Conversion to the DART System: Update on Implementation Schedule

Transcription

1 Conversion to the DART System: Update on Implementation Schedule March 11, 2015 WebEx at 1:00 p.m. CCT 1

2 Agenda Updated Timeline to Convert to DART Additional Tariff Changes Other Updates and Next Steps Appendix A High-Level Overview Appendix B NAESB Example 2

3 Converting to the DART Computer System SNG will convert from the SoNet Premier system to the DART computer system See Appendix A for high-level overview 10/23/14 SNG circulated draft tariff sheets and solicited customer comments 12/11/14 SNG hosted a Meeting/WebEx to answer questions Follow-up feedback and discussions have led SNG to agree to a schedule change and an early report review and DART training environment ( Sandbox ) Some customers are concerned about having sufficient time to prepare for the transition 3

4 Updated Implementation Timeline Conversion Date: April 1, 2016 Monthly report review: Starting March 2015 SNG will provide draft formats in advance and host a monthly WebEx to review and finalize Sandbox Opens: June 2015 March 2016 June Entities, PINS, IT and Pool Contracts July 2015 Firm contracts and some converted draft nominations Monthly releases thereafter with additional data Training: September - October 2015 with refresher training in February - March 2016 Mid-March 2016: SNG opens DART for shippers to conduct business for April 1,

5 Updated Implementation Timeline (cont d) Benefits of Delay: Customers will have significant amount of time to use DART in the Sandbox Viewing data and entering nominations and capacity release in particular Monthly review of report formats will provide familiarity and opportunity for customers to update their own documentation Trade-offs: Customers will need to take advantage of opportunity to use DART in 2015 prior to winter weather If FERC requires industry changes prior to DART conversion, SNG plans to minimize changes to SoNet Premier and request an extension of time Example-NAESB 3.0: SNG would implement change in Gas Day and synch up changes to nomination deadlines, but SNG would request an extension of time to implement more nomination cycles or other changes (see Appendix B) SNG requests customer support 5

6 Additional Tariff Changes 6

7 Tariff Updates Agreed to 12/11/14 Please refer to the December 11 th presentation for more details: Clarified Section 22.6(l) of the GTC to set forth retained rights of the Releasing Shipper; Revised Section 12.1(b) of the GTC to designate a back-up nomination process for business resumption purposes; Clarified that the Offer will set forth whether FTNN is being released as FT; Paralleled the IT rate language so that AO can be eligible for discounting. 7

8 Overview of Tariff Updates Agreed to After 12/11/14 PDAs: Provide 2 full business days to enter PDAs and allow shippers to enter contract PDAs Jump Ball: File to retain SNG s current process of prioritizing flowing gas on the Timely nomination cycle instead of implementing a Jump Ball process for Timely nominations Zone Matrix Calculation: Match receipts to deliveries at the zone level prior to firm contract maximization and final zone matrix commodity billing 8

9 Predetermined Allocations (PDAs) Point operators will have 2 business days after the gas day ends to enter PDAs Example 1: Gas day ends on Sunday at 9:00 a.m. Central Time; PDA deadline is 5:00 p.m. CT on Tuesday Example 2: Gas day ends on Monday at 9:00 a.m. CT; PDA deadline is 5:00 p.m. CT on Wednesday PDA changes can be requested after the deadline up to 4 business days after the end of the month if affected parties agree This schedule significantly exceeds the NAESB standard The operator PDA will allocate gas to the shippers at the point The quantity allocated to the Shipper at the point will then be allocated among the Shipper s contracts on a pro rata basis The Shipper has the option to enter a PDA to rank its contracts at a point if it so chooses Tariff changes will be reflected in Section 13 of the GT&C 9

10 A Jump Ball Will Not Be Implemented for Timely Nomination Cycle SNG s 10/23/14 tariff proposed implementing a jump ball for the Timely nomination cycle IT/AO, out-of-path firm, in-path firm, and primary firm would be scheduled based on priority without considering previously scheduled quantities within that category SNG believes this is consistent with the industry Based on significant customer interest in keeping the current course of performance for the Timely cycle, SNG will add tariff language to reflect that it proposes to continue to prioritize previously scheduled nominations over incremental nominations within each category above for the Timely cycle Based on the last scheduled nomination cycle prior to Timely which is the Evening Cycle for the previous gas day Procedure will be stated in Section 12.2(d) of the GT&C 10

11 Zone Matrix Calculation In its 10/23/14 draft tariff, SNG had proposed to honor the Shipper s nominations and bill transportation commodity based on each receipt to delivery combination nominated by the Shipper, scheduled and allocated Then SNG would apply Zone Maximization to determine if the Shipper had unutilized firm service to which IT or AO allocations could be shifted prior to final billing A significant number of customers requested SNG to retain its process to match allocated receipts and deliveries in the sequence set forth in the tariff to further minimize transportation commodity costs prior to Zone Maximization SNG has agreed to add this process to DART for transportation commodity billing Section 13.7 of the GT&C will be revised to reflect the process to be implemented by SNG 11

12 Simple Example FT Shipper is allocated service as follows on a day: Receipt PIN Allocated Receipt Qty Delivery PIN Allocated Delivery Qty Coal Seam (Oak Grove Zone 2) 10,000 dth Industrial ABC (Zone 2) 8,000 dth Shadyside (Zone 0) 5,000 dth Alabama LDC (Zone 2) 5,000 dth Total Billed: 13,000 dth Bill based on Shipper allocations would be $558 8,000 dth * $0.036/dth (Zone 2-2) = $288 5,000 dth * $0.054/dth (Zone 0-2) = $270 With the Zone Matrix recalculation SNG will bill $522 8,000 dth * $0.036/dth (Zone 2-2) = $288 2,000 dth * $0.036/dth (Zone 2-2 recalc) = $72 3,000 dth * $0.054/dth (Zone 0-2) = $162 12

13 Tariff Correction Recently SNG found an inadvertent deletion in Section 14.1(a) of the GTC of its 10/23/14 tariff draft that it will correct The denominator in the Net Imbalance Percentage will exclude quantities allocated between the same Shipper s contracts at a Pool PIN (just like today between pool and transport contracts for the same shipper) 13

14 Other Updates and Next Steps 14

15 Eligible Receipt Points to Nominate to the Zone 0 South Pool PIN SNG is willing to enhance the Pool PIN proposal posted on 9/25/14 to allow shippers to nominate gas from any receipt point back to the Zone 0 South Pool PIN for sale Under a pool or transport contract No commodity or fuel will be assessed Still subject to scheduling priorities through any constraints Nominations away from the Zone 0 South Pool PIN will be assessed the fuel and transportation commodity from Zone 0 Reflects that nominations from generic pool contracts today are deemed to be in Zone 0 Reflects that the Zone 0 South Pool Pin equates to the South Louisiana Index Price with full receipt point flexibility to the pool 15

16 Post-Implementation Process SNG agrees to address accuracy and timeliness of data within 30 days or less Prior to April 1, 2016, SNG will work with customers to agree on report formats to be implemented April 1 SNG will form a Customer Working Group to help develop consensus on solutions to other post-production issues and priorities for such solutions For two years unless the group agrees to continue SNG asks that customers maintain consistent participation 16

17 Next Steps By April SNG plans to file its pro forma tariff sheets at FERC March Let your Account Manager or Scheduling Analyst know if you want to participate in the monthly report review Sample report formats will be ed to all Premier users May 2015 Each company needs to execute a DART Security License and appoint a security administrator to work with SNG to set up your employee s access to DART Starting June 2015 Review data set up and begin to utilize the Sandbox Ongoing - Participate in monthly WebEx sessions and training 17

18 Questions? 18

19 Appendix A High-Level Overview 19

20 Key Elements Driving Tariff Changes Firm transportation contract rights will be pathed and displayed using DART Based on each firm contract package awarded to Shipper as set forth on its firm contract SNG will adopt NAESB s pathed, non-threaded nomination model utilized by DART Geographic locations will be established for storage and supply pools Sufficient information will reside in DART to allow for pipeline segment scheduling using contract path priorities 20

21 Contracts All firm contracts will be converted from Mcf to Dth Based on Dth/Mcf which is used today for nominations and billing Master Firm Transportation contracts will be used for each service type (with some exceptions) Separate Master Contracts for FT, FT-SS, FTNN, and FTNN-SS Stand-alone contracts that are not part of a Master Contract will be utilized as needed to accurately track, schedule or bill Master Firm Storage will include CSS, and CSS- SS if applicable 21

22 Contracts (cont d) ISS contract One per customer IT contract(s) Can have one or multiple Supply Pool Balancing Agreement Can have one or multiple Tier 1 and Tier 2 restrictions will be eliminated Master PAL contract with separate request orders SNG will convert contracts and new numbers will be communicated to customers in advance Except new Supply Pool contracts will be set up for execution prior to implementation since the form of contract will change significantly 22

23 Use of Pipeline Segments Pipeline segments will be established in DART for these purposes: Contractual capacity path rights (Primary Path) Scheduling pipeline constraints Capacities for Operationally Available Capacity postings Meter station constraints will be allocated at the applicable receipt or delivery points 23

24 Capacity Release ( CR ) - General Administrative Releases will be in Dth since contracts will be in Dth Acquiring Shipper will now be called Replacement Shipper Releases from master firm contracts must be balanced releases by package Total receipt point quantity and total delivery point quantity must be equal, and the points must come from the same package However, a releasing shipper can include multiple balanced releases in one offer under the master contract Will provide option to release FTNN as FT 24

25 Capacity Release ( CR ) General (cont d) Will continue to support By zone offers and Point-to-Point offers Will allow a replacement shipper to submit its request for alternate in-the-path points during the term of a release instead of requiring such request to be made during the CR bid process; benefits shipper to keep the longest path request to SNG 8 business hours in advance Reput of capacity will occur after the recall term ends, if the offer provides for a reput Releases of CSS Can be MSQ only, MDWQ/MDIQ only, or MSQ/MDWQ/MDIQ; based on tariff ratios 25

26 Capacity Release of Firm Receipt Rights to a Supply Pooler Firm A receipt point assignments to a supply pooler will be available through a new process Basic rules Releasing Shipper can offer capacity from a firm receipt point to an eligible pool location in the same zone that is located in Shipper s Primary Path Replacement Shipper will acquire this capacity under a special purpose master FT contract (not its pool contract) This master FT is used to nominate from the acquired receipt point or from receipts in the path to the pool location where sales can occur No transportation commodity or fuel will be assessed 26

27 DART Uses the Pathed Non-Threaded Nomination Model In the Pathed, Non-Threaded nomination model, there are 3 nomination components Transport nominations will identify the receipt locations (PINS) and quantities that are serving/linked to each delivery location (PIN) At each receipt PIN, the shipper will identify its upstream supplier(s) At each delivery PIN, the shipper will identify its downstream market(s) The Shipper has several ranking options as provided by the NAESB standards PIN is Point Identification Number 27

28 Nominations Other General Nominations to/from the Storage PIN The storage holder at the Storage PIN will enter a storage nomination instead of a confirmation Firm shippers will be allowed to nominate Authorized Overrun above firm Transportation Demand AO and IT service will have the same scheduling priorities based on rate 28

29 Nominations Other General SNG will eliminate the Tier 1 and Tier 2 pool nomination restrictions Only 1 pool contract needed to nominate supply from receipt points to eligible pool locations Priority of these nominations is interruptible However, if the pooler sells gas at a pool location directly to a shipper nominating to receive the gas under a firm transport agreement, then the pool nomination will get a secondary firm priority (out-of-path) if the firm shipper ranks the supply accordingly SNG will eliminate the requirement to enter into a supply pool contract for title transfer tracking ( TTT ) purposes Parties can enter title transfer tracking nominations to buy and sell gas at a location so long as they have a DART security agreement to use the system 29

30 Segment Scheduling Transport scheduling will be at The pipeline segment level for pipeline constraints The point level for meter capacity constraints Contract rights will determine shipper s priority of service through the segment and at the point 30

31 Segment Scheduling (cont d) Transport scheduling priorities: Firm service Primary to Primary (using firm contract points and Primary Path) In Path (using the Primary Path but at secondary points) Out of Path (outside the Primary Path rights) Interruptible Service IT and AO based on rate 31

32 Invoicing Fuel will be assessed on allocated receipts based on the rate zones of the actual receipt point to delivery point nomination made by the shipper Each Pool Location will have a geographical location in a zone Prior to final transportation commodity billing, SNG will match the shipper s allocated receipts and deliveries by zone to minimize transportation commodity costs After metered quantities are allocated to shippers contracts, SNG will match receipt allocations to delivery allocations based on the defined zone to zone rate sequence set forth in the tariff Then SNG will maximize the use of a firm shipper s unutilized FT and FTNN reservation charge services before charging IT, Small Shipper, or Authorized & Unauthorized Overrun commodity 32

33 Invoicing Cash out billing or payments will be on a one month lag Example: Transportation month of April Transportation charges invoiced in May Cashout invoiced or credited in June, depending on imbalance direction Allows for completion of imbalance trades and offsets with storage Avoids invoicing on estimated cash out with a true-up the following month 33

34 More Details Please refer to the following presentations posted on Informational Postings, Non- Critical Notices, for more details on upcoming changes: May 12, 2014 Shipper Meeting Presentations October 23, 2014 Draft Tariff Filing December 11, 2014 Q&A Presentation Please note that certain of these items have been modified as set forth in this presentation Call your Account Manager or Scheduling Analyst with any shipper-specific questions or scenarios 34

35 Appendix B Example of Proposed Plan to Address NAESB 3.0 if Required Prior to April 1,

36 Example of Proposal to Delay Implementation of New Industry Standards NAESB 3.0 Implementation Items Premier Change? Capacity Grid/Postings on Informational Postings - Inclusion of both Design Capacity and Operating Capacity Delay until DART - New footnotes Delay until DART Locations - Elimination of DRN Codes EDI and Index of Customers Delay until DART - New Location Download Delay until DART Nomination Timelines/Intraday Cycles - Additional Intraday nomination cycles Delay until DART - Adjust Times/Cycle Lengths to match current Timelines YES Capacity Release - Capacity Release Timeline YES - Recall Timeline YES - Additional Intraday Release corresponding to an additional intraday cycles Delay until DART - Bidding Basis Delay until DART Flowing Gas Data Set EDI Maps - ANSI X12 Compliant Delay until DART Gas Day - Elapsed Prorated Scheduled Quantity (EPSQ) calculations. YES - Measurement change to match new Gas Day YES Code Values - Potential impact to all NAESB Screens/Data Sets Delay until DART - Reports Those that represent a NAESB Standard Data Sets Delay until DART Notices/Offers to Purchase Release Capacity - New Links for Informational Postings Delay until DART Other 2.1/3.0 Minor Required Changes Delay until DART 36