Creditworthiness for active parties as of 1 January 2019
What is the process for demonstrating creditworthiness if you are already active
Starting gas day 1 January 2019 the amended creditworthiness policy of GTS will enter into force. The creditworthiness requirements which must be met by each programme responsible (‘programma verantwoordelijke’ PV) and transport capacity holder (TCH) are laid down in the Transmission Code Gas - TSO (appendix 1) .
You can find an overview of all the amendments in GTS’ creditworthiness policy in our news item of 14 September 2018.
This page contains all the information about this topic which you as a shipper or end user with exit capacity (EWEX) should take into account.
Our online customer portal Gasport (menu: financial\exposure position) gives you access to your organization’s current financial exposure situation. Based on this information you can calculate the credit limit required starting 1 January 2019 by using the calculation module set out below. In 3 steps you will find comprehensive information about how to calculate your expected exposure, the determination of the required credit limit and supply of additional securities (if applicable) in accordance with the amended code.
*No rights can be derived from the calculation based on this calculation module
Step 1. Determine your maximum exposure
The exposure consists of 2 components: contracted exposure and imbalance exposure.
1. Contracted exposure (in Gasport: Contracts)
You can contract services if you have sufficient credit space to cover the credit risk related to the services to be contracted. To calculate your exposure for the service to be contracted, you apply the highest (future) monthly invoice of your contract and multiply this value with exposure factor 3. In the case of a booking of 1 month or 2 months, multiply the highest monthly invoice with factor 1 or 2 respectively. If your credit space is not sufficient for your desired booking, your booking request will be rejected.
Any outstanding invoices due to contracted services that have been outstanding for more than 60 days are added to the contracted exposure.
N.B.: When calculating your contracted exposure you should take 21% VAT into account if your organization is registered with a Dutch VAT code. In Gasport the contracted exposure is currently shown without 21% VAT till gas day 1 January 2019. Due to the changing Transmission Code Gas – TSO, 21% VAT will be included in Gasport not sooner than gas day 1 January 2019.
2. Imbalance exposure (in Gasport: Balancing)
GTS determines your current imbalance position at 06.00 h (LET) every day.
The value of the imbalance exposure is the sum of:
- financial value of the Portfolio Imbalance Signal (POS). The value of the POS must be greater than or equal to zero; if the POS is negative, this value is set to zero;
- financial value of Linepack Flexibility Service. LFS is determined on an absolute basis.
- financial value of balancing actions of the current month;
- outstanding settlement invoices.
If the sum of the imbalance exposure amounts to a negative value, a value of € 0 is applied. The imbalance exposure is adjusted on a daily basis to your actual imbalance and is valid indefinitely.
N.B.: When calculating your balancing exposure you should take 21% VAT into account if your organization is registered with a Dutch VAT code. In Gasport the imbalance exposure is currently shown without 21% VAT till gas day 1 January 2019. Due to the changing Transmission Code Gas – TSO, 21% VAT will be included in Gasport not sooner than gas day 1 January 2019.
3. Reservations (in Gasport: Reservation)
A fixed imbalance reservation of 100.000 euros applies for parties with license A,B, and C. This reservation will be processed during second half of September 2018. From that moment on, related parties will find this reservation and inherent effect in Gasport starting January 2019.
If you are active as a shipper on the LDC market (license B), GTS also reserves an amount of the credit space for this service. During the first year the amount is set at least € 50.000. This amount will be updated each following year on the basis of 3 times the value of the highest invoice for exit points connected with the local distribution network.
N.B.: 21% VAT should be included for parties registered with a Dutch VAT code. In Gasport your LDC reservation will be processed including VAT during second half of September 2018. From that moment on, related parties will find the adapted LDC reservation and inherent effect in Gasport starting January 2019. Please take this into account when calculating your exposure.
Step 2. Determine your credit limit and credit space
GTS sets an initial credit limit for each party on the basis of an analysis of financial annual reports. Depending the determined risk category (medium or low), the next financial analysis is carried out respectively every 2 or 3 years. Additional financial securities are required for parties who are determined in risk category high.
Your credit limit must at least cover your exposure, but we advise you to have a minimum credit space of at least 15% of your credit limit. We also advise you to take additional credit (in Gasport: Available Amount) into account if you want to contract additional services in the future or to cope with any imbalance. In case of tariff changes, the exposure will increase (due to a tariff increase) or become lower (due to a tariff reduction).You can increase your credit limit by supplying additional securities.
Step 3: Supply additional securities (if applicable)
If the first two steps show the (expected) exposure exceeds the credit limit, additional securities have to be supplied. GTS accepts: a parent company guarantee (PCG), a security deposit agreement (SDA) and/or a bank guarantee (BG). The application documents can be found via this link. The Bank Guarantee must be issued by a bank with Moody’s long term credit rating of not less than Baa2 or Standard & Poor’s rating of not less than BBB. The worst rating of the issuing bank shall be applicable.
Financial securities must be 4 months longer than the contract with an end date which is located furthest in the future.
Creditworthiness enforcement protocol
This Protocol for Enforcing Creditworthiness is applicable to all shippers and EWEX’, including programme responsibles (PV) and transport capacity holders (TCH).
This enforcement protocol is a more detailed completion of the creditworthiness requirements as laid down in the Transmission Code Gas TSO. This protocol should be read specifically in conjunction with and as a supplement to the Transmission Code Gas TSO. GTS may, in exceptional circumstances, bring the enforcement protocol into force sooner or later or make the enforcement protocol, or parts thereof, inapplicable.
What measures does GTS take if your exposure exceeds your credit limit?
If the credit limit is exceeded, parties are alerted after no more than 1 working day by GTS. On the same working day the party is requested to provide additional financial securities within 1 working day or steer their POS to zero or pay outstanding invoices or a combination of these during the same day.
If after 3 working days (= 2 working days after our request) neither an additional security has been provided nor other actions have been taken and the credit limit is still exceeded, GTS will take the following measures on the basis of Article B1.6 of the Transmission Code Gas TSO:
- all suppliers are informed that switch messages in which the relevant party occurs are no longer accepted;
- all parties are informed that (partial) nominations for sales transactions on TTF of the relevant party are no longer accepted.
If after 6 working days (= 5 working days after our request) the credit limit is still exceeding, GTS takes the following action on the basis of article 3.3.2 of the Transmission Code Gas TSO:
- withdrawal of the license of the relevant party.
Yes, you can ask us to return all or part of your additional securities if you expect that you will no longer need the additional credit. The financial securities must be valid for at least 2 months after the end date of the longest transmission booking contract. If, for example, a transmission contract has expired, surplus unused credit becomes available. Your credit limit must at least cover your exposure but we advise you to keep a minimum of 15% of your credit limit as surplus unused credit. Remember to allow for extra unused credit you will need if you want to book transmission in the future.
The amended credit worthiness policy affects every customer. A large number of customers has to increase and/or extend their securities, which takes processing time within GTS. Therefore we request our customers to provide us their final additional securities (a final security is a valid security which is accepted by GTS) before 1 November 2018. Securities provided after 1 November 2018 will be processed on a best effort basis.
No, in case your organization features a valid “warehouse arrangement”, VAT can be excluded when calculating your exposure and related credit limit.
If your organization is registered under a Dutch VAT code and does not feature a warehouse arrangement, VAT will be added to your LDC reservation. GTS will adjust the LDC reservation during the second half of September 2018. Tis adjustment will be visible in Gasport immediately, starting January 2019.
During the second half of September, GTS will end your TTF reservation (€ 50.000) per gas day 1 January 2019. The same date, the imbalance reservation (€ 100.000) will start. VAT will be included in the LDC reservation per 1 January (if applicable). These changes will be visible in Gasport by the end of September 2018. Provided additional securities will be visible immediately after processing.
VAT on all services (for e.g. contracted capacities) and the amended daily imbalance will be visible as of 1 January 2019.
Current securities with a written end date will be shortened by GTS with 4 months due to the amended credit worthiness policy instead of the current 2 months. In case the exposure of the last 2 months is not covered by a security anymore, you have to send us an amendment bank guarantee or a new parent company guarantee or surety agreement.
Once a day at 06.00 hour the available credit space per customer is interfaced to PRISMA . During the period that your spent percentage of 100% is exceeded, no capacity can be contracted.