What is it?
Unidentified Gas (UIG) is the shortfall between the volume of gas that enters the National Grid and what is consumed by end users. The shortfall is mainly caused by consumption on unregistered meters, theft of gas, pipe leaks and shrinkage. As this shortfall cannot be attributed to a specific meter, all suppliers are charged by the industry for their allocation of UIG. Suppliers pass the UIG charges on to consumers as part of their gas rate.
The way these costs are calculated and apportioned across all gas meters is based on UIG factors that are determined by the Allocation of Unidentified Gas Expert (AUGE).
Why is it changing?
From June 2017 to June 2020, a company called DNV were the Allocation of Unidentified Gas Expert (AUGE) that determined the UIG factors. However, as part of a tender process they were replaced by Engage Consulting Limited, in December 2020 they issued their first draft of the new methodologies for determining UIG factors. The newly calculated UIG volume has increased by 42% under the new methodology.
How does that impact businesses?
Whilst the impact for each meter will be different, the general trend sees a cost reduction for domestic meters but for most business meters there will be a cost increase, with high consuming sites seeing the biggest change.
When will the change come into effect?
The new rates will be applied from 1st October 2021 and be reflected on your November 2021 invoice.
Industry response to the change in methodology
Corona Energy is a member of ICoSS (Industrial & Commercial Shippers and Suppliers) which is a group of industry representatives who have challenged the new methodology for calculating UIG factors. We challenged this to try and reduce the impact of this methodology change on our customers. This challenge was unfortunately rejected however Corona Energy is sponsoring a modification to create an independent assurer role to ensure that the AUGE is working within the agreed Framework and provide governance of the role of the AUGE in apportionment of unidentified gas costs between suppliers.
