1. Aligning the connections and capacity processes 1 Mike Wassell Transmission workstream, January 2012

2. 2 Background  We have spoken about connections and capacity processes through our Talking Networks’ events – which discussed what you want us to deliver during the next price control period  Some stakeholders requested that the connections and capacity processes be co-ordinated; streamlining and simplifying them  We raised the issue of needing to account for the timescales associated with The Planning Act (~7 years for delivering of infrastructure) within the process  We want to deliver greater certainty to our customers  Stakeholders requested that this be taken forward as an industry, under existing governance 2

3. Current position  Since the Talking Networks workshop in November we have been considering some possible options  There are pros and cons associated with each and these are not necessarily mutually exclusive  They require further development to fully understand the impacts of each option on us, and stakeholders 3 Status QuoManage planning act under the current arrangements Connect and manageContractual solutions, potential new products, increased constraint management funding Anticipatory InvestmentZonal reinforcement based on commercial intelligence (rather than auction/application signal) Extended lead timese.g. 72 months obligated lead times Contractual alignment of timescales Earlier and phased user commitment outside of capacity auction / application process

4. Proposed way forward  We propose a new Review Group is set up to take this topic forward, with the first meeting on the morning of 23 rd January  “Developing processes for future Gas Access”  At this first meeting we propose discussing and exploring the options we have been considering  In addition we request and welcome any potential solutions you may also wish to bring to the meeting  We are seeking the Transmission Workgroup’s approval for this approach 4