1. Credit Arrangements – Independent Assessments
Joanna Ferguson

2. Current Arrangements
Current arrangements for utilising Independent Assessment as a means of obtaining unsecured credit contained in UNC Section V3.1.7
Transporter will specify a panel of 3 independent credit rating agencies
User may select from the panel
User allocated an Independent Assessment Score (1-10) used to allocate up to a maximum of 20% of Transporters Maximum Unsecured Credit Limit

3. Current Arrangements (cont.)
The table contained in UNC shows only limited information
Table provides no guidance on how the 1-10 scoring is mapped to the independent rating agencies scoring mechanism
Independent Assessment Score
% Transporters Maximum Unsecured Credit Limit

4. DCUSA Example February 2009 Ofgem directed DCP034 into DCUSA
Introduction of Independent Assessment arrangements
DCP034 included a table similar to that in UNC and also a further table to enable mapping of the Credit Assessment Factor to the scoring mechanisms of 5 independent rating agencies

6. RG252 Discussion Need to ensure that DNs take a consistent approach
Agreed that it is not necessary for UNC to be an exact duplicate of DCUSA
Further consideration required to establish if there are better options available in creating clarity in UNC
Final choice needs to be reasonable and justifiable

7. Options for Discussion
Copy DCUSA table into UNC, retaining the ability of DNs to select a panel of three (including an agency not included in the table) and allowing the user to choose per the current text
Limit the table to 3 agencies which are agreed by all DNs. Lowest rating used to assess unsecured credit limit
Either of the above and also allow the DNs to “cap” the amount of unsecured credit if the recommendation from the agency is lower than the table proposes
Other combinations?