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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