1. Code Governance Review UNC Modification Proposals Beverley Viney - National Grid NTS

2. Background – Code Governance Review (CGR)  Ofgem announced the Review of Industry Code Governance in November 2007  Code Governance Review (CGR) concluded at the end of March 2010 when Ofgem published their Final Proposals  The licence modifications necessary to implement the Final Proposals for the CGR and the Code of Practice (CoP) were published on 3 June 2010 and become effective on the 31 December 2010

3. Background – Review Group 0267  Review Group 0267 “Review of UNC Governance Arrangements” raised October 2009  The Joint Office of Gas Transporters (JO), has been working with the industry on the necessary modifications to the UNC via the Governance Workstream  National Grid volunteered to raise all the necessary governance modifications to implement the CGR Final Proposals  National Grid have committed to liase with the industry in development of the proposals

4. Distribution Workstream – objectives of presentation  Raise awareness of approach and timetable for developing the CGR UNC Modification Proposals  Provide an overview of the content of each Modification Proposal  Facilitate the provision of feedback  Modification Proposals will be updated and formally raised for August Panel – consultation

5. Significant Code Review (‘SCR’)  UNC Modification Rules change  3 main elements of proposal:  Prevent an SCR related non-urgent Modification Proposal being raised during an associated SCR period  The treatment of Modification Proposals determined as relating to a SCR  Withdrawal or variation of SCR driven Modification Proposals

6. Self-Governance (‘SG’)  UNC Modification Rules change  3 main elements of proposal:  Clarification of when a Modification Proposal shall follow the Self Governance route  A Self Governance Determination by the UNC Panel  Appeals Process

7. Environment  Evaluation of proposed modifications shall include assessment of the quantifiable impact on greenhouse gas emissions  Details to be included in reports produced during progression of the proposal

8. Charging Methodologies  Two proposals  NTS Charging Methodology and Connection Charging Methodology  Distribution Network Charging Methodology  Key elements:  Existing methodology (to be detailed in Appendix A) is incorporated within the Uniform Network Code  UNC Modification Rules are amended to reflect that:  a change to the Charging Methodology is not able to be made unless the requirements of the UNC Modification Rules are complied with  the Transporters must convene regular meetings of the charging methodology forum/s  a Modification Proposal in respect of a UNC Charging Methodology may only be made by a UNC signatory or a Materially Affected Party (being a person or class of persons designated by the Authority for this purpose)

9. Role of Code Administrators & Code of Practice  The CGR Final Proposals require that code administrators:  Act as a ‘critical friend’, in particular to small participants; and  Act consistently with the Code Administrator Code of Practice.  Other key elements:  Ofgem send back powers  Published reasons for Panel recommendations (based on relevant objectives)  Legal text provision  Cost information  Super Mod (in terms of volume of changes to the mod rules)

10. Alternatives  Aspect of the Code of Practice (CoP) - the approach to be taken when raising alternatives to Modification Proposals:  alternative solutions being developed to the same degree as an original solution; and  alternative proposals are raised prior to or during the working group stage.  No alternatives (or further alternatives) can be raised once a Modification has been issued for Consultation

11. Appointment and Voting Rights for a Consumer Representative and Independent Panel Chair  Modification Proposals 0286 and 0286A: “Extending Modification Panel Voting Rights to Consumer Representative(s)”  Ofgem minded to approve 0286A  Main elements of proposal:  Option for the Authority to appoint a further Consumer Representative member  Independent chair’s casting vote