UNC MOD 213: USER PAYS GOVERNANCE ARRANGEMENTS GOVERNANCE WORKSTREAM 19 June 2008 Stefan Leedham

COST ESTIMATE BUSINESS RULES Pre DMR Stage Mod Panel Request limited to type 1/bargain bucket appraisal At DMR Stage if cost appraisal required panel to decide on type of appraisal and determine timeline for production of this To aid panel’s the decision guidelines should be developed GTs also able to make representations to the panel on what they believe should be an indicative timeline If GTs are unable to meet this timetable then they should provide a written explanation to the UNC Panel at the earliest opportunity and no later than 2 business days after the target deadline has passed Different targets for different types of cost appraisals? Panel to set targets dependent on appraisal – in agreement with GTs?

COST ESTIMATE COSTS The cost of providing cost estimates to be funded from a pot of money administered by the Joint Office, with the cost of implemented user pays mods refunded by xoserve upon implementation notice The pot of money at the start of a Gas Year will be £200,000 and will be funded by Transporters based on their funding of xoserve Upon implementation of this proposal the value of the pot will be calculated pro rata based on how far through the Gas Year the proposal is implemented Provides control measure for cost estimates approved by panel Similar to funding arrangements in electricity Covers Shipper and GT mods Could make use of the accumulation mechanism

IMPLEMENTED COST ESTIMATE COSTS For all User Pays proposals implemented by Ofgem the cost of providing a cost estimate will be recovered as an overhead cost of xoserve smeared across all xoserve services on an annual basis Costs of providing cost estimates should be viewed as business as usual Could make use of accumulation mechanism Similar to commercial arrangements

WAY FORWARD Next Steps Stefan.leedham@edfenergy.com 0203 126 2312 Produce and agree final set of business rules Complete development workgroup report Stefan.leedham@edfenergy.com 0203 126 2312 07875 118024

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