of bundled products will be held in June 2013. 28 the system,that connects 28 28

  29. Change of Supplier the system,that connects

  30. Change of Seller In order to develop competition on the internal gas market, large customers that are not households should have the opportunity to select their providers, as well as sign contracts with several suppliers in order to secure their demand for gas. Such customers should be protected against non-competition clauses that are designed to eliminate competition or alternative offers. (Directive 2009/73 point 17 Preamble) (…) Member States shall ensure that the eligible customer is in fact ableeasily to switch to a new supplier. (Directive 2009/73 Art. 3 item 3) Member States shall ensure that where a customer, while respecting thecontractual conditions, wishes to change supplier, the change is effected bythe operator(s) concerned within three weeks. (Directive 2009/73 Art. 3 item 6) 30 the system,that connects 30

  31. Change of Seller Stages in the Change of Seller Process: The Customer concludes a sale agreement with a new seller; the Customer gives notice of termination of the sale agreement to the current seller; The new seller informs the current seller and the TSO or DSO of the date when he will start selling the gaseous fuels; New seller concludes transmission and distribution contracts; Termination of transmission and distribution contract with current seller; The TSO or DSO will collect the readings from the metering system in order to perform settlements with the current seller; The TSO or the DSO shall immediately convey the metering data to the current and the new seller. 31 the system,that connects 31

  32. Change of Seller The customer that is connected to the network is the disposer of the capacity at that point. "The capacity of the point follows the customer.” This principle was expressed in point 12 of the TNC and point 16 of the DNC. The conclusion of transmission contract or the distribution contract with the new seller/customer immediately renders the contract with the current Shipper ineffective at that point. TSO DSO2 DSO1 A change in seller only concerns exit points both in the system of the TSO and the DSO. The introduction of an entry point into the distribution system – with an undefined location (group MFPWYDSO) will facilitate the change in seller process and will get rid of the current problems connected with the determination of the PWE to the distribution system. The possibility of performing a partial change of Seller 32 the system,that connects 32

  33. Change of Seller • Each seller has the right to purchase gaseous fuels from a selected seller (Art. 4j EL; § 14 System Regulation). • Schedules for the Termination of Contracts • Household customers – the last day of the month following the month in which the declaration of that customer was delivered to the energy company (re. contracts concluded after 11.03.2010); • Final customers – the schedule specified in the contract. • Pursuant to the Decision of the President of the OCCPNo. DOK 1/2012 of 13 April 2012, the procedure for changing the seller should include all the customers with which the trading company has signed complex contracts 33 the system,that connects 33

  34. Change in Seller - Costs Giving notice of termination to the current seller should take place at no additional costs and compensation other than that resulting from the wording of the contract – Art. 4j item 3 EL; The Customer shall be liable only for such costs and compensation as result from the wording of the contract (e.g. contractual penalties, but they cannot directly incur any costs connected with, e.g. taking the meter readings); This provision does not apply to the contracts concluded before 11.03.2010 (Art. 6 amendment of 8.01.2010). 34 the system,that connects 34

  35. Contracted Capacity Allocation (CCA)for One Day Contracts the system,that connects

  36. CCA for One Day Contracts • Conclusion of transmission contract. • Obtaining the CA for the given point in which the one day services will be performed. • Submission of security. • Contracted Capacity Allocation (CCA) shall take place through the approval of nominations. • One day services are provided on the following principles: • Firm and • Interruptible. • Interruptible services are provided on gas level 4. 36 the system,that connects 36

  37. CCA for One Day Contracts Interruptible capacity awarded Technical capacity Contracted capacity Shipper1 Nomination Shipper1 Nomination Shipper2 37 the system,that connects 37

  38. CCA for One Day Contracts Firm capacity awarded Interruptible capacity awarded Technical capacity Contracted capacity Shipper1 Nomination Shipper1 Nomination Shipper2 38 the system,that connects 38

  39. CCA for One Day Contracts Technical capacity Additional firm capacity awarded Contracted capacity Shipper1 Nomination Shipper1 Nomination is not rejected if the Shipper1 has daily CA at that point. In this situation, firm capacity is awarded for 1 day. Re-nomination during the day is possible 39 the system,that connects 39

  40. CCA for One Day Contracts Proportional reduction in relation to submitted nominations while dayahead allocating capacity Technical capacity Contracted capacity Shipper1 Nomination Shipper1 Nomination Shipper2 Nomination Shipper3 40 the system,that connects 40

  41. CCA for One Day Contracts Technical capacity Contracted capacity Shipper1 Firm Interruptible Nomination Shipper1 Nomination Shipper2 Nomination Shipper3 41 the system,that connects 41

  42. CCA for One Day Contracts Re-nomination With re-nomination of dayahead services, only those CCA change proportionally to the available capacity for which the re-nomination was submitted. Technical capacity Contracted capacity Shipper1 Nomination Shipper1 Nomination Shipper2 Nomination Shipper3 Nomination Shipper4 42 the system,that connects 42

  43. Thank you for your attention the system,that connects

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