Retail Market Assurance Services for the Irish Electricity Market IGG 16th April 2009

Assurance Activities One re-qualification ongoing One new market segment application One completed re-qualification – approved by CER Three Small Supplier applications DR 0172 (Small Supplier Definition) DR0163 (Risk-based Assurance) IPT Scenarios

DR 0172 Small Supplier Definition Change definition of “small supplier” to one that uses only Webforms to generate market messages Downgraded from MCR to DR at March IGG. Participants asked to feedback comments and discuss/agree at IGG Conference Call In advance of March IGG Conference Call comments received from one Supplier in support of change Given that DR has been discussed a number of times at the IGG, the reservations of ESB IE, and the fact that no consensus can be reached we have submitted DR to CER for a decision based on feedback received to date 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.”

DR 0163 Risk Based Approach Change from fixed process to flexible process including a risk-based approach and introduce post-live stage (CME) Airtricity agreed to sponsor DR at March IGG DR remains under development and to be presented at next IGG 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.

IPT Scenarios Gemserv in discussion with RMDS 5

Questions & Discussion.