Credit Scenarios – Modification 0335Joanna Ferguson

VAR Requirements

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• UNC V3.2.1(d): Sum of aggregate amount (other than Energy Balancing Charges) invoiced and unpaid PLUS average daily rate of invoices issued in previous month multiplied by 20

• UNC V3.3.1(a): Issue of notice of 80% utilisation of VAR

• UNC V3.3.1(b): 100% VAR requires additional surety or surety in 2 business days

• Failure to provide additional surety or security enables Transporter to take action by way of sanctions to prevent growth or ultimately to terminate the User

Modification 0335 Impact

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• UNC V3.2.1(d): Sum of aggregate amount (other than Energy Balancing Charges) invoiced and unpaid PLUS average daily rate of invoices issued in previous month multiplied by 20

• Modification 0335 creates a new transportation invoice from a Distribution Network to a User for an amount equivalent to the value of the LDZ Commodity Reconciliation and Energy Balancing Charge

• Therefore the 0335 invoice is subject to the normal UNC V3.3.1 definition of invoiced charges

Credit Example - Current

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Based on NGN Maximum Unsecured Credit Limit

Northern Gas Networks Shipper 1 (AAA rated) Shipper 2 (A rated)

Credit Limit   11,500.00 11,500.00

Max Limit 29,000.00 11,630.00

   

Normal Sales 5,520.00 5,520.00

VAR 9,200.00 9,200.00

Average Peak VAR 80% 80%

Peak of Max Allowed 32% 79%

    OK OK

Credit limit maintained =<80%, no notices issued

50GWh: 12 months Commodity 1,150.00 1,150.00

  Energy - -

  Total 1,150.00 1,150.00

   

New Sales 6,670.00 6,670.00

VAR 11,116.67 11,116.67

Average Peak VAR 97% 97%

Peak of Max Allowed 38% 96%

    OK 80% Notice

80% notice requirement will result in increased unsecured credit being awarded

Credit Example – Mod 0335

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Based current Mod 0335 invoicing rules

Northern Gas Networks Shipper 1 (AAA rated) Shipper 2 (A rated)

Credit Limit   11,500.00 11,500.00

Max Limit 29,000.00 11,630.00

   

Normal Sales 5,520.00 5,520.00

VAR 9,200.00 9,200.00

Average Peak VAR 80% 80%

Peak of Max Allowed 32% 79%

    OK OK

Credit limit maintained =<80%, no notices issued

50GWh: 12 months Commodity 95.83 95.83

SAP = 45p/therm Energy 5,514.71 5,514.71

  Monthly 5,610.54 5,610.54

   

New Sales 11,130.54 11,130.54

VAR 18,550.90 18,550.90

Average Peak VAR 161% 161%

Peak of Max Allowed 64% 160%

    OK Add'l security req'd

AA Shipper will result in increased unsecured credit

A Shipper will be required ~£9m to lodge additional security