Gas Security of Supply SCR Proposals: Credit Implications for the GB Gas Market Introducing a new Transmission Workgroup Topic 4 October 2012

The Credit Implications of Ofgem’s Gas SCR Proposals Ofgem has signalled its intention to press ahead with changes to the GB emergency cash-out arrangements which will see the “short” cash-out price set at £20/th Centrica believes that these proposals could have far reaching implications for the financial exposure faced by many players within the industry Affected parties could include gas shippers, traders, National Grid Gas (as system operator), operators of traded markets, banks, and ultimately end consumers The credit implications stemming from this proposal have not been modelled in Ofgem Regulatory Impact Assessment Limited consideration has therefore been given to the size of the issue, and how credit arrangements may need to change as a result Following an approach by us, the Energy Balancing Credit Manager has agreed to lead discussions at future Transmission Workgroups aimed at addressing these and other questions The purpose of today is simply to draw this topic your attention and invite you to submit early thoughts to mark.cockayne@xoserve.com