GTAC Workshop Block 1 10 July 2018 - PowerPoint Presentation

1. GTAC Workshop Block 110 July 2018

2. Agenda Agenda ItemsIndicative TimingWorkstream 1 – ICAs1.2Core terms of interconnection10:30-12:30pm Lunch 1.1Integration of ICAs in the Code1-2pmWorkstream 2 – Linepack Management and Intraday Flexibility2.4Allocation methods (upstream and downstream)2-5pm

3. 1.2 Core Terms of InterconnectionGTAC References. 7.13Discussion ObjectiveIdentify the terms of interconnection that are common and essential and therefore should be standardised FAP FindingsD.1The core terms of interconnection should be standard across all interconnected parties (so that coherent, non-discriminatory access is assured). Except to the extent that individually negotiated terms are appropriate.Supporting MaterialInformation on current number of ICAs, termination, counterparties, confidentialitySummary of possible core terms and their treatment under MPOC, VTC and GTAC template ICAs

4. Framing the discussion

5. Core Common Terms – Technical StandardsItemDescriptionApplicable technical standardsApplicable technical standards for gas and metering should be specified. For example, NZS 5442, NZS 5259, and the Metering Standards Document. Gas QualityThe responsibility for monitoring and reporting gas quality should be set out, including any rights of inspection and audit. All IPs should have the same obligation in regard to the quality of gas they inject, including:any restrictions on the injection of non-specification gas notification of non-specification gas incidents costs of monitoring and testing the gas injectedIn addition, there should be no secrecy about non-specification gas incidents. All non-specification incidents should be publicly notified by First Gas.MeteringThe responsibility for testing and monitoring measurement equipment, and for reporting of metered quantities and correcting for errors set out, including any rights to witness tests and audit results.

6. Core Common Terms – Balancing and FlexibilityItemDescriptionPeakingSome minimum entitlement to peak, with specified consequences for exceeding the entitlement.Flow to nominationsThere should be reasonable incentives for IPs to flow to nominations. This could apply through shippers, or directly with the IP (MPOC s12.9 requires WP to use reasonable endeavours to manage ROI towards zero)PressureCommitment for the TSP to maintain the pipeline pressure within a defined range.

7. Core Common Terms – Nominations and GovernanceItemDescriptionTSO InstructionsThe TSP may rely on a Shipper to get an IP to curtail or shutdown a gas flow, or for that instruction to be given to the party in the physical supply chain: the IP. In either case, it is in the interests of the TSP, Shippers and IPs that the same arrangements apply to all. ChangesChanges to the GTAC need to flow through to ICAs. LiabilityTerms that harmonise with the eventual GTAC framework.Liability for non-specification gasTerms that harmonise with the eventual GTAC framework.

8. 1.2 Integration of ICAs in the CodeGTAC References. 7.13Discussion ObjectiveEstablish how ICAs should be integrated into the GTAC (e.g. via a list in the GTAC, specification of common terms in the GTAC, or some other form)FAP FindingsD.1Terms that apply to interconnected parties through ICAs must mesh with the terms that apply to all other interconnected parties and to Shippers through TSAs. The terms and conditions of access to, and use of, the gas transmission system must be fully described for all system users and be coherent (i.e. work together).Supporting MaterialNA

9. Code Integration Options

10. 2.4 Allocation MethodsGTAC References. 6Discussion ObjectiveClarify allocation methodologies and how these are specifiedFAP FindingsRange of receipt point and dedicated delivery point allocation methods lack clarity/specificity (18)Shippers are not always best placed to make the choice. For RPs and DPs with a single injecting party or end-user, it is interconnected parties who have the long term interest in the allocation method, and so they should be permitted to choose it.Absence of D+1 agreement under GTAC to replace existing one under VTCSupporting MaterialNA

11. D+1 AgreementsMBB D+1 Pilot AgreementD+1 data used to calculate Shipper VTC balancing positions and allocate cash-out amounts and quantities.DRRs Interim and Final Allocations used to calculate wash-ups of balancing positions and allocated cash-out amounts and quantities.D+1 Data AgreementGIC produces D+1 allocationsFirst Gas agrees to use that dataD+1 Data AgreementDownstream Reconciliation RulesRegulations for determining Initial, Interim, Final and Special AllocationsThe GTAC Relies on the D+1 Agreements to FunctionKey questions:Are the changes to the MBB D+1 Pilot Agreement, D+1 Data Agreement and Downstream Reconciliation Rules administrative?If not, why not?First Gas position:These agreements are beneficial to stakeholdersThe changes required to these agreements are administrativeIt is the role of the GIC to drive the changes to these agreement

12. Allocation Agreement Options under GTACThe GTAC allows parties to choose their allocation agreements at interconnected points:Key question:Should interconnected parties always be in control at the interconnection point?First Gas Position:Allocation agreements should be driven by those parties with the greatest interest in the allocation

13. Allocation Methodology Options under GTACThe GTAC allows parties to choose their allocation methods at interconnected points:Key questions:Are there any allocation methodologies (except OBA) not covered above?Do any allocation methodologies have an impact outside the interconnection point?Should First Gas specify allocation methodologies?First Gas position:Interconnected parties benefit from flexibility in allocation methodologies to allow for commercial flexibilityFacilitating allocation methodologies is low cost given the GTAC software proposed