1. DNPC03 CONSULTATION PAPER LDZ System Charges Capacity/Commodity Split and Interruptible Discounts

2. The Proposals
Change the LDZ system charges target capacity/commodity split from 50:50 to 95:5
Introduce partial capacity charges for Interruptible supply points (This will need UNC Mod to introduce)
Implementation date April or October 2008
The proposal the DN are putting forward is to change the customer charge for the 0 – 73 MWh loadband from a commodity based charge to a capacity based charge.
Implementation date of 1st April 2007 – reason will be explained later in presentation.

3. Why Change the Cap/Com Split
Improve Cost Reflectivity
Improve the stability of charges
Improve competition

4. Why Capacity Charges for Interruptibles
Currently Interruptibles receive discounts of approx 50% of the LDZ system charges
If the capacity element of these charges is increased to 95% the discount would increase to 95%
Proposal is designed to maintain the discount at its current level

5. Charge Adjustment Factors
Commodity Capacity
Eastern
London
North West
West Mids
Scotland
Southern
Wales&West
Northern

6. Questions for Consultation
Change the LDZ system charges target capacity/commodity split from 50:50 to 95:5 ?
Introduce partial capacity charges for Interruptible supply points ?
Implementation date April or October 2008 ?

7. Responses Responses should be sent to enquiries@gasgovernance.com
By close of play on Tuesday 28 August 2007