Moving the QSEC and AMSEC Auctions Update

2  Presented proposal at October Workstream  Questions / suggestions received, mainly around  Over & Under recovery and interaction with formula year  Timing of implementation / no 2009 QSEC  Linkages between the three elements of proposal  As a result, the proposal was re-worked (taking the above into consideration) and issued via JO on 8 October  Mod Panel referred back to Workstream for one month for further development (in line with National Grid NTS’ recommendation)  Would welcome your suggestions / questions

3 Updates to the proposal  Now proposing that AMSEC be moved to June (rather than August)  Avoids summer holiday period  Mitigates concerns around over/under recovery as allows for actual auction revenues to feed in to 1 October charge setting (rather than estimation)  No 2009 QSEC  Implementing the proposal from April 2009 provides for a timely transition to the new auction timings  Reasoning has been clarified in the proposal  Link between three elements (moving QSEC, moving AMSEC and changing Capacity Year) of the proposal  National Grid NTS believes that all three elements must be delivered to achieve desired effect of proposal – this has been clarified in the proposal

4 Next Steps  Welcome your comments / suggestions / questions  Will recommend progressing to consultation at November Mod Panel  National Grid NTS believes it would be beneficial to know Ofgem’s decision on the proposal before the February AMSEC to provide certainty on when Shippers will next have an opportunity to procure capacity after the February ’09 AMSEC  Therefore suggesting a shortened consultation of 10 days, allowing FMR to be submitted to Mod Panel and Ofgem before Christmas Questions?