1. An alternative approach…..
We could widen the ‘ARCA’ (advanced reservation of capacity) principles currently applicable to non-UNC parties in exit
The high level principle would be that capacity is reserved following the signature of a bi-lateral contract whilst planning activities are undertaken
The ‘demonstration date’ concept would be retained, whereby the contract can be terminated and the capacity no longer reserved if the project does not progress
Formal user commitment would be made at a defined point following receipt of a Development Consent Order 1

2. Planning and Advanced Reservation of Capacity Agreement (PARCA)
Our alternative approach utilises a bi-lateral contract which incorporates the principles of the existing PCA and ARCA contracts
Signature of the contract would not be mandatory to signal incremental capacity – but provides certainty of overall timeline for both parties and is likely to lead to a more efficient timeline overall because of this
Planning and Advanced Reservation of Capacity Agreement
Pre-Capacity Agreement
1a – need case and technical options
1b – strategic options
2 – Preferred route corridor
3 – Environmental Impact Assessment
Advanced Reservation of Capacity Agreement
Capacity reserved from signature
Demonstration dates and information
Termination where project doesn’t progress 2

3. How it could work
Part 1a of the PCA works takes around 6 months to complete and identifies whether there is existing capability in the system and therefore whether the rest of the PCA activities (1b to 3) are required
If there is no existing capability in the system then a PARCA contract could be used to:
Underpin the work needed to investigate build and non build options to provide that capacity
Reserve capacity whilst these activities are undertaken
Provide ‘drop out’ points which allows the customer to terminate and capacity to be returned to market if they decide not to progress their project
Could be utilised in conjunction with (or used to facilitate) ‘stop-gap’ long term non-firm product 3

4. Kick off PARCA anytime here
Interaction with Mod 373
The initial part 1a work could be carried out in parallel or sequentially with the Mod 373 timeline
It would be the customer’s choice of when to start the 1a phase, but we believe there is an ‘optimal’ point
This optimal point ensures that the customer receives a connection offer and need case/technical options report to consider together
Day 0
3 months
9 months
12 months
15 months
Connection
Application
Simple
Provide
Offer
Accept
Kick off PARCA anytime here
Mod 373
Connex Process
Optimal PARCA
signature date
6 months
Conceptual
Design Study
Feasibility
Study
Conceptual
Design Study
Complex
Connection 4

5. Further development required…
We have been looking at this option as a result of the feedback that the ‘split auction’ approach is potentially too complex
Our thinking is therefore not as far developed as the split auction option
There are a number of questions to be discussed for example:
Should this allow reservation of unsold only (where no incremental required)?
Is an ‘open season’ approach required to let market know when a PARCA is about to be signed?
Interaction with Europe?
But in general, we believe this option has merit 5

6. Way forward Monthly workgroup as part of Transmission workgroup
propose to begin on 5th of July – initially cover outstanding actions
Is monthly sufficient?
A lot of material to cover so which areas to focus on first?