1. 7 th October 2010 energynetworks.org 1 PRESENTED BY Andrew Pace, WSC CHAIR Workstream C Long Term Products Common Methodology Group Work

2. energynetworks.org 2 WorkStream C – CDCM (1) Reviewing User Guide Agreeing detail on CDCM inputs Frequency of update Time period over which inputs are derived Some data will be smoothed over 3 years: Load Factors Coincidence Factors Peaking Probabilities Split of rate 1 & 2 units by distribution time band Notice period for changing timebands Ensuring DNOs are using common assumptions CDCM Methodology that is currently in the user guide will be put into DCUSA and become subject to open governance. 7 th October 2010

3. energynetworks.org 3 WorkStream C – CDCM (2) CDCM Annual Review Pack Produce 5 year of CDCM inputs DNOs to provide commentary and assumptions behind the CDCM inputs To highlight any changes timebands Suppliers to produce tariffs To be issued in December 2010 7 th October 2010

4. WorkStream C – EDCM (1) EDCM Volatility Analysis produced for September 2010. – on ENA website Based on LRIC/FCP version used for notional Sep submission (not expected to change) Based on Demand Scaling option 25 used for notional Sep submission (currently on option 30) 4 7 th October 2010

5. WorkStream C – EDCM (2) EDCM Volatility Analysis: Marginal Charges Volatility LRIC / FCP Base Case LRIC / FCP High/ Lo scenarios (+/-3% load data) Demand Scaling Volatility Addition of 3 demand customers of different sizes Addition of typical generator 5 7 th October 2010

6. WorkStream C – EDCM (3) EDCM Volatility Analysis: 7 prices produced for each customer Data summarised by DNO and on a national basis. Analysis consisted of: average % impact on charges No. of customers experience price disturbance with different % bands Average impact for groups of customers. 6 7 th October 2010

7. WorkStream C – EDCM (4) 7 7 th October 2010 Average impact – Demand Customers Base case 0.0% All loads up 3 per cent 0.4% All loads down 3 per cent -2.4% Dummy demand customer 1 - Large user -1.6% Dummy demand customer 2 - Medium user -0.3% Dummy demand customer 3 - Small user 0.0% Dummy generator - Medium size 0.0%

8. WorkStream C – Next Steps EDCM Continue to undertake further volatility analysis CDCM Finalise annual review pack Determine DCUSA change mods and submit to COG subgroup Update and issue user manual 8 7 th October 2010