Direction to use a different price reporting service for the NTS Shrinkage Target
Decision
Publication date
Industry sector
Generation and Wholesale Market
Under Special Condition 3D (SpC 3D) of the Gas Transporter Licence, National Grid Gas plc (NGG) is required to use ICIS Heren (or any similar reporting service directed by the Authority) for the gas and electricity cost reference prices used to calculate the NTS Shrinkage Incentive Target.
On 8 March 2017, NGG wrote to us seeking a direction to use a different price reporting service from the expiry of their current contract. NGG proposed that changing from ICIS Heren to Argus would deliver significant cost reductions and that this would have a negligible impact on the prices used to set the NTS Shrinkage Incentive Target.
On the basis of the information provided, we are content with the reasons given for the change from ICIS Heren to Argus and consider it to be appropriate. We therefore direct NGG to use Argus for the gas and electricity cost reference prices from the expiry of the current contract with ICIS Heren.
We expect NGG to keep monitoring the quality and costs of the price reporting services for the NTS Shrinkage Target and to submit another direction request when necessary.