ARTI CLE / MAKALE and/or an ARCA (Advance Reservation of Capacity Agreement). Network Exit Agreements are required for connections to the NTS (National Transmission System), for connections with third party pipelines ete. the NExA establishes the ownership of key elements of the connection and establishes the obligations of each of the owner e. g. for maintenance and emergency service provision. Advance Reservation of Capacity Agreements is used for high volume connections, usually over 586 million kWh per year. ARCA provides the project developer with assurances that the gas required for his project will be available - at the same time it allows Transco to plan network developments. The maximum ARCA period is 5 years. The costs for connections will be calculated individually - some connections may require a feasibility study to determine the charges. For high volume connections to the NTS, e. g. over 1 465.5 million kWh per year, or for LDZ connections of similar volume a separate procedure is used. The first step of this is a feasibility study costing around _1 0,000(EURO 1 5 600), followed by a conceptual design study costing _20,000 to _50,000(EURO 31 000 to 78 000). For NTS connections a minimum connection only is provided. This consists of a telemetry link, agreed ramp rates remotely operated isolation valve and site security measures. A minimum NTS connection will cost _200,000 to _250,000(EURO 312 000 to 390 000) and has a lead time of 2 to 3 years, added to this is the cost of the pipeline required to reach the NTS system. NTS connections are rare with only power stations and 8 large industrial users connected. in addition to the cost of the connection there may be upstream system reinforcement costs. Transco may fund these - subject to an Economic Test. The test calculates the maximum investment Transco can make for the load that is being connected. A load is deemed to be economic when the extra transportation income for Transco exceeds the costs of connecting the load. For loads, which fail the test, a capital contribution towards the reinforcement costs will be required. Connections cost examples given by Transco are: Load Connection Reinforcement Total Commercial Load LTS Connection and Cost E20,000 - passes E1 15,000 73.3 million kWh per pipeline -E115,000 Economic Test year Power Station NTS minumum Cost E2,000,000 -fails E2,250,000 1 500 million kWh connection - E250,000 Economic Test per year Barriers in practice many sites find that numerous administrative barriers are encountered. For sites connecting to the LDZs the local Transco office deals with the design and quotation for the connection. Local offices appear to have inconsistent � COGENERATION WORLO & Renewoble Energy procedures and requirements for dealing with requests for connection. This is evident as difference s in approach between different Transco personnel and between different loca! offices. Hence there is a lack of clarity within Transco about the detailed procedures and a lack of communication of those procedures to sites requesting a connection. in cases where the distance to the relevant gas main is significant the pipeline will need to cross the land of third parties. Negotiations are needed with these landowners to permit the laying of the pipeline and to arrange any longterm access to the pipe. These negotiations are complex for a company proposing to self-lay a pipeline. As a licensed Public Gas Transporter Transco has powers to dig trenches and lay pipelines which gives Transco an advantage in undertaking this work. Other issues are linked to an over bureaucratic approach in handling requests. For example a reluctance to provide information -often in case the information contravenes part of regulations which govern Transco's activities. Examples include refusal to provide a list of contractors who are approved to undertake the installation of gas pipelines. Other examples of bureaucracy include delays in providing quotes for connection, providing insufficient details of Transco's side of the physical connection -impeding the design and costing of the site's side of the connection, and withdrawing ARCAs at key stages of project negotiations. From Transco's point of view they feel that the regulatory system constrains them to provide a connection service - not a consultancy service to assist in specifying details of connections. This conflict arises because some consultancies provide this type of advice for a fee - if Transco were to provide this for free to some customers they could be subject to a regulatory complaint. As a result of complaints about these issues from 1997 onwards the UK gas market regulator initiated investigations into Transco's handling of connection requests. The results of this investigation were published in February 1999 and require: • Transco to obtain ISO 9001 certification for its connection quotation operation; • Transco to set up systems for logging and dealing with quotations requests with agreed time scales; • Transco to provide training for handling quotations; • Transco to introduce compensation schemes for late or incorrect quotations; • Transco to supply its methodology for connection charges; • Transco to arrange independent audits of three quotations from each LDZ. These actions should when implemented improve matters, as implementation is stili in progress it is too early to comment on their success. Conclusions on gas connection There is evidence that in many cases Transco has been unhelpful in dealing with requests for connection and in the
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