MOD 0351 - Deemed applications – User pays initial thoughts. Transmission Workstream 6 January 2011 Transmission Work stream 2 December 2010

MOD 0351 - Background Discussed at July/August 2010 workstream General support Potentially benefits all NTS Exit (Flat) Capacity holders by amending the rules for deemed applications Where NTS Exit (Flat) Capacity holders have multiple deemed applications at an NTS Exit Point Some benefit for National Grid NTS Clearer investment signals

User pays MOD 0351 is a User pays proposal Changes to xoserve systems Costs around £40 to 80k if included in Exit Phase 3 IS release MOD is unique (to date) for a non-zero cost User pays proposal in that: All NTS Exit (Flat) Capacity holders potentially benefit i.e. potentially benefits DNO and Shipper Users equally Current User pays arrangements require apportionment of costs to Shipper Users and Transporters separately

National Grid NTS view Need to demonstrate appropriate apportionment of costs to all parties benefiting from the proposal Proposed apportionment is one based on each User’s (Shipper and DNO) NTS Exit Capacity holdings as at 1st October 2012 Transporter apportionment of costs based on: 10% of total costs apportioned to National Grid NTS Remaining 90% pro-rated between Shipper and DNO Users Based on ratio of aggregate DNO Users NTS Exit (Flat) Capacity holdings to aggregate Shipper Users NTS Exit (Flat) Capacity holdings Resulting DNO User proportion is added to the 10% NTS allocation to form the total “Transporter” User Pays allocation of costs Example follows...

User pays apportionment example Based on Users current NTS Exit (Flat) Capacity holdings (1st October 2012)