1. EDCM update Mo Sukumaran (on behalf of CMG)
1 | Energy Networks Association – DCMF
5 April 2012 1

2. Current position – EDCM demand
The EDCM will be used to calculate import charges for qualifying customers from 1 April 2012
Ofgem has approved the incorporation of the EDCM for import charges into DCUSA (DCP 109)
From 1 April 2012, the EDCM for import charges would be subject to open governance
2 | Energy Networks Association – DCMF
5 April 2012 2

3. Further work on EDCM demand
Ofgem placed 3 conditions on its approval of the EDCM for demand.
Conditions 1 and 2 have been met and the methodology updated
Condition 3 relates to the treatment of spare capacity in calculating network use factors for demand
Condition 3 requires the DNOs to:
Consider the circumstances under which costs associated with spare capacity on the network may be “socialised”
Examine different options for doing so
Analyse the impact on customer charges
Provide a well-reasoned recommendation for change (or no change)
3 | Energy Networks Association – DCMF
5 April 2012 3

4. Condition 3
Workstream A of the CMG is working towards meeting condition 3
Several options and their impact on charges are being considered
We plan to publish a consultation on these options and their impact on charges in mid-April 2012
DNOs need to submit a report explaining their recommendation to Ofgem by 1 June 2012
Changes to the methodology, if any, are unlikely to affect tariffs before 1 April 2013
4 | Energy Networks Association – DCMF
5 April 2012 4

5. Current position – EDCM export
The EDCM will be used to calculate export charges for qualifying customers from 1 April 2013
Ofgem guidance on the methodology for export charges published on 2 February 2012
DNOs are currently working to develop and submit the methodology by 1 June 2012
Consultation document with our proposals published on 2 March 2012 (Deadline for responses is 12 April 2012)
Workshop to support consultation held on 8 March 2012
5 | Energy Networks Association – DCMF
5 April 2012 5

6. Arrangements for Pre-2005 DG
Ofgem published its decision on the arrangements for pre generators
Generators that “connected” on or before 31 March would be eligible for a time-limited (25 year) exemption from use of system charges
“Designated EHV properties” will default to the exemption from 1 April 2013 (even if they are currently on the CDCM)
Other generators (CDCM) will default to being subject to the CDCM
Generators that connected on or after 1 April 2005 but were charged for their connection based on “pre-2005” arrangements would also be eligible for the 25-year exemption starting from the connection date
6 | Energy Networks Association – DCMF
5 April 2012 6

7. Arrangements for Pre-2005 DG
Designated EHV properties that qualify for the exemption can “opt in” to charges at any time in the future:
Deadline for opting in to charges for 2013/2014 is 30 June 2012
Deadline for future years is 1 November of the preceding year
Opting in to charges is a “one way” decision
Please contact your DNO before the deadline if you would like to opt in
7 | Energy Networks Association – DCMF
5 April 2012 7

8. LDNO arrangements
Portfolio discounts for CDCM-like generation (export) end users
Extended Method M to calculate discounts
Methodology approved by Ofgem in December 2011
Charges and credits for EDCM-like generation (export) end users calculated on a “boundary-equivalent” basis
LDNOs to provide boundary-equivalent data to the host DNO for charges to be calculated
8 | Energy Networks Association – DCMF
5 April 2012 8