Gas Long Term Vacant (LTV) Proposal April 2010 Karen Kennedy ScottishPower ScottishPower, Energy Retail

Background There are approximately 700k homes unoccupied, 300k vacant for more than 6 months in England alone Gas Shippers are unable to effectively reduce their settlement and transportation cost exposure to these sites – presenting a commercial exposure: An AQ for a site can only be amended through obtaining meter readings A Shipper cannot gain access to the site to obtain meter readings The Shipper has no redress to change the AQ of the site to reduce costs MOD196 has been introduced in electricity to address the settlement risk ScottishPower, Energy Retail

It is proposed that a gas equivalent of MOD196 is developed……….. Proposal for gas It is proposed that a gas equivalent of MOD196 is developed……….. PRINCIPLE: Allows Shipper to classify a site as Long Term Vacant (LTV) and asks Xoserve to set the Annual Quantity (AQ) to one for settlement Should the AQ be set to 1? Are there planning issues for the Transporters from such a proposal? Will the capacity still be available if/when the site needs to have the AQ re-instated? ScottishPower, Energy Retail 3

Proposal for gas TO QUALIFY: The Shipper must have received two RVV02 flows with validation code E126 (“vacant premises”) and these must be more than three calendar months, but less than seven months, apart RVV02 is the proteous flow – do other codes need to be catered for? Is three months sufficient to determine the site as vacant? Does a seven month interval give enough monitoring to ensure that costs are re-allocated when a site is no longer vacant? ScottishPower, Energy Retail 4

Proposal for gas EXCLUSIONS: The site should not be classed as LTV if: any other validation code is received between “vacant premises” notices the Shipper receives any other valid flows containing register reading data there is any indication of consumption at the site How can it be assured that all flows received by the Supplier are forwarded to Xoserve? Are there other means of monitoring the status at a site? ScottishPower, Energy Retail 5

……….. and that adequate safeguards are put in place Ongoing management of gas LTVs ……….. and that adequate safeguards are put in place The Supplier must proactively attempt to obtain meter readings and retain a record of these attempts: extra attempts to contact the owner e.g telephone, post, e-mail attempting to contact the local estate agent or local authority where dual fuel by checking for a similar pattern with electricity consumption The site must remain live on the Sites and Meters Database, noted as LTV, to qualify as an LTV How do you ascertain that the actions above are being undertaken? Should there be a point where a site can no longer be classed as an LTV and must move to isolation and withdrawal? ScottishPower, Energy Retail 6

Concluding gas LTV status A site ceases to be an LTV where: EITHER One of the exclusions are met: any other validation code is received between “vacant premises” notices the Shipper receives any other valid flows containing register reading data there is any indication of consumption at the site OR The Shipper has not registered an RVV02 flow within a seven month period The Shipper believes that gas consumption has re-started Shipper must then instruct Xoserve to revert to the previous non-vacant AQ value ScottishPower, Energy Retail 7

Safeguards Xoserve would monitor the use of the LTV process and report Shipper usage through the RbD Sub-group It should be considered that there is an auditable process in the electricity market and that this might be used as a corresponding safeguard that the Supplier is acting in good faith Are there any other safeguards required? How would an audit process work? ScottishPower, Energy Retail 8