1. Overview of Balancing & Settlement Code Change Process By Gareth Evans on Behalf of Gazprom Marketing & Trading –Retail

2. The Power Rules  BSC – balancing & Settlement Code Energy rules only Administered by Elexon Physical players required to sign traders chose to sign  CUSC – Connection Use of System Code Signed only by those connected to NGC Covers transmissions rules & charges  Grid Code – Technical (and commercial) Signed by power plants & larger users  DUSC - Distribution Use of System Code (Distribution connection only) Covers all distribution issues Administered by DNOs – central governance in place  Power players multi-contract, each with different governance rules

3. BSC Modification Process - Panel  11 Members Chair 2 Independent members (appointed by chair) + 1 other if desired by chair to represent other members. 2 consumer members (appointed by Consumer Focus) 5 industry members (elected by industry Transmission Company member DSOs, Ofgem, Elexon CEO may attend but do not vote.

4. BSC Modification Process - Panel  Give priority to changes, can amalgamate changes.  Determine Implementation dates  Can raise modifications themselves if: A change in a related document requires a change to the BSC Improves efficiency Modification cannot be implemented as envisaged.  Can reject changes if similar to previous ones.

5. BSC Modification Process  Process potential for 3 phases: Definition Procedure (if needed) Assessment Procedure (if needed) Report Phase.  Process covered in detail on Elexon website Section F BSC, BSCP 40 Code summaries

6. Definition Procedure  Used where Panel needs more information to decide next steps, so not always needed.  Similar process to UNC development workgroups, but more formalised.  BSC gives provision for additional analysis from Elexon as well as external parties.  Modification Group of industry experts – strange distinction between Modification Group Members and attendees (based on who attends first meeting!)  Modification groups can request external help – commission studies, see QCs, etc. – also undertake extra consultations

7. Assessment Procedure  Can follow be after the definition procedure or modification can be sent. straight there by the Panel.  Tend to get detail in Assessment – get systems costs, NGC costs, etc.  Costs that are provided are usually detailed and can be supported by extensive analysis (e:g Modification P229) undertaken by 3 rd parties.P229  At this stage alternative Modification may also be developed if modification group thinks the Alternative would better achieve the Applicable BSC Objectives.  Additional analysis can be commissioned but must be approved by the Panel if costs go above a level set by them.

8. Report Procedure & Implementation Process Report Phase  Modification (and alternate) can go straight here.  Intended to provide final consultation with industry before Panel recommendation to Ofgem. Implementation Process  Implementations tend to be twice a year (system releases)  Elexon holds regular meeting with service providers.