1. Energy Networks Association RIIO-ED1 Update for Suppliers December 2012

2. ENA members

3. Agenda  Last meeting covered the background to the RIIO- ED1 price control review, the initial timetable and the key elements in relation to price certainty  This meeting will provide an update on –Where we are in the process –The Ofgem strategy consultation document published in September –The timetable and key milestones going forward  A proposal to set up a series of supplier/all DNO meetings at key parts of the process to agree how information can be shared across all suppliers at a single forum

4. RIIO - ED1 timetable PHASEYEARMONTHMILESTONE Strategy Development 2012FebruaryOpen letter consultation published (8 weeks consultation) SeptemberStrategy consultation published (8 weeks consultation) Initial Business Plan Assessment and fast- track decision 2013FebruaryStrategy decision published JulyDNOs submit & publish business plans Invitation for comments (4 weeks) OctoberInitial assessment and fast track draft Determination published (8 weeks consultation) Draft and Final Determination and launch 2014FebruaryFast track final determination published MarchNon-fast track DNOs resubmit & publish business plans Invitation for comments (4 weeks) JulyNon-fast track draft determination published (8 weeks consultation) NovemberNon-fast track final determination published DecemberStatutory consultation (28 days) on licence modifications 2015AprilWednesday 1 st new price control (RIIO-ED1) commences

5.  The document sets out Ofgem’s proposed approach to the next electricity distribution price control (RIIO-ED1) which will run for eight years from 1 April 2015. The document; –Focusses on meeting the challenges of delivering a low carbon, sustainable energy sector while maintaining business as usual –Consults on outputs –Sets out the core elements of the price review framework –Sets out the requirements for DNOs’ Business Plans  Specifically in relation to revenue profiling and charging volatility Ofgem set out; –A timetable that ensures that business plans are submitted nearly two years in advance of the commencement of the price control review to give visibility of the materiality of any changes –Seek views on whether this is adequate or whether further steps are needed  In October 2012 Ofgem also published their conclusion on mitigating network charging volatility arising from the price control settlement proposing the following is built into RIIO-ED1 –Improved information for suppliers –Restricting the frequency of intra-year charge changes –Increasing the lag on recovery of incentive reward/penalties and for some uncertainty mechanisms Strategy document update

6. Supplier key milestones 2013 February 2013  – Strategy decision published which will include –Form of the business plan –Financing assumptions –Details of incentives –Details of uncertainty mechanisms and triggers July 2013 –Submission and publication of Business Plans October 2013 –Initial assessment of business plans and publication of fast track Initial Determination

7. ENA propose to facilitate three workshops in 2013 for suppliers at key points in the process - all DNOs will be represented Timing  Early February –Ofgem decision document on charging volatility –Feedback from DNOs on the strategy consultation and impact on business plan development –Supplier feedback/expectations  Early May –Feedback from DNOs on the strategy decision and impact on business plan development –Supplier feedback/expectations  Early August –Business Plan submission and publication –Supplier feedback  This will be in addition to individual DNO engagement with suppliers and other stakeholders  Further workshops will be arranges if required Supplier engagement proposal

8.  Does this cover what is needed ?  Are the timings correct ?  What is the best forum ? –Separate seminar organised by the ENA –Separate session at the DCMF  How do we ensure all suppliers are invited ? –ERA for large suppliers –Small suppliers Questions