1. Assignment of NTS Entry Capacity Transmission Workstream 06 November 2008

2. 2 Assignment is……………. The Transfer of Financial Liability in addition to the Capacity Entitlement

3. 3 Background  Historically NTS entry Capacity has been viewed as “one” product that is tradable.  Recently we have seen a marked interest in the introduction of an assignment process for NTS Entry Capacity: Via Customer Account Management Via Review Group 221 (Review of Entry Capacity & the appropriate Allocation of Risk)  Proposed introduction of assignment of NTS Exit Capacity as part of the proposed Reform of the NTS Exit Capacity arrangements has lent some impetus to these requests.

4. 4 Background - Proposed rules for Assignment of NTS Exit Capacity  User facility to assign all of its NTS Exit (Flat) Capacity obtained via long/medium term releases at an Exit Point to another User at the same Exit point from a specified day  Assigning user must notify & the assignee user must confirm Identities Exit Point Assignment date  Assignment will result in: Assigning Users Exit capacity holdings at the exit point will be reduced to zero & the User will no longer be liable for capacity charges for the assigned quantity from the assignment date Assignee Users exit capacity holdings will be increased accordingly and the User will become liable for capacity charges from the assignment date

5. 5 First Steps…  National Grid NTS wishes to establish: the level of industry interest whether assignment should be Full, Partial or Both whether a Modification or Review Group Proposal should be brought forward & if so by National Grid NTS or the Industry whether such a change will fall under the “User Pays” process  National Grid NTS to Initiate discussions with xoserve through the ROM (Rough Order of Magnitude) process to establish the complexity of the concept

6. 6 Issues  Differences to NTS Exit Capacity: Majority of ASEPs are multi party Entry Capacity is sold via multiple mechanisms QSEC/AMSEC/RMTTSEC/DRSEC with overlapping capacity periods Multiple Bids consisting of varying prices i.e. each Entry Capacity sub transaction period can have a number of prices associated to it.  Complex change potentially impacting on a number of areas: Invoicing - Entry Capacity Invoice driven by specific Bid Information i.e. quantity & price associated to a specific Bid ID & Method of Sale Trading – would need to link traded capacity to specific Bid IDs (currently based on entitlements) Transfer and Trade (Surrender) Credit Partial Assignment – would need to identify which ‘bits of capacity’ were to be assigned & price impact on Assignee  Implementation Date / System Requirements Unlikely to be able to complete any required system changes prior to 2010 at the earliest Limited scope to offer a manual solution Impact of / relationship with NTS Exit Reform

7. 7 Next Steps…