MOD Proposal 0224 Facilitating the use of AMR in the Daily Metered Elective Regime 28 May 2009 Code User Pays Services

2 Objectives  Background to Mod 0224  Development costs  Forecast service demand  DME Services  Core Service  Reconciliation  Consumption Adjustments  User Pays proposed charges

3 Background  Mod 0224 seeks to allow users to elect for a daily settlement regime, rather than use the Non Daily Metered (NDM) demand profile  Implementation will allow shippers to submit Daily Metered (DM) reads for eligible sites within their portfolio, based on Meter Point EUC band  Phased approach still being assumed for costing / demand purposes  Proposed solution is to enhance existing DN systems and processes to achieve tactical solution ahead of Project Nexus  Mod 0224 is to be a Code User Pays service. Ongoing services will be included in the Agency Charging Statement (ACS) and follow the approved methodology

4 DME Development Cost  The re-charge methodology has been agreed as part of the Mod Proposal  Development cost is c.£565k and will be recovered up front  Re-charge for all shippers, based on eligible Meter Points as at 28 April 2009 Phase 1EUC 6,7,8,9£29.00 per MP Phase 2EUC 5£21.50 per MP Phase 3EUC 4£14.50 per MP

5 Demand Forecast  Demand provided by users and collated by Ofgem based on potential price ranges, as shown below  To support charges a linear demand take up has been assumed, so full demand for each phase is not reached until final month of phase £ £ £ £ £ Phase 1 (12 months) Phase 2 ( months) 1, Phase 3 (18+ months) 2,980 1,4421, Total Demand4,666 2,9971,895877

6 Demand Profile  Linear demand profile assumed for DME Core Service Phase 1 (12 months) Phase 2 ( months) Phase 3 ( months) 667 1,019 3,176 Meter Points 1,686 1,490

7 Code User Pays Services  The DME services will be charged under two categories and follows the approved User Pays charging methodology  DME Core Services  The core activities required by all users to participate in the regime will be charged at a daily rate per Meter Point  “Non performance” related services  There will be a transactional charge per individual “non performance”  Reconciliation Investigations  Consumption Adjustments

8 DME Core Service  Core DME service activities will be performed by xoserve to facilitate the regime. These include;  Receipt and processing of daily DME reads  Manual validation of reconciliations (as per next slide)  Provision of mandatory reports  Monthly DME uptake report  Weekly DMSP notification report  Invoicing services  User Pays charges  DME read incentive  Shippers will incur charges on a daily basis, following confirmation of Meter Point to DM Elective regime

9 Reconciliation Investigation  xoserve validates all DM reconciliations. This activity is included in the DME Core Service charge  Types of validation checks include;  Daily energy (GRE, NRE, ZRE charges)  Resynchronisation data  Excessive charges not created  Duplicate checks  Output of validation;  Approved reconciliation – no direct charge  Reconciliation requires further investigation and resolution, due to user error – TRANSACTIONAL CHARGE

10 Consumption Adjustments  Shipper submits a consumption adjustment to xoserve, which is validated and processed offline. Online adjustments are managed through shipper file submission and included within development costs  Adjustments (after D+5 close out) must be submitted via ADJ1 form and during investigation xoserve may be required to liase with shipper to gain further information to process adjustment  Types of valid adjustments include;  Asset resynchronisation  Faulty equipment  Incorrect asset set up  Consumption adjustments will be charged following processing and receipt on DM invoice - TRANSACTIONAL CHARGE

11 Proposed Price for Core DME Service  Charge is per Meter Point per day and to forecast to remain static for first 2 years, based on demand  Costs and demand will be published in ACS and will be reviewed as part of the wider ACS review process  Any prices changes will be discussed in principle at the User Pays User Committee ServiceTriggerCharge TypePrice DME Core ServiceConfirmation of DME Meter PointDaily£0.26

12 Proposed Transactional Prices  All prices are for delivery of each activity  The costs are based on the estimated time taken to complete the activity and the associated costs of this time  There is also two additional Non Code User Pays reports that will be made available, these will be agreed through User Pays User Committee ServiceTriggerCharge TypePrice Reconciliation Investigation Manual investigation / resolution of DM reconciliation due to shipper error Per Transaction£47 Consumption Adjustments Submission of ADJ1 filePer Transaction£38

13 Year 3 Forecast  Assuming;  Operational cost remain as forecast  First 2 years demand achieved  Maximum demand reached in 6 month of year 3  Year 3 daily rate c.£ £0.12 per MP Phase 1 (12 months) Phase 2 ( months) Phase 3 ( months) 667 1,019 3,176 Meter Points 1,686 1, months 1,490 4,666