Treatment of Daily Read sites ICoSS Presentation

I&C Shippers and Suppliers (ICoSS) Members Corona Energy ENI UK Ltd Gazprom Marketing and Trading – Retail GDF Suez Energy UK First Utility (associate) Shell Gas Direct Statoil (UK) Total Gas and Power Ltd

Demand for Daily read Rollout of next generation of metering will greatly increase level and granularity of consumption information available to customers. Coupled with increased requirements for energy management (CRC, Corporate Social Responsibility, etc), likely to see massive increase in demand for being settled on a daily basis. High-level principles identified two possible ways of handling Daily Read (DR)s, which is taken here to mean: Allocation based on daily reads, daily balancing , analogous to DM regime Estimated Allocation, periodic balancing on a weekly, monthly basis using daily read data. DR customers are likely to cover a broad spectrum.

Customer Requirements: large plant Important Network load Transporter need realtime visibility of offtake Inidividual Meter Errors/Estimation can have impact on other customers. Material Impact on Energy Allocation High level of interaction in market: Demands flexible/innovative contracts Dedicated energy managers. Environmental Obligations stimulate need for data granularity.

Customer Requirements: SME Negligible Network load Transporters do not need realtime visibility. Individual Meter Errors/Estimation will have tiny impact on other customers. No Material Impact on Energy Allocation Low level of interaction in market: Simple contracts Uses brokers

Implications for Nexus At its lowest level daily read can mean periodic reconciliation using meter readings procured and validated by the Shipper. Other sites will require allocation and balancing to occur on a daily basis. Shippers may have portfolio customers who will contract for common service. In addition Shippers may want to offer varying service levels. Implies a flexible regime with Shipper being the primary driver for determining site treatment, underpinned by obligations to safeguard settlement and network integrity.

DR v current regime (DME/DM) 1 of 2 Area DME/DM DR Eligibility / Obligation for Daily Balancing >2,196 MWh (DMM firm) >732 MWh (DME – phase 3) >73.2 MWh (DMV) + Interruptible, NTS,etc Daily read submission mandatory when needed for Network/settlement integrity (current thresholds?) All others - Shipper election for Daily or periodic read submission. No restrictions on choice if sites fulfils equipment criteria)

DR v current regime (DME/DM) 2 of 3 Area DME/DM DR Read Provision Daily at set time (10am) Daily read submission – End of Gas Day? Periodic read submission, end of week/month (as appropriate). Read Validation Undertaken by Meter Read Provider in 1st instance, Transporter Agent secondary validation. Undertaken by Shippers in 1st instance. Transporters Agent as safety net. Read Estimation Undertaken by Transporters Agent

DR v current regime (DME/DM) 3 of 3 Area DME/DM DR Read Replacement Actual Reads can be submitted by D+5 to replace estimates Reads (estimated or actuals) can be replaced up to D+5 Resynch/reconciliation Transporter notified day of resynch, reads validated by Shipper (DME) Still needed to notify for all/any daily allocation sites? For periodic read submission sites Shipper does not need Transporters Check Readings/ Meter Inspections Undertaken by Shippers/Transporters Still needed for all/any daily allocation sites? No need for periodic read submission sites

Key Issues Where to set obligations levels? Transporter Requirements (network operation) Shipper Requirements (integrity of settlement process) Capacity to allow increased numbers of DR sites. Level of take-up Interaction with DM Unbundling Transfer to Shipper-led regime (timescales)

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