1. CVA Presentation to Energy Balancing Committee 25 May 2007 by John Fitzpatrick & Peter Collins

2. Agenda –Objectives of the claims validation process –Organisations –Claiming gas –Rules for balancing claims –Claims validation timetable –Disaster recovery

3. Objectives of CVA –Provide the information necessary for National Grid to allocate NTS (National Transmission System) charges to shippers/traders based on actual gas flows into the NTS Objectives of CVA

4. Organisations involved CVSL Shippers/TradersCVA National Grid Producers

5. Claim made by shipper/trader Claim is checked by agent –matched to National Grid information –matched to producer information –matched to other shipper information Balancing rules applied Claim is validated Validated claim notified to National Grid How is gas claimed?

6. Producers: (D+3) –Gas flow day –Sub-terminal –Amounts in kWh (A) Allocated Entitlement (B) Upstream Acquisitions and Disposals (C) Disposals to CVSA Principals (D) Amount retained as CVSA Principal Daily Entitlement Statements

7. Shippers/Traders: (D+5) –Gas flow day –Sub-terminal –Transactions Transaction type (Base,Purchase,Sale) Counter party Amount (kWh) –Total daily claim quantity (B+P-S) Daily Activity Logs

8. Trade Validation - Rule 1 When the parties to a trade disagree on the amount of gas sold, the sale amount should be used (“seller wins” rule)

9. Trade Validation - Rule 2 When a Shipper/Trader has insufficient gas to meet its sales obligations, its sale will be scaled down accordingly

10. Trade Validation - Rule 3 Where a Shipper/Trader has its sales scaled down, the ‘seller wins’ rule (Rule 1) shall be applied to the affected parties

11. Base Quantity Validation - Rule 1 Gas claimed cannot exceed the delivery quantity at any sub terminal

12. Base Quantity Validation - Rule 2 Rights to base quantity gas can be protected if a producer can substantiate your claim

13. –Delivered quantity (D+1) –Daily Entitlement Statements (D+3) –Daily Activity Logs (D+5) –Validation by Agent (D+5 to D+7) –Validated claims submitted to National Grid via Gemini (D+7 ) –Interim upload by Agent (1 st & 2 nd working day of the month) Validation timetable

14. –Revisions to Daily Entitlement Statements –Revisions to Daily Activity Logs –Validation by Agent Revision timetable (daily after D+7)

15. –Deadline for revisions to Daily Entitlement Statements (M+10) –Deadline for revisions to Daily Activity Logs (M+12 12:00 pm) –Final revisions (M+13 to M+15) –Final validated claims submitted to National Grid via Gemini (M+15) Close out timetable

16. Agenda –Objectives of the claims validation process –Organisations –Claiming gas –Rules for balancing claims –Claims validation timetable –Disaster recovery

17. Disaster Recovery Systems Remote DR Site with full capability Back Up Routine –Log shipping to DR site every 5 mins via VPN –Database backed up to tape on a daily basis –Tapes rotated on a 7 day cycle Back up internet connection at Cambridge for VPN Servers on UPS CLAIM2 website hosting at main and DR locations Phones & Faxes can be diverted to any location GMSL has 24 hour IT Network support

18. Disaster Recovery Event Short term system outage CVA team access DR servers from main site CVA team relocate to DR site Recent Outage - Inconsistency between a table in the web admin system and the processing table which subsequently affected the system’s data transfer functionality. Outage < 24 hours CLAIM2 software run live for 6 years CVA process 11 years with no missed deadlines