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FAQs on transaction reporting – Question III.4.2.21

Market Participant (MP) “A” owns a pipeline business in the UK that transports gas from Point “X” (Exit point of the National Grid´s National Transmission System – certified TSO) or Point “Y” (Entry terminal) to four customers (two oil refineries and two Combined Cycle Gas Turbines).

Qualification of reporting obligations for transportation contracts concluded as a result of primary capacity allocation by or on behalf of the TSO:

MP “A” is not a TSO under Art. 2(11) REMIT and hence, is not obliged to report the transportation contracts with its customers as transportation contracts concluded as a result of a primary explicit capacity allocation by or on behalf of the TSO in sense of Article 6(2) in conjunction with Article 3(1)(b)(i) REMIT Implementing Regulation. This conclusion is based on the following points:

  • Article 2(11) REMIT refers to the TSO definition laid down by Article 2(4) Directive 2009/73/EC and Directive 2009/72/EC.
  • According to Article 10 of the above Directives, each TSO shall be designated and certified as a TSO by the National Regulatory Authority (NRA). MP “A” is not certified as a TSO by the respective NRA (Ofgem).
  • The gas pipeline, owned and operated by MP “A”, has a named license exemption from requiring a TSO certification under the UK Gas Act 1986. Not being certified as a TSO, MP “A” remains out of the scope of the obligations posed on the TSOs. The latter includes the reporting obligations pursuant to Article 6(2) in conjunction with Article 3(1)(b)(i) REMIT Implementing Regulation which stipulate that TSOs or third parties acting on their behalf shall report contracts relating to transportation of natural gas in the Union concluded as a result of a primary explicit capacity allocation by or on behalf of the TSO.

Qualification of reporting obligations for transportation contracts concluded between market participants on secondary market:

The gas transportation contracts that MP “A” has with its customers do not meet the criteria of a secondary capacity allocation foreseen under Article 3(1)(b)(ii) REMIT Implementing Regulation read in conjunction with the reporting format of Table 4 and TRUM pp. 133-155. This assessment is based on the following points:

  • REMIT or REMIT Implementing Regulation do not define what means secondary market for the purposes of Article 3(1)(b)(ii) REMIT Implementing Regulation.
  • A definition of the above term can be found in Article 2(6) Regulation 715/2009 which defines secondary market as “the market of the capacity traded otherwise than on the primary market”. Primary market is defined in point (22) of the same Article as “the market of the capacity traded directly by the TSO”. REMIT or REMIT Implementing Regulation do not make a reference to the above mentioned definitions of primary and secondary market contained in Regulation 715/2009 and these definitions do not therefore directly apply for the purposes of REMIT.
  • Table 4 and the respective passages in the TRUM (pp. 133-155) are designed on the presumption that the contracts concluded between market participants on secondary markets in sense of Article 3(1)(b)(ii) REMIT Implementing Regulation are contracts that govern a secondary allocation of a capacity which was previously and primarily allocated by a TSO, e.g. price paid to a TSO [for the primary capacity allocation] is a mandatory field when reporting secondary capacity allocation.

Questions:

1)    Primary Capacity Market: Are the transportation contracts in question between MP “A” and its four customers reportable under REMIT regulation as transportation contracts concluded as a result of primary explicit capacity allocation by or on behalf of the TSO? Who should be identified as the TSO since MP “A” is NOT a designated and certified TSO in sense of Article 2(11) REMIT?

2)    Secondary Capacity Market:

a. Considering no primary capacity allocation through a TSO has occurred, are these transportation contracts reportable under REMIT regulation as transportation contracts concluded between market participants on secondary markets?

b. How should MP “A” and its customers report fields #25 TSO 1 identification, TSO 2 identification and #34 Price paid to TSO (underlying price) in Table 4, which in the case of the contracts in question are neither applicable nor available?

Business Case:

Market Participant (MP) “A” owns a pipeline business in the UK that transports gas from Point “X” (Exit point of the National Grid´s National Transmission System – certified TSO) or Point “Y” (Entry terminal) to four customers (two oil refineries and two Combined Cycle Gas Turbines).

MP “A” is not considered a TSO and the gas transportation obligations (subject of the contract) are not issued out of primary capacity market (i.e. not traded with a TSO).

Secondly, the nature of the contracts do not satisfy the requirements to report the contracts as secondary capacity since there is no TSO involved, hence a number of key attributes cannot be reported.

Our interpretation is that the above described gas transportation contracts fall outside of the scope of REMIT trade reporting since these contracts are not concluded on a primary market (between TSO and Market Participant), neither do they qualify under the definition of a secondary capacity allocation.

We would be grateful for ACER’s immediate response on this matter please.


Answer:

There are currently no requirements for the reporting of transportation contracts involving locations that are not balancing zones.

If the transportation contracts between MP “A” and its four customers allow to flow gas from points X to Y which are in a non-balancing zone, the transportation contracts are not reportable. The same will apply if the transportation contracts between MP “A” and its four customers would allow to flow gas from points X (balancing area) to Y (non-balancing area). This is in line with FAQ 4.2.19.

Last update: 14/12/2016   RSS_Icon Subscribe to this Page’s RSS