On 10 October 2014 Gas Industry Co received a request from Maui Development Limited (MDL) to consider and make a recommendation in respect of proposed changes to the Maui Pipeline Operating Code (MPOC) to introduce daily cash-out of any user imbalances (over an allowed tolerance). MDL had been discussing a draft of this Market-Based Balancing Change Request (MBBCR) with Maui pipeline users and wider stakeholders.
Submissions were invited by 24 November 2014 and Gas Industry Co subsequently invited cross-submissions for submitters to respond to points raised by others.
Note: The excel document below was updated on 21 November 2014 to correct an error. The Frankley Road 'Flow' data was displaying the delivery metered quantity in the receipt column and vice versa. If you had downloaded the document prior to this date it is recommended you check the updated version.
In anticipation of receiving the Change Request, and with a view to making the processing of it as streamlined as possible, Gas Industry Co began preliminary work on a cost benefit analysis (CBA).
After receiving the MBBCR Gas Industry Co requested more information from MDL, which was received on 17 October 2014. The letter containing that information is attached to the MBBCR. It confirmed MDL’s intention to implement the MBBCR promptly and states MDL’s view that the cost-benefit analysis should compare the MBBCR to the version of the MPOC then in force.
Gas Industry Co's took the view that it was appropriate to compare the MBBCR to the version of the MPOC that would likely be in place if the MBBCR was not supported. This reflected Gas Industry Co's belief that, while the MBBCR incorporated elements of the previously supported but not implemented back-to-back Change Requests, from MDL, it was unlikely that either the entirety or any element of back-to-back balancing would be implemented if the MBBCR was not supported. Gas Industry Co therefore proposed to compare the entirety of the MBBCR to the MPOC then in force, rather than comparing it to a version of the MPOC that incorporated the back-to-back amendments.
The MBBCR represented further efforts to address long-standing gas balancing issues, after the industry requested in 2009 that regulatory proposals be deferred and that it be given an opportunity to develop transmission code-based improvements. In making its Draft Recommendation, Gas Industry Co’s role is to consult on the Change Request and make a recommendation either ‘supporting’ or ‘not supporting’ it. Gas Industry Co particularly assesses whether a Change Request will improve on the status quo and how it aligns with relevant objectives of the Gas Act 1992, and costs and benefits.
5 November Workshop
A workshop was hosted by Gas Industry Co on 5 November 2014 to allow potential submitters an opportunity to discuss how the costs and benefits of the MBBCR should be assessed. The discussion was led by Dr. John Small, who Gas Industry Co engaged to develop the cost benefit analysis. Participants identified some information that would assist their understanding. This information is posted at the end of the list of download links in the Change Request section.