Force Majeure - Capacity Transmission Workstream 2 July 2009.
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Transcript of Force Majeure - Capacity Transmission Workstream 2 July 2009.
![Page 1: Force Majeure - Capacity Transmission Workstream 2 July 2009.](https://reader036.fdocuments.in/reader036/viewer/2022083008/56649f565503460f94c7a3d5/html5/thumbnails/1.jpg)
Force Majeure - Capacity
Transmission Workstream 2 July 2009
![Page 2: Force Majeure - Capacity Transmission Workstream 2 July 2009.](https://reader036.fdocuments.in/reader036/viewer/2022083008/56649f565503460f94c7a3d5/html5/thumbnails/2.jpg)
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Background
In terms of context Force Majeure affecting Capacity has only been declared once (as far as we have been made aware) since the inception of code.
Where National Grid NTS gives notice of Force Majeure under UNC General Terms B3.3.1(a) it is relieved of its UNC obligation to take constraint actions (Buy back) where the Shippers nominate flows in excess of the quantity covered by Force Majeure
Currently Shippers receive no relief from the full payment of Capacity charges once Force Majeure has been called
National Grid NTS has received requests from industry parties to look at addressing this issue
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High level Proposal
National Grid NTS to:
Continue to invoice Shippers for their full NTS Entry Capacity Charges
Calculate and issue a Force Majeure rebate based on Shipper Holdings ie. Force Majeure quantity prorated between affected Shippers based on individual holdings for an amount that equates to the
Force Majeure quantity
Price to be based on a weighted average price based on a Shippers overall holdings at the affected point
Recover the Rebate via the Commodity charge
Suspend additional Capacity sales at the affected entry/exit point during the instance of Force Majeure
In the case of a buy back within / below the Force Majeure level affected Shippers to:
Undertake to tender a quantity of capacity (equivalent to the Force Majeure Rebate level) back to National Grid NTS at zero price i.e. the quantity rebated will be bought back at zero price in the case of a buy-back
Any additional constraints beyond the Force Majeure level would be subject to normal buyback principles
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Extent to which implementation of this Modification Proposal would better facilitate the achievement (for the purposes of each Transporter’s Licence) of the relevant objectives
1(a) the efficient operation of the pipe-line system – The Proposal would
introduce additional certainty into the UNC that will enable optimisation of
Supply at an Entry Terminal under circumstances of Force Majeure (whether
or not such Force Majeure is agreed between parties)
1(d) so far as is consistent with sub paragraphs (a) to (c) the securing of
effective competition (i) between relevant Shippers – This Proposal is likely to
be fairer in the context of individual projects, hence encouraging future
investment and improving effective competition between Shippers. The
Proposal may also secure effective competition between Shippers by ensuring
that players at single points would not be inappropriately or
disproportionately affected by Force Majeure.
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Proposed Timeframes
If agreement can be reached then National Grid NTS to raise a UNC mod along the following timeframes:
Proposal discussed at Tx Workstream 02/07/09
Proposal issued for Consultation 16/07/09
Closeout for representations (15bd) 06/08/09
Mod Panel decide upon recommendation 20/08/09
FMR issued to Ofgem 21/08/09
Proposal implementation date 01/10/09