1. Code Administrators Working Group (CAWG) Meeting 3, 29th October 2008

2. 2 Key issues – setting the scene Transparency, accessibility and effective consultation? –How easy is it for parties to understand modification proposals, reports and processes? –How easy is it for parties to engage in the modification process and progress modifications? –Are aspects of the modification process too burdensome? –Measures to assist smaller market participants and consumers?

3. 3 Key issues – setting the scene (continued) Flexibility and cost effectiveness –What can we do to improve the efficiency and operation of the modification process? –Is there duplication? How do we reduce duplication? –Are processes sufficiently flexible to enable different types of modifications to be treated differently? Rigorous and high quality analysis –Is analysis sufficiently rigorous and robust? Is it objective and independent? –Do the modification processes support rigorous analysis?

4. 4 Formulating and raising modification proposals Testing ideas –How easy is it to test ideas under CUSC/BSC and UNC –Issues groups or work-streams? Any material differences? Who can raise modification proposals? Should panels be able to initiate proposals when they identify a deficiency in the codes arrangements?

5. 5 Mod raised – Panel considers what route to take Are initial written assessments useful, or unnecessary overhead? Do Panels find the right balance between mods sent straight to consultation and those sent straight to workgroups? Who should advise on Terms of Reference, and when? Do (can?) Panels bundle similar mods effectively? Use of workgroups, amalgamation of proposals Do we need to increase the flexibility of the process (eg under BSC)? How do we do this? Should some steps in the process be removed depending on the nature of the proposal? Should simpler processes be introduced under CUSC/BSC for housekeeping modifications?

6. 6 The Working Group process – ownership of the proposal Who should own the modification proposal? The proposer or the workgroup? Possible “proposer owns” approach: –Proposer controls proposed solution and evolution of the proposal –WG assesses proposal and makes recommendations –WG able to develop alternatives or variations –Is voting necessary? –Administrator chairs WG –Open door policy on work-groups –Owner of proposal able to withdraw proposal

7. 7 Proposer owned proposals – Pros and cons? Proposer maintains control of proposal – small participant benefits? But… more resource burden for smaller parties? Less reliance on voting and more flexible WG membership? Increased accessibility? Flexibility and cost savings if proposals can be withdrawn

8. 8 Other aspects of the modification process Treatment of alternative proposals –Should there be restrictions on the number of alternative mods? –Should there be restrictions on when alternatives can be raised? Possible approach: –No restrictions on alternatives –But, alternatives can only be raised within WG (or work- stream) process (CUSC CAP160 approach)?

9. 9 Consulting stakeholders Should the length of the report consultation be discretionary or fixed? Should there be a de minimis consultation period? Difference in treatment between urgent and non-urgent mods? Should legal text be consulted on? If so, when?

10. 10 The modification group report – role of the code administrators What should be the role of the code administrator in relation to the WG report/modification reports? Critical friend for the mod group? Active analytical role in the assessment process? More than just reporting of views? Issues to be considered as part of the Performance of Code Administrator work-strand Ofgem interested in the views of CAWG

11. 11 Panel considers recommendation Do Panels have relevant expertise? Do Panels adequately reflect range of stakeholder views? –Independent vs representative –If no, how to cater for what’s missing? Should the proposer, working group chair, or any other attendee, have the ability to challenge the Panel’s thinking? Do Panels provide enough information/rationale to explain their recommendations? Should materials sent to the Authority be final: –Legal text (i.e. consequential changes and typos)? –Analysis? –Implementation Date?

12. 12 Code of Practice for Panels and Administrators Standard proforma for a modification proposal Standard proforma for modification reports Websites conform to agreed standards/principles Alignment of code change process terminology Description of role of administrator (including with respect to smaller parties) Plain English summaries of modification proposals and Panel assessment Describe factors that may be taken into account when assessing a mod against relevant objectives Other suggestions?

13. 13 Initiatives to assist smaller players/consumers Should code administrators be able to raise modification proposals on behalf of smaller market participants, or sponsor proposals? Should administrators be required to assist smaller market participants? Are consumer views adequately represented on panels and workgroups? Separately funded Consumer/Small participant advocacy panel? Who pays?

14. 14 Initiatives to assist smaller players/consumers (continued) Should there be consumer representation on the UNC panel? Should consumers be able to raise modification proposals across all of BSC, CUSC and UNC? Should administrators establish regular cross-code education forums for participants on key industry changes? Would this “crowd out” private sector provision? Other suggestions?

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