EU Workgroup – Mod 500

1. EU Workgroup – Mod 500 Action 703 – confirm current capacity surrender process

2. Rolling Monthly Surrender process Note: a minimum surrender re-allocation quantity is not specified under the existing Surrender process

3. CAM-CMP surrender offers • No min reallocation quantity for CAM surrender offers • Surrender offers must be offered unconditionally to shippers via PRISMA • Consistent approach with other TSOs • In line with precedent under TnT Surrenders • No min surrender price for CAM surrender offers • Main purpose of economically ordering Surrenders for re-allocation is now redundant (CMP mandates timestamp) • Shippers still guaranteed to get at least reserve price (over last 12 months no shipper has submitted a min surrender price above the reserve price of the auction)

4. EU Workgroup – mod 500 Units – kWh/h & kWh/d

5. kWh/day and kWh/hour - Proposal • NG currently sells all capacity in kWh/d • IUK & BBL sell capacity in kWh/h. Irish sell capacity in kWh/d. • How is a bundled product marketed? • kWh/h or kWh/d (CAM allows both) • A pragmatic option would be for NG/Adjacent TSO to offer capacity in kWh/h at the Bacton IPs. • Maintain kWh/d at Moffat. • NG would convert Available Capacity (and corresponding price) from kWh/d to kWh/h for marketing on PRISMA. PRISMA uses kWh/h.

6. Example conversions • NG Obligation • NG available capacity: 240 kWh/day • Conversion: 240 kWh/d 10 kWh/h • Marketed on PRISMA as 10 kWh/h/runtime • Shipper perspective • For all auctions, except within day, the daily right will be the capacity purchased (in kWh/h) x 24. • For within day auctions, the daily right will be the capacity purchased (in kWh/h) x remaining hrs in the day.

7. Implication - Reducing Within Day Obligation kWh/h 10 12 24 6 18 hrs kWh/h 10 6 12 24 18 hrs kWh/d 240 10 10 kWh/h offered for a whole day equates to an offer of 240 kWh/d. 10 kWh/h offered for the remaining half of a day equates to an offer of 120 kWh/d. This effectively means the capacity offered, as measured in kWh/d, reduces as the day progresses. 12 24 6 hrs 18

8. Alternative – Increasing kWh/h obligation • To have a flat within day obligation (as measured in kWh/d) NG would have to ramp up the amount offered in kWh/h e.g. for 240 kWh/d obligation: • For 24hrs remaining then 10 kWh/h offered • For 6hrs remaining then 40 kWh/h offered • For 1 hr remaining then 240 kWh/h offered • However other TSO operating in kWh/h do not do this. • So assuming a matching technical capacity of 240 kWh/d on either side of the IP. • For the last hour of the day - 10 kWh/h would be offered bundled; the remaining 230 kWh/h would be unbundled

9. NG view – Bacton IPs only Proposal - the daily obligation is converted into an hourly obligation by dividing by 24. The hourly obligation remains constant throughout the within day auctions From a technical view point, a reducing within day obligation makes sense as it matches the physical capability of the pipeline It would be a consistent approach with adjacent TSOs operating in kWh/h & avoids large amounts of unbundled capacity being offered PRISMA has a within day functionality that TSOs can use; this assumes a flat hourly offering of capacity. Overruns continue to be measured at a daily granularity. NG still has the ability to release non-obligated capacity