Connected System Exit Points Options for strategic regime change

1. Connected System Exit PointsOptions for strategic regime change Chris Warner

2. Option 1 - The DCUSA Model • DNO invoices the aggregate transportation invoice to the iGT based upon load information provided to it by the iGT • Subsequently, the iGT would levy an aggregate transportation invoice (in respect of both DNO/NTS and iGT services) per User (to a meter point level of detail) registered at the relevant CSEP Network

3. Option 1 - The DCUSA Model

4. Option 1 - Assumptions • Obligations on lead/nesting iGT to procure/provide load data • Replica of NTS reform model

5. Option 1 - Advantages • Fewer counterparties for the DNO • Single transportation services invoice for the User • Effectively places an obligation on iGTs to reconcile Meter Point data • Consistent with NTS/DNO relationship • Incorporates solution for nested arrangements (based on the relevant ‘assumption’)

6. Option 1 – Disadvantages • Reliance on information provision by iGTs who have no commercial interest in providing the data • Potentially not effective unless the offtake is metered (option 1A) • Lack of benefit for iGT in the provision of timely and accurate data • As the iGT would effectively be charged as a User (Shipper) of the NTS/DN networks this is likely to require exemption from Gas Act section 7(3) and section 7A(3) • Likely to require new Transporter licence obligation • Credit arrangements required between NTS/DNO and iGT • Lack of clarity for the requirements in respect of nested arrangements

7. Option 2 - Individual Meter Point Detail • load information (including Larger Supply Point (LSP) reconciliation volumes) will be issued by iGTs to DNOs at a meter point level of detail. Any changes in respect of load or Registered User (transfers) will be required to be issued to DNOs on daily basis • ‘de-coupling’ of the physical and commercial processes such that the registration of the first Supply Point/s at a CSEP will not require the DNO authorisation of the engineering aspects of the CSEP connection • nested iGTs would be required to issue appropriate meter point information directly to xoserve along with meter point reconciliation volumes for LSPs

8. Option 2 - Individual Meter Point Detail

9. Option 2 - Advantages • Enables Users to identify meter point mismatches between NTS/DNO and iGT invoices • Highlights the major cause of the current Supply Point mis-match • Provides method of capturing nested load

10. Option 2 – Disadvantages • Continued requirement for information provision by iGTs for whom there is no benefit in the provision of the data • Requires DNOs to establish an alternative method of addressing engineering validation and potential load breaches as these would no longer frustrate the commercial processes • Requires significant system change and also the management of a greater quantity of data items • New/revised iGT-DNO file formats required

11. Option 3 - Industry Data Manager • The DNOs’ service provider (DSP) would build and maintain a Supply Points Register on behalf of iGTs to support both the DNO invoicing of Users and the iGTs UNC obligation to maintain a Supply Point Register • Users would perform their SPA transactions directly with the DSP and consequently the iGT would take information from this register (either via direct access or periodic data feed?) to facilitate its own invoicing • The DSP would potentially utilise a clone of the existing Sites and Meters database and therefore file format requirements are likely to be in line with those in use for directly connected Supply Points

12. Option 3 - Industry Data Manager User 1 iGT User 2 DSP SPA Transactions SPA Data feed iGT Transportation Charges DNO Transportation Charges

13. Option 3 - Assumptions • All iGTs utilise common service provider (the DSP) pursuant to a licence obligation • All parties (beneficiaries) required to contribute to cost • Data cleansing exercise required for implementation

14. Option 3 - Advantages • Removes the majority of the reliance on data provision by iGTs • DNO agent maintains control of data necessary to levy NTS/DNO invoice • Single dataset utilised to levy NTS/DNO and iGT invoices • Single communication protocol for User – Transporter communications • Allows the streamlining of demand allocation and settlement processes operated by the DNOs agent • Provides a greater level of confidence to DNOs that costs are being apportioned accurately in line with UNC and licence • Proven model already exist (Sites and Meters) – a clone system is likely to deliver the solution • Reduce SCOGES costs for iGTs

15. Option 3 – Disadvantages • Requires major regime reform – new contractual terms (and potentially licence obligations?) would be required • Requires the management of a greater quantity of iGT related data by DSP. (c.1million additional Supply Points) • Requires consideration of set up and ongoing funding issues

16. Option 4 - Enhance Current Regime (interim solution?) • maintain the current regime and make incremental improvements such as ‘de-coupling’ of the physical and commercial processes such that the registration of the first Supply Point/s at a CSEP will not require the DNO authorisation of the engineering aspects of the CSEP connection

17. Option 4 - Enhance Current Regime (interim solution?) xoserve SPA Aggregate Data DN/iDN Invoice (NTS/DN/iDN Network) Reconciliation Volume Uniform Network Code NExA Shipper iGT iGT Network Code SPA Activity Meter Readings Invoice (iGT Network)

18. Option 4 - Advantages • Offers ‘solutions’ that can potentially be delivered in the short term • Maintains the current LMN level of detail held by xoserve

19. Option 4 – Disadvantages • Requires DNOs to establish an alternative method of addressing engineering validation and potential load breaches as these will no longer frustrate the commercial processes • Does not enable Users to directly identify meter point discrepancies • Continued requirement for information provision by iGTs for whom there is no benefit in the provision the data • Requires potential system and validation changes for xoserve / DNO processes