Consultation on licence modifications

16 December 2021

 

Today we are publishing our gas transmission price control (GT22) Draft Determination for consultation.

GT22 is the price control review for the high pressure gas network in Northern Ireland for the five year period from 1 October 2022 to 30 September 2027. The high pressure gas network comprises five gas transmission pipelines operated by four conveyance licence holders, which we refer to as Transmission System Operators (TSOs):

  • GNI (UK)
  • Premier Transmission Limited (PTL)
  • Belfast Gas Transmission Limited (BGTL)
  • West Transmission Limited (WTL)

The gas transmission pipelines transport gas from Scotland to the gas distribution networks (Phoenix Natural Gas, firmus energy Distribution and SGN Natural Gas) and to the gas-fired power stations, Ballylumford Power Station and Coolkeeragh Power Station.

We have reviewed the TSOs’ business plan forecasts.

Overall, we have concluded at this stage that:

  • while forecast costs were generally well justified, we propose to disallow some insufficiently justified cost lines;
  • we will continue to liaise with the TSOs on development in areas relevant to the NI Energy Strategy;
  • a weighted average cost of capital for GNI (UK) of 2.66%, which is lower than their current rate of 3.17 is appropriate; and
  • we allow 89% of MEL’s submitted amount, 86% of GNI (UK)’s and 80% of GMO NI’s.

We will continue to monitor progress on costs and outputs through the Regulatory Instructions and Guidance (RIGs) and intend to add additional areas for review, including progress on asset management systems, tracking of TSOs’ stakeholder engagement activities, progress on joint working between the TSOs and the development of an Environmental Action Plan.

The proposed allowances, combined with growing annual capacity bookings on the transmission network, indicate that transmission charges will not increase as a result of GT22.

We are seeking views on our proposals. The consultation will close on 16 February 2022. Following consideration of the responses received, we will publish a final determination in April/May 2022 to be effective from October 2022.