* Amendment to Appendix P to ensure correct treatment of Interconnector Unit Offer Data 29th May 2012 * 1##

Introduction As Interconnector Units can submit negative Prices or Quantities, Market Exposure can occur where Commercial Offer Data (COD) includes: Positive Prices and negative Quantities (units offer to pay to Export); or Negative Prices and Positive Quantities (units offer to pay to Import). Participant pays To Export to Import Participant paid to Export Price Quantity SEM Credit Exposure 2

Sufficiency Check The sufficiency check is the process by which it is verified that enough ACC is in place to cover the Offered Exposure at each GWC. Where ACC is insufficient, those elements of COD that create an unsecured credit risk, will be excluded at the relevant GWC. 3

Offered Modified PQ Pairs Following the sufficiency check the Accepted PQ Pairs become Offered Modified PQ Pairs. This is regardless of any modification being applied. Where ACC is sufficient: Temporary Points are deleted Accepted PQ Pairs = Offered Modified PQ Pairs 4

X X X X Offered Modified PQ Pairs LLQ HLQ Accepted PQ Pair = Offered Modified PQ Pairs Temporary Point Deleted points or Excluded PQ Pairs Example 1: ACC > Total Offered Exposure X P Price Axis Crossing Point X X P3Q3 P4Q4 LLQ Point HLQ Point P2Q2 X P1Q1 Q LLQ EA1= max(MIUEC,AIUECH) EA2 and WD1 = MIUEC HLQ EA1= min(MIUIC,AIUICH) EA2 and WD1 = MIUIC 5

Offered Modified PQ Pairs Where ACC is insufficient : Temporary Points are deleted. All bids up to and including the area of Energy Offered Exposure are excluded. Accepted PQ Pairs ≠ Offered Modified PQ Pairs. The remaining non excluded PQ Pairs are renumbered. The Low Limit Quantity is set to zero to prevent any Export. 6

X X X X X X X X X Offered Modified PQ Pairs PQ Pairs Temporary Point Deleted points or Excluded PQ Pairs Renamed PQ Pairs X Example 1: ACC < Total Offered Exposure X P Price Axis Crossing Point X X X P3Q3 X P4Q4 P2Q2 P1Q1 P2Q2 X LLQ HLQ X P1Q1 X Q LLQ Export Exposure HLQ 7

Interconnector User offers in top left quadrant only P2Q2 P1Q1 Q Maximum Interconnector Unit Export Capacity Maximum Interconnector Unit Import Capacity 8

X X X Current Treatment Excluded PQ Pairs P ACC < Total Offered Exposure No offers in right top quadrant P2Q2 X HLQ P1Q1 X Q LLQ Import also excluded Export excluded HLQ 9

X X X X X Proposed Treatment Excluded PQ Pairs Additional PQ pair ACC < Total Offered Exposure No offers in right top quadrant Additional PQ pair inserted if highest Q index <=0 P Additional PQ pair inserted P2Q2 X X HLQ P1Q1 X P1Q1 Q LLQ=0 Export excluded Import allowed HLQ 10

Questions and Discussion 11