ScottishPower, Energy Retail MOD 282 – Introduction of a process to manage Long Term Vacant Sites May 2010 Elaine Carr ScottishPower

ScottishPower, Energy Retail 2 2 Items for Discussion Scope of vacant process Initiation of vacant status Process/management of vacants Monitoring requirements Reporting requirements Safeguards Summary of Issues to Consider

ScottishPower, Energy Retail 3 3 Scope of the Vacant Process Should the proposal relate to SSP or LSP sites or both? In electricity the process relates to domestic and NHH What charges should be included – capacity or commodity or both? In electricity capacity charges are retained, however in the gas market these make up 95% of costs Propose that the modification relates to SSP and LSPs, with the exception of DM Propose that the modification applies to capacity and commodity Issues to Consider: Would the Modification need to change to reflect the detailed scope?

ScottishPower, Energy Retail 4 4 Initiation of Vacant Status Should a site classify for vacant status after 3 months? In electricity 3 months is the applicable period of qualification There has been no objection to the 3 month proposal in initial gas discussions What evidence does a Supplier have to provide to initiate a site as vacant? In electricity a flow kicks off the process There are no consistent meter read flows across the gas industry Propose that the modification retains a 3 month qualification period Propose that MR site visit notification is sent to Xoserve flagging a vacant property Issues to Consider: How do we ensure that only genuine vacants are notified?

ScottishPower, Energy Retail 5 5 Process/Management of Vacants [1] What do Xoserve do when a site is notified as vacant? In electricity the EAC is set to zero There are two schools of thought – either AQ goes to 1 or sites retain AQ and come out of Settlement What happens on conclusion of a vacant? In electricity EAC is set to Profile Class Average, until Annual Advance updated No definitive feedback received on gas equivalent Propose that AQ is set to 1 for capacity and commodity payment calculations Propose that AQ is set to historic pre-vacant value Issues to Consider: Should Xoserve “set aside” vacant sites for monitoring?

ScottishPower, Energy Retail 6 6 Process/Management of Vacants [2] What issues are there with the AQ Review process? There is no reason to exclude vacants from the AQ Review process The risk on reduced historic consumption factoring into future AQs is the nature of AQ/RbD How does a site retain vacant status? Supplier continues to send vacant notices on the back of reading visits, these being no more than seven months since the last notification There should be no consumption increment at the supply point Propose that vacants still go through AQ Review process as normal Propose that if a Supplier does not submit further notification or consumption commences that the AQ is reverted to the historic value Issues to Consider: What happens, and when, if a read is submitted for a vacant site? Are there invoicing considerations for when consumption re-commences? Are there any distinct issues for LSP sites, given the potential different usage of new tenants?

ScottishPower, Energy Retail 7 LTV Process and Timelines Data Retriever Supplier Xoserve property identified as Vacant? Identify as candidate for LTV process property identified as Vacant (2 records) Identify mprn as LTV. * Send update to xoserve Process mprn as Vacant Is property identified as Vacant Is it <3 months since Last reading/update Is it > 7 months since last reading/update Reduce AQ to ‘1’ yes no Send read to xoserve Process reading Reinstate pre-vacant AQ value Await further read/update within timescales Vacant flag will have lapsed. Process as Candidate. (M1) Is it >3, < 7 months since last reading/update * Send update to Xoserve confirming Vacant Retain Vacant status Retain AQ at ‘1’ Mprns vacant >24 months Arrange Isolation of meter Withdrawal notice To xoserve Process Withdrawal Notice * Medium of files to be agreed ** If no update notice is received by xoserve at the 7 month point, then the AQ reverts back to previous ** M1 M3 – M7 M7 – M24 M24+ (TBC)

ScottishPower, Energy Retail 8 8 Monitoring Requirements Audit/Xoserve Reporting Similar to the AQ Review process – anonomised information provided to industry Ofgem role Monitoring Shipper/Supplier usage Addressing concerns Following up on issues Audit, as required Regulatory sanction AQ Review Look for reads getting submitted for vacant sites Monitoring patterns of vacant sites (similar to Threshold Crossers) Customer contact Xoserve contact properties to ensure that a site is vacant

ScottishPower, Energy Retail 9 9 Reporting Requirements The Supplier must proactively attempt to obtain meter readings and retain a record of these attempts: –extra attempts to contact the owner e.g telephone, post, –attempting to contact the local estate agent or local authority –where dual fuel by checking for a similar pattern with electricity consumption All of this information and attempts to contact the customer should be retained for Ofgem monitoring Issues to Consider: Does this need to be prescriptive?

ScottishPower, Energy Retail 10 ScottishPower, Energy Retail 10 Safeguards Issues to Consider: Warrants are normally only obtained for inspection – are there any issues with this? Could there be regional differences with warrants, due to the different judiciary? If the industry process only allows for sites to remain vacant for a defined period of time would this allow easier access to warrants? What happens when a Supplier can’t obtain a warrant? Should there be a time limit in relation to how long a site can sit as a vacant site without moving to isolation/withdrawal? If a time limit is set, then this has to take account of commercial consequences and customer perception/inconvenience.... as well as addressing safety concerns/issues

ScottishPower, Energy Retail 11 ScottishPower, Energy Retail 11 Scope: Would the Modification need to change to reflect the detailed scope? Summary of Issues to Consider Initiation of Vacant Status: How do we ensure that only genuine vacants are notified? Process/Management of Vacants: Should Xoserve “set aside” vacant sites for monitoring? What happens, and when, if a read is submitted for a vacant site? Are there invoicing considerations for when consumption re-commences? Are there any distinct issues for LSP sites, given the potential different usage of new tenants? Reporting Requirements: Does this need to be prescriptive? Safeguards: Does this need to be prescriptive? Are there any other issues?