1. EDCM update Mo Sukumaran On behalf of DNOs ( WSB Chair) 1 December 2011 1 | Energy Networks Association - DCMF

2. Current position 1 December 2011 2 | Energy Networks Association – DCMF Ofgem has decided to approve the EDCM for demand charges only, subject to conditions. See: http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=760&refer=Networ ks/ElecDist/Policy/DistChrgs DNOs have since submitted revised proposals for demand only Ofgem decided to delay the implementation of the EDCM for generation charges to April 2013, at the earliest Ofgem is consulting on the way forward on generation charges, see: http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=762&refer=Networ ks/ElecDist/Policy/DistChrgs

3. Ofgem decision on EDCM demand 1 December 2011 3 | Energy Networks Association – DCMF Ofgem has decided to approve the EDCM for import (demand) charges only. –Approval subject to three conditions –Condition 1 relates to LDNO discount categories (by 30 November 2011) –Condition 2 relates to the sense-checking of LRIC branch charges (by 30 November 2011) –Condition 3 relates to the treatment of spare capacity in calculating network use factors (by 1 June 2012)

4. Work on conditions 1 and 2 1 December 2011 4 | Energy Networks Association – DCMF WSB has developed proposals to meet condition 1 –LDNO representatives participated in, and provided feedback through, WSB meetings –There are now 5 boundary categories for LDNO discounts WSA has developed proposals to meet condition 2 –The method for sense-checking LRIC charges has been amended as required by Ofgem –Analysis of the impact of these changes sent to Ofgem by DNOs DNOs believe that these conditions have been met, and therefore should be approved by Ofgem

5. Other changes to the EDCM 1 December 2011 5 | Energy Networks Association – DCMF We have amended the methodology statements and Excel models to reflect Ofgem’s decision postpone the implementation of the EDCM for generation (export) charges Since April 2011, we have carried out extensive tests on the EDCM. Consequently, we have made improvements to the Excel model and methodology statement –To remove identified inconsistencies –To remove ambiguities and add clarity On 30 November DNOs submitted a report, an updated and revised version of the models and methodology statements to Ofgem for approval

6. Current status on EDCM generation 1 December 2011 6 | Energy Networks Association – DCMF Ofgem is currently consulting on two sets of proposals on generation charges –The first proposal is for a time-limited exemption for pre-2005 connected DG (20 years) –The second proposal contains different options for setting charges to DG that would not be covered by the time-limited exemption. Ofgem has also proposed a timetable for implementation of the EDCM for non-exempt generation –DNOs to submit methodology by April-May 2012 –Implementation on April 2013 Consultation closes on 5 December 2011

7. DCUSA CP timeline 1 December 2011 7 | Energy Networks Association – DCMF ActivityTarget Date Methodology text submitted for legal review28 November 2011 DCP 109 Consultation issued08 December 2011 WG meeting to review Consultation responses09 January 2012 Change Report presented to DCUSA Panel18 January 2012 Party Voting ( 2 weeks)23 January 2012 Authority Determination14 March 2012 Implementation01 April 2012