In February 2009, Gas Industry Co issued the Transmission Pipeline Interconnection Guidelines (the Guidelines). The Guidelines set out its view on the features of good interconnection practice.
The objectives of the Guidelines are to:
• describe what a TSO’s interconnection policy should address;
• describe the phases of interconnection, what should happen in each phase, and the key decision points;
• establish principles that should apply to the overall provision of an interconnection service, and to each phase of interconnection;
• encourage TSOs to adopt consistent interconnection documentation;
• establish clear responsibilities; and
• minimise barriers to entry by promoting transparency and efficiency.
In September 2009, a review was conducted on the interconnection arrangements of both MDL and Vector against the Guidelines. As a result of the review and discussions held with the TSOs, some amendments to the Guidelines were considered necessary. These amendments and the reasons for them are noted in the table below.
Amendments to Guidelines on Interconnection with Transmission Pipelines
3.2 Interconnection Policy
Each TSO should publish an interconnection policy that includes:
‘the TSO’s general policies relating to interconnection matters;’
An overarching interconnection policy would provide greater clarity to an interconnecting party (IP). A policy would provide a clear process for both parties in respect of information requirements, timelines, and responsibilities. It would also provide the principles for issues such as the near-by existing interconnection points.
5.2 Equipment Responsibilities
The TSO and IP should agree the ownership and demarcation points of the interconnection equipment. In particular, they need to consider who will own TSO specified assets (noting that regardless of ownership, all TSO specified assetsshould be designed, constructed, operated, maintained and tested in accordance with the TSO’s standards).
For a delivery interconnection point (see Figure 3):
· ownership of the equipment downstream of the primary isolation valve should be agreed between the parties. The TSO should not be obliged to own or provide this equipment. The TSO should give the IP an option to own this equipment permanently, or to transfer ownership to the TSO once constructed; and…
The objective of the Guidelines is to provide flexibility to an IP in respect of ownership and the means of cost recovery. By allowing an IP to own the station, it can choose how it funds the capital expenditure and be assured of a competitive cost.
As MDL does not fully address the requirements of a delivery interconnection, an interconnection policy should provide guidance in respect of delivery point interconnections. The delivery interconnection point is amended so that an interconnecting party (or a third party appointed by the IP) can construct the station and then transfer ownership to the TSO, enabling the IP a similar degree of financing flexibility.
Appendix A Documentation
An interconnection policy should include:
Relevant policies and standards:
h) general policies relating to interconnection matters, including:
I the use of existing interconnection points;
ii equipment ownership and ownership transfer; and
iii other relevant policy matters;
i) links to other policies and technical standards relevant to interconnection, including:
i pricing policy;
ii list of TSO-specified assets; and
iii technical standards;
Technical review principles:
l) a description of the process and principles that will be used to assess the technical acceptability of an interconnection application.
Neither has a specific interconnection policy; however, many aspects of the policy are addressed by each TSO in various documents. An overarching interconnection policy would provide greater clarity to an interconnecting party (IP). A policy would provide a clear process for both parties in respect of information requirements, timelines, and responsibilities.