Transmission Workstream – 6th July 2005 Incremental Entry Capacity Release Methodology Statement Review 2005 - Update Transmission Workstream – 6th July 2005

Investment Lead Time – Industry Views Desire for certainty pre-auction to understand implications of any bids Where not physically possible to deliver capacity within 3 years sensible not to expose NGT/industry to risk of large buy-back costs Clarity on circumstances in which Transco NTS would use any pre-auction flexibility

Revised IECR Proposal Removed post-auction process Retained some flexibility pre-auction for exceptions, not the norm apply where normal timescales on consenting and construction process very unlikely to hold Consider that UNC Mod Proposal required to ensure consistency B2.2.2(c) – Modify annual invitation requirements so do not have to offer “not less than 150% of baseline” for relevant period Considering other changes consistent with desired principle of providing clarity pre-auction….

Restriction on offering for sale unsold entry capacity - Proposal Limit offering for sale unsold entry capacity under B2.1.5(c) where Transco NTS assesses significant risk that unable to physically deliver all or part of the unsold capacity if allocated; and expectation that previously allocated capacity would need to be bought back at same entry point Avoid NGT/industry exposure to potentially high buy-back costs