Ofgem has approved a series of temporary changes to gas settlement arrangements to manage the effects of the coronavirus pandemic.
The modifications to the Uniform Network Code (UNC) all emerged from a specially convened session of the UNC distribution workgroup held in April.
UNC722 allows gas shippers to submit estimates when they are unable to collect meter readings due to social distancing measures. The proposer, Gazprom, said the pandemic has not only prevented readings from taking place, but has also led to consumption diverging significantly from what customers are otherwise assumed to have used.
Ofgem accepted the problem but said “the growing numbers of advanced meters should limit the impact of this issue.”
“Whilst recognising that communications enabled meters are not yet universal and that technical difficulties may cause difficulties obtaining some meter readings, we nonetheless consider that the need to submit an estimated read into central systems should be an exception,” the regulator added. “In particular we would be concerned if the estimates were in any way to interfere with the subsequent submission into settlements of an actual meter read.”
It said any meter reads submitted under the modification should be flagged as such and urged the Performance Assurance Committee for the code to “closely monitor and report on the use of estimated reads”.
Meanwhile, UNC723 permits gas shippers to shut down – or “isolate” – a supply point without having to prove it can no longer consume gas.
The proposal was submitted by Northern Gas Networks which said it was no longer practical to conduct the necessary site visits. It said the modification would enable supply points that are not consuming any gas, even if they are capable of doing so, to be excluded from the allocation process during the pandemic.
Ofgem said the amendment “deviates from existing isolation practice in that it does not require absolute cessation of consumption” but described it as a “pragmatic short-term mitigation against some of the challenges facing the gas industry”.
As with the previous modification, the regulator emphasised that any instances of its use should be carefully monitored, including by the Performance Assurance Committee : “Whilst it is hoped that most supply points will quickly resume economic activity once the period of lock down has ended, some may remain closed while any ongoing requirements around social distancing make their operations impracticable.
“Unfortunately, some companies may also not survive the current disruption. It will be important to ensure that the relevant industry parties and in particular the relevant gas shipper remain responsible for that site and continue to discharge all applicable safety obligations.
“They will also remain liable for charges in the event that the supply point is subsequently found to have been consuming gas.”
Ofgem noted that shippers remain liable to pay network capacity charges for a supply point unless they submit a withdrawal notice to Xoserve, adding: “The shipper ceases to be responsible for all charges only once the supply point withdrawal becomes effective.”
And finally, UNC724 removes shippers’ liability to pay ratchet charges if daily gas flows to a supply point exceed its registered capacity over the winter season. The charges are intended to incentivise shippers to secure sufficient capacity.
Ofgem said there is enough capacity on the system at the moment to temporarily remove the charges, which would otherwise penalise businesses that are contributing to the coronavirus response and have increased their gas consumption as a result. The change will apply retrospectively from the beginning of the government’s lockdown.
The modifications all took effect last week, the day after they were approved.