GNI PROPOSALS ON NEW CONNECTIONS POLICY JANUARY 2015

Transcription

1 2015 GNI PROPOSALS ON NEW CONNECTIONS POLICY JANUARY 2015

2 Contents Background... 2 Rationale for Change... 2 Proposal 1: Amendments to Financial Security Criteria... 3 Proposal 2: Inclusion of Transmission Revenue in all appraisals... 8 Proposal 3: Amendment of Institutional I & C Customers Proposal 4: Proposals on Existing Gas Areas Proposal 5: Group Sites (different entities, same corridor) Proposal 6: Group Sites (same entity, different sites) Proposal 7: Treatment of CNG Connections Summary & Conclusions GNI proposals on Connection Policy Dec 14 1

3 Background The Connections Policy was approved by the CER on 6th April, 2006 and is a single connections policy dealing with connections to both the Transmission and Distribution networks. The policy sets out the detailed criteria for the evaluation of extensions to the gas network, including extensions to towns not currently served by natural gas. While there were some changes to the policy in the interim, the current policy has been in effect since April This paper seeks to outline some proposed amendments to the connections policy to enhance the level of economic connections to the gas network. The context of this review is that areas of the current policy may be hampering the full realisation of the potential economically efficient demand and load growth available for the gas network in Ireland. While the overall risk will be increased, Gas Networks Ireland (GNI) believe that this is mitigated as these proposed changes will facilitate additional connections, who would not otherwise connect to the Natural Gas network under the existing Connections Policy. The addition of the extra load to the system will have the effect of reducing tariffs for existing customers in the long term. Separate to this review of the Connections Policy, GNI is working on the roll-out of a range of initiatives aimed at furthering public awareness of the availability and benefits of natural gas versus other fuels. Initiatives to promote the use of natural gas as a clean, efficient and cost competitive fuel for transport, along with integration of biogas in the network are also currently being implemented. Rationale for Change There are significant benefits associated with increasing the load on the gas network. A key benefit is the ability to spread the cost of running the network over a larger customer base, thus achieving economies of scale and a lower tariff rate for customers. New incremental load also offsets decreases in consumption arising from the loss of existing gas sites (e.g. disconnected sites) and/or lower gas usage by existing gas sites. Encouraging the connection of new customer load where it is efficient which should in the medium and long term increase throughput and reduce unit tariffs for all gas customers --- Current Connection Policy GNI proposals on Connection Policy Dec 14 2

4 Proposal 1: Amendments to Financial Security Criteria Background and Key Issues: Under the provisions of the current connections policy, Financial Security (FS) is required where the total cost of a connection, less the Customer Contribution, is at least 250,000. Where a connection meets this threshold, the customer must provide appropriate Financial Security in accordance with the Financial Security policy and sign up to a Large Network Connection Agreement (LNCA). In light of feedback from new and potential customers, a review of the 250k threshold is appropriate. While there will always be increased risk associated with adjusting the requirements of FS to make it easier for more customers to connect to the network, it is important to ensure growth such that tariffs for existing customers will not increase in the long term. This needs to be balanced with the Regulated Asset Base being underpinned appropriately by the provision of Financial Security. It is not proposed to amend section of the current Connections Policy which states that for Large Daily Metered and Daily Meters customers, a de minimis level of capacity will be set in the Capacity Register for the term required to pay back the outstanding connection costs. The de minimis level of capacity will be based on the projected load profile provided by the customer and used in the connection appraisal. The risk of an LDM or DM customer booking less capacity than was appraised would therefore not materialise. The increased risk associated with the proposed changes is reduced to the possibility of a new I&C customer disconnecting. In practice, few large customers disconnect within their capacity commitment period, and in general, if a large customer does disconnect, a new customer will take over the premises. Considering the above, and after completing an analysis of the need for Financial Security, it is clear that the additional throughput stemming from these otherwise non-users, will bring down the tariffs in the long term and benefit all customers on the network. It is the view of GNI that the benefits of additional growth outweighs the overall risk to the system as a result of the changes proposed. For example, GNI have identified a number of customers who have expressed interest in connecting but have highlighted the LNCA and the Financial Security as a barrier to proceeding with a connection. GNI has done some analysis and if three of these missed opportunities did connect to the Natural Gas network, the impact is a potential 0.24% reduction in the Distribution tariff. GNI proposals on Connection Policy Dec 14 3

5 GNI proposed changes Proposed amendments to the FS for new connections are outlined below: i. Increase the FS threshold ii. iii. Introduce a tiered threshold for FS that recognises the relative payback period for alternative projects Adjust the credit rating applied to Letters of Credit for Financial Security associated with new connections Proposal 1.1: FS Threshold GNI believe it is appropriate the raise threshold at which Financial Security applies. A base threshold of 500k is proposed as GNI s view is that the current threshold of 250k is too low. Proposal 1.2: Tiered Threshold GNI believe it is appropriate to introduce a tiered threshold to more appropriately reflect the relative payback periods of alternative connections. If Project A has a quicker payback period than Project B then all else being equal, the relative financial risk of Project A is lower and this should be reflected by the requirement for Financial Security. The GNI proposals are as follows: If the project becomes NPV positive in 7 years or more, and/or a supplemental contribution is required, the proposed threshold for Financial Security is 500k. If the project becomes NPV positive in years 4, 5 or 6, the proposed threshold for Financial Security is 750k. If the project becomes NPV positive in 3 years or less, the proposed threshold whereby Financial Security is required, is 1m. NPV Positive in Threshold LNCA Required FS Required >= 7 years 500K Above Threshold only Above Threshold only 4-6 years 750K Above Threshold only Above Threshold only <= 3 years 1m Above Threshold only Above Threshold only Note: For all of the above cases, the current threshold is 250k and a Large Network Connection Agreement is required. GNI proposals on Connection Policy Dec 14 4

6 The proposal is that a Large Network Customer Agreement is only required when the FS threshold is met, an NPV amount under the appropriate threshold is covered by using the standard I&C Agreement. The benefit of this amendment is that the FS requirement is more closely based on the risk profile of the new connection regarding the speed of payback for investment in the gas network i.e. recognising the relative risk of different projects with different payback periods. If Project A has a quicker payback period than Project B then all else being equal, the relative financial risk of Project A is lower and this should be reflected by the requirement for Financial Security. In this way, connections that cover their costs and contribute downward pressure to tariffs in a relatively short period are facilitated and incentivised to connect to the gas network through the removal of the requirement for financial security. Proposal 1.3 Financial Security Credit Ratings Under the current financial security policy, if the connecting entity is rated BBB or higher by S & P and/or BBB or higher by Fitch and/or Baa2 or higher by Moody s the customer will be exempt from providing financial security. Connections by such entities are not considered the norm however. Financial security is required in the majority of cases. The most popular (and practical) form of financial security for new connections is a letter of credit. Under the current financial security policy, the letter of credit must be issued by either: (a) a Bank with long term unguaranteed unsubordinated debt rated at least AA by S&P and/or AA2 by Moody s and/or AA by Fitch. OR (b) a subsidiary of a Bank which has total balance sheet assets of not less than 1,000 million (or equivalent in other currencies) and the long term unguaranteed unsubordinated debt that is rated at least A by S&P or A2 by Moody s or A by Fitch. Whilst many banking institutions would have met this criteria when the policy was initially written, the benchmark needs to be reviewed to allow connecting customers procure a letter of credit from robust financial institutions that they regularly transact with. To achieve this, GNI s view is that the financial security approach applied to shippers financial security (which is typically of a much larger scale than new connections) should be differentiated from that applied to new connections. GNI proposals on Connection Policy Dec 14 5

7 GNI proposed changes Taking account of the current financial circumstance along with customer feedback during discussions with potential new customers as part of the connection process has highlighted difficulties for new customers (e.g. I&C sector) in putting the required provisions of the current financial security policy in place such that they are unable to use the banks they regularly transact with. GNI therefore propose the addition of the following text within clause of the Financial Security Policy: In respect specifically of new connections, and with the prior written approval of the Transporter and where the Financial Security Amount is less than or equal to 1,000,000, an irrevocable standby letter of credit in or substantially in the form attached at Appendix 1, or in such other form as may be acceptable to the Transporter (a Letter of Credit ) issued for the account of the Counterparty in favour of the Transporter which Letter of Credit shall allow for partial drawings, if necessary, and shall provide for payment to the Transporter forthwith on demand and shall be issued by a Bank with long-term unguaranteed unsubordinated debt rated at least BBB by S&P and/or Baa2 by Moody s and/or BBB by Fitch and which has total balance sheet assets of not less than 1,000 million (or equivalent in other currencies) GNI proposals on Connection Policy Dec 14 6

8 A summary of the initiatives on financial security is outlined below: Initiative Number Outline of Initiative Rationale 1 Increase the base threshold for both the Financial Security and Large Network Connection Agreement from 250k to 500k 2 Introduce a tiered threshold (ranging from 500k to 1m) for financial security that reflects the relative payback period 3 Adjust the minimum credit ratings requirement where the Financial Security amount is <= 1m GNI s view is that the value/threshold of FS was set too low initially In addition, the threshold needs to be adjusted to reflect time value of money changes since the policy was last updated. This change provides a risk-adjusted approach to financial security under which connections that involve lower financial security should have more flexibility Taking account of the current financial circumstance along with customer feedback during discussions with potential new customers as part of the connection process has highlighted difficulties for new customers (e.g. I&C sector) in putting the required provisions of the current financial security policy in place such that they are unable to use the banks they regularly transact with. GNI proposals on Connection Policy Dec 14 7

9 Proposal 2: Inclusion of Transmission Revenue in all appraisals Each new connection provides incremental revenue for both the transmission and distribution networks. However, under the current policy, only the following sectors recognise transmission revenue in the appraisal exercise: 1. New Towns 2. Loads with consumption greater than 57.5 GWh/annum 3. Connections that involve investment in transmission assets 2.1 Transmission Exit Capacity Revenue: At the time of the last policy change, there was extensive flexibility for shippers to optimise their transmission exit capacity bookings through internal transfers in their portfolio and trading with other shippers. Therefore it was very difficult to determine the incremental benefit of a new connection on transmission exit revenue. A recent key change in the market has seen the removal of trading transmission exit capacity on a secondary basis. In the new market structure, shippers need to book peak capacity pertaining to each gas point and cannot rely on a portfolio effect to transfer transmission exit between points (or trade with shippers). It is therefore appropriate to recognise the incremental transmission exit revenue benefit from each connection, and amend the Connection Policy accordingly to reflect this. With this in mind, it is proposed that transmission exit revenue be extended to the appraisal of all categories of connection (i.e. Transmission exit revenue should be included in the appraisal for all sectors). This would be based on a commitment by the customer on de minimis transmission exit bookings for the required period which ensures that the Transmission Exit Capacity revenue does indeed materialise. Even though the fact that no Large Network Connection Agreement would be applied, a contract is still put in place and the customer would have an obligation to book the de minimis level of capacity as per the Connections Policy. Under the current Connections Policy, only 80% of Distribution revenues are generally included in the appraisal, therefore the de minimis level of capacity only applies to Distribution Supply Point Capacity. However, if Transmission revenues were included in the appraisals, it is proposed that Transmission Exit Capacity would also be included in the de minimis level of capacity required and the customer would be obliged to book both the de minimis level of Distribution Supply Point Capacity and Transmission Exit Capacity until the cost of the connection was paid off. GNI proposals on Connection Policy Dec 14 8

10 2.2 Transmission Entry Capacity Revenue: In terms of transmission entry, shippers book this on a portfolio basis and are able to trade transmission entry with other shippers. It is assumed each connection will always offer incremental entry bookings to the network as the shipper must increase entry bookings to accommodate the new load. To establish what level of entry revenue is appropriate to include in the appraisal, GNI have undertaken a study to review the relative ratio of total transmission entry capacity bookings versus total exit bookings in recent years to assess the incremental value of new connections in terms of increased total transmission entry bookings. The findings are outlined in the chart below. Before the removal of secondary transmission exit capacity, there was generally a 1:1 ratio between entry and exit bookings, as shippers optimised their aggregate entry and exit portfolios. The impact of the removal of secondary exit capacity trading outlined above is clearly evident, where the ratio falls from c. 1:1 to 0.8:1 in Gas Year 13/14. The fall in the ratio is due to the following: Exit: Since the removal of secondary exit capacity trading, shippers need to book specific firm bookings prevailing to each exit gas point and can no longer spread its exit capacity portfolio across its sites. Therefore the outcome is more firm bookings on the exit side versus the previous regime which allowed a portfolio approach. Entry: In contrast, the market conditions for transmission entry remain unchanged and therefore the ratio of entry bookings (which were not affected by the market change) to exit bookings (which increased due to the market change) has therefore decreased. On this basis, GNI propose that a factor of 80% (0.8) be applied to peak day bookings of each new connection entry revenue calculation. For example, if peak = 100 KWh, then 80% * 100 KWh = 80KWh is the volume included for incremental transmission entry revenue. GNI proposals on Connection Policy Dec 14 9

11 02-Oct Nov Jan Mar May Jul Sep Oct Dec Feb Apr Jun Aug Sep Nov Jan Mar May Jul Aug Oct Dec Feb Apr Jun Aug Sep Nov Jan Mar May Jul Aug-2014 Ratio of Total Entry Bookings to Total Exit Bookings Source: GNI Analysis The key benefits of these changes would be evident in the Medium and Small IC category of the connection policy, where currently the transmission revenue (both entry and exit) are not considered in appraisals. However Transmission revenue is received from these customers through shipper bookings, and therefore should be reflected in the appraisals. The overall benefit that this will bring will vary depending on the requirements of the specific connection: For connections which pay the 30% contribution charge and also pay a supplemental charge, there should be a decrease (if not removal) of the supplemental charge as the commercial appraisal will be improved by the inclusion of the transmission revenues. There should also be a decrease in the time for which Financial Security is required. For connections which pay the 30% contribution and are not required to pay a supplemental charge, the benefit will be that the length of time that Financial Security is required should decrease. All appraisals that currently don t recognise transmission revenue will benefit to a greater or lesser extent from this change, but the inclusion of the transmission revenue is reflective of the incremental value the new site offers in contributing to the remuneration of the network. The inclusion of such revenues should lead to a reduced upfront contribution by the customer and/or reduced financial security obligations which will make the connection to gas more commercially attractive to the prospective customer. GNI proposals on Connection Policy Dec 14 10

12 For the avoidance of doubt, this proposed amendment is only applicable to connections where transmission revenue is not recognised where it is already accounted for in appraisals (e.g. new towns) the appraisal continues as is. Initiative Number Outline of Initiative Rationale 1 Include TX Exit Revenue (100%) to all appraisals which currently don t recognise transmission revenue 2 Include TX Entry Revenue (80%) to all appraisals which currently do not recognise transmission revenue. Recent market changes which removed secondary exit support the inclusion of TX exit to all sectors. Each new connection provides some level of incremental entry capacity to the network. Based on historic data, a factor of 80% (0.8) is proposed. GNI proposals on Connection Policy Dec 14 11

13 Proposal 3: Amendment of Institutional I & C Customers The connections policy outlines that an Institutional I&C Customer is one which as a result of their load characteristics are likely to remain connected to the network for a longer period of time than a typical commercial enterprise. The current connections policy allows for a 20 year appraisal for such connection types which are institutional in nature and a list of Institutional I&C Customers is provided in Annex 3 of the current connections policy. GNI propose to include five more connection types to this list: Ports Bus Stations Waste Collection Depots Biogas Injection Facility Retail CNG Forecourts The first two additions are institutional types which are built for long term use (ports/bus stations). The remaining three additions are typically significant long term investments to provide services on a long term basis to customers: Waste collection depots are built to provide municipal services to customers for a year lifetime at a specific location Biogas plants will inject gas into the grid at the specified location for a prolonged period of time with potential expansion. Including biogas injection facilities to the institutional I & C list would encourage more installations. This in turn would support the requirement for EU Member States to undertake measures to assist the wider use of gas from renewable sources. Note biogas plants will typically be injecting/entering gas in the system whereas conventional connections in the connections policy are exit points that offtake gas from the grid. However, the exercise at the start of connecting the facility to the gas grid by way of extending the gas network can follow the same principles. Retail CNG forecourts would be developed at strategic locations to provide long-term refuelling services to CNG vehicles. GNI proposals on Connection Policy Dec 14 12

14 To summarise, GNI would propose that the list would include new additions as follows: Current List Schools Third Level Colleges Hospitals Prisons Garda Stations Stadiums Airports (airport specific infrastructure only) Railway stations Museums/Heritage Sites Fire/Ambulance Station Army Barracks Government Buildings Additional New Sites Ports Bus Stations Waste Collection Depots Biogas Injection Facility Retail CNG Forecourts Initiative Number Outline of Initiative Rationale 1 Amend institutional list to reflect additions above Extend list to other forms of institutional sites which merit a 20 year appraisal due to longevity of tenure GNI proposals on Connection Policy Dec 14 13

15 Proposal 4: Proposals on Existing Gas Areas The purpose of this proposal is to develop a policy to allow for infill projects in areas close to or including the existing gas network. The Connection Policy as it stands does not specifically address opportunities for infill in urban or suburban areas i.e. industrial zones/streets/regions that could be connected with a minimal incremental increase to the existing infrastructure. There is therefore the risk of missing opportunities for new connections and load growth, as the existing gas infrastructure is not utilised to its fullest extent on an economic basis. The existing Connections Policy does not facilitate the efficient extension of the network into an area within an already connected city/town. In practice, there are some areas within cities that could potentially be the equivalent of a small town, however, there are limited methods of connecting the areas outside of connecting a single customer (using a 7 or 20 year appraisal or appraise as a non-gas estate). This has resulted in potential missed opportunities to grow the network in existing gas areas. On this basis, GNI have two key proposals: 4.1 Introduction of a Suburb Policy GNI would advocate the introduction of an infill suburb policy under the following criteria: (i) Use the mechanics of the new towns model(see description below) to appraise these projects (ii) Where the overall investment <= 1m (iii) (iv) Where the upstream investment in the network is <= 100k The largest user is <= 50% of the total projected volumes New Towns Model: As per section 8 of the Connections Policy, New Towns are evaluated over 25 years for both Industrial Commercial Customers and New Housing to reflect the lower risk and broader growth opportunities of a diversified area load base. The economic test includes both Transmission and Distribution revenue and considers the long term potential of the entire area. It is proposed that funding for such infill suburb projects would be applied to the most economic projects with each project scored and appraised by GNI against an annual funding allowance from the CER. GNI proposals on Connection Policy Dec 14 14

16 4.2 Removal of Domestic Connection Fee in certain circumstances At present new domestic connections pay a fee of 250. GNI believe there is merit in waiving the domestic connection fee in certain circumstances to increase/accelerate the rate of new domestic connections in new towns or targeted suburbs/regions. To compete in the energy source market GNI need to entice new customers to join the gas network. A removal of the domestic connection fee in these circumstances will assist in the take up during various campaigns. Natural Gas is clean, convenient and cheap. Natural gas is always available, no ordering or storage is required; it is compatible with contemporary appliances and is the most environmentally friendly of all fossil fuels. The removal of the connection fee in certain circumstances will encourage growth in the domestic sector. Initiative Number Outline of Initiative Rationale 1 Apply new infill Suburb policy as outlined above. 2 Domestic Housing contribution for targeted suburb/urban areas and new towns allow the domestic housing connection fee to be waived under certain circumstances The new towns model could easily be adapted to streets/zones/regions ( suburbs ) and would provide consistency of application in growing out the network. Previous I&C infill appraisals didn t include take up of domestic connections arising as a result of the infill project Will increase/accelerate the rate of connection in new towns and ensures that no opportunities are missed GNI proposals on Connection Policy Dec 14 15

17 Proposal 5: Group Sites (different entities, same corridor) This proposal will only come into effect when the total investment of the project is greater than 1m. If the project is less than 1m, Proposal 4 (Infill Suburb Proposals on Existing Gas Areas) will apply. The current connections policy is silent on circumstances where GNI are approached by a number of companies or entities simultaneously on a corridor/route who collectively want to connect to the network. The current policy appraises each connection query on a case-by-case basis and GNI would like to formalise the approach for multi-clients on the same corridor. The principle would remain that GNI are remunerated for the aggregate cost of the connection, but a pro-forma share of costs would be proposed to the clients but on a case by case basis, an alternative cost sharing mechanism could be developed/agreed. To reflect this into the policy, GNI propose that the following wording would be added to the opening section of the Connections Policy which outlines the objectives/principles of the policy: Joint cost sharing mechanisms for simultaneous multiple connections from one aggregate project should be encouraged (e.g. a joint proposal from multiple potential customers on the same corridor). The key component is that the aggregate cost of the connection is fully paid through an appropriate cost sharing mechanism funded by the various clients. This cost sharing mechanism can be reviewed on a case by case basis Initiative Number Outline of Initiative Rationale 1 Apply multi-client model on a case-by-case basis whilst retaining the principles of the Connections Policy. The sharing mechanism should be flexible (including input from the clients involved), with the key issue being that the aggregate cost of connection is remunerated. This provides clarity to situations where multi-clients simultaneously want to connect to the grid. GNI proposals on Connection Policy Dec 14 16

18 Proposal 6: Group Sites (same entity, different sites) The current connections policy is silent on circumstances where GNI are approached by a company/entity to connect a number of their locations e.g. chain of retail outlets. The current policy appraises each connection query on a case-by-case basis and GNI would like to formalise the approach for multi-sites for the same client, recognising the portfolio benefit of getting all the sites rather than potentially none. If we consider the different sites as one entity rather than a number of different sites and look at the NPV as a whole, GNI feel that this would encourage more connections. If an entity is looking to set up or standardise multiple locations in Ireland, being able to apply for new connections for all of their sites with one enquiry could act as an incentive and it also offers economies of scale in progressing the multiple connections under one aggregate project. The risk in not considering this approach is that potential multi-national companies and existing indigenous companies may not decide to expand / set up in Ireland as they may take an all or nothing approach with their sites. Therefore GNI feels that multiple sites from the same company/entity should be group-appraised, with net contribution calculated in aggregate as this will encourage new connections overall. Initiative Number Outline of Initiative Rationale 1 Multiple sites from the same company/entity would be group-appraised, with net contribution calculated in aggregate. Recognises portfolio benefit of multiple sites simultaneously under one connection/one contribution. This initiative would assist in the rollout of CNG infrastructure particularly in the event that an existing forecourt operator was interested in building a network of filling stations to adopt the fuel. GNI proposals on Connection Policy Dec 14 17

19 Proposal 7: Treatment of CNG Connections The current connections policy is silent on the treatment of CNG connections as this in itself is a new technology. GNI proposes to have a clear outline in the policy regarding CNG connections. This will not preclude end users from installing their own equipment once all safety requirements have been satisfied, but where GNI build the compression and multi-storage equipment, the investment must be remunerated under the principles of the connections policy. One of the critical elements of the market for natural gas in transport is the availability of vehicles. Without a strategic network of refuelling infrastructure the manufacturers will not commit vehicles to the market. Without GNI s involvement, refuelling islands may appear without any unified national network overview. GNI are of the opinion that the provision of CNG refuelling stations at this early stage of the market will require the support and involvement of the natural gas system operator. The benefits of this approach are: High quality refuelling infrastructure in the market; Long-term view taken; Market introduction supported; Application of gas technical experience; National infrastructure support; Lower financial burden on end user; Consistent technical application across the market; and Higher probability of market adoption. In line with the current Connections Policy, customers will make a contribution of 30% towards the cost of the connection. An economic test will be undertaken (in line with existing policy), which will dictate that if the customer s capacity charges over a seven year period do not meet the cost of the remaining 70% of the cost of connection, the customer must pay the difference GNI proposals on Connection Policy Dec 14 18

20 Initiative Number Outline Initiative of Rationale 1 Include compression and multi-stage storage in the connection. Reduce costs for the gas user through increased use of gas network assets and long term reductions in tariffs 30% contribution from the customer and economic test to protect the gas user from inefficient investments Maintains consistency of service and quality GNI responsible for maintenance and care of the compression and storage The inclusion of CNG in the connection will allow GNI to provide necessary support to the market development of CNG in Ireland. Vehicle manufacturers and after sales converters will not serve the Irish market until sufficient refuelling infrastructure is in place. To date private industry has failed to provide the necessary refuelling infrastructure and so the CNG in transport market for Ireland has failed to develop. GNI proposals on Connection Policy Dec 14 19

21 Summary & Conclusions To summarise, GNI propose to amend the Connections Policy in the following ways: (i) (ii) (iii) (iv) (v) (vi) (vii) Amend the FS provisions to include tiered thresholds Recognise transmission revenue in all appraisals Extend the list of I&C institutional customers Formalise the development of infill suburb/urban projects Clarify treatment of group sites (different entities, same corridor) Clarify treatment of group sites (same entity, different sites) Clarify the treatment of CNG connections Many of the changes are to provide clarity on the treatment of certain connection types and to apply consistency (e.g. recognising transmission revenue in all appraisals). GNI believe the incorporation of these proposals are aligned with the overall principles of the policy and will assist in economically and efficiently extending the level of connections to the network, helping to spread the cost of the network across a larger number of users. GNI proposals on Connection Policy Dec 14 20