Chris Warner Network Code Manager Proposed Agreement For Identification And Administration Of Unregistered Sites Chris Warner Network Code Manager

Unregistered Sites An “Unregistered Site” is: new Meter Point Reference Number in Transporters’ Supply Point Register (SPR) no User Registration (or prior registration) in SPR legitimate status where no gas is flowing (usually ‘siteworks’ in process) illegitimate status where gas is being consumed i.e. potential that gas has been illegally taken whilst in the course of conveyance no supply contract between supplier and consumer (NB: Ofgem has the view that a Supply Contract is not ‘valid’ if there is no User Registration in SPR) socialised risk (energy reconciled via RbD) Shipperless Sites are not within scope of this agreement

Transporter Obligations Transporters Licence Condition 7 obligations to investigate where it appears gas is taken whilst it is ‘in the course of conveyance’ to use reasonable endeavours to recover the value of the gas taken in such circumstances (Gas Act Sch 2B provides legal ability to do so) ‘ in the course of conveyance’ where a supply contract (or a deemed supply contract) is in place, any point upstream of the ECV where there is no supply contract (or deemed supply contract) is in place, at any point

NGD / BGT Agreement (Pilot) – BGT to Provide Service on behalf of NGD information from existing Xoserve Unregistered Sites (“Orphaned”) reporting for ‘shipper activity’ MPRNs, relevant shippers have confirmed ‘no interest’ or not responded to request undertake investigation (LC7) on behalf of NGD to establish whether gas is being consumed establish if a supply contract is in place BGT to comply with requirements in respect of treatment of vulnerable customers if gas is being consumed and there is no supply contract in place use reasonable endeavours (LC7) on behalf of NGD to recover the value of the gas costs (NB: no investigation costs) notify consumer that it must enter into a supply contract with a supplier possible future service to undertake disconnection on behalf of NGD where instructed to do so by NGD

BGT Service – Treatment of Cost and Revenues Value of gas costs recovered by BGT on behalf of NGD are returned to NGD NGD pays BGT for investigation and cost recovery services BGT charges required to be reasonable and cost reflective NGD treats revenue recovered and investigation and costs recovery charges in accordance with Licence Condition 7(3) Scheme Changes made to Licence “Transportation Revenue” to maintain revenue neutrality

BGT Service – Status Ofgem is aware of proposal and following various challenges dialogue has taken place to ensure arrangement is acceptable NGD and BGT intends to commence pilot as soon as possible bilateral arrangements to be finalised operational processes/interfaces to be concluded

BGT Service – Next Steps Costs and revenues to be monitored on an ongoing basis Pilot likely to commence Q1 2011 and last 12 months At this point review to be conducted and decision taken on whether to extend duration of arrangement Potential success criteria volume of consequential User registrations proportion of invoiced charges recovered extent to which costs recovered meet service charge residual theft detection

BGT Service – Next Steps Comments? To National Grid To Ofgem