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DISTRIBUTION SYSTEM LIMITATIONS MANAGEMENT

24.1

Reasons for system limitations

24.1.1 System limitations occurring in the distribution system may be connected to: 24.1.1.1 the events specified in the Law on reserves, i.e.

- national fuel safety hazard,

- unforeseen increase of natural gas consumption by the Consumers, - disruptions in transportation of the natural gas,

- malfunctions in the networks of gas system operators, - gas networks operation hazard,

- human safety hazard,

- substantial material losses hazard,

- the necessity to fulfil the international obligations by the Republic of Poland,

24.1.1.2 the following events:

- limited throughput of networks or system technological facilities,

- the necessity to maintain minimum pressures in the exit points from the distribution system,

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- the necessity to maintain stable gas fuel quality parameters in the distribution system,

- maintenance/development works in the distribution system or cooperating systems,

- actions of the DSC, its suppliers, Consumers which are non-conforming with the resolutions of the Grid Code or the distribution contract.

24.2

DSO’s actions towards effective utilisation of the distribution system throughput

24.2.1 DSO runs the activities aimed at effective utilisation of the distribution system throughput in order to perform the distribution services to the benefit of the DSC and the entities submitting the application on the provision of distribution services. 24.2.2 Among others, the activities connected with the effective utilisation of the

distribution system throughput include:

24.2.2.1 the analysis of potential development of the gas market in the area of DSO operation and the applicable adjustment of the DSO Development Plans,

24.2.2.2 system development programming,

24.2.2.3 system development according to the assumptions of the Development plan and submitted conditions for connection,

24.2.2.4 system development wherever throughput bottlenecks arise, 24.2.2.5 development of intra-system connections,

24.2.2.6 monitoring the technical and the quality parameters of the gas fuel, 24.2.2.7 management of the system operation using nominating procedures,

24.2.2.8 introducing fees for the actions breaching the Grid Code and the distribution contract aimed at motivating the DSC to avoid the situations resulting in creating limits in the distribution system.

24.2.3 In order to effectively utilise the existing technical capabilities of the distribution system, DSO monitors the utilisation of the commissioned throughputs by the DSC and, in case of their insufficient utilization, undertakes activities described in point 24.2.4.

24.2.4 If during the investigation of a new application for distribution service it will turn out that there is no technical throughput available, and in the framework of the existing contracts there are reserved, but not utilised throughputs, then after the consultation with the ERO President, DSO summons the DSC who uses less than 80% of the distribution system throughput reserved in the period of six (6) consecutive months, including the months starting from December to March the following year to resign from the not utilized throughput in the period of thirty (30) days.

24.3

Suspending, limiting or renewing the distribution to the exit points

24.3.1 DSO may suspend or limit the distribution to the exit points in the following cases: 24.3.1.1 introducing limits in supply and reception of gas fuels,

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system causes direct hazard to life, health or environment, 24.3.1.3 when there was an illegal collection of gas fuels,

24.3.1.4 when the DSC delays payment for the collected gas fuel or the provided services for at least one month after the due date, despite prior announcement in writing on the intention of terminating the contract and setting at least fortnight period to pay the due and current payments,

24.3.1.5 performing repair or development works described in point 17,

24.3.2 introducing the suspension or limitation, DSO immediately provides the DSC with the information on the day in which the limits will be implemented, their estimated duration, maximum hourly and daily gas fuel collection capacity in the given points. The DSC and the DSC’s Consumers are obliged to limit or suspend the collection of gas fuel in case of introducing the limitations described in point 24.3.1.

24.3.3 DSO cannot be held liable for the results of the limitations introduced.

24.3.4 Costs of the DSO’s activities related to the suspension, limitation or renewing the distribution of gas fuel are covered according to the rules and in the amounts specified in the tariff.

24.4

Management of system limits in case of discrepancies in the amounts of supplied gas

fuel with the approved nomination

24.4.1 DSO plans the operation of the distribution system based on the submitted and approved nominations.

24.4.2 In case when the amounts of gas fuel supplied to the distribution are inconsistent with the approved nominations, DSO undertakes additional actions related to the adjustment of the distribution system operation to the new conditions and preventing possible system limitations.

24.4.3 In case when the inconsistency described in point 24.4.2 exceeds the allowable tolerance limit described in point 22.1.12, the DSO will bill additional fees, according to the resolutions of point 24.5.1

24.5

The method of billing the fee to the DSC for inconsistent nominations.

24.5.1 Charge for failure to deliver the amount of gas fuel specified in the approved DSC nomination at the exit point (ONWW) is calculated in the following way:

24.5.1.1 Charge for failure to deliver the amount of gas fuel specified in the approved DSC nomination at the exit point (ONWW) is calculated in the following way:

24.5.1.1.1 relative failure to meet the DSC nomination at the exit point (PNWW) is calculated using the following formula:

PNWW = [MOD(NZ – IG)/NZ] * 100%

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PNWW - relative failure to meet the DSC nomination at the exit point, MOD - absolute value,

NZ - daily amount of gas fuel specified in the approved DSC nomination, IG - daily amount of gas fuel collected by the DSC.

24.5.1.1.2if PNWW > 15 %, DSO calculates and charges the fee for failure to meet the DSC nomination at the exit point, according to the following formula:

ONWW = (PNWW – 15%)* NZ * 0.01 * CRG

where:

ONWW - charge for failure to deliver the amount of gas fuel specified in the approved DSC nomination at the exit point,

PNWW- relative failure to meet the DSC nomination at the exit point, NZ - daily amount of gas fuel specified in the approved DSC nomination, CRG - Gas reference price.

24.5.1.1.3In case when the given exit point is nominated with a zero value of daily amount (NZ=0), DSO calculates and charges for failure to deliver the amount of gas fuel specified in the approved DSC nomination at the exit point (ONWW), according to the following formula:

ONWW = IG * 0.01 * CRG

where:

ONWW - charge for failure to deliver the amount of gas fuel specified in the approved DSC nomination at the exit point,

IG - daily amount of gas fuel collected by the DSC. CRG - Gas reference price.

24.5.2 DSO does not charge fees for failure in keeping the approved nominations in the exit points if the failure was independent from the DSO, including the emergency situation in the DSO’s distribution system.

24.6

Management of limitations in case of supplying the distribution system with a gas fuel with

the quality parameters non-conforming with the Grid Code

24.6.1 With the exception of point 24.6.2.1. DSO refuses to collect from the entry point of the distribution system a gas fuel with the quality parameters non-conforming with the Grid Code.

24.6.2 In case of discovering gas fuel with parameters non-conforming with Grid Code has been supplied to the distribution system, DSO specifies the scope and range of possible disruption and will undertake one of the following actions:

24.6.2.1 conditionally allow part of all of the gas fuel for transport, provided that the scale and range of the disruption will not adversely affect the performance of the distribution

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contracts of other DSCs,

24.6.2.2 suspend the acceptance of the gas fuel in the points specified in 24.6.1 and the performance of the DSC’s distribution contract - in part of all the distribution zone, immediately informing the DSC, GSO or CSO till the moment of releasing the disruption and recovering the quality parameters conforming to the Grid Code if it recognizes that the scale and range of the disruption may adversely affect the performance of the distribution contracts of other DSCs or may have negative impact on the safety of distribution system operation.

24.6.2.3 immediately informs DSC, GSO or CSO on the suspension described in point 24.6.2.2.

24.6.3 DSO may suspend the acceptance of the gas fuel in the network points which are described in point 24.6.1, entries and the performance of all SDOs from this entry point to the time of ceasing the interruption and recovering the quality parameters conforming to the Grid Code.

24.6.4 DSO allocates the supplied or planned to be supplied amounts of gas fuel to the distribution system with the quality parameters not conforming to the Grid Code to the specific DSCs applying the allocation methods specified in point 21.

24.6.5 DSO charges the DSCs for supplying Grid Code non-conforming gas fuel to the distribution system entry points on the conditions specified in points 24.8 - 24.10, which does not absolve from liability on general terms.

24.7

In case of supplying non-conforming with Grid Code gas fuel to the distribution system without prior DSO’s notification and the DSO’s approval, DSC assumes all possible liabilities related to the delivery of this gas fuel, including the liabilities related to possible other system users’ claims resulting from these circumstances.

24.8

Payments and discounts for not maintaining the quality parameters of gas fuel

24.8.1 If the gas fuel supplied to the entrypoint of the distribution system or collected from the distribution system in the exit point fails to fulfil quality parameters specified in the below table, the DSO will charge additional fees.

Quantity characterizing the quality of natural

gas Unit

of measure

Highest acceptable

XSJNmax value

hydrogen sulphide content mg/m3 7.0

mercury vapours content µg/m3 30.0

total sulphur content mg/m3 40.0

24.8.2 If at the distribution system entry the DSC will supply a gas fuel with insufficient quality, the DSO will charge the DSC with a fee for not keeping the gas fuel quality parameters in this entry point (ONP), calculated as:

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ONP – charge fee for not fulfilling the gas fuel quality parameters at the entry point,

IN - amount of gas fuel supplied from the distribution system entry point which fails to conform with the quality parameters of the Grid Code

CRG - Gas reference price,

XSJNmax – highest possible value of given quality parameter presented in the table included in point 24.8.1.

XSJW – real value of a given gas fuel quality parameter supplied to the distribution at the entry point,

24.8.3 If the notification on supplying the gas fuel with the quality parameters non- conforming with the Grid Code will be provided to the DSO and the DSO issues an approval for accepting the gas fuel to the distribution, the DSO will charge a fee for the accepted amount of gas fuel with the parameters non-conforming with the Grid Code at the level of 50% of the payment described in point 24.8.2.

24.9

Charges for non-conforming to the dew point temperature parameter

24.9.1 The DSC and the GSO are obliged to ensure a sufficient dew point temperature of the gas fuel supplied to the distribution system in the points described in point 24.6.1, according to the following requirements:

24.9.1.1 highest allowed dew point value (XSTNmax) for 5.5 MPa from April 1st to September 30th is +3.7 °C (276.85 K),

24.9.1.2 highest allowed dew point value (XSTNmax) for 5.5 MPa from October 1st to March 31st is - 5 °C (268.15 K),

24.9.2 If at the distribution system entry the DSC will supply a gas fuel with insufficient parameters specified in point 24.9.1., the DSO will charge the DSC for non- conforming to the water dew point temperature parameter at the entry point (ONT), calculated as:

ONT = IN x 0.1 x CRG x (X

STW

- X

STNmax

) / X

STNmax

where:

ONT - charge for non-conforming to the water dew point temperature parameter at the entry point, IN - amount of gas fuel supplied from the distribution system entry point which fails to conform with the quality parameters of the Grid Code,

CRG - Gas reference price,

XSTNmax - highest allowed dew point value [K],

XSTW – real value of water dew point parameter supplied to the distribution at the entry point [K],

24.9.3 During the calculations of the water dew point for different pressures, table included in the Attachment A to the PN-C-04752 Polish Standard shall be applied.

24.10

Charges for not keeping the gas fuel calorific value

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HZW calorific value parameter, less than the minimum value (HSNmingr), specified according to the point 6.8.1.2., the DSO will charge the DSC with a charge for a non- conforming calorific value at the entry point (ONC), calculated as:

ONC = IN x 2 x CRG x (1 – H

ZW

/ HSN

mingr

)

where:

ONC - charge for a non-conforming calorific value at the entry point,

IN - amount of gas fuel supplied from the distribution system entry point which fails to conform with the quality parameters of the Grid Code

HZW – The actual gas fuel calorific value delivered by the DSC to the distribution system or supplied from the distribution system (MJ/m3),

HSNmin - minimum calorific value of the gas fuel transported by the distribution system determined according to point 6.8.1.2 (MJ/m3),

CRG - Gas reference price.

24.10.2If the DSC supplies at the distribution system entry and without prior written DSO’s approval gas fuel with the HZW calorific value higher than or equal to the HSNmingr,

as specified in point 6.8.1.2., but smaller than the HSNmin, specified according to

6.8.1.1., the DSO is entitled to charge the DSC for a non-conforming calorific value at the entry point (ONC), calculated as:

ONC = IN x CRG x (1-H

ZW

/ HSN

min

)

where:

ONC - charge for a non-conforming calorific value at the entry point,

IN - amount of gas fuel supplied from the distribution system entry point which fails to conform with the quality parameters of the Grid Code

HZW - the actual gas fuel calorific value delivered by the DSC to the distribution system or supplied from the distribution system (MJ/m3),

HSNmin – minimum calorific value of the gas fuel transported by the distribution system specified according to point 6.8.1.1 (MJ/m3),

CRG - Gas reference price.

24.10.3If the notification on supplying the gas fuel with the insufficient calorific value was provided to the DSO and the DSO issued an approval for accepting the gas fuel to the distribution, the charge for supplying this kind of gas fuel will amount to 50% of the payment described in point 24.10.2. The DSO’s approval for accepting the gas fuel with decreased calorific value falling in the range described in point 6.8.1.1 at the entry point may be stated only as a response to the written DSC’s application filed at least 48 hours prior to the planned start of supplying such gas fuel to the entry point.

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