Allocation of Unidentified Gas Statement 2014/1515th May 2013

Areas Covered

• Timelines• Data• Methodology overview• Analysis & methodology updates in 2013

• Consumption calculation improvements/analysis• SN adjustments, meter unit updates, use of meter reads where

consumption calc fails, T&P factors, vacant sites• Theft split methodology and assessment of method proposed by ICoSS• Modifications 0398 and 0424• Other Analysis/Updates

• CSEP shrinkage, MMSPs• Next steps

Timelines 1/2

Key Dates Description

1st May First draft AUGS published

15th May UNCC (AUGE) MeetingGL Noble Denton present AUGS

1st May - 12th June First consultation period

7th June Consumption data expected

1st July TBC Responses to consultation published / discuss at UNCC meeting

31st July Second draft AUGS to be published

1st August - 7th August Second consultation period

22nd August Recommended updates and responses to consultation published

Timelines 2/2

Key Dates Description

30th August Cutoff for data required for Interim table

2nd September TBC UNCC (AUGE) approval meeting

30th September Publish final AUGS

October 1st Interim AUG table provided to GTs

November 1st GTs publish Interim AUG table to industry

November 29th Cutoff for data required for Final table

September 1st 2013 - 28th February 2014

Query process

January 1st 2014 Final AUG table provided to GTs

February 1st 2014 GTs publish Final AUG Table to industry

Data 1/2

• 2013 analyses based on data from 2012• Plus MMSPs provided to investigate a specific query

• Theft analysis and MMSP data available on UK-Link as of 2nd May under• 22. MOD229 AUGE Data Provision / 17. Multi Metered Supply Points• 22. MOD229 AUGE Data Provision / 14. AUGS Calculations / J. Theft Analysis 2013

• Data used for Interim AUG table will be made available later in the year in two formats• Oracle database exports• .CSV extracts

Data 2/2

• Interim AUG table will be based on updated data sets from Xoserve including• Historic LSP consumptions including updates plus new data up to end March 2013• New SSP meter reads, consumptions up to end March 2013• Ongoing snapshots of shipperless/unregistered sites• Allocations• Updated asset information• Latest AQs and details of new/lost sites

• If there are issues obtaining updated data – fallback is to use data sets from 2012

Methodology Overview – Total UGLDZ Metered Demand

SUBTRACT•LDZ Meter Errors•Metered DM Volume•DM Meter Errors•Shrinkage

NDM Allocation = NDM Demand +Shrinkage Error +

UG

NDM Demand(LSP + SSP)

LDZ Meter Errors

DM Meter Errors

Metered DM Volume

Shrinkage

Shrinkage ErrorUG

Shrinkage Error

NDM Demand(LSP + SSP)

UG

Methodology Overview – Total UG

NDM Demand(LSP + SSP)

UG + Shrinkage Error

Consumption Scaled(Non-Calcs & CSEPs)

Consumption Error

Consumption Calculated

Error in UG Estimate

UG Estimate

Balancing Factor(mostly

undetected theft)

Detected Theft

Direct Temporary UG

Direct Permanent UG

2009/10

Balancing Factor

Detected Theft

Direct Temporary UG

Direct Permanent UG

2010/11

Balancing Factor

Detected Theft

Direct Temporary UG

Direct Permanent UG

2011/12

Balancing Factor

Direct Permanent UG

2013/14

LSP

LSP

Forecast UG =Average 2009-2012

Methodology Overview – Forecast UG

Consumption Calculation

• UG to be based on (ΣSN Allocations – ΣSN Consumptions)• Correction to logic regarding use of meter read units• Considered the use of LSP meter reads when calculation using metered volumes

fails• T&P factor analysis• Vacant sites investigation

T&P Factors

• Default T&P Factors - 25% Large Meters• Suspect T&P Factors

Correction Factor

Number of Meters

0 722 1 9,950 3 1 4 5,886 5 3,494 6 286 7 14 8 22

10.2264 14 102.264 1

Vacant Sites

• No information available from Xoserve• Sensitivity analysis

• Meters with no reads for 3 years and AQ>1• 90GWh difference between 0% and 100% meters consuming (all LDZs)

• Assume same proportion non-consuming as wider population

Balancing Factor Split

AUGE recommends SN-adjusted throughput (consumption)- Rolling 3-year Average

• Detected theft data quality•Estimates of theft quantity and period•Inaccurate AQ – uncertainty in market sector assignment

• Assumptions• Influenced by detection rates• Volatility• Non-theft component

Example Theft Data Issues

• Anomalous number of thefts of 365 days• Significant number of short period thefts• Significant number of small thefts

Theft duration histogram (<3yrs)

0

100

200300

400

500

600

700800

900

1000

30 180 330 480 630 780 930 1080

Period of theft (days)

Co

un

t

Theft Duration

ICoSS Proposed Theft Split Method

• Assessed by the AUGE• Full details in AUGS document

• Based on average theft rates by sector• Key issues:

• Dependent on detected theft data that is not sufficiently reliable to support overall theft calculation

• Depends on an assumption that theft occurrence rates are consistent across market sectors

• In 2012 we concluded that detected theft data should not be used as a basis for splitting theft and this still holds

• The AUGS methodology will therefore be based on throughput for 2014/15

Modification 0398: Limitation on Retrospective Invoicing

• Reconciliation window reduces to 3-4 years from 1 April 2014• Most reconciliation within this window• Shipper behaviour change

• Propose no change to UG• Minimal impact• UG consistency with other industry processes• SMEs – Mod 0429

Source: Mod0398 Final ModificationReport V6.0

Data used in consumptioncalculations

Mod 0424: Re-establishment of Supply MeterPoints

• Shipperless sites found to be flowing gas through the same meter will be previous Shipper’s responsibility

• Shipperless PTS – Temporary UG• Effective Date - 25 Jan 2013

• Not retrospective• Xoserve to provide date in snapshot files

• AUGE to estimate temporary UG for 2014/15 based on changes between snapshots

Other Analysis/Updates

• CSEP Shrinkage• Recommended this issue is raised with the Shrinkage forum• NGT have provided an estimate ~13GWh based on information for 8 LDZs• We will monitor further progress of this issue through Shrinkage Forum

• MMSPs• Complete list of MMSPs obtained from Xoserve• Details on UK-Link• Anomalies investigated• No changes to methodology required

Next Steps

• Consultation open until 12th June• GL Noble Denton will prepare responses and 2nd Draft 2013 AUGS for 2014/15• As data received will undergo validation and seek to address any new issues

that arise• Assessment of modifications that are implemented over the summer that impact

the 2014/15 AUG year

Thank you for your attention

Supporting Slides

The following slides do not form part of the main presentation but provide useful supporting information and may be used during discussions

Methodology Overview

Consuming Meters

Non-Consuming Meters

Non-Consuming Meters

Consuming Meters

Individual Meter ConsumptionCalculations

Meters withConsumptionCalculatedSuccessfully

CalculatedConsumption

CalculatedConsumption

= Zero

Meters whereConsumptionCalculationFailed Average EUC

Consumption

ZeroConsumption

Consumption Used

CSEPs

Consumption Analysis: Scaling and Sample Size

• Actual consumptions based on meter reads can be calculated for a certain proportion of the population

• This is the sample• Meters can lie outside the sample for a number of reasons

• Consumption calculation failed (AQ check/negative consumption)• Site has no/insufficient valid meter reads• Site is in a CSEP

• Sample consumption must be accurately scaled to cover full population

Consumption Analysis: Scaling and Sample Size

• Non-consuming sites outside the sample must be handled correctly• AQ=1 sites and non-consuming sites are not necessarily the same

thing• Some sites with AQ=1 are consuming gas• Some sites with AQ>1 are not consuming gas

• Sites in CSEPs are always outside the sample

• Scale up correctly to cover all cases

Consumption Analysis: Scaling and Sample Size

• Scaling up procedure example

EUCSample

Size

Sample Metered Consumption

(GWh) SDFailed Sites

Sites in CSEPs

Population Size

Population Metered

Consumption (GWh)

01B 1,855,569 30,016.9 0.009 281,011 132,732 2,269,312 36,709.802B 16,418 2,231.4 0.057 4,318 138 20,873 2,837.003B 4,008 1,795.0 0.118 828 31 4,867 2,179.804B 1,541 1,837.2 0.384 290 94 1,925 2,295.305B 419 1,414.0 0.937 78 6 503 1,696.806B 138 1,213.8 2.284 23 4 165 1,453.407B 45 937.9 4.286 13 0 58 1,211.208B 11 404.2 5.003 6 0 17 648.809B 1 60.6 0.000 0 0 1 60.6

Consumption Analysis: Scaling and Sample Size

Shipperless and Unregistered Sites

AQ Variation

• This issue affects Unregistered sites• Setting of a representative AQ is in three stages• Requested AQ Confirmed AQ AQ Following AQ Review

• Requested AQ is contained in the Unregistered Sites report sent to the AUGE• This undergoes no validation• It regularly differs from the Confirmed AQ and can be several orders of magnitude out

• Confirmed AQ is still on average much higher than the first AQ set by the AQ review for the site

• Factors to convert between all stages to give the best possible final estimate of Unregistered UG

Consumption Analysis: Scaling and Sample Size

• Effect of sample size on UG estimate

0%

1%

2%

3%

4%

5%

25% 50% 75% 100%

UG

%

Sample Size

Sample Size Sensitivity - EA LDZ

Average

Min

Max

Theft

• Consumption plus Theft Method suffers from the following issues:• The calculations are heavily dependent on the accuracy of the estimate and duration of theft.• Use of AQs - particularly as we can only calculate metered consumption for 50% of the data set.• Accuracy of the metered consumption calculation.• Potential effect of customer changes on pre/post theft AQs.• Site classification issues – e.g. Unregistered sites.• An assumption that the market sector split of unknown theft is the same as that of detected theft.

• Throughput method preferred and therefore recommended for future use

General Enhancements to UG Calculation

• Unregistered Sites: two-stage AQ adjustment process• iGT CSEPs: sufficient snapshot data now exists to identify a trend rather than

simply taking forward a fixed value• LDZ offtake meter errors: these are applied to the UG estimate from the

Consumption Method