1. Development Workgroup 0282 Action 018 – impact on RbD 13 September 2010

2. Action 0282/018  “xoserve RbD expert to consider the proposal impacts and provide a view/attend the next meeting”  This action refers to treatment of SSP vacant sites in the RbD calculations

3. What is RbD?  Reconciliation by Difference is the substitute for meter point reconciliation in the SSP market  SSPs receive energy allocation and commodity charges via NDM Daily Allocation process  Individual meter readings are not used to reconcile SSPs  Within each LDZ, every LSP rec has an equal and opposite entry in RbD – both energy and commodity charges  RbD charges are apportioned on basis of live (not isolated) SSP AQ  Monthly RbD values are dependent on the number and value of LSP Recs in the month  RbD energy is usually a small fraction of commodity allocation

4. Comparison to other existing/future scenarios CapacityEnergyCommodityRbD AllocationAllocationSmear  Isolated & Withdrawn sites    Isolated sites√   DWG 0270 – Elective Meter Point Rec for SSPs  Proposed treatment √ √ √ √  DWG 0282 – Vacant sites  Suggested treatment √  √

5. Financial Impacts of RbD  For the 12 months to July 2010, RbD represented 2.2% of total SSP Allocation  % varies between months depending on levels of reconciliation and allocation and financial adjustments

6. Assessment of Suggested Treatment  No precedent for sites being subject to RbD but not allocation  No parallel with DWG 270 Elective Meter Point Rec proposal  Those sites remain in Allocation  Retaining those sites in RbD shares the unaccounted for gas across all active SSPs  Leaving those sites in RbD should be a simpler change  Leaving Vacant sites in RbD is not consistent with similar scenarios, e.g. Isolations  Risk of erroneous isolation is borne by remainder of SSP market  No reduction in complexity of change