1. Review Group Action 012
27 November 2008

2. RG0221 – 012 Option C & Interim Arrangements.
Option C: Security is needed for any capacity currently allocated to the User.
Advantages & Disadvantages were identified as:
Advantages:
Would affect the balance of risk between Users and community in the community’s favour
Treats all Users the same
Crystallises and quantifies current socialised risk
Disadvantages
Sudden increase in industry wide requirement to provide security may require delayed implementation for Security Instrument Providers to provide instruments required and for National Grid to assess them.
Some Users may not be able to comply with new arrangements and may face increased risk of failure or sanctions.
There is an assumption that for future QSEC Auctions all security arrangements will be in place within 28 days of Capacity Allocation.

3. RG0221 – 012 Options for Interim Arrangements
Following Approval of Modification Proposal by the Authority the new security arrangements are put in place to take effect before the next QSEC Auction, i.e. to be effective for September 2009 or March 2010 auctions (Mod 230).
What needs to be done to overcome disadvantages described on previous slide?
Could Users get security in place in, say, 6-9 months?
If security required in this period would an EBCC type arrangement (limited duration) be effective to try and mediate risks to Users/Community and could it be created / implemented in the same timescale, i.e. 6-9 months?
Who would sit on this committee, what would its remit be e.g. sanctions, and would there be an appeal route?
Following Approval of the Modification Proposal by the Authority the new security arrangements are put in place to take effect after the next QSEC Auctions, i.e. 2010, 2011, 2012…..
What would the appropriate lead time be that would balance the risk on Users of having to put arrangements in place and that of giving such a long lead time that the current risks to the Community are not dealt with?
Should introduction of the new arrangements be phased to cover capacity released in previous auctions? (Example schedule on next slide)

4. RG0221 – 012 Options for Interim Arrangements (2)
QSEC Auction Timings
Capacity Release Period
Arrangements Introduced
Date of Introduction
January 2003
Oct 2004 – Sep 2017
Phase 1
What is appropriate timing?
September 2003
Apr 2005 – Mar 2020
February 2004
September 2004
Apr 2006 – Mar 2021
Phase 2
Sept – Dec 04 (MH Only)
November 2005
Apr 2007 – Mar 2022
September 2006
Apr 2008 – Mar 2023
Phase 3
September 2007
Apr 2009 – Mar 2024
September 2008
Apr 2010 – Mar 2025