1. Genuine Reconciliation
Distribution Workstream
23rd October 2008

2. Background Modification Proposal 228
Raised on 8th October
Contains element of ‘Genuine Reconciliation’
Reflects fact that LSP AQs are reducing at a faster rate than SSP AQs

3. AQ impact on reconciliation
Initial Allocation of Gas is based on AQ values, scaled to match the total consumed.
If AQs were all accurate then no reconciliation would take place
If AQs are equally inaccurate then no reconciliation would take place
If AQs in one market are more or less accurate than the other then reconciliation will occur.

4. Site by Site Reconciliation
At a site level AQs will be higher or lower and this will always generate reconciliations.
However, these reconciliations should ‘net-off’ if the aggregate AQ was correct in the first allocation.

5. Change between 06/07 and 07/08 Modification 0081 data shows that;
LSP AQs reduced from 156.6TWh to TWh between the two gas years
SSP AQs reduced from 553.7TWh to 527.5TWh during the same period
Therefore LSP AQs are dropping at a faster rate

6. Methodology

7. Worked Example
(27.956% %) x TWh = TWh.