Retail Market Assurance Services for the Irish Electricity Market IGG 5th March 2009

Assurance Activities Two re-qualifications ongoing (as previously reported) One new Small Supplier – approved by CER MCR 0172 (Small Supplier Definition) DR0163 (Risk-based Assurance) DR 0164 (Self-Supplier Definition) Self Assessment Return Participant Questionnaire IPT Scenarios

MCR0172 Small Supplier Definition Change definition of “small supplier” to one that uses only Webforms to generate market messages At January IGG, action was to discuss/agree at conference call After IGG ESB IE raised objection and conf. call agreed it would have to come back to IGG – so here it is. The current definition of a small supplier (as in the Assurance Strategy) is as follows: A supplier with up to 200 metering points registered or up to10MW power supplied at peak demand and intends to work within these thresholds for the foreseeable future. This threshold was set during the Market Opening Project in 2004 for the particular requirements of that period and may be viewed as somewhat over-restrictive in today’s environment. It has recently been increased on a one-off basis for a particular supplier rather than subject them to further assurance and it is envisaged that this situation will recur. It is proposed that the term “Small Supplier” is redefined and based on a more flexible criterion, as follows: “A Small Supplier is a Supplier who utilizes only Webforms (or directly equivalent facility) for the creation of all outgoing Market Messages.”

MCR0172 Small Supplier Definition ESB IE comment (paraphrased) … there is an inherent risk to market operations in amending the current definition to … … a small supplier is a supplier who utilizes only Webforms for outgoing messages… In a small market … one supplier operating using webforms could supply to a small number of large companies whose demand might … be a substantial element of the overall daily demand.  In the event of any … failure the damage …would be catastrophic. The current definition provides an element of assurance as to the serious intent of a new supplier and does not preclude or impact unfairly on new entrants or on competition. 4

DR 0163 Risk Based Approach Change from fixed process to flexible process including a risk-based approach and introduce post-live stage (CME) DR has not been received with enthusiasm and no positive comment Gemserv suggests withdrawing this DR for the present In the GB Electricity Market a risk-based approach has recently been introduced and has been applied to several market participants. This allows greater flexibility for the appropriate application of assurance techniques in situations such as: A supplier whose aspirations are for only low numbers of metering points and who are willing to accept a threshold on registrations, above which further Assurance would be obligated A new supplier that is utilizing systems, processes and staff that are already operating in the market A new brand for an existing supplier The above could be viewed as lowering the risk to the market whereas their corollaries could be seen as indicating higher risk. Controlled Market Entry (CME) is an initial period of market operation by Suppliers under agreed conditions e.g. threshold on the number of registrations that can be initiated in a given period. This is followed by an audit after which the conditions may be lifted or modified. It is suggested that the risk-based approach together with CME might be applied in Ireland and that this could facilitate a shorter time to market, with less overhead, for new low-risk Suppliers but with an assurance toolkit that can also mitigate operational risk for Suppliers competing in the (large-scale) domestic sector.

DR 0164 Change to Self-Supplier definition Initial DR has provoked some adverse feedback RMDS is to take on ownership and discuss requirements with CER 6

Self Assessment Return IGG action was to approve at conf. call No comments received at Conference Call Document now ready for publication on RMDS website. 7

Participant Questionnaire Included in IGG papers Gemserv is seeking IGG approval for publication on RMDS website. 8

IPT Scenarios Gemserv in discussion with RMDS. 9

Questions & Discussion.