Gas Performance Assurance Framework 11 th January 2013

Gas Settlements, Energy Retail Objective 2 To ensure that gas settlement has accurate allocation, control, self monitoring and governance post Project Nexus so that no commercial advantage can be derived from settlement

Gas Settlements, Energy Retail Governance Structure – Foundation Stage 3 Attendance by any Party to the UNC Consider monitoring reports around control measures # Monitoring reports will be provided by Shipper/Supplier, but anonimity will be retained Committee will consider – non-compliance, dispute/errors and performance Committee will also consider implications of industry processes and procedures on each aspect and take a view on what needs to be done to resolve them, the likely timescales and materiality of the issue Reporting will be provided to the Panel to allow them to consider materiality and develop targets/incentives Performance Committee Performance Assurance Panel Facilitated by the Joint Office, with appointed Independent Experts Receive reports from the Performance Committee and request additional information from the Performance Committee/Xoserve, as necessary Determine overall materiality of issues and prioritise these – advising of actions required of Parties to rectify them Consider where targets/incentives could be applied Incentives would have to relate to a genuine estimate of loss that the issue presents and be transparent to Parties to whom they may apply Any proposals for targets/incentives would be: (a) provided to the Committee for consideration, where any Party could raise MODs to the UNC to facilitate or (b) the Panel could have the right to develop, implement and amend such working practices and procedures as it considers necessary Report on issues Analysis required

Gas Settlements, Energy Retail Performance Assurance Panel 4 The Panel would be made up of Independent Industry Experts There would be a tender process to appoint [5] Industry Experts and a consumer representative [Consumer Focus] This process would be run by [Xoserve] as the legal entity who would procure the services of the experts and contract their engagement To allow Xoserve to appoint the [5] Industry Experts, the Performance Assurance Committee will provide a recommendation of the mix of skills and experience necessary to make the Panel an effective advisory body, with impartial experts Industry Experts would be contracted, with the terms of contract including – Confidentiality, Data Protection, Indemnity and Conflict of Interest

Gas Settlements, Energy Retail Performance Committee 5 The Committee will be open to all Parties to the UNC Xoserve will provide reports to the Committee, as requested and determined by the Committee and through requests from the Panel The Committee should also work with Xoserve and the AUGE to facilitate requests from the Panel, where they are trying to assess materiality of an issue The Committee will make a recommendation to Xoserve on the Skills and Experience required of the Performance Assurance Panel to allow them to undertake an appointment process The Committee will also determine the budget for the Committee through majority vote

Gas Settlements, Energy Retail Controls under Performance Assurance 6 A number of reports will be provided by Xoserve to the Committee on a monthly basis, for example: Input measures – frequency, quality and control Output measures (for example meter readings) – frequency, quality and control iGT registrations and data update – frequency, quality and control Site registrations – exceptions and handling Asset information – status, verification and responsibility Data quality (measure of errors) – meter readings, asset information Process serials – AQ update, threshold crossers, dead meters, product switching Accounting of unidentified gas – AUGE continuing role Difference between input and output by LDZ to consider unidentified gas

Gas Settlements, Energy Retail Possible issues to be controlled/resolved 7 Post Nexus a lot of issues could be resolved, but these are possible ongoing elements to be considered: Offtake errors Meter reading submission in line with UNC and Licence requirements CSEP update Shipperless and unregistered sites Incorrect asset information and invalid meter readings AQ update performance and the timing out of reconciliation, prevalence of MOD640 charges, sites not allocated gas and erroneously low AQs Shrinkage and allocation