Code Governance Review UNC Modification Proposals Ritchard Hewitt - National Grid NTS

Background – Code Governance Review (CGR) Ofgem announced the Review of Industry Code Governance in November 2007 Code Governance Review (CGR) concluded at the end of March 2010 when Ofgem published their Final Proposals The licence modifications necessary to implement the Final Proposals for the CGR and the Code of Practice (CoP) were published on 3 June 2010 and become effective on the 31 December 2010

Background – Review Group 0267 Review Group 0267 “Review of UNC Governance Arrangements” raised October 2009 The Joint Office of Gas Transporters (JO), has been working with the industry on the necessary modifications to the UNC via the Governance Workstream National Grid volunteered to raise all the necessary governance modifications to implement the CGR Final Proposals National Grid have committed to liase with the industry in development of the proposals

Transmission Workstream – objectives of presentation Raise awareness of approach and timetable for developing the CGR UNC Modification Proposals Provide an overview of the content of each Modification Proposal Facilitate the provision of feedback Modification Proposals will be updated and formally raised for August Panel – consultation

Alternatives - 0318 Aspect of the Code of Practice (CoP) - the approach to be taken when raising alternatives to Modification Proposals: alternative solutions being developed to the same degree as an original solution; and alternative proposals are raised prior to or during the working group stage. No alternatives (or further alternatives) can be raised once a Modification has been issued for Consultation

Role of Code Administrators & Code of Practice - 0319 The CGR Final Proposals require that code administrators: Act as a ‘critical friend’, in particular to small participants; and Act consistently with the Code Administrator Code of Practice. Other key elements: Ofgem send back powers Published reasons for Panel recommendations (based on relevant objectives) Legal text provision Cost information

Appointment and Voting Rights for a Consumer Representative and Independent Panel Chair - 0320 Main elements of proposal 0320: Option for the National Consumer Council & Authority to each appoint one Consumer Representative Consumer Representatives to become Voting Members Appointment of an Independent chair’s and provision of a casting vote where panel determinations are at stalemate Not applicable for recommendations on whether or not to implement mods

Environment 0321 Evaluation of proposed modifications shall include assessment of the quantifiable impact on “greenhouse gas emissions” Details to be included in reports produced during progression of the proposal

Charging Methodologies – 0322 (NTS) / 0325 (DN) Two proposals NTS Charging Methodology and Connection Charging Methodology Distribution Network Charging Methodology Key elements: Existing methodology (to be detailed in Appendix A) is incorporated within the Uniform Network Code UNC Modification Rules are amended to reflect that: a change to the Charging Methodology is not able to be made unless the requirements of the UNC Modification Rules are complied with the Transporters must convene regular meetings of the charging methodology forum/s a Modification Proposal in respect of a UNC Charging Methodology may only be made by a UNC signatory or a Materially Affected Party (being a person or class of persons designated by the Authority for this purpose)

Self-Governance (‘SG’) 0323 UNC Modification Rules change 3 main elements of proposal: Panel able to recommend to Authority that Panel can take implementation decisions for non-material mods Authority also able to designate ‘self governance’ mods & approve / reject Panel recommendations Appeals Process

Significant Code Review (‘SCR’) 0324 UNC Modification Rules change Main elements of proposal: Once an SCR has started any non-urgent mods seeking to change same section of UNC as SCR are ‘suspended’ Panel submits decision to Authority to subsume mod into SCR or allow to progress individually Once SCR is complete related mods are ‘unsuspended’

Summary Number Title 0318 Alternatives 0319 Role of Code Administrators and CoP 0320 Appointment and Voting rights for a Consumer Rep and Independent chair 0321 Environmental assessment 0322 NTS Charging methodologies 0323 Self Governance 0324 Significant Code Reviews 0325 DN Charging methodologies