DCMF Meeting – January 26th 2009 SGN’s Jan 09 Mod 186 Report DCMF Meeting – January 26th 2009

Scotland Revenue Data

Scotland – Commentary (1) 2007/08 Pass through movement is due to a reduction in Formula Rates and Licence Fees The increase in the Mains Replacement allowance has outweighed the decrease in the Shrinkage allowance K movement is an under recovery from 2006/7 The under recovery in 2007/08 is mainly due to the under recovery being brought forward from 2006/07 - this effect being reduced by the higher than forecast throughput 2008/09 Pass through movement is due to a change in Formula Rates, NTS Pension and Licence Fees Incentive movement is primarily driven decreases in the Shrinkage and Mains Replacement allowance offsetting increases in Innovation Funding allowance K movement is an under recovery from 2007/08 95/5 Capacity/Commodity methodology implemented from 1 October 2008

Scotland – Commentary (2) 2009/10 - 2012/13 Pass through movement is due to a change in Formula Rates, NTS Pension, Licence Fees and the Traffic Management Act Incentive movement includes increases in the Environmental Emissions, Exit Incentive, Innovation Funding Incentive mechanisms - and the Discretionary Reward Scheme from 2010/11 - offsetting a decrease in the shrinkage allowance. Sensitivity Analysis – Refer to published report Further Information * This is an increase to new rates under 95/5 methodology, not an increase to Oct 07 rates Disclaimer - Refer to published report

Southern Revenue Data

Southern – Commentary (1) 2007/8 Pass through movement is due to a reduction in Formula Rates and Licence Fees The decrease in the Shrinkage allowance has offset increases in Mains Replacement and Exit Incentive allowances K movement is an under recovery from 2006/7 The over recovery is due to higher than forecast volumes 2008/9 Pass through movement is due to a change in Formula Rates, NTS pension and Licence Fees Incentive movement is primarily driven decreases in the Shrinkage and Mains Replacement allowance offsetting increases in Innovation and Exit Incentive allowances K movement is an over recovery from 2007/08 95/5 Capacity/Commodity methodology implemented from 1 October 2008

Southern – Commentary (2) 2009/10 - 2012/13 Pass through movement is due to a change in Formula Rates, NTS Pension, Licence Fees and the Traffic Management Act Incentive movement includes increases in the Environmental Emissions, Exit Incentive, Innovation Funding Incentive mechanisms - and the Discretionary Reward Scheme from 2010/11 - offsetting a decrease in the shrinkage allowance Sensitivity Analysis – Refer to published report Further Information * This is an increase to new rates under 95/5 methodology, not an increase to Oct 07 rates Disclaimer - Refer to published report