Code Governance Review UNC Modification Proposals Beverley Viney

Code Governance Review UNC Modification Proposals Beverley Viney - National Grid NTS

Background – Code Governance Review (CGR) ® Ofgem announced the Review of Industry Code Governance in November 2007 ® Code Governance Review (CGR) concluded at the end of March 2010 when Ofgem published their Final Proposals ® The licence modifications necessary to implement the Final Proposals for the CGR and the Code of Practice (Co. P) were published on 3 June 2010 and become effective on the 31 December 2010

Background – Review Group 0267 ® Review Group 0267 “Review of UNC Governance Arrangements” raised October 2009 ® The Joint Office of Gas Transporters (JO), has been working with the industry on the necessary modifications to the UNC via the Governance Workstream ® National Grid volunteered to raise all the necessary governance modifications to implement the CGR Final Proposals ® National Grid have committed to liase with the industry in development of the proposals

Distribution Workstream – objectives of presentation ® Raise awareness of approach and timetable for developing the CGR UNC Modification Proposals ® Provide an overview of the content of each Modification Proposal ® Facilitate the provision of feedback ® Modification Proposals will be updated and formally raised for August Panel – consultation

Significant Code Review (‘SCR’) ® UNC Modification Rules change ® 3 main elements of proposal: ® Prevent an SCR related non-urgent Modification Proposal being raised during an associated SCR period ® The treatment of Modification Proposals determined as relating to a SCR ® Withdrawal or variation of SCR driven Modification Proposals

Self-Governance (‘SG’) ® UNC Modification Rules change ® 3 main elements of proposal: ® Clarification of when a Modification Proposal shall follow the Self Governance route ® A Self Governance Determination by the UNC Panel ® Appeals Process

Environment ® Evaluation of proposed modifications shall include assessment of the quantifiable impact on greenhouse gas emissions ® Details to be included in reports produced during progression of the proposal

Charging Methodologies ® Two proposals ® NTS Charging Methodology and Connection Charging Methodology ® Distribution Network Charging Methodology ® Key elements: ® Existing methodology (to be detailed in Appendix A) is incorporated within the Uniform Network Code ® UNC Modification Rules are amended to reflect that: ® a change to the Charging Methodology is not able to be made unless the requirements of the UNC Modification Rules are complied with ® the Transporters must convene regular meetings of the charging methodology forum/s ® a Modification Proposal in respect of a UNC Charging Methodology may only be made by a UNC signatory or a Materially Affected Party (being a person or class of persons designated by the Authority for this purpose)

Role of Code Administrators & Code of Practice ® The CGR Final Proposals require that code administrators: ® Act as a ‘critical friend’, in particular to small participants; and ® Act consistently with the Code Administrator Code of Practice. ® Other key elements: ® Ofgem send back powers ® Published reasons for Panel recommendations (based on relevant objectives) ® Legal text provision ® Cost information ® Super Mod (in terms of volume of changes to the mod rules)

Alternatives ® Aspect of the Code of Practice (Co. P) - the approach to be taken when raising alternatives to Modification Proposals: ® alternative solutions being developed to the same degree as an original solution; and ® alternative proposals are raised prior to or during the working group stage. ® No alternatives (or further alternatives) can be raised once a Modification has been issued for Consultation

Appointment and Voting Rights for a Consumer Representative and Independent Panel Chair ® Modification Proposals 0286 and 0286 A: “Extending Modification Panel Voting Rights to Consumer Representative(s)” ®Ofgem minded to approve 0286 A ® Main elements of proposal: ®Option for the Authority to appoint a further Consumer Representative member ®Independent chair’s casting vote