Development Work Group 194 Overview of RbD Verification 27 March 2008

RbD Verification – Background Purpose RbD Verification was one the assurance activities to support the introduction of RbD in 1998 Designed to give a view as to whether RbD gives the same results as Meter Point Reconciliation within a statistical tolerance How Verification uses the “Domestic Monitor Panel” of customers maintained by British Gas Customers read their meter every week, submit reads monthly Verification calculates actual consumption from those reads Compares actual energy consumed against amounts billed via Commodity and RbD for those customers Scales up the results to match each LDZ mix of sites and calculates a total difference in kWh per LDZ

RbD Verification Outputs Comparison of actual v. billed by customer by month Commodity RbD LDZ LDZ LDZ DMP LDZ KWh Actual total KWh Billed total Explanatory items Remaining imbalance table

Verification – Explanatory Items Initial imbalance is adjusted for items which are: not present in the sample not yet processed via invoices Phasing by month unknown – totals only available

Current adjusting items Domestic Monitor Panel scaled up, plus … Unavoidable items not in sample Unidentified Theft of Gas (downstream) Late confirmed sites (orphaned energy) Historic known issues which cannot be corrected, not present in the sample, e.g. Threshold crosser exclusions (Mod 640) LDZ/postcode discrepancies Inter-LDZ unmetered transfers Total billing via Commodity/RbD, less … Timing issues, e.g. Unprocessed LDZ Reconciliations Unprocessed financial adjustments (duplicates) Threshold crosser adjustments not yet processed Annual Shrinkage adjustment not yet processed Initial graph Difference after adjusting items is the remaining imbalance

Latest RbD Verification slides – December 2007 Data available up to September 2007 National figures only reproduced (LDZ level shared with RbD Sub-Group) Statistical confidence levels: +/- 1.3% nationally Typically +/- 2.5% per LDZ Next update due at RbD Sub-Group, 8 April 2008

National Verification Update – 4 year History

RbD Imbalance – 4 year History Note: Items removed as a result of move to 4 year analysis include Temperature and Pressure Adjustments, Threshold Crossers 2000 to 2003 and Historical Shrinkage Adjustment

RbD Imbalance continued – 4 year History

Imbalance Breakdown – 4 year History .