National Grid CCL & CRC Water Project Update

1. National Grid CCL & CRC Water Project Update 11 December 2013

2. CCL • CCL – Climate Change Levy is a tax to encourage businesses to operate in a more environmentally friendly way. • CCL Rates • Reductions or lower rates can be applied to CCL rates for the following: • Holders of a Climate Change Agreement (CCA)* • Where the Commodity is used in approved metal recycling process. • *CCAs are aimed at eligible energy-intensive industries to save energy and reduce carbon dioxide emissions.

3. NG CCL Exempt Supplies • NG submitted PP11s directly to suppliers to obtain 100% exemption for 496 electricity supplies, these supplies use the commodity for generation, transportation or distribution of electricity or gas. • UES Energy have no record of PP11’s being submitted for natural gas supplies. • NG are responsible for maintaining and storing all PP10 and PP11 forms. UES Energy apply the exemption at account level on Optima when advised by NG that PP11’s have been submitted to suppliers. • Project required to maintain and audit CCL exemptions.

4. Phase 2 CRC Scheme Changes • (Taken from NG CRC Presentation) • Excludes all energy supplies to an EU ETS installation • Excludes all electricity and gas supplies used directly for the generation transmission and distribution of gas and electricity. • National Grid need to determine which supplies are in/out of Phase 2. • NG Decision: Either 100% in/out or as a percentage • NG Assumption: Exempt from CCL exclude from CRC – clarification of assumption required. • UES Energy are able to record the CRC status of individual accounts in Optima. NG to confirm requirements.

5. Water Projects 11 December 2013

6. 1 – Hind Street, Birkenhead (PG) • Opportunity – Surface Water Highway Drainage (SWHD) Charges, reduction of site area calculation due to unnoccupied / derelict offices • Status – United Utilities (UU) have rejected Claim, but UES are proposing to escalate • Next Action – Escalation • Potential annual reduction £40K with backdate opportunity

7. 2 – Harker, Carlisle (ET) • Opportunity – SWHD Charges – Site not connected to Public Sewer (confirmed from NG Drawings) • Status – Application submitted but initially on hold due to existing application from 3rd Party – Sarah Bayliss is not aware of 3rd party activity – awaiting guidance from NG • Next Action – Escalate once approach confirmed by NG • Potential annual reduction £80K with backdate opportunity

8. 3– WhitegateMorcambe (PG) • Opportunity – Water & SWHD Charges / effect of offices which may be leased • Status – awaiting confirmation of lease status from NG • Next Action – Further analysis & claim once lease status confirmed • Potential annual reduction £15K with backdate opportunity

9. 4 – East Winch, Kings Lynn (GT) • Opportunity – Water Tariff switch to reduce costs • Status – Application about to be submitted. • Next Action – complete application and chase supplier • Potential annual reduction £700 future saving only

10. 5– Gallows Hill, Warwick (PG) • Opportunity – SWHD Charges – maybe not connected to public sewer • Status – requested Foul & SW drainage drawings from NG. • Next Action – Keep Chasing, confirm if claim possible from drawings and submit claim. • Potential annual reduction £65K with backdate opportunity

11. 6– West Boldon, Newcastle (ET) • Opportunity – SWHD Charges – possibility of site not connected to Public Sewer & partial demolition may reduce SWHD chargeable area • Status – requested Foul & SW drainage drawings from NG. • Next Action – Keep Chasing, confirm if claim possible from drawings and submit claim. • Potential annual reduction £25K with backdate opportunity