18 April 2023

GAZ DE FRANCE ESS

Mod 115An alternative view

Phil Broom

Gaz de France ESS

18 April 2023

GAZ DE FRANCE ESS

Measurement Issues and incentives in the monthly read sector

Potential Measuremen

t Issue

Applicable to

monthly read sector

Incentives

LDZ Off-take Metering

No LSPs are reconciled on actual throughput, residual energy is correctly allocated to SSPs. RG 126 to resolve issue

System Leakage

No Leakage costs are borne by all Users. New shrinkage arrangements in place for DNs under 07/08 price control. Incentive for DNs to reduce leakage

End User Theft

No Minimal evidence of theft in I&C market, shippers have incentive to detect and claim back costs.

Unregistered Sites

No No evidence of unregistered sites in I&C market. Business customers, more than others, want to be billed accurately. Transporter records error

Supply Point Metering

No Frequency and volume in I&C market leads to early detection and resolution. Businesses keen to manage energy budget

Supplier Inputs

e.g. AQ Review

process

No Strong incentives on monthly read suppliers to submit good data and deem accurately. Risk averse behaviour key for I&C contracts. Mod 640 has increased incentive have accurate Aqs and lower unreconciled energy.

Deeming Algorithms

No Monthly read meters have exceptional read performance and 4 month must read process

18 April 2023

GAZ DE FRANCE ESS

Monthly Read Performance – Shipper A

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

January-06 February-06

March-06 April-06 May-06 June-06 July-06 August-06 September-06

October-06 November-06

December-06

January-07

Annual Average 98 %Must Reads 3-4 per month

18 April 2023

GAZ DE FRANCE ESS

Monthly Read Performance – Shipper B

Month Monthly Reads Requested % Success

Jul 98.3% 99.3%

Aug 98.8% 99.0%

Sep 99.0% 98.7%

Oct 98.0% 99.2%

Nov 98.3% 99.5%

Dec 98.9% 99.1%

18 April 2023

GAZ DE FRANCE ESS

Monthly read read performance shipper C

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

January-06 February-06 March-06 April-06 May-06 June-06 July-06 August-06 September-06

October-06 November-06 December-06 January-07

18 April 2023

GAZ DE FRANCE ESS

Must Read Performance – Shipper C

Days Since Meters (NDM - Monthly) Last Reconciled - 5 Jan 07

0

500

1000

1500

2000

2500

3000

No. ofMeters

No. of Meters 2384 324 68 28 24 14 9 3 3 5 3 0 6

0 - 30 31 - 60 61 - 90 91 - 120 121 - 150 151 - 180 181 - 210 211 - 240 241 270 271 - 300 301 - 330 331 -360 >361

18 April 2023

GAZ DE FRANCE ESS

Must Read Performance – Shipper C

Days Since Meters (NDM - Non Monthly) Last Rec - 5 Jan 07

0

10

20

30

40

50

60

70

80

90

No. ofMeters

No. of Meters 83 53 50 33 30 30 22 13 2 6 4 2 13

0 - 30 31 - 60 61 - 90 91 - 120 121 - 150 151 - 180 181 - 210 211 - 240 241 270 271 - 300 301 - 330 331 -360 >361

18 April 2023

GAZ DE FRANCE ESS

Pricing Options

Transportation rates should reflect actual rates to align with objectives of transporter’s charging methodology

• “Compliance with the charging methodology results in charges which reflect the costs incurred by the licensee in it’s transportation business”

• “..properly takes account of developments in the transportation business”

• “facilitates effective competition between gas shippers and suppliers”

Simple and efficient to administer for non-monthly portfolio – only 2 rates apply (<73,200 and 73,200 to 732,000)

Should not be a penalty rate as per mod 640 – suppliers do not have control over many cost factors for unreconciled energy

18 April 2023

GAZ DE FRANCE ESS

Conclusions – basis of an alternative to mod115

Monthly read sites create immaterial contribution to unreconciled energy costs as demonstrated by increased visibility and control

Monthly read meters should be excluded from unreconciled energy smear charges

Transportation rate should reflect actual rates to be consistent with transporter’s charging methodology

Implementation timescales should allow time for building into forward customer contracts i.e. no earlier than October 07