1. Shipperless & Unregistered Workgroup Friday 15 th March 2013

2. Agenda  Introduction  Previous actions  Statistical Information  Overall industry volumes  S&U Population ‘Pot’ Priorities  S&U Sites – DN Update  Desktop Investigation / End User Letter Trial Proposal  MPRN Creation Workgroup  MPRN Creation Process change ~ Update  A.O.B.

3. Previous actions Ref.DescriptionActionStatus 136 All to investigate the impact of the proposed MPRN Creation Process change on their organisations’ systems and processes and feedback any issues for the next Workgroup meeting. AllC/Fwd 137 All Networks to investigate examples of MPRNs set to DE in error. Update 5 th December – Networks had nothing to report on this matter. All NetworksC/Fwd 127 All Distribution Network representatives to discuss possible future Xoserve end user letter exercises. Update 19 th September – DNs are in agreement that the resurrection of the EU Letter Process would be worth while. However, a firm detailed decision has not yet been made. All DNs to engage with Xoserve to finalise decision. Update 5 th December – Networks stated that they would favour further desktop investigations. However, they would engage with Xoserve to discuss the possibilities of reintroducing the End User Letter process. All DNsC/Fwd 138 Xoserve agreed to republish the slides which described when a new MPRN would need to be created. XoserveOpen 139Xoserve to investigate if UIPs can have access to Data Enquiry.XoserveOpen 140 Xoserve agreed to conduct analysis on a sample of 25 MPRN Creations to determine if any were created as a result of an MPRN being erroneously set to DE. XoserveOpen 141 Xoserve to consider different ways of presenting the Industry Statistics to demonstrate the levels of priority of the various pots. XoserveOpen 142 DNs to consider what actions they could complete to meet the requirements following the Desktop Data Cleansing Exercise conducted by Xoserve. All DNsOpen

4. Statistical Information

5. Overall Industry Volumes Unregistered SitesJan-12Mar-12May-12Jul-12Sep-12Nov-12Jan-13 Shipper Activity376398360279302292279 Orphaned TOTAL14,84515,02315,13815,26315,44515,76716,077 With Meter6331 (42.6%)6443 (42.9%)6442 (42.6%)6504 (42.6%)6591 (42.7%)6735 (42.7%)6855 (42.6%) Shipperless Sites - Shipper (PTS) GSR1,3171,3461,1101,0621,0239751,013 GSS9031,0151,003919845113205 Shipperless Sites - Industry (SSP)4,6574,7814,9574,9854,9774,7814,898 No Activity1,4081,1991,2911,2901,3871,4331,587 Legitimately Unregistered32,65333,32933,75834,30734,90335,22436,924 Meter Point created less than 12 months 27,72828,55528,08428,97529,65929,84828,816 TOTAL82,98484,63184,69886,16187,69688,32089,564

6. Overall Industry Volumes Excluding Legitimately Unregistered Unregistered SitesJan-12Mar-12May-12Jul-12Sep-12Nov-12Jan-13 Shipper Activity376398360279302292279 Orphaned TOTAL14,84515,02315,13815,26315,44515,76716,077 With Meter6331 (42.6%)6443 (42.9%)6442 (42.6%)6504 (42.6%)6591 (42.7%)6735 (42.7%)6855 (42.6%) Shipperless Sites - Shipper (PTS) GSR1,3171,3461,1101,0621,0239751,013 GSS9031,0151,003919845113205 Shipperless Sites - Industry (SSP)4,6574,7814,9574,9854,9774,7814,898 No Activity1,4081,1991,2911,2901,3871,4331,587 Legitimately Unregistered32,65333,32933,75834,30734,90335,22436,924 Meter Points created less than 12 months 27,72828,55528,08428,97529,65929,84828,816 TOTAL50,33151,30250,94051,85452,79353,09652,640

7. Overall Industry Volumes Excluding Legitimately Unregistered and MPs Created < 12 Months Unregistered SitesJan-12Mar-12May-12Jul-12Sep-12Nov-12Jan-13 Shipper Activity376398360279302292279 Orphaned TOTAL14,84515,02315,13815,26315,44515,76716,077 With Meter6331 (42.6%)6443 (42.9%)6442 (42.6%)6504 (42.6%)6591 (42.7%)6735 (42.7%)6855 (42.6%) Shipperless Sites - Shipper (PTS) GSR1,3171,3461,1101,0621,0239751,013 GSS9031,0151,003919845113205 Shipperless Sites - Industry (SSP)4,6574,7814,9574,9854,9774,7814,898 No Activity1,4081,1991,2911,2901,3871,4331,587 Legitimately Unregistered32,65333,32933,75834,30734,90335,22436,924 Meter Points created less than 12 months 27,72828,55528,08428,97529,65929,84828,816 TOTAL22,60322,74722,85622,87923,13423,24823,824

8. S&U Population ‘Pot’ Priorities

9. S&U Pot Priorities  Xoserve has assigned priority ratings to each of the S&U pots  Two priorities ratings have been assigned  Primary priority; applied to the fresh datasets that are issued on a bi-monthly basis.  Secondary priority; applied on an ongoing basis, for continuous work to reduce the overall population  The ratings were mainly based on the apparent ability to consume gas

10. Pot Descriptions and Trends Unregistered Sites Current Volume 12-month Trend DifferenceDescription Shipper Activity 279 Down68.54% Reports are issued to the specific shippers containing MPRNs for which an activity has been identified. E.g. Confirmation rejection, Meter asset update to the C&D store, Conquest raised to create the M Number, End User. These reports only include MPRNs > 12 months from creation date. Orphaned With Meter 16,077 Up3.13% This report is sent out to the whole industry. Records include MPRNs either following a shipper's response to the shipper activity report, that they have no further interest in the M Number, or where no response is received before the production of the next Bi monthly report. They include sites where a service has been completed and in some instances a meter already installed. This report only includes MPRNs > 12 months from creation date. TOTAL 6855 (42.6%) Up5.14% Shipperless Sites - Shipper (PTS) GSR 1,013 Down27.94% These contain sites which have previously been confirmed with meter removed. Information provided by the Networks suggests either the existing meter still on site or a new meter has been fitted. Shipperless Sites - Industry (SSP) 205 Down2.93% No Activity 4,898 Up2.51% These contain meter points created on UK Link where no shipper activity has been recorded and that remain unconfirmed. Legitimately Unregistered 1,587 Up9.86% These contain sites which can represent one of the following reasons: Vacant sites; No Gas meter but live service; Service still in planning stage Meter Point created less than 12 months 36,924 Up12.37% These figures provide details of meter points that have not reached the first anniversary of their creation date and remain unconfirmed. TOTAL 28,816 Up8.64% Not included in Total Figures

11. Primary Pot Priorities Unregistered SitesInitial PriorityJustification Shipper Activity1 Records within this pot have been associated with a particular shipper. It is important that the shippers thoroughly investigate records issued to them as soon as possible while the inforamtion is "fresh" to ensure that they do not fall into the Orphaned Pot unnecessarily. Orphaned With Meter3 This section of the S&U population should be treated with priority as intelligence suggests that the site is capable of using gas, and a meter has been reported to be in situ. TOTAL5 The remainder of the Orphaned Pot should be addressed as a second priority. However, it is recommended that this pot should be broken down further to form sub-pots defined by the record's original pot. Shipperless Sites - Shipper (PTS) GSR 2 Records within this pot remain on the specific shippers' reports until they have confirmed the MPRN. They should be investigated as a high priority as the networks have identified that the site is capable of consuming gas, and that the meter on site is the one that the previous shipper has purported to have removed. Shipperless Sites - Industry (SSP) 4 Records within this pot should be investigated as a high priority as the networks have identified that the site is capable of consuming gas. No Activity 6 MPRNs in this pot have had no activity since their creation. Therfore it is not certain that gas is being consumed on these sites. Legitimately Unregistered 8 Recent analysis of the Legitimately Unregistered Population increased confidence that the MPRNs in this pot were correctly categorised. Meter Point created less than 12 months 7 Previous analysis has shown that <80% of MPRNs are confirmed within 12 months of creation through normal means.

12. Secondary Pot Priorities Unregistered Sites Overall Priority Justification Shipper ActivityN/A Records within this pot are automatically included in the Orphaned pot in the next reporting run if they are not confirmed or set to EX or DE. Orphaned With Meteri This section of the S&U population should be treated with the highest priority as intelligence suggests that the site is capable of using gas, and a meter has been reported to be in situ. TOTALii The remainder of the Orphaned Pot should be addressed as a second priority. However, it is recommended that this pot should be broken down further to form sub-pots defined by the record's original pot. Shipperless Sites - Shipper (PTS) GSR iiiRecords within this pot remain on the specific shippers' reports until they have confirmed the MPRN. Shipperless Sites - Industry (SSP) ivRecords within this pot remain on the reports until they have been confirmed. No Activity N/A Records within this pot are automatically included in the Orphaned pot in the next reporting run if they are not confirmed or set to EX or DE. Legitimately Unregistered v Recent analysis of the Legitimately Unregistered Population increased confidence that the MPRNs in this pot were correctly categorised. Meter Point created less than 12 months vi Previous analysis has shown that <80% of MPRNs are confirmed within 12 months of creation through normal means.

13. 13 Energy Networks Association Shipperless & Unregistered sites Chris Warner 15 th March 2013

14. 14 Shipperless & unregistered sites 14 Energy Networks Association Transporters are currently developing and revising policies, procedures and processes to ensure efficient and effective investigation of theft of gas incidents (which includes reported Shipperless & Unregistered (S&U) sites) Consistent with GT Licence, UNC and SPAA ToG CoP (note: revision to CoP required to address practical issues) Expected to be complete and implemented by Oct 2013 Scope includes reacting to reports of suspected incidents of ToG (including ‘upstream’ tampering incidents and ‘downstream’ where no Supplier is found to be present) May result in certain sites in the S&U Portfolio being reported

15. 15 Shipperless & Unregistered sites 15 Energy Networks Association In order to better understand the make up of the S&U portfolio we suggest a number of activities as follows: Initiate Shipper/Supplier portfolio reconciliation exercise (under UNC Modification Proposal 0431) Undertake analysis to better understand the requirements and extent of a data reconciliation exercise to be conducted in the Transporter businesses and Xoserve Undertake a limited & targeted ‘one off’ consumer lettering exercise The output will be used to inform Ofgem’s consultation in Q1 2013 on the regulatory framework surrounding GT Licence Condition 7 Transporters propose to take the following measures in respect of the S&U portfolio

16. 16 Shipperless & Unregistered Sites The ‘one off’ extended consumer lettering exercise has issues associated with it which will look to address Risk in undertaking activities in absence of validated and efficient ‘end to end’ processes May be reduced by setting scope of consequential action Risk of consumer dissatisfaction through random targeting Reduced by content of letter Consequential actions limited to analysis of returns Energy Networks Association

17. 17 Shipperless & Unregistered Sites 17 Energy Networks Association Exercise targeted on 1000 sites across all networks and including a range of AQs Focus primarily on Orphaned sites with meter Undertaken by Xoserve over 3 month period However, we need to identify what we are collectively trying to achieve in terms of output and learning Registration? Non-responses? Need to identify Shipper/Supplier role? Need to understand what is failing and look at a cost targeting mechanism?

18. 18 Shipperless & Unregistered Sites 18 Energy Networks Association The outcome of this exercise can inform the basis of further industry work and the additional funding required by Transporters and Shippers to address this issue. Ofgem is due to consult on possible modification of GT Licence Condition 7 Q1 2013 In the absence of a comprehensive plan, defined roles and adequate funding which is informed by the Ofgem’s consultation in Q1 2013, Transporters are not in a position to pursue beyond this trial.

19. Desktop Investigation / End User Letter Trial Proposal A joint request from all DNs has recently been made for Xoserve to produce a proposal for an exercise to investigate a sample of 1000 MPRNs from the Orphaned Pot of the Shipperless and Unregistered Sites population.

20. Desktop Investigation / End User Letter Trial Proposal Scope Investigation of 1000 MPRNs (with meters) from the Orphaned population, using Xoserve systems and other available information sources. Objectives To promote the confirmation of MPRNs as necessary To ensure that MPRNs are set to EX or DE as necessary

21. Investigation Methods Xoserve Systems –UK-Link –Data Enquiry –Conquest / CMS Address Databases –GB Address Manager / Post Office Website Internet Search Engines –Google / Bing etc. –Google Maps / Earth / Street View Local Authority Websites –Local Authority Council Tax Web Pages –Local Authority Planning Application Web Pages External Communications –Shippers –Networks –End Users

22. MPRN creation Workgroup

23. Energy Networks Association Root cause solution for unregistered sites / MPRN creation David Mitchell 15 th March 2013

24. MPRN Creation - Background 24 Energy Networks Association GDNs proposed the MPRN Creation solution – MPRNs are created by shippers and a supply contract is required before the service is laid. This went out for industry consultation in December 2012 and closed 4 th January 2013 A total of 7 responses were received from a variety of industry participants including GDNs, IGTs, UIPs, MAMs and Shippers

25. MPRN Creation – Consultation Responses 25 Energy Networks Association There was general support from Shippers with some minor suggested amendments The UIPs and MAM businesses that responded were very opposed to the proposal as they feel that it would be anti competitive and would complicate the process for end users. Two UIPs have indicated that they would commence legal proceeding should the proposal be implemented. The IGT respondent was supportive as long as this process is not applied to IGTs but stated that they did not believe this would resolve all unregistered sites and questioned whether this would work for I&C connections and multi-meter point developments

26. MPRN Creation – Consultation Responses Concerns Raised 26 Energy Networks Association I&C Connections – as a large majority of these connections are speculative i.e. the connection is needed but may not be used for some time. The UIPs especially felt very strongly that this new process would limit their workload as developers would not wish to get a supply contract Multi meter point developments – As these sites can span over several years ensuring that supply contracts are in place could severely delay the progress for these sites (including fuel poor connections) Anti competitive – UIPs and MAMs raised concerns that only allowing shippers to create MPRNs will be anti competitive as customers will have to go through a shipper for their MPRN and so the shipper would have an advantage over other connection providers and meter installers.

27. MPRN Creation – Consultation Responses Suggestion Raised 27 Energy Networks Association Most of the responses stated that the main issue with unregistered sites is not in fact the service in the ground but the meter being fitted as this allows gas to be offtaken Respondents (including MAMs) suggested placing obligations on MAMs to not fit meters without supply contracts which would then stop unregistered gas being offtaken It was also suggested through discussions with UIPs that I&C connections are locked to only allow the connection provider to remove the lock once a contract is in place and a meter is being fitted

28. MPRN Creation – Next Steps 28 Energy Networks Association GDNs are fully committed to implementing root cause solutions for unregistered sites. We have to take the concerns and suggestions raised in the consultation responses seriously and so have re-thought the root cause solution previously proposed We note that although the previously suggested approach would go some way to reduce the number of unregistered sites it was not a perfect solution as customers could cancel the supply contract or change supplier and would also potentially mean increased waiting times for customer in getting a new connection. We have therefore come up with the following package of measures which will have the smallest impact on customers whilst minimising any new unregistered sites being created.

29. Unregistered Site – Root Cause Solution Measures 29 Energy Networks Association 1.Smaller, controlled batches of MPRNs for connection providers – More ownership of MPRN creation, reducing duplicates 2.Looking into the benefits of delaying MPRN creation from Quote Acceptance to Job Scheduling Stage – This will lead to less MPRNs being cancelled due to jobs not going ahead 3.Further controls over Code12 MPRN creation – Avoiding duplicate MPRNs being raised

30. Unregistered Site – Root Cause Solution Measures 30 Energy Networks Association 4.MAMCoP obligation to only install meters where a supply contract is in place – Stopping gas being taken without a supply contract being in place 5.Further MAMCoP obligation and change to RGMA to obligate MAMs to copy meter installation flows to the C&D Store and to include details of the initiating supplier on the flow – Allowing Xoserve to more actively monitor for meters being fitted 6.Joint GDN customer connections communications leaflet – Encourage customers to get a supply contract from planned stage in connection process and informing of need for a supply contract before meter fit 7.MOD410A (if implemented) used as a backstop alongside further monitoring of connection jobs and meter fits by DNs

31. Unregistered Site – Next Steps 31 Energy Networks Association The smaller actions e.g. batches will be implemented as soon as possible and we will keep industry up to date on progress We are progressing with the first MAMCoP change. This was raised at the MAMCoP meeting on the 28 th February and the official change should be submitted to SPAA by the end of March. The second MAMCoP change is currently being developed and will be progressed during Q2 2013. The customer communications leaflet is with the GDN Communication Manager to progress through ENA GDNs will be drafting an ancillary document to the UNC and raising a code modification to refer to this in the UNC. The document will outline the MPRN creation process with the amendments outlined in previous slides

32. AOB  Any other business?  Thanks for your attendance…  … your contribution & support  Have a safe journey home!