1. Distribution Network Interruption - Initialisation 28 September 2010

2. Interruption to Firm – initialisation  DN Interruption Reform (MOD 90) requires all LDZ supply points to convert to firm and pay firm transportation charges from 1 st Oct 2011  Supply points still requiring interruption will have bid for interruption rights under the Annual or Ad Hoc DNI auction processes  Therefore, for 1700 interruptible supply points we need to:  Change the status to firm  Set NDMSOQ or DMSOQ & SHQ parameters  Correct transportation invoicing  Coordinate the change across both transporter & shipper systems  Our preferred solution ….

3. Benefits …….  Well established, tried & tested solution  Shippers will confirm offers at the correct rates.  SPA processes work as normal  For DMs, provides an opportunity to review and set the DMSOQ & SHQ  Shippers will be able to exercise choice of GNT where permitted by code  NDM or DM (DM mandatory above 58,600,000kWh)  Updates both transporter and shipper systems  Remember:  DMSOQ for interruptible supply point will not have increased in line with daily consumption (although BSSOQ will have been reset once per year)  Supply Points confirmed as DM will be subject to the capacity ratchet regime

4. Our Back-stop Solution  Transporter driven  If by 7 th September a supply points is not showing a confirmation effective date of 1 st October:  xoserve will create and confirm offers on the shippers behalf and pass the confirmation response to the shipper  Default Rules:  Shipper will be sent a copy of the default offer  Sites will be confirmed as DM  Sites will be confirmed at the prevailing DMSOQ  Proposal to introduce an incentive regime to minimise transporter interference

6. Shared Supply Meter Points (Unique Sites)  Opportunity for shippers to review and revise Allocation Agreements for Shared Supply Meter Points (SSMPs) with an Interruptible element  Some sites may remain Firm/Firm splits between multiple shippers:  Allocation Agreements should be reviewed to ensure all parties agree on how the gas is to be allocated when Interruptible elements are removed  DNI removes “overflow” interruptible supplies  Ratchets could be incurred

7. Shared Supply Meter Points - not required  Some sites will become fully firm with one shipper  These sites may no longer need to be managed via Unique Sites processes and could return to Sites & Meters  Reducing manual processes  Reads managed electronically  Charges issued on standard invoices  Avoiding SSMP admin charges  xoserve will identify Unique Sites that could transfer and work with impacted shippers to review and action