Individual Meter Point Reconciliation

1. Individual Meter Point Reconciliation

2. What? • Calculation of actual energy used at meter point level for all supply points • Allow sites to be accurately reconciled • Incentives on shippers to obtain reads • Transparent supporting data

3. Why? • RbD was essentially an interim step to enable competition amidst data, process and system limitations • RbD works with one dominant shipper, however, there are now six shippers with large RbD portfolios • Approx 400TWh of unreconciled energy p.a. • Huge potential cost misallocations • Support for reform from RbD shippers • The industry has evolved, as has technology, no excuse for acceptance of imprecise settlement arrangements • UK Link replacement system due in 2012 • Electricity has worked for almost a decade ???

4. When? • Jul ’07 – Review proposal to Panel • Aug ’07 – Initial review group meeting • Oct ’07 – Report to Mod Panel • Nov ’07 – Raise mod & consultation • Jan ’08 – Panel recommendation • Q1 ’08 – Ofgem determination

5. Benefits • More certainty for RbD shippers • Incentives to get meter readings • Less potential for ‘gaming’ on AQ review • Smaller AQ review process • More correct cost allocation to shippers • Improved data quality • Will emphasise extent of other ‘leakage’ points and increase incentives on market to address • Reduced risk for RbD shippers • Incentives for smart metering

6. Issues • Type of Model – LSP / electricity / other • Establish an accurate view on costs • Funding arrangements • Resistance from neutral participants • Timing • Shipper performance targets • Reconciliation periods • Impact on settlements • Data aggregation • Inclusion of IGT meter points