Ownership of Connecting Pipes. The connection agreements submitted by Transco in respect of the storage facilities currently owned by BG plc made clear that Transco would own the pipes connecting the facilities to the NTS. Under this arrangement, any maintenance and reinforcement costs would be borne by all shippers through transportation charges rather than just the storage customers at a particular storage facility. In contrast, the pipeline connecting ScottishPower’s Xxxxxxxx Moor facility to the NTS is to be owned by ScottishPower. This is consistent with ScottishPower’s desire to retain ownership of the connecting pipeline and operate it under a PGT exemption order. Consequently, any maintenance and reinforcement costs will be borne by ScottishPower and, presumably, passed through to users of its facility. Ofgem is concerned to ensure that Transco deals with all connecting parties in a non- discriminatory manner. We are concerned that the arrangements at the BG plc facilities might constitute an unjustifiable cross-subsidy which could be avoided if ownership of the pipes lay with the storage operator. If the assets were owned by the storage business, that business would be on the same footing as other storage operators having to finance the cost of building, operating and maintaining the pipes leading to and from the NTS. Transco has stated that arrangements with respect to the facilities currently owned by BG plc are consistent with its general connections policy for taking ownership of pipelines supplying premises above 75,000 therms per annum where the connecting party agrees. Therefore, Xxxxxxx has suggested that, if this policy is to be reconsidered, it should be addressed through the wider arena of the Connections Steering Group. Transco has also stated that storage facilities will be treated in the same way as any other end user. Transco has also said that it is operating a trial in relation to taking ownership of pipes above 7 xxxx and that both prospective storage operators at Aldbrough could take advantage of this if planning consent is granted to their projects. 6 Finally, Xxxxxxx has stated that ScottishPower could not have taken advantage of this policy because work on constructing its Xxxxxxxx Moor pipeline had begun before the trial was established. Transco concludes that, as a result, ScottishPower will be operating on the same basis as other parties who have chosen to self-lay connecting pipelines. We recognise that the issue of connecting pipeline ownership affect...
