Proposed Agreement For Identification And Administration Of Unregistered Sites Chris Warner Network Code Manager

2 Unregistered Sites  An “Unregistered Site” is:  new Meter Point Reference Number in Transporters’ Supply Point Register (SPR)  no User Registration (or prior registration) in SPR  legitimate status where no gas is flowing (usually ‘siteworks’ in process)  illegitimate status where gas is being consumed i.e. potential that gas has been illegally taken whilst in the course of conveyance  no supply contract between supplier and consumer (NB: Ofgem has the view that a Supply Contract is not ‘valid’ if there is no User Registration in SPR)  socialised risk (energy reconciled via RbD)  Shipperless Sites are not within scope of this agreement

3 Transporter Obligations  Transporters Licence Condition 7 obligations  to investigate where it appears gas is taken whilst it is ‘in the course of conveyance’  to use reasonable endeavours to recover the value of the gas taken in such circumstances (Gas Act Sch 2B provides legal ability to do so)  ‘ in the course of conveyance’  where a supply contract (or a deemed supply contract) is in place, any point upstream of the ECV  where there is no supply contract (or deemed supply contract) is in place, at any point

4 NGD / BGT Agreement (Pilot) – BGT to Provide Service on behalf of NGD  information from existing xoserve Unregistered Sites (“Orphaned”) reporting  for ‘shipper activity’ MPRNs, relevant shippers have confirmed ‘no interest’ or not responded to request  undertake investigation (LC7) on behalf of NGD to  establish whether gas is being consumed  establish if a supply contract is in place  BGT to comply with requirements in respect of treatment of vulnerable customers  if gas is being consumed and there is no supply contract in place  use reasonable endeavours (LC7) on behalf of NGD to recover the value of the gas costs (NB no investigation costs)  notify consumer that it must enter into a supply contract with a supplier  possible future service to undertake disconnection on behalf of NGD where instructed to do so by NGD

5 BGT Service – Treatment of Cost and Revenues  Value of gas costs recovered by BGT on behalf of NGD are returned to NGD  NGD pays BGT for investigation and cost recovery services  BGT charges required to be reasonable and cost reflective  NGD treats revenue recovered and investigation and costs recovery charges in accordance with Licence Condition 7(3) Scheme  Changes made to Licence “Transportation Revenue” to maintain revenue neutrality

6 BGT Service – Status  Ofgem is aware of proposal and following various challenges dialogue has taken place to ensure arrangement is acceptable  NGD and BGT intends to commence pilot as soon as possible  bilateral arrangements to be finalised  operational processes/interfaces to be concluded

7 BGT Service – Next Steps  Costs and revenues to be monitored on an ongoing basis  Pilot likely to commence Q and last 12 months  At this point review to be conducted and decision taken on whether to extend duration of arrangement  Potential success criteria  volume of consequential User registrations  proportion of invoiced charges recovered  extent to which costs recovered exceed service charge  residual theft detection

8 BGT Service – Next Steps  Comments?  To National Grid/BGT  To Ofgem