Assignment of NTS Entry Capacity Review Group 221, 10th December 2008

2 Assignment is……………. The Transfer of Financial Liability in addition to the Capacity Entitlement

3 Background  National Grid NTS discussed the concept of Assignment at the November Transmission Workstream  Discussion centred on the scope of any development: Whether limited to New Developments & Long term NTS Entry Capacity Applied to all ASEPs & all elements of NTS Entry Capacity Somewhere in between  The Workstream was supportive of the concept of Assignment  Request was made for this topic to be taken to Review Group 221 for additional discussion.

4 Assignment Rough Order of Magnitude (ROM)  National Grid NTS requested that xoserve undertake a ROM on the concept of Assignment, the ROM was based on Assignment having the following characteristics: User driven (NG or Shipper) Applicable from a future date On an enduring basis To include both Full & Partial Assigned NTS Entry Capacity to be Tradable Assigned NTS Entry Capacity to be tracked within the Gemini system & feed through to all relevant processes i.e. Invoicing, neutrality etc Fully auditable  National Grid NTS requested the ROM to help inform discussion with the industry as to the potential costs, timeframes & complexities associated with the concept  Please note that ROM analysis is not based on Formal systems analysis & should not be taken as a formal quote

5 ROM Results  Timescales guidance: Minimum 9months Maximum 15months Taking the current Gemini programme of work into account it is unlikely that this change could be included without reprioritisation of or overlapping of projects prior to Q (assuming industry governance is completed Q1 2009)  High level Estimated Costs: Low Estimate - £300k High Estimate - £700k  Please note that these are estimated timescales/costs that detailed analysis may cause to vary significantly

6 Concerns Raised by ROM  Complex change potentially impacting on a number of areas: NTS Entry Capacity Invoice & File Format Supporting Data Impact upon planned system developments Impact upon Voluntary Discontinuance & Terminations  Manual Solution A manual process is highly risky to the integrity of data and would require numerous controls to satisfy audit requirements

7 National Grid NTS Position  Understand Industry desire for this service  We do believe the service would be beneficial to market operation  However the service may only be used by a few industry players and existing arrangements whilst not ideal do work.  We are happy to work with the industry in the development of a Mod but recognising the system implications and resource requirements and based on our prioritisation, we are currently not in a position to raise a mod.