Mod 0273: 3 rd Development Group Workshop 4 th March 2010.

Mod 0273: 3rd Development Group Workshop

4th March 2010

Contents

1. Answers to 1st Workshop Questions

Number of large Projects

Capacity Application/Connection Timeline

2. Overview of Shipper and GT issues identified at 1st Workshop

3. Possible solutions to issues identified

4. Appendix A – Issues Summary

Answers to 1st Workshop Questions

More information on CUSC process

Number of large projects

3/4 power stations in Gas

Similar number of power stations in Electricity

20~ other large electricity projects (tbc)

How does gas connection process fit in with associated capacity request?

Conc. Design Detailed Design

Gas Year +1 Gas Year +2 Gas Year +3 Gas Year +4Annual Window

(July)

For a new Exit Connection, Shippers / Developers should approach National Grid’s Customer Services Team as early as possible to discuss the capacity & connection process

Initial Discussion

NTS License Amendment

NTS Re-enforcement (if necessary)

SiteworksFeasibility Study

Agree & Sign NExA

Cap

acit

yN

ew

Co

nn

ecti

on

NE

xA

NTS Exit (Flat) Capacity Request

(For Capacity from Gas Year +4)

Shipper and GT issues identified at 1st Workshop

See appendix A for full details

Summary of Key Issues Identified

CustomerEnquiry

Agree studyrequirements

and obtaindata required

ContractsAgreed

NGCommencestudy andengage

contractorsrequired

Studychallenged

andreviewed

Reportissued toCustomer

Key

Customer Network Design

Contractor Customer Services

Contractorsundertake

Study

Lack of process transparency

Unknown timescales & costs at outset

Difficulties in understanding requirements /agreeing study scope

Elongated contractual negotiation

Poor communication

Difficulties in providing information

No set timescales

Process – Possible Solutions

Potential Solution Advantages Disadvantages

Develop template to ensure all required info is provided up front

Able to implement relatively quickly

Will reduce admin timescales & enable projects to be agreed & start ASAP

May reduce flexibility of transporters to begin project with minimal data and build up info as project progresses

Customers may need time to populate, especially if info is required from elsewhere or it may be seen as bureaucratic if unnecessary info is requested

Standard contractual terms

Able to implement relatively quickly

Will reduce admin timescales & enable projects to start ASAP/once scope of study is agreed

Does not provide contractual flexibility Delays may still occur in signing

contract and have a knock on effect to study start times

Customer Enquiry Form

A Standard Form has now been developed for new connections (see form)

A Form for Modification requests is under development

Standard Contractual Terms

NG already have standard T&Cs but a review is underway to assess whether they are fit for purpose/could be enhanced (Design & Build Agreement first, then Feasibility Agreement)

Would an industry consultation be advantageous?

Communication – Possible Solutions

Potential Solution Advantages Disadvantages

Create standard project communications documents

Formalised Comms. Process will report regular progress, next steps & risks / issues (on monthly basis)

Could be applicable to all ongoing projects irrelevant of size

Additional admin work for both parties

Does not capture (future) work not yet progressed/discussed

Increased Cost Increased red tape Potential delays to study process

Develop & agree a high-level project plan to highlight key milestones

Visibility of important milestones

Manages customer expectations & allows customer to plan activities accordingly

Planned timescales may be subject to change

Provision of key contact information

Will enable right people to talk to each other direct and reduce hand time taken to obtain information, etc.

Include key Engineer & Commercial contacts within new modification enquiry form (see previous slide)

A high-level project plan template is under development

Timing – Possible Solutions (1)

Potential Solution Advantages Disadvantages

Review NTS website to ensure new connection & modification processes timescales are transparent and meet customer requirements

Able to implement relatively quickly Low cost Aid visibility of end-to-end process

(inc feasibility) Manage customer expectations of

overall process duration

Unlikely to directly ‘speed up’ process

Case studies may not cover every scenario

Improve case studies both on-line and within Charging Methodology Statement

Review of connection information on National Grid website

Website Improvements are due to be implemented this summer

Review of Gas Connection Charging & Methodology Statement

See further examples – Do they aid understanding of timescales / likely costs?

Development of Feasibility Study Cost / Timescale Matrix

Combined with the above example, does this provide enough indicative information?

Timing – Possible Solutions (2)

Potential Solution Advantages Disadvantages

Introduce ‘no longer than’ timescale for all feasibility studies

Provides users with confidence in timescales

Allows ‘worst case’ date to be utilised in user planning process

Longer term solution – how would it be introduced (licence change)?

Blanket ‘worst case’ date may not be suitable for all types of study

Does not focus on root cause of issue (time spent to agree scope/costs, etc.)

May increase cost of survey if required timescales are shorter than current times

Defining appropriate fixed timescales up front may be difficult given complexity of requests

Introduce ‘fixed’ timescales for feasibility studies

Fixed timescales?

When would clock start??

Costs – Possible Solutions

Potential Solution Advantages Disadvantages

Develop on-line ‘decision tree’ & develop time/cost matrix to support

Able to implement in medium term

Medium cost Will provide a more accurate

indication of cost & timescale to users

May prove difficult to capture all eventualities / variety of projects

If not robust may cause customer challenges

Develop fixed prices Published fixed prices will manage customer expectations/reduce challenges (take it or leave it?)

May prove difficult to price up all possible projects

Current process requires obtaining price from external contractors

May frequently change due to market prices

Some Customers may still want indicative prices (possible refund) and any effort spent in developing fixed prices will have been wasted

See timing solution slide 1 (improved indicative price information/examples)

Fixed Prices?

Very rarely chosen in Electricity!

Summary of Possible Solutions

CustomerEnquiry

Agree studyrequirements

and obtaindata required

ContractsAgreed

NGCommencestudy andengage

contractorsrequired

Studychallenged

andreviewed

Reportissued toCustomer

Key

Customer Network Design

Contractor Customer Services

Contractorsundertake

Study

Enhance process information to provide greater clarity / transparency

Streamline process - templates

Provide enhanced indicative timescales & costs

Revised terms and conditions

Set timescales ? – costs and benefits

Appendix A – Issues Summary

Process - Issues

User Transporters

No standardisation across Transporters. No standard documentation / T&Cs / applic. process. Number and nature of studies required unknown until

well into the process and can change as project develops within Transporter.

Lack of process transparency. No guarantee of non-discrimination in treatment by

Transporter – e.g. how can we be certain that Transporter not prioritising all the “easier” requests?

Unclear definitions of types of study – e.g. what is the difference between “feasibility study” and “pre-feasibility study”?

Transporters not always clear what info they want from Shippers and is what they ask for always relevant / necessary?

Number of gas enquiries is small compared to electricity

Some enquiries are speculative in nature Scope creep is sometimes a problem Customers don’t always know what they

want! Customers often experience difficulties in

providing the information requested, especially if it needs to be provided by their equipment suppliers

Difficulties in agreeing Contractual terms (between Customer and NG)

By offering flexibility and offering new products (e.g. pre-feasibility) definitions have been diluted

Communication - Issues

User Transporters

Relies on individuals within Transporter to progress request, rather than established process.

May require Shippers to do lots of chasing to obtain updates on progress.

No visibility of upcoming work (types, number, nature and frequency) - receiving a number of enquiries in a relatively short period can cause workload planning difficulties

Costs - Issues

User Transporters

Unknown at outset.

True costs often not known until well into the application process and can differ substantially from initial estimate (where provided)

No idea whether costs are currently “cost-reflective” and Shippers in a poor position to challenge them

Breakdown of costs – not always clear what we are actually paying

Rough costs are provided upon initial application

Refined costs are provided upon agreement of scope

Complexity of exit connections/modifications and associated differences in scope make it difficult to define exact costs upfront

License states that Transporters can charge users in respect of the cost incurred

Timing - Issues

User Transporters

Open-ended process – no established time limits.

Unable to initially gauge how long Transporter will take to deal with request(s).

No obligation on Transporter to respond by any set date(s).

Indicative timescales are provided and contracts include end dates for scheduled completion of works

Complexity of exit connections/ modifications and associated differences in scope make it difficult to define exact timescales upfront