Code Modification Forum

1. Code Modification Forum Ashling Hotel, Dublin Wednesday, 2 May 2018

2. Agenda (1 of 2) • Review of minutes from last meeting • Review of Action Items from last meeting • General Items Update • GNI Scheduled Maintenance Update • Intra-day Nomination Patterns and Profiles / Cod Mod Proposal A086-Incentives for Intra-day Balancing • Code Modification Proposal A087- Implementing a new framework for Suppliers to contract their payment channels for PPM customers • Code Modification Proposal A090- Proposed new Invoice Dispute Procedure

3. Agenda (2 of 3) 8. Code Modification Proposal A091-Modification of oxygen content limits for Renewable Natural Gas (RNG) injected from RNG Entry Points 9. GNI Trading Platform Business Rules /Timelines of review and consultation process on potential amendments to cashout prices and tolerances after commencement of trading on platform 10. Trading Platform Transactions Agreement 11. Gas /Electricity Interaction interaction 12. Brexit and ROI Gas Market 13. Transparency Data Update 14. AOB Next Code Modification Forum Meeting Next Code Modification Forum Meeting

4. 1. Review of minutes from last meeting

5. 2. Review of Action Items from last meeting

6. Code Modification Forum – Open Actions (Slide 1 of 2)

7. Code Modification Forum 3. General Items Update

8. Code of Operations 5.02 • Version 5.02 has been released , to reflect: • Code Mods A071, A079, A080, A081, A082 A088 and A089 (all of which have been approved by the CRU). https://www.gasnetworks.ie/corporate/gas-regulation/service-for-suppliers/code-of-operations/

9. Code Modification Forum 4. GNI Scheduled Maintenance Update

10. Network Maintenance Update 1. Upstream Operator Maintenance GNI have been advised of the following scheduled Maintenance Upstream of Entry Points:

11. 2017/ 2018 GNI Proposed Maintenance Days • Note: Dates and maintenance programme may be subject to change

12. 2018/ 2019 Maintenance Days

13. IT Maintenance Update Please note the above works/timings/duration are subject to change

14. Code Modification Forum 5. Intra-day Nomination Patterns and Profiles /Code Mod Proposal A086 –Incentives for intra-day Balancing

15. Outline of proposed GNI Modification A086 • Modification Raised by GNI to address concerns that the aggregate system imbalance intra-day is creating operational difficulties. • At times, there are large deviations between the prevailing exit nominations on the system and the prevailing entry nominations. GNI wish to introduce an incentive to encourage more alignment of entry and exit • PROPOSAL: At check points during the gas day (11:00, 17:00, 23:00) a shippers portfolio Nomination Imbalance position will be recorded. • A tolerance will be applied at each point • Worked Example: A shipper has 24 units of Aggregate Exit Nomination at 11:00. • Deemed flow at Exit = (24 units * 6hrs/24hrs) = 6 units • Total Entry Nomination = 4 units • Apply a [10%] tolerance: Adjusted Nomination Imbalance Position • Nomination Imbalance Position = (6 * 90 %) – 4 = 1.4 units • The Adjusted Nomination Imbalance Position at the 3 time checks will be added • The total for the day will be multiplied by [SAP] * [x%] • The amounts for each day in a month will be invoiced at month end.

16. Impact if Code Mod was applied in November 2017 –March 2018 • Assume 10% Exit Tolerance and charging of 5% of SAP • November 2017 • 8 shippers would have received charges ranging from €365 to €148k • Total charges: €334k • 92% of charges attributable to 3 shippers • December 2017 • 5 shippers would have received charges ranging from €17 to €124k • Total charges: €162k • 96% of charges attributable to the same 3 shippers • January 2018 • 5 shippers would have received charges ranging from €18 to €30k • Total charges: €67k • 96% of charges attributable to 3 shippers

17. Impact if Code Mod was applied in November 2017 –March 2018 • February 2018 • 7 shippers would have received charges ranging from €15.20 to €72k • Total charges: €116k • 93% of charges attributable to 3 shippers • March 2018 • 6 Shippers would have received charges ranging from €86 to €149k • Total charges: €252k • 96% of charges attributable to 3 shippers

18. Impact if Code Mod was applied in November 2017 –March 2018 • There was a marked improvement in Shipper Nominations following discussions of the proposed modification at recent code mod forums. The estimated monthly financial impact dropped from €334k (November) to €67k (January). • However, during February and March late day nominations have resulted in almost hourly batches late in the gas day, causing operational difficulties once again for both GNI and National Grid- see next Slide for more details

19. Impact if Code Mod was applied in November 2017 –March 2018

20. Code Modification Forum 6. Code Modification Proposal A087-,Implementing a new framework for Suppliers to contract their own payment channels for PPM customers

21. Code Mod 87 – Front Office PAYG Contracts • Recap of Code Modification: • Raised by GNI, this modification seeks to revise the provisions in the Code of Operations related to Prepayment Metering so that Suppliers contract their own payment channels for gas prepayment meter customers rather than be required to be a party to a Front Office Services agreement agreed by the Transporter with third party service providers. • Status of Code Modification: • This code modification is fundamentally a retail issue and it has been agreed that it should be further discussed at the retail (GMARG) forum

22. Code Modification Forum 7. New Code Modification Proposal A090 Proposal from BGE for New Invoice Dispute Resolution Procedure

23. Code Modification Forum 8. New Code Modification Proposal A091-Modification of oxygen content limits for Renewable Natural Gas (RNG) injected from RNG Entry Points

24. Code Mod A091: Overview • Proposal: • Increase the current oxygen limit of ≤ 0.2mol% to ≤ 1mol% • Applicable to biomethane entry points and to exit points only • All other gas specification parameters will apply at these points • Relevant entry points will be subject to continuous monitoring of both dew point and oxygen content • Rationale: • Some biomethane sources will not be able to meet the current oxygen limit • Benefits • Modification will enable biomethane producers to meet GNI’s quality specifications • Biomethane production is to be encouraged as it supports, inter alia, the reduction of carbon footprint of the gas network and the reduction of carbon emissions, thereby helping to future proof the gas network in Ireland • Status • Code Modification to be progressed subject to CRU approval of PENSPEN Report

25. Code Modifications - Live

26. Code Modification Forum 9. GNI Trading Platform Business Rules / Timelines of review and consultation process on potential amendments to cashout prices and tolerances after commencement of trading on platform

27. GNI Trading Platform/Timelines of review and consultation process on potential amendments to cashout prices and tolerances after commencement of trading on platform • GNI will be transitioning to using the EBI Trading Platform for Balancing Actions during May/June 2018. As trading at the Irish Balancing Point (“IBP”) develops GNI intends to begin using the IBP traded prices as the basis for cashing out Shipper imbalances under the Code of Operations. The relevant Articles of the BAL NC are Art. 22 and Art. 23. • Following the most recent Code Mod Forum (7th March) GNI circulated: • Proposed First Tier and Second Tier Imbalance Cash-out Prices • A questionnaire seeking the views of Industry stakeholders with regard to the outstanding issues with respect to implementation of the EU Network Code on Gas Balancing of Transmission Networks (EC 312/2014) (“BAL NC”). • It was requested that responses be returned by April 20th. • GNI received 2 responses.

28. Proposed First Tier ImbalanceCash-out Prices to apply in different scenarios

29. Proposed Second Tier ImbalanceCash-out Prices to apply in different scenarios

30. Industry Responses to Questionnaire

31. Industry Responses to Questionnaire

32. Industry Responses to Questionnaire

33. Industry Responses to Questionnaire

34. Industry Responses to Questionnaire : IOOA

35. Next Steps - Tolerances • The BAL NC envisages the removal of tolerance • Interim measures allows the retention until 2019 • GNI believes, following recent consultation, that it is now time to move towards removal • The table below outlines a 2 step approach to removal of tolerances at LDM, DM. • Corrib and Inch Entry point Tolerances proposed to move to 0.75% on the 1st of August 2018 and 0% on the 1st of October 2018

36. Code Modification Forum 10. Trading Platform Transactions Agreement

37. Code Modification Forum 11. Gas / Electricity Interaction

38. Code Modification Forum 12. BrExit and ROI Gas Market

39. Brexit – In The News • Draft Withdrawal Agreement published in March 2018 including an agreement on a transition period to last until the end of 2020 • Important to point out that ‘nothing is agreed until everything is agreed’ – GNI are therefore continuing to consider Brexit as if there was no transition period agreed

40. 13. Transparency Data Update Code Modification Forum

41. 1. Upcoming Code Modification Forum Meetings Next Meeting

42. Thank you for your participation