Review Group 177

1
Review Group 177

• Overview of RbD Risk Modelling
• 31 March 2008

2
RbD Risk Modelling Background

• Purpose
• Risk Modelling supported the introduction of RbD
  (Reconciliation by Difference) in 1998
• Designed to be one of the operational monitors
  of RbD
• How
• Defined Risk as the difference between actual
  gas bills and those estimated by RbD
• Estimated month on month variability of RbD
  Charges based on assessment of inherent risk
  factors
• Periodic updates were shared with the RbD
  Sub-Group

3
Risk Model - Results

• Risk Model showed that RbD was less variable than
  Meter Point Reconciliation
• Base model showed variability of /- 1.3 of
  allocation
• Indicated variation with errors/timing
  differences included /- 2.5
• Predicted variation increased/decreased between
  updates
• Actual variation can be up to 5 of allocation
• Last update provided 2002
• Risk Model superseded by RbD Feeder Model and RbD
  Forecasting

4
Review Group 177

• Variability of SOQs
• 31 March 2008

5
Variability of SOQs

• SOQ AQ PLF 365
• PLF Peak Load Factor
• Measure of peakiness of annual demand in an EUC
  what proportion of AQ would be used on a 1 in 20
  peak day
• Set each year for each EUC as part of NDM
  Capacity Algorithms
• Determination of PLF
• EUCs 1 to 4 determined directly from the NDM
  Modelling extrapolating modelled demand to the
  78 year 1 in 20 CWV
• EUCs 5 to 9 determined from the NDM Modelling
  using a Weather Correction Factor derived from
  the DNs forecast 1 in 20 Peak
• 
  
  
  

6
Variability of PLFs Gas Year 05 to 06
B band EUCs only excludes WAR bands
7
Variability of PLFs Gas Year 06 to 07
B band EUCs only excludes WAR bands
8
Variability of PLFs 2006/07 to 2007/08

• WAR Band variability
• Gas year 05 to 06 100 of WAR Band PLFs changes
  in range -3 to 3
• Gas year 06 to 07 96 of WAR Band PLFs changes
  in range -3 to 3

9
SOQ Amendment Options

• PLFs are available by end of August (latest) for
  coming Gas Year, following industry consultation
• Under rolling AQ rules, AQ may have recently
  updated
• Options for NDM SOQs
• Restate all SOQs on 1 October, regardless of
  recent AQ changes
• Leave SOQ unchanged, will update at next AQ
  change
• Update SOQs based on read frequency only amend
  Annually Read sites Monthly Read will get reads
  and update soon
• Update SOQs based on read history if reads are
  frequent and AQ updates regularly, dont update
  SOQ
• Considerations
• Shipper comparability, differing read
  performance, Transportation revenue/costs, system
  processing, system capacity requirements