Xose r ve F GO Update on F GO outputs to UNC 565 wor kgr oup - - PowerPoint PPT Presentation

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Xose r ve F GO Update on F GO outputs to UNC 565 wor kgr oup - - PowerPoint PPT Presentation

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Xose r ve F GO Update on F GO outputs to UNC 565 wor kgr oup 21 st Mar c h 2016 DRAFT: for discussion Ag e nda 1. Ove ra ll summa ry of prog re ss 2. Oblig a tions 3. Contra c ts 4. Corpora te Gove rna nc e 5. CDS Gove rna nc e

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SLIDE 1

DRAFT: for discussion

Xose r ve F GO

Update on F GO outputs to UNC 565 wor kgr

  • up

21st Mar c h 2016

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SLIDE 2

1

Ag e nda

1. Ove ra ll summa ry of prog re ss 2. Oblig a tions 3. Contra c ts 4. Corpora te Gove rna nc e 5. CDS Gove rna nc e 6. Busine ss Pla nning a nd Budg e ting 7. Cha rg ing a nd Cost Alloc a tion 8. Ong oing c ommunic a tion

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DRAFT: for discussion

Summa ry of prog re ss

T he F GO Pro g ra mme Ma na g e r ha s b e e n a ske d to a tte nd UNC 565 wo rkg ro up to pro vide upda te o n wo rk do ne unde r F

  • GO. A sig nific a nt a mo unt o f pro g re ss ha s b e e n

ma de o n this pro g ra mme a s a re sult o f the e ffo rt put in b y a ra ng e o f sta ke ho lde rs. Ofg e m’ s de c isio n le tte r o f Oc to b e r 2013 c la rifie d the ne e d fo r Xo se rve to intro duc e c o o pe ra tive a rra ng e me nts a nd ma ke a ll use rs a c c o unta b le fo r the CSP. T he fo llo wing o ve ra rc hing do c ume nts ha ve b e e n e ndo rse d b y POB:

  • Pro g ra mme I

nitia tio n Do c ume nt 

  • Blue print se tting o ut ta rg e t o pe ra ting mo de l 
  • T

ra nsitio n Pla n se tting o ut 2 pha se a ppro a c h to F GO de live ry (2016/ 17 tra nsitio n ye a r a nd 2017/ 18 full Go L ive ) 

  • L

e tte r to Ofg e m se tting o ut risks to F GO fro m CMA e nq uiry a nd fa ste r switc hing pro g ra mme 

  • De pe nde nc ie s ma p 
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Summa ry of prog re ss (2)

Unde r the POB sit 5 diffe re nt wo rkstre a ms a s fo llo ws:

  • Ob lig a tio ns a nd c o ntra c ts
  • Xo se rve c o rpo ra te g o ve rna nc e
  • Ce ntra l Da ta Se rvic e s (CDS) g o ve rna nc e
  • Busine ss pla nning a nd b udg e ting
  • Cha rg ing a nd c o st a llo c a tio n

With the la unc h o f 565 mo dific a tio n, the pla n is fo r the o utput o f thre e o f the se wo rkstre a ms to b e ha nde d o ve r to the 565 wo rkg ro up no w, so tha t the y c a n b e fina lise d a nd inc o rpo ra te d into the mo dific a tio n pro po sa l tha t will g o to pa ne l a nd the n Ofg e m in Se pte mb e r/ Oc to b e r. T he se re la te to :

  • Ob lig a tio ns a nd c o ntra c ts
  • CDS g o ve rna nc e
  • Busine ss pla nning a nd b udg e ting
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Oblig a tions

Aim

  • At pre se nt a ll UNC o b lig a tio ns fo r GT

a g e nc y se rvic e s a re the re spo nsib ility o f the GT s

  • F

GO pro vide s a n o ppo rtunity to re vie w whe re the se o b lig a tio ns sit, a nd whe the r c ha ng e s a re ne e de d to pro vide g re a te r tra nspa re nc y, inc lusivity a nd invo lve me nt o f a ll use rs

Pr

  • gr

e ss and outputs

  • T

a b le a llo c a ting ASA se rvic e line s to c o nstitue nc ie s (e ndo rse d b y POB 30th Oc to b e r) 

  • Wo rkg ro up re vie we d 300+ se rvic e line s o f the ASA re la te d to c e ntra l da ta se rvic e s
  • T

his ha s b e e n a n ite ra tive pro c e ss with the wo rkg ro up re a c hing a n a g re e d vie w fo r furthe r disc ussio n o n e a c h se rvic e line

  • Disc ussio n o n ho w to a llo c a te o b lig a tio ns ha s fo c use d o n whe the r o b lig a tio ns sho uld

b e a llo c a te d b a se d o n use o f the se rvic e / b e ne fit fro m the se rvic e / a b ility to influe nc e the de live ry o f the se rvic e .

  • Ge ne ra lly the g ro up ha s a g re e d tha t the se thre e c o mpo ne nts a re linke d, a nd ha ve

a llo c a te d o n the b a sis o f tho se who b e ne fit fro m a se rvic e a nd influe nc e ho w it is de live re d

Ne xt ste ps

  • Allo c a tio n ta b le with la te st po sitio n se t o ut fo r e a c h o f 300+ se rvic e line s ha nde d o ve r to

UNC 565 wo rkg ro up fo r yo u to pro g re ss 

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Contra c ts

Aims:

  • T

he c urre nt ASA is a c o ntra c t b e twe e n Xo se rve a nd the GT s

  • F

GO pro vide s a n o ppo rtunity fo r a re vie w o f the se c o ntra c tua l a rra ng e me nts, in pa rtic ula r to pro vide g re a te r tra nspa re nc y, inc lusivity a nd invo lve me nt fo r a ll use rs o f CDS se rvic e s

Prog re ss a nd outputs:

  • E

xc e l ta b le hig hlig hting po te ntia l a re a s o f c ha ng e fo r e a c h ASA sc he dule a nd c o ntra c t fro nt e nd 

  • Summa ry o f wo rkg ro up disc ussio ns a ro und ne c e ssa ry c ha ng e s to ASA (pre se nte d to

POB o n 11th Se pte mb e r) 

  • T

he c o ntra c t wo rkg ro up spe nt se ve ra l se ssio ns re vie wing the ASA fro nt e nd a nd e a c h sc he dule

  • T

he g ro up disc usse d a nd ide ntifie d po te ntia l a re a s o f c ha ng e ne e de d to imple me nt F GO

  • T

his wa s a n ite ra tive pro c e ss whic h a ssume d tha t the ASA wo uld b e a use ful sta rting po int fo r the ne w c o ntra c t

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Contra c ts (2)

Prog re ss a nd outputs (c ontinue d):

  • T

he a im wa s to pro vide a vie w a nd ide a s tha t c o uld b e use d b y le g a l e xpe rts in dra fting the ne w c o ntra c t

  • T

he fina l wo rkg ro up wa s he ld o n 17th Aug ust, with a pre se nta tio n to POB o n 11th Se pte mb e r

Ne xt ste ps:

  • We a re ha nding o ve r the ta b le s hig hlig hting a re a s whe re the ne w c o ntra c t c o uld

de pa rt fro m the ASA 

  • Assumptio n is tha t this wo rk will b e ta ke n fo rwa rd b y Xo se rve with De nto ns, b ut tha t

c lo se wo rking with the UNC wo rkg ro up is e sse ntia l

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DRAFT: for discussion

Corpora te Gove rna nc e

Aims:

  • T

he c urre nt Xo se rve b o a rd inc lude s 6 GT

  • a ppo inte d dire c to rs
  • F

GO pro vide s the o ppo rtunity to a me nd the c o nstitutio n a nd o pe ra tio n o f Xo se rve ’ s c o rpo ra te g o ve rna nc e a rra ng e me nts, spe c ific a lly fo r the a ppo intme nt o f shippe r- no mina te d dire c to rs fro m 2016 a nd iGT invo lve me nt in a ppo intme nt fro m 2017

Prog re ss a nd upda te s:

  • Re vise d T

e rms o f Re fe re nc e ha ve b e e n de ve lo pe d thro ug h wo rkg ro up 

  • T

his wa s a n ite ra tive pro c e ss with a fina l wo rkg ro up o n 21st Se pte mb e r, a nd e ndo rse d b y POB o n 13th No ve mb e r

  • T

he se T e rms o f Re fe re nc e we re pa sse d to Xo se rve to re fle c t in the ir upda te d c o nstitutio na l do c ume nts o n 20th No ve mb e r

  • Re vise d se t o f c o nstitutio na l do c ume nts wa s c irc ula te d o n 5th F

e b rua ry 

  • F
  • r the tra nsitio n ye a r, the Shippe r No mina tio ns Co mmitte e ha s b e e n e sta b lishe d

a nd the pro c e ss is unde rwa y- the pro c e ss wa s e ndo rse d b y POB o n 11th De c e mb e r a nd is inc lude d in this slide pa c k 

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DRAFT: for discussion

Corpora te Gove rna nc e (2)

Ne xt ste ps:

  • F

urthe r wo rk is ne e de d to c o nfirm the c o nstitutio n a nd o pe ra tio n o f the b o a rd o n a n e nduring b a sis fro m April 2017

  • Curre nt vie w is tha t this will b e a n F

GO wo rkg ro up with upda te d T e rms o f Re fe re nc e b e ing pa sse d to Xo se rve via POB

  • A re vise d se t o f c o nstitutio na l do c ume nts will the n fo llo w
  • K

e y to suc c e ss will b e to le a rn fro m the o pe ra tio n o f the b o a rd in 2016/ 17

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DRAFT: for discussion

Shippe r nomina tions proc e ss

Nominations committee formed Agree specification Identify long list Propose short list Gas shipper licensees advised of short list Objections process Open meeting held – all gas shippers invited Nominations committee select up to four Directors from the ratified short list Xoserve advised of nominees and move to appointment

Members of the committee confirmed as two reps each from Energy UK and ICOSS Role specification to be determined by the nominations committee – working with Xoserve and the head-hunter Head-hunter is to provide the nominations committee with a list of individuals that meet the specification To rank the candidates and form the shortlist, objective scoring criteria will be developed Shippers will be able to raise a written objection to anyone on the short list, with the nominations committee given a chance to respond in writing to specific objections. If any objections remain, Shippers will take a vote, with a 2/3rds majority needed to uphold an

  • bjection. The meeting will

then ratify the proposed nominees. Xoserve will be advised of the Shipper proposed nominees and will commence their appointment process, including seeking Board approval of the nominations All gas shippers will be notified in writing of the short list The nominations committee will distil the long list down to a short list (could be in consultation with industry reps). Once process is underway, FGO Programme will engage with non association shippers to invite involvement

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CDS Gove rna nc e

Aims:

  • CDS g o ve rna nc e c o nc e rns the da y to da y a nd o ng o ing ma na g e me nt a nd industry

g o ve rna nc e o f Xo se rve ’ s de live ry a g a inst the ASA

  • F

GO pro vide s the o ppo rtunity fo r re vise d a rra ng e me nts to b e imple me nte d tha t re fle c t the c o o pe ra tive mo de l a nd a re mo re tra nspa re nt a nd inc lusive fo r a ll use rs

Prog re ss a nd outputs

  • Re vise d T

e rms o f Re fe re nc e fo r Co ntra c t Ma na g e me nt a nd Cha ng e Ma na g e me nt g ro ups ha ve b e e n de ve lo pe d thro ug h nume ro us wo rkg ro ups 

  • T

he se we re e ndo rse d b y POB fo r pa ssing to the UNC wo rkg ro up o n 11th Ma rc h

Ne xt ste ps

  • T

he a im is to use the se T e rms o f Re fe re nc e a s a sta rting po int fo r e nduring a rra ng e me nts whic h will b e de ve lo pe d b y the UNC wo rkg ro up a nd imple me nte d thro ug h the mo dific a tio n pro po sa l

  • A ke y issue to a ddre ss is ho w the se g ro ups c a n ma ke re c o mme nda tio ns/ d e c isio ns

unde r the e nduring a rra ng e me nts, ta king into a c c o unt the b ro a de r ra ng e o f c o nstitue nc ie s invo lve d

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DRAFT: for discussion

Busine ss Pla nning a nd Budg e t Se tting

Aims:

  • Xo se rve b usine ss pla n is c urre ntly de ve lo pe d b y the Xo se rve e xe c utive a nd

a ppro ve d b y the b o a rd

  • Budg e t is c urre ntly re c o ve re d thro ug h the re g ula to ry pric e c o ntro l fo r the GDNs a nd

NT S

  • F

GO o ffe rs a n o ppo rtunity fo r inc re a se d c o nsulta tio n a nd e ng a g e me nt with a ll use rs a t b o th c o rpo ra te a nd CDS g o ve rna nc e le ve ls

  • T

his will pro vide g re a te r tra nspa re nc y a nd will b e c o nsiste nt with the c o o pe ra tive mo de l

Prog re ss a nd outputs:

  • Re vise d CDS T

e rms o f Re fe re nc e 

  • Re vise d pro po se d b usine ss pla nning pro c e ss dia g ra ms 
  • Xo se rve de live ra b le s do c ume nts de ta iling b usine ss pla nning pro c e sse s 
  • Xo se rve b usine ss pla ns fro m pre vio us ye a rs
  • Disc ussio n thro ug h wo rkg ro ups ha s re sulte d in the b usine ss pla nning a nd b udg e t

se tting e ng a g e me nt pro c e ss b e ing inc o rpo ra te d into the CDS c o ntra c t ma na g e me nt g ro up with info rma tio n to b e sha re d a nd de ve lo pe d with a ll use rs 

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DRAFT: for discussion

Busine ss Pla nning a nd Budg e t Se tting (2)

Ne xt ste ps:

  • Xo se rve will c o nfirm timing s a nd issue a c o mmitme nt sta te me nt fo r 2016/ 17
  • Xo se rve pla n to c irc ula te a 2015/ 16 b usine ss pla n c o mmunic a tio n b y 24th Ma rc h
  • T

he ke y to suc c e ss will b e fo r le sso ns le a rne d fro m the ASA g ro ups during April to Se pte mb e r 2016 to b e disc usse d a t the UNC 565 wo rkg ro up a nd inc o rpo ra te d into the T e rms o f Re fe re nc e fo r the e nduring a rra ng e me nts

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DRAFT: for discussion

Cha rg ing a nd Cost Alloc a tion

Aims:

  • At pre se nt GT

s re c o ve r a g e nc y c o sts thro ug h tra nspo rta tio n c ha rg e s unde r the pric e c o ntro l

  • T

he se c ha rg e s a re pa sse d o n to shippe rs a nd the n c o nsume rs

  • F

GO o ffe rs a n o ppo rtunity to re vie w the c ha rg ing a rra ng e me nts a nd to intro duc e a tra nspa re nt a nd c o st-re fle c tive c ha rg ing me tho do lo g y a nd c o st a llo c a tio n a ppro a c h whic h ma y inc lude a me ndme nts to invo ic ing a rra ng e me nts

  • T

his will inc lude a n a nnua l re vie w o f c ha rg ing a rra ng e me nts

Ke y doc ume nts:

  • Dra ft princ iple s fo r c ha rg ing whic h we re la st disc usse d a t wo rkg ro up o n 1st F

e b rua ry. A furthe r wo rkg ro up disc ussio n ha s b e e n sc he dule d fo r 5th April. 

  • Ofg e m issue d a re q ue st fo r info rma tio n to the GT

s a sking fo r c o st info rma tio n fo r the re ma inde r o f the GD1 pe rio d. T he PM c irc ula te d the Xo se rve / GT re spo nse (se nt to Ofg e m o n 29th Ja nua ry) o n 3rd Ma rc h 

  • T

his inc lude d a n F GO pa pe r summa rising the c o st a llo c a tio n pro c e ss a nd me tho do lo g y unde rpinning the RF I sub missio n 

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DRAFT: for discussion

Cha rg ing a nd Cost Alloc a tion (2)

Ne xt ste ps

  • Sig nific a nt furthe r wo rk is re q uire d to de ve lo p the c o st a llo c a tio n a ppro a c h a nd

de ta ile d c ha rg ing me tho do lo g y tha t will b e imple me nte d fro m April 2017

  • POB o n 11th Ma rc h a g re e d to ho ld a wo rkg ro up o n 5th April
  • A mo re de ta ile d pla n will b e disc usse d a t POB o n 8th April
  • Onc e the de live ra b le s ha ve b e e n de ve lo pe d furthe r the y will b e sub mitte d to the

UNC 565 wo rkg ro up fo r re vie w a nd to inc o rpo ra te into the DSC a s a ppro pria te

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DRAFT: for discussion

Ong oing c ommunic a tion

Mo nthly POB me e ting s a re in dia rie s a nd will c o ntinue to fo c us o n:

  • T

ra c king a nd imple me nting the pro g ra mme in full

  • E

nsuring c o nsiste nc y a c ro ss wo rkstre a ms

  • Pro viding a n o ppo rtunity fo r c o nc e rns a nd issue s to b e ra ise d

We ha ve a g re e d with Chris Wa rne r tha t he will pro vide summa ry slide s a he a d o f e a c h me e ting o utlining the wo rk o f the UNC 565 wo rkg ro up. We will suppo rt the wo rk o f the UNC 565 wo rkg ro up a s use ful with a fo c us o n the pla nne d de live ry o f the fina l mo d to the pa ne l in Oc to b e r.

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DRAFT: for discussion

T hank you