UNC Urgent Modification Proposal 0275 Supplemental Analysis and Timeline

1. UNC Urgent Modification Proposal 0275 Supplemental Analysis and Timeline

2. Analysis Caveats • Based on National Grid Distribution Supply Points only • Based on average capacity values • Based on average charge rates • Based on limited response to requests for evidence

3. Scope – Scale of reduction necessitating UNC Modification • 643 DM Supply Points on National Grid Distribution networks (excluding ‘Unique Sites’) • Aggregate SOQ - 233,786,972 kWh • Average SOQ - 363,588 kWh • Aggregate BSSSOQ – 177,055,742 kWh • Average BSSOQ – 275,359 kWh • On average, to reduce the SOQ below the BSSOQ, a DM Supply Point will need to reduce the SOQ by 24.3% or greater

4. Evidence Submitted - Usage and Reduction • Usage • the quantity of DM Supply Points requiring reduction of SOQ below BSSOQ • one User suggested that 23.9% of DM Supply Points within its portfolio may reduce SOQ to below the BSSOQ if the UNC permitted this • Reduction • the scale of reduction (compared to current SOQ) likely to be requested • one User confirmed that one DM Supply Point in its portfolio would reduce its SOQ (which is equal to its BSSOQ) by 87.7% if the UNC permitted this

5. Application of Evidence to National Grid DM Supply Points • 643 DM Supply Points • Usage of 23.9% is 154 Supply Points • Average SOQ is 363,588 kWh • Reduction of 87.7% reduces SOQ to 44,721kWh (a reduction of 318,867 kWh) • Overall DM SOQ reduction • 154 Supply Points * 318,867kWh = 49,105,518 kWh • Overall a 21% reduction in registered SOQ • (49,105,518 kWh / 233,786,972 kWh)*100 • An estimated annual reduction in LDZ Capacity revenue of circa £6million

6. Impact on Other Customer Groups • Based on £6million reduction in revenue from DM Supply Points • Slight transportation charge increase of approximately 0.5% per annum for all customers to enable Transporter to recover its allowed revenue • Average SSP annual transportation charge of £116 • Would increase by 58p • An example LSP annual transportation charge of £40,000 • Would increase by £200

7. Modification Proposal 0275 – Load Reduction Process & TimelineAll days are business days andthe timeline is based on best endeavours basis • Day 1 • User raises APP Conquest Query with requested loads (BSSOQ, SOQ, SHQ) and provides warrant from end consumer via fax or email as early in the day as possible (AM, specifically prior to midday) • Loads requested should follow existing SOQ / SHQ ratio rules otherwise request will be rejected • Appeal is raised by xoserve and appeal reference number is sent back to User via Conquest • User nominates submits a Supply Point Nomination with the appeal reference number via IX • No further changes to the Supply Point should be nominated at this time • Day 2 • Based on the appeal reference number a Supply Point Offer is generated by xoserve and submitted back to the User via IX • User validates the Supply Point Offer and submits a Supply Point Confirmation via IX • Day 3 to Day 10 • Supply Point Confirmation is processed. • Day 11 • Effective Date of Supply Point Confirmation. New SOQ, SHQ and BSSOQ values are live on Day 11. • NOTE: Submissions within the Capacity Reduction Period that do not allow sufficient time for the full process to be completed will be rejected.

8. Modification Proposal 0275 – Load Reduction Process & TimelineAll days are business days andthe timeline is based on best endeavours basis 6. User receives Supply Point Offer with appealed load values and submits Supply Point Confirmation via IX 1.User raises APP Query via Conquest with requested loads (BSSOQ, SOQ, SHQ*) and provides signed letter of consent / warrant to xoserve (via fax or email) 4.User submits Supply Point Nomination with Appeal reference via IX 7. Effective Date for new BSSOQ, SOQ and SHQ DAY 1 DAY 2 Day 3 to Day 10 Day 11 6. System processes Supply Point Confirmation 2.xoserve receives letter of consent and APP Query – xoserve process Appeal request via Conquest * 5.xoserve receives Supply Point Nomination and issues Supply Point Offer via IX (time required for system processing) 3.xoserve send Appeal reference to User via Conquest * SOQ has to be between 4 and 24 times the SHQ (TPD G5.4.1). If not – rejection will occur

9. Modification Proposal 0275 – Load Reduction Timeline – Example Dates • For Appeals submitted on 21st December 2009 • Time for submission should be as early in the day as possible to ensure these timescales are adhered to • New Load values live from 8th January 2010* • For Appeals submitted on 5th January 2010 • Time for submission should be as early in the day as possible to ensure these timescales are adhered to • New Load values live from 19th January 2010 • For changes to be effective by 29th January 2010 (last business day of Capacity Reduction Window) • Appeal should be submitted by 15th January 2010 * NOTE – The following days are not classed as Business Days pursuant to UNC TPD G1.10 - 25th December 2009, 28th December 2009, 1st January 2010 and 4th January 2010