NTS Update

1. NTS Update Gas Customer Forum 25th September 2006

2. Area updates • NTS Charging • Winter 2006/7 Consultation Report • GBA notification service • 006 Implementation • Introduction of new forecasting incentive • NTS exit reform

3. NTS Charging Proposal for April 2007 • Pricing Consultation Document shortly • Changes to NTS Capacity charge methodology • Proposal key changes • Replace Transcost with a Transportation Model • Move from ten years of forward looking supply/demand projections to a single year model

4. NTS Capacity Charging Proposal Implementation • Exit • Implementation for 1st April 2007 • Entry • Implementation for 1st April 2007 – revised reserve prices would apply for all auctions held on or after 1st April 2007 • Charging Model • The combined Transport and Tariff model would be made available to Users once S&D data could be made available • UNC modification may be necessary to address data confidentiality issues Contact Paul Roberts 01926 656369 paul.a.roberts@uk.ngrid.com

5. Winter 2006/7 Consultation Report - Summary http://www.nationalgrid.com/uk/Gas/TYS/outlook/ • Gas demand; forecasts materially lower than those produced in 2005 • Gas supply; positive developments have been reported in relation to new infrastructure projects, however, uncertainty remains regarding utilisation rates • Electricity market; less uncertain. Coal generation expected to operate at baseload with gas providing marginal capacity • Weather remains key determinant • Little / no demand-side response required in an average / mild winter • Sufficient gas to maintain supplies to NDM market in a 1 in 50 cold winter • Information available throughout the winter via our website Contact Simon Griew 01926 656314 simon.griew@uk.ngrid.com

6. GBA Notification Service • New subscription service • Active GBA notification • Text message and/or e-mail notifications • Free service To register use the National Gas Operational Data website: http://www.nationalgrid.com/uk/Gas/Data/ Contact: Paul Gallagher, 01926 654109 paul.gallagher@uk.ngrid.com

7. Information Provision: 006 Timescales Final FMR 3rd Apr ‘06 Ofgem Defer Decision July ‘05 Go-Live 3rd Oct ’06 Mod Raised 3rd Nov ‘04 RIA (1) Issued 27th May ‘05 RIA (2) Issued 3rd Feb ‘06 IS Development Effective Consultation Period RIA (1) Close 26th Jun ‘05 RIA (2) Close 17th Mar ‘06 Ofgem Decision 5th May ‘06 Initial FMR 1st Nov ‘05 DMR 9th Feb ‘04

8. 006 “Publication of near real time info at UK sub-terminals” - implementation • NTS input flow data from terminals, sub-terminal, storage • 2 min resolution of data • Updates every 12 minutes • Supply updates effectively containing 6 sets of 2 min data Internet functionality to publish Approximately another £1.5m investment Delivers another world first? Contact Development Chris Logue 01926 656733 chris.logue@uk.ngrid.com Operational 01926 654639 sysop.centre.reporting@uk.ngrid.com

9. Information Location • Available from the National Grid website www.nationalgrid .com • Located with other market data provided by National Grid within the Operational Data area of the site www.nationalgrid.com/uk/gas/data • Situated on a new button entitled • Energy – Flow Data, • or at URL www.nationalgrid.com/uk/gas/data/EFD • Information made available in 3 complimentary ways across 3 pages

10. Data Access • Page 1 (Instantaneous Flows • Latest 12 minute data in tabular and graphical form • Always shows the most currently available data • Page 2 (Entry Zone Graphs) • Up to last 24hrs data in graphical form by terminal / type • Can be used to monitor trends • Period selectable by user • Page 3 (User Defined downloads) • Provides flexible data download facility • Allows user to define download period, and • Any combination of sub–terminals/terminals API interface too …..

11. Example of Screen Layout – Page 1 Feedback Form Telephone Helpline: 01926 65 4639 Historical notes Latest relevant note 6 snapshots of data at 2 minute intervals updated every 12 minutes Data issues highlighted Graph of latest flow data by subterminal

12. Example of Screen Layout – Page 1 (Cont) Graph of latest flows for terminal Latest total daily flow into NTS

13. Example of Screen Layout – Page 2(last 24 hours) Feedback Form Telephone Helpline: 01926 65 4639 Selectable time period – last 24 hours selected

14. Example of Screen Layout – Page 3 Feedback Form Telephone Helpline: 01926 65 4639 Selectable time period Select original or amended data Select sites of interest Selected data displayed graphically

15. 006 Implementation Philosophy • Data as seen by Control Room • “warts and all” • “no guarantees” • Users can • View • Download • Access via APIs Data users will need to interprete data

17. New SO Gas Incentives • NTS Gas demand forecasting accuracy • Performance measure based on the accuracy of day ahead 1400 UNC gas demand forecast • NTS Market info website performance • Performance measures based on: • The availability of the National Grid Web information web pages (24/7) • The timeliness of publication of information reports on the website, fore example NTSAFF, NTSAPF, SISR03 etc In both cases, performance improvement to be delivered through IS changes, training, and process/analytical changes.

18. Day Ahead Demand Forecast Incentive • Option 2 risk/reward DF incentive chosen: Winter only incentive “13:00” Day ahead demand forecast Benchmark set at last years performance 3.6% = 11.4 mcm average error Circulatory issue critical?

19. NTS Exit Reform • UNC Mod Proposal 0116 “Reform of NTS Offtake Arrangements” • Points of clarification sought by Wednesday 27th September • Mod Panel to consider potential consultation on 12th Oct NTS advocate that this Modification Proposal should proceed to consultation and that it be considered in conjunction with Ofgem’s price control proposals envisaged ExCR (Exit Capacity Release) statement envisaged NTS Enduring Exit Pricing Methodology An alternate proposal has also been submitted by E.On Contact Paul Roberts 01926 656369 paul.a.roberts@uk.ngrid.com