Leakage Model Modification Update Shrinkage Forum 26 September 2012

Leakage Model Modifications Presented to Shrinkage Forum 6 January 2012 LP Service Modification Re-baseline service numbers to an estimate of 2010/11 Populations Incorporate impact of service transfers into leakage calculation AGI Venting Modification Assess venting rates for Positioners and Controllers Estimate steady-state and operational venting

LP Service Modification Formal Consultation by National Grid February 2012 and submitted to Ofgem April 2012. Ofgem indicated they would need to consult on changes to licence baselines Ofgem indicated a preference for a common model for all the DNs National Grid has agreed to defer application of the modification into the next price control period Ofgem should be able to direct changes to licence baselines then All DNs should be in a position to make the modification Modification to apply to the leakage assessment for 2013/14

AGI Venting Modification National Grid has initiated an IFI Project to quantify Venting from control equipment Key deliverables Establish relationship between venting rate and control system operating pressure for steady-state venting Identify levels of venting in operation Investigate the potential to relate operational venting to telemetered flow and pressure data The viability of this will be assessed when data is available

AGI Venting Modification Data is to be collected from four sites from August 2012 through to March 2013 to identify any seasonal variances As with the LP Service Modification, it is intended to apply the modified venting assessment in the first year of RIIO-GD1 for application to the leakage and shrinkage assessment for 2013/14 Data will be shared to enable other DNs to make the modifications at the same time

Impact on Key Shrinkage Dates Neither modification will apply to the current price control period Shrinkage estimate for 2013/14 Published 31 December 2012 Do we include an estimate of the impact of the two modifications? Accurate estimate of LP Service impact could be available Accurate estimate of AGI unlikely

Impact on Key Shrinkage Dates Shrinkage estimate for 2014/15 Published 31 December 2013 Consultation and Ofgem decision on both modifications expected to be complete 2013/14 Leakage and Shrinkage Assessment Published 31 July 2014

Key Dates Autumn 2012 – Establish relationship between steady-state venting and control system operating pressure From Autumn 2012 – Model validation with recorded venting rates over winter period Spring 2013 – Project complete Spring 2013 – Formulate Consultation and discuss at Shrinkage Forum Spring 2013 – Formal Consultation Summer 2013 – Ofgem decision