1. Modification Proposal 0220 – “Invoicing Arrangements for Late Payments” National Grid (Distribution) Comments Chris Warner

2. Issues – Application / Set Off Assumption that the Proposal applies to all Interest (due to Transporters and Users) Set Off provisions appear to only apply to credits to the User Although Transporters have existing set off rights in the UNC (S3.8) this requires the User’s consent Set Off in the context of this proposal appears to not require the consent of the Transporter (beyond a pre-notification) This ‘unconditional’ set off right should apply in instances of both credit and debit interest Set Off terms propose that this is applied in the “next scheduled payment run” This may require further clarification (eg: specification of the invoice types that qualify as the “next scheduled payment run”) The practical application of the Set Off in respect of User Credit interest would require the User to establish the interest value due to it Further provision may be necessary for Transporter to query the credit interest value as determined by the User

3. Issues – Deadline for Payment NG(D) preference is to issue interest invoices monthly Minimises processing costs Minimises validation burden Proposal may not facilitate this for 31 day months, for example: Interest invoice is issued on 20th Jan Interest that is accrued (i.e. date of late payment) on 20 th Jan unlikely to be included on the above interest invoice Under the proposed terms it would become due for payment on 19 th Feb (the day prior to when the next monthly Interest invoice is schedule for issue on 20 th ) Solution is to slightly extend the payment period (to at least 31 days)