1. UK GAS DISTRIBUTION DN Charging Methodology Forum NGGD Oct-14 Mod0186 Dave Chalmers / Mike Lapper

2. UK GAS DISTRIBUTION Headline Movement Since July-14 Report 2015/16 distribution charges lower than previously forecast across all networks Reduced customer bill impact in 2015/16, remaining relatively flat in future years as previously stated EoE NL NW WM

3. UK GAS DISTRIBUTION Forecast Revenue - Main Drivers of Change RPIF t – August HM Treasury report forecasts lower RPI in 2014, higher in subsequent years to 2018 PCFM iteration adjustment – Value of MODt reduced to reflect modelling change to legacy adjustment SOQ – Annual October SOQ reduction less than anticipated. Revised forecast for future years from 3% to 2.5% (av.) based on latest historical SOQ average changes

4. UK GAS DISTRIBUTION East of England Network Price Control Financial Model Iteration AdjustmentMODt RPI True UpTRUt Pass ThroughPTt Correction Term revenue Adjustment (K added)Kt Maximum DN Allowed Revenue (including NTS Exit)ARt Collectable Revenue (including NTS Exit)Rt NTS Exit Capacity Revenue AdjustmentEXt Under/Over-Recovery Carried Forward (including NTS Exit)Rt - ARt Total Distribution Charges Arithmetical April Price Change (%) movement Movement 2014-152015-162016-172017-182018-19 --0.3 -0.2 ---0.9-0.0 -0.00.1 --0.00.10.0-0.1 --2.80.1- 2.7-0.2-2.03.84.7 2.7-0.1--- --0.0-2.03.84.7 0.0%-1.7%-1.2%0.0%-0.8% July-14 Total Distribution Charges Price Change (%) Oct-14 Total Distribution Charges Price Change (%) -0.4%5.8%4.5%7.8%5.1% -0.4%4.1%3.3%7.8%4.3% SOQ reduction movement (%) (smaller reduction than prev. forecast) 0.5%0.8% Indicated price change for April 2015 is slightly lower than previous forecast due to movement in RPI, modelling update to MODt and smaller reduction in aggregate peak load.

5. UK GAS DISTRIBUTION North London Network Price Control Financial Model Iteration AdjustmentMODt RPI True UpTRUt Pass ThroughPTt Correction Term revenue Adjustment (K added)Kt Maximum DN Allowed Revenue (including NTS Exit)ARt Collectable Revenue (including NTS Exit)Rt NTS Exit Capacity Revenue AdjustmentEXt Under/Over-Recovery Carried Forward (including NTS Exit)Rt - ARt Total Distribution Charges Arithmetical April Price Change (%) movement Movement 2014-152015-162016-172017-182018-19 --1.3 -1.2-1.6 ---0.6-0.0 -0.00.1 --0.00.0-0.0-0.1 --2.1-0.0- 2.0-1.3-2.91.21.3 2.00.0--- --1.4-2.91.21.3 0.0%-2.7%-1.0%0.3%-0.6% July-14 Total Distribution Charges Price Change (%) Oct-14 Total Distribution Charges Price Change (%) 0.1%11.3%5.9%2.2%7.8% 0.1%8.5%4.9%2.5%7.2% SOQ reduction movement (%) (smaller reduction than prev. forecast) 1.3%0.6% Indicated price change for April 2015 is slightly lower than previous forecast due to movement in RPI, modelling update to MODt and smaller reduction in aggregate peak load.

6. UK GAS DISTRIBUTION North West Network Price Control Financial Model Iteration AdjustmentMODt RPI True UpTRUt Pass ThroughPTt Correction Term revenue Adjustment (K added)Kt Maximum DN Allowed Revenue (including NTS Exit)ARt Collectable Revenue (including NTS Exit)Rt NTS Exit Capacity Revenue AdjustmentEXt Under/Over-Recovery Carried Forward (including NTS Exit)Rt - ARt Total Distribution Charges Arithmetical April Price Change (%) movement Movement 2014-152015-162016-172017-182018-19 --1.7-1.6-1.4-1.3 ---0.7-0.0 -0.00.1 -0.00.10.0-0.1 -0.20.0- -0.2-1.91.11.7 -0.2-0.0--- --1.91.11.7 0.0%-0.8%0.4%0.6%0.3% July-14 Total Distribution Charges Price Change (%) Oct-14 Total Distribution Charges Price Change (%) -1.4%8.2%6.6%2.9%5.9% -1.4%7.4%7.0%3.5%6.2% SOQ reduction movement (%) (smaller reduction than prev. forecast) -0.2%-0.1% Indicated price change for April 2015 is lower than previous forecast due to modelling update to MODt and small movement in RPI.

7. UK GAS DISTRIBUTION West Midlands Network Price Control Financial Model Iteration AdjustmentMODt RPI True UpTRUt Pass ThroughPTt Correction Term revenue Adjustment (K added)Kt Maximum DN Allowed Revenue (including NTS Exit)ARt Collectable Revenue (including NTS Exit)Rt NTS Exit Capacity Revenue AdjustmentEXt Under/Over-Recovery Carried Forward (including NTS Exit)Rt - ARt Total Distribution Charges Arithmetical April Price Change (%) movement Movement 2014-152015-162016-172017-182018-19 --0.9 -0.8 ---0.5-0.0 -0.00.1 0.0 -0.0-0.1 -0.1- 1.0-1.61.11.6 1.0-0.1--- --0.9-1.61.11.6 0.0%-1.8%-0.9%0.1%-0.5% July-14 Total Distribution Charges Price Change (%) Oct-14 Total Distribution Charges Price Change (%) 2.6%2.7%6.3%8.7%5.2% 2.6%0.8%5.5%8.8%4.6% SOQ reduction movement (%) (smaller reduction than prev. forecast) 1.4%0.6% Indicated price change for April 2015 is slightly lower than previous forecast due to movement in RPI, modelling update to MODt and smaller reduction in aggregate peak load.