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UNC Mod 392/ IGT Mod 040 Proposal to amend Annex A of the CSEP UNC Mod 392/ IGT Mod 040 Proposal to amend Annex A of the CSEP NEx. A table, by replacing the current version of the AQ table August 2011

Background Development Group IGT 030 Ran from 27/10/10 till 06/04/11 Remit The Review Group Background Development Group IGT 030 Ran from 27/10/10 till 06/04/11 Remit The Review Group was required to: • Undertake a review of the current AQ Table to establish if the values remain representative of average consumption of the majority of consumers in relation to the geographical area and house types specified. • Consider additional impacts to AQ values resulting from energy efficiency measures taken by Builders and consumers, including improvements in home insulation/building standards, the installation and use of high efficiency condensing boilers, and general demand reduction. (The review will also consider any impacts of the installation by Builders and developers of micro-generation). • Consider the impacts, if any, on Relative Price Control • Consider the frequency of the review of AQ figures. Gas Settlements, Energy Retail

Methodology proposals Scottish. Power Methodology Sample • All New Connection Change of Responsibilities occurring Methodology proposals Scottish. Power Methodology Sample • All New Connection Change of Responsibilities occurring between Feb 2009 and Aug 2009. • At least 1 year’s consumption data for the above New connections. • Only actual meter readings have been used within the data analysis (all at least 6 months and a day apart). Included in the sample • Live sites. • Lost sites. • Confirmation pending. The meter fit data is a floating date, as the trigger point is the point the customer moved in Raw data required Difference (in days) between the recorded COR Date and next valid read date (no less than 6 months and 1 day apart) Difference between the recorded COR Read and next valid read WAALP Data for the date of the COR, and for the valid read date. WAALP Data for the periods 30/09/09 and 01/10/09. Formulae We require the CWWALP figure to calculate the AQ Value. Example on next slide. AQ Value (((Units Used * Reading Units * Correction Factor * Calorific Value) / 3. 6)*365)/CWAALP. Working exampled are provided. Gas Settlements, Energy Retail

Methodology adopted in the modifications IGT 040/ UNC 0392 IGT Methodology Sample AQ review Methodology adopted in the modifications IGT 040/ UNC 0392 IGT Methodology Sample AQ review output files Included in the sample • Only properties deemed to be new housing when first connected to a gas connection. • The AQ changed outside the +100% / -50% tolerance, but the new AQ issued as the shipper successfully challenged the old AQ being used. • All other AQ values calculated as part of the most recently completed AQ • Review using meter reads (for clarity it also includes those above the 2, 500 therm threshold). • Only house types that are listed in Table 1 in Appendix CI-1 of the Code. • IGTs will collectively collate the results of each IGT AQ review using template C 2 by November 30 th. • The results of the AQ collation exercise may be discussed in the January following the AQ review. Shippers may also wish to collate their own data for such discussions. Not included in sample • Infill domestic property AQs. • Non-domestic property AQs. • Where an installation read was used in the AQ calculation. • There was no AQ change because the site became live less than 26 weeks prior to the cut off read date. • There were no reads with which to calculate the AQ. • The AQ changed outside the +100% / -50% tolerance and the Calculated AQ is used as it was not challenged, or challenged unsuccessfully. • AQs changed using the Large Transporter’s agent adjustment factors based on the change from the old to new weather correction data. Formulae All IGTs (with the exception of Fulcrum, due to time constraints) collated the data on a template and provided to the AIGT to collate for discussion at the review group. Gas Settlements, Energy Retail 4

Methodology adopted in the modifications IGT 040/ UNC 0392 At the final meeting, it Methodology adopted in the modifications IGT 040/ UNC 0392 At the final meeting, it was noted that following the work group contacting the Gas Forum, only 2 Shippers had actually been able to provide AQ data in the required timeframe and that all other Shipper parties were either not able to supply the data at all or within the group’s work plan timescales. As the IGTs had already collated their AQ data it was agreed that the work group would proceed on the original timescales and provide a final report to the Panel based on this data alone. It was agreed that parties could proceed and raise a modification to propose an update to the AQ values if they wished Gas Settlements, Energy Retail 5

Ongoing solution As a result of the workgroup a new report will be added Ongoing solution As a result of the workgroup a new report will be added to Section 9 of the AQ Procedures Document detailing the following : • On an annual basis, following AQ Review IGTs will individually collate AQ data using an agreed template, and utilising the agreed methodology. • In compiling the results they will use one tab per licence held, inputting the average AQ per property type for each of the three geographic areas. • Next to this value, input the number of individual supply points used to derive that average. • IGTs will be reporting from the AQ review output files, not from the overall portfolio. • If an AQ has not been reviewed, it should not be part of the dataset. • The AQ used should only be the final AQ that was taken as the revised AQ value. • Where an i. GT has no values for a type of property the cell AQ and NUMBER must be left BLANK. It was also agreed that in the lead up to the review meeting, shippers may also wish to collate their own view and provide to Gemserve to collate, and provide as discussion material at the review meeting. It was also agreed that there would be no parameters updated in the document to mandate a modification raising criteria, that as a group, or on an individual level modifications can be raised when a party feels that it is commercially warranted to update the values. Gas Settlements, Energy Retail

UNC 392 UNC Mod 392 was raised to facilitate the update of the AQ UNC 392 UNC Mod 392 was raised to facilitate the update of the AQ values proposed as a result of the work carried out in Review Group IGT 030 and in the corresponding IGT 040 Modification. In terms of the implementation of both modifications, the dates were aligned to minimise the risk of a misalignment of implementation dates. It is felt that this modification is a self governance modification due to the fact that there are no significant negative financial implications for the large transporter, the shipper, supplier or customers. There is however a cost Implications for the IGTs in terms of the RPC, which was discussed in the Review Group. Gas Settlements, Energy Retail