XRN 5652
Enabling Direct Contractual Arrangements with Consumers for Demand Side Response (Modification 0844)

Summary

At present, NGT is only able to contract for gas DSR with Shippers.  Modification 0844 seeks to introduce provisions into the UNC which will allow NGT to contract directly with Class 1 Consumers for the purposes of DSR. Based on consumer feedback, this proposal has the potential to increase the level of participation in the gas DSR market and therefore increase the volumes which NGT can procure, which will further enhance the suite of pre-emergency tools NGT can call upon in the event of a forecast supply shortage. 

It is envisaged that NGT would publish an annual tender for this DSR service that eligible consumers could respond to according to the same timescales as the tender process established for shipper DSR options by Modification 0822.  Consumers that have DSR offers accepted through this process would receive monthly ‘option’ payments based on volumes and prices offered in return for agreeing to reduce their gas demand if called upon by NGT to do so at times of national gas supply shortage.  Such events would also trigger ‘exercise’ payments, again based on prices submitted in the tender.  Both option and exercise payments will be funded from Balancing Neutrality.

If the Modification is implemented, there are a number of additional processes that NGT requests to be discharged by the CDSP (summarised in the CP document)