CAP190: Workgroup Report CUSC Modifications Panel, 26th August 2011 Alex Thomason, CAP190 Workgroup Chair

Background Issue identified by QC with existing rights of appeal to Competition Commission NGET raised CMP196 to deal with existing anomalies CAP190 Workgroup was on hold since January 2011 Review date of July 2011 CMP196 raised to deal with ambiguity relating to ‘recommendations’ in the CUSC. Panel voted unanimously that CMP196 better facilitates the ACOs. CAP190 timetable extensions granted January 2011: Panel agreed to one month extension February 2011: Panel agreed to further one month extension March 2011: Panel agreed to four month extension to July 2011

Other code modifications UNC 0312 raised by E.ON UK in May 2010 BSC P264 raised by Drax Power in August 2010 Authority rejected both proposals on 20 July 2011 UNC 0312 UNC 0312 raised 26th May 2010, varied multiple times – version 4.0 was issued 12th October 2010 5 votes for implementation (shippers), 6 did not vote for implementation (Transporters & Consumer Focus) P264 5 BSC Panel members voted P264 better than baseline (all preferred Alternative over Proposed); 4 members voted not better.

CAP190 recent developments Majority decision by Panel at July meeting not to extend Workgroup timetable Proposer does not wish to withdraw CAP190 Workgroup Report compiled to capture Workgroup discussions No Workgroup consultation carried out No Workgroup recommendations made No legal text drafted Proposer The Code Administrator contacted the Proposer (Lisa Waters) after the Panel decision to ask what she wanted to do. Response: People seem to want it to go to consultation so they could complain about the BSC UNC decision. So will not withdraw and allow industry to get it off its chest! WG Report has been compiled to capture the details of CAP190, the discussions, legal advice etc. In light of CMP196 and developments with CAP190, no WG recommendation has been made and no legal text has been drafted. NG has provided an initial view in the report: National Grid initial view 6.2 National Grid agrees with the principle that existing rights of appeal should be maintained. However, the implementation of CAP190 would not necessarily be more efficient in terms of fulfilling licence obligations as a party may still raise an appeal under circumstances where there has been a two-thirds majority vote for implementation. National Grid believes that the decision of the Panel should be focused on the merit of the proposal itself and not potentially on keeping open the rights of appeal. 6.3 In addition, whilst a unanimous Panel vote indicates a clear view to the Authority and the industry, it is possible under CAP190 that only one additional vote could result in a two-thirds Panel majority and this therefore represents only a marginal difference from the current position. 6.4 National Grid notes that CAP190 has not been fully developed and for clarity this view is an initial view based on analysis undertaken by the Workgroup to date.

CAP190 Next Steps Panel invited to: ACCEPT Workgroup Report AGREE CAP190 progresses to Code Administrator consultation

Timetable 1st Sept Publish Code Administrator Consultation 22nd Sept Code Administrator Consultation closes 29th Sept Draft final CUSC modification report published 6th Oct Deadline for comment 28th Oct Panel Recommendation Vote 2nd Nov Final CUSC Modification Report sent to Panel 9th Nov Deadline for Panel comment 10th Nov Final CUSC Modification Report sent to Ofgem 15th Dec Indicative Authority Decision