Application of User Pays Principles to Existing Service Lines 22nd November 2006

User Pays Criteria for Existing Services  The key stakeholder of a service line is the party who has the most interest in the way the service operates.  The key stakeholder is not necessarily  The recipient of the output from the service line or  The owner of the obligation.  Criteria for applying user pays arrangements to an existing service:  The key stakeholders are Users and  Users have discretion on whether to use the service and  [Users have discretion on how to use the service and]  The cost of the service line is usage dependent.

User Portfolio Report  User portfolio report (Part 3 – 35).  Criteria  The key stakeholders are Users -  Users have discretion on whether to use the service -  The cost of the service line is usage dependent - ?  Issues  Not sending a report may be more expensive than sending to all.

Supply Point Information Services  Provision of relevant data to gas shippers or their agents or non-domestic customers of a gas supplier or persons acting on their behalf (Part 2 – 8).  Criteria  The key stakeholders are Users -  Users have discretion on whether to use the service -  The cost of the service line is usage dependent -  Issues  Internet Access to Data is largely fixed cost.  Different approach for different aspects of a single service line.

Record Meter Reference Number  Record the number for a New Supply Meter Point on the Supply Point Register. (Part 1E - 18).  Criteria  The key stakeholders are Users -   Users have discretion on whether to use the service -   The cost of the service line is usage dependent - ?  Issues

Must Reads  Notify user and obtain meter read following failure by user to provide valid meter read for a monthly read meter. (Part 1E – 16).  Criteria  The key stakeholders are Users -  Users have discretion on whether to use the service -  The cost of the service line is usage dependent -  Issues  A charge is already made.

SPA Data From iGTs  Validation of relevant supply point administration data submitted to a network operator by a connected system operator or independent gas transporter in relation to an NDM CSEP. (Part 1E - 12).  Criteria  The key stakeholders are Users -   Users have discretion on whether to use the service -   The cost of the service line is usage dependent -  Issues

User Admission  Coordinate admission requirements for an applicant user. (Part 1E – 1).  Criteria  The key stakeholders are Users -  Users have discretion on whether to use the service -  The cost of the service line is usage dependent -  Issues  Could include provision of IX equipment (Part 3 – 8)

Energy Balancing  Credit Risk Management and Cash Collection. (Part 1D).  Criteria  The key stakeholders are Users -  Users have discretion on whether to use the service -   Users have discretion on how to use the service - ?  The cost of the service line is usage dependent -  Issues  Transporters have a strong interest in the financial incentives to balance the system.  Unlikely to provide incentive to manage costs imposed on xoserve.

Invoicing  Submission of supporting data for Invoice Documents. (Part 1C - 4).  Criteria  The key stakeholders are Users -  Users have discretion on whether to use the service -   The cost of the service line is usage dependent - ?  Issues  Not sending supporting information may be more expensive than sending to all.

User Provisional Annual Quantity  Respond to notification of User Provisional Annual Quantity. (Part 1B - 17).  Criteria  The key stakeholders are Users -  Users have discretion on whether to use the service -  Users have discretion on how to use the service -  The cost of the service line is usage dependent -  Issues

Retention of Meter Reads  In relation to NDM Supply Meters maintain a record of valid Meter Readings for no longer than 5 years. (Part 1B - 5).  Criteria  The key stakeholders are Users -   Users have discretion on whether to use the service -   The cost of the service line is usage dependent -   Issues

Query Management  Standards of service query management. (Part 1A - 25).  Criteria  The key stakeholders are Users -  Users have discretion on whether to use the service -  Users have discretion on how to use the service -  The cost of the service line is usage dependent -  Issues

Supply Point Nomination  Respond to Supply Point Nomination. (Part 1A - 3).  Criteria  The key stakeholders are Users -  Users have discretion on whether to use the service -   Users have discretion on how to use the service -  The cost of the service line is usage dependent - ?  Issues

Summary of User Pays Analysis (1) User is StakeholderGT is Stakeholder User Pays Applicable Transportation Charge 1A – Provide and Maintain a Supply Point Register Manage Supply Point Register Provide Query Management Record, submit data in compliance with UNC 1B – Recording & Calculating Transportation Volumes Metered Volume & Quantity Annual quantity, DM supply point capacity and offtake reviews. 1C – Provision of Transportation and balancing invoices.

Summary of User Pays Analysis (2) User is StakeholderGT is Stakeholder User Pays Applicable Transportation Charge 1D – Energy Balancing 1E – Other SPA Services User admission & termination Connected System Exit Points NExA Supply Meter Points Must Reads Generation of a supply meter point reference number. 1F – Demand Estimation Services.

Summary of User Pays Analysis (3) User is StakeholderGT is Stakeholder User Pays Applicable Transportation Charge 2 – Provision of services in relation to obligations under GT licence. 3 – Other ServicesUK Link services Provision of User Reports and Information. Network Operator and User relationship management. Data flows to Network Operators. 4 – AT Link & RGTA systems services (Gemini).

User Pays Analysis Caveats  Not all individual service lines are appropriate for user pays, even within a user pays category.  Service lines identified as user pays candidates can have a significant fixed cost element.  It’s likely that if a materiality criteria were to be applied, the number of user pays service lines would reduce.