1. Flow Flexibility Business Rules Ritchard Hewitt

2. Items to resolve today  Nodal or Zonal release.  If zonal  Preferred Number of zones.  Extent of Tradability.  Preferred Anti-hording Measure. –Aggregation –Interruptible product  Timing of day ahead auctions.

3. Issues to consider  Larger zones = More opportunity to trade but greater buy back risk and less efficient investment and inaccurate buy back.  Smaller zones = less opportunity to trade on 1 to 1 basis but more efficient Investment and more accurate buy back actions.  Nodal release = Efficient investment signals but more complex release, holding and trading arrangements.

4. Action items from last meeting  Provide map and list of offtakes for 31 zone model  Provide baselines based on 31 mcm.  Provide details of historic use.  Provide details of players in the 31 zone model to allow assessment of trading opportunities.

5. Barrow Teesside St.Fergus Glenmavis ToBallylumford ToZeebrugge To Dublin Easington Dynevor Arms Avonmouth WytchFarm Isle Of Grain Theddlethorpe Bacton Interconnector Burton Point Towton Pannal Hornsea Interconnector Terminal LNG Storage Regulator National Transmission System Salt Cavity Existing Pipeline LDZ Offtakes Kinkockie Aberdeen Careston Balgray Drum Pitcairn Armadale Broxburn Soutra Hume Saltwick Coldstream Guyzance Corbridge Humbleton Netherhowcleugh Lockerbie Keld Wetheral Cowpen Bewley Baldersby Thrintoft Burley Bank Pickering Ganstead Paull Partington Lupton Samlesbury Blackrod Rawcliffe Asselby Blyborough Thornton Curtis Walesby Warburton Malpas Weston Point Mickle Trafford Eccleston Holmes Chapel Audley (NW) Audley (WM) Aspley Millwich Alrewas (EM) Alrewas (WM) Blaby Tur Langton Austrey Shustoke Market Harborough Caldecot Rugby Leamington Stratford-upon-Avon Evesham Kirkstead Silk Willoughby Gosberton Sutton Bridge Eye West Winch Brisley Roudham Heath Great Wilbraham Yelverton Royston Dyffryn Clydach Dowlais Gilwern Ross (SW) Fiddington Ross (WM) Cirencester Eastern Grey Little Drew Pucklechurch Ilchester Aylesbeare Kenn Braishfield Mappowder Roxwell / Chelmsford Peters Green Whitwell Hardwick North Stoke Winkfield (NT) Winkfield (SE) Winkfield (SO) Shorne Farningham Tatsfield 0 1 2 4 3 5 6 7 10 12 8 9 30 13 15 22 28 14 20 27 25 26 24 21 17 16 23 18 19 29 11 Milford Haven Lyneham Proposed Pipeline Proposed Regulator Proposed Terminal Tow Law Little Burdon Elton Matching Green Horndon

6. 31 zone baseline based on 31MCM capability plus Historic peak usage in 2004.

7. 13 zone baseline based on 31MCM capability

8. 5 zone baseline based on 31MCM capability

9. Players in each zone – Part 1  Zone 0 – 4 LDZ, 1 CCGT  Zone 1 – 4 LDZ, 1 CCGT, 1 I&C  Zone 2 – 3 LDZ  Zone 3 – 8 LDZ  Zone 4 – 1 Storage, 1 LDZ  Zone 5 – 6 LDZ, 1 CSEP  Zone 6 – 2 LDZ, 1 CCGT, 2 CSEP, 3 I&C  Zone 7 – 4 LDZ, 2 CCGT  Zone 8 – 7 LDZ, 1 Storage, 2 I&C, 2 CCGT  Zone 9 – 3 Storage, 5 LDZ, 2 I&C  Zone 10 – 2 LDZ, 1 I&C  Zone 11 – 2 LDZ, 6 CCGT, 1 I&C  Zone 12 – 1 CCGT, 1 CSEP  Zone 13 – 3 Storage, 14 LDZ, 8 I&C, 3 CCGT  Zone 14 – 3 LDZ, 2 CCGTs, 1 CSEP  Zone 15 – 3 LDZ, 1 CCGT  Zone 16 – 3 LDZ  Zone 17 – 2 LDZ, 1 CCGT  Zone 18 – 1 CCGT

10. Players in each zone – Part 2  Zone 19 – 2 LDZ,  Zone 20 – 2 LDZ, 1 CCGT, 1 I&C  Zone 21 – 5 LDZ, 1 I&C  Zone 22 – 6 LDZ, 1 CCGT, 1 Storage  Zone 23 – 1 LDZ  Zone 24 – 6 LDZ, 2 CCGT, 1 I&C  Zone 25 – 10 LDZ, 6 CCGT, 1 Storage, 1 I&C  Zone 26 – 1 Storage, 7 LDZ, 2 CCGT  Zone 27 – 2 LDZ  Zone 28 – 1 Storage, 3 LDZ, 4 CCGT  Zone 29 – 2 LDZ  Zone 30 – 4 LDZ, 4 CCGT

11. Summary

12. Items to resolve today  Nodal or Zonal release.  If zonal  Preferred Number of zones.  Extent of Tradability.  Preferred Anti-hording Measure. –Aggregation –Interruptible product  Timing of day ahead auctions.