QSEC auction timetable Transmission Workstream 6 Dec 2007

Proposal To bring the QSEC auction forward (on an enduring basis) from September to April Why April? A number of Shippers provided feedback in August suggesting that the September ’07 QSEC be postponed to April ’08 to provide an immediate opportunity to bid against the new baselines. Would align to normal capacity release timings. Currently the capacity release date is April 2010, shippers generally do not want capacity from April. By holding the QSEC auction in April, National Grid NTS can potentially release capacity from October ’09. 2

Proposal Why April? Greater notice of any required incremental capacity, potentially providing further time to complete the required investments and reduce the risk of failing to make the capacity available by the required delivery date Potential to reduce the requirement to request for an extension to lead times for the delivery of incremental capacity It will help National Grid NTS to obtain and manage efficiently any incremental signals received from the long term auctions Aligns with TBE process 3

Timing The proposed mod & timing is intended to align with the conclusion of the baseline re-consultation (01/04/08) If there is a slight delay to the baseline re-consultation i.e. baselines are implemented for the 01/05/08, we believe that for 2008 it would still be possible to run the QSEC auction in May whilst still releasing capacity from the 01/10/11. 4

Proposed UNC mod timeline Draft mod presented to work-stream 06/12/07 Mod sent to panel 20/12/07 Proposal issued for consultation 21/12/07 Closeout for reps 16/01/08 Final Mod Report issued by JO 17/01/08 Mod panel decide upon recommendation 07/02/08 Ofgem decision expected 07/03/08 Proposed implementation date 10/03/08 5