1. User Pays – Changed & New Services
19th November 2007

2. Agency Change Funding Model
Further
Relevant Objectives ?
Degree to Which
Furthers Relevant
Objectives and Doesn’t Meet
User Pays Criteria ?
To some extent
Fully
GT Pay
(Class 2)
MOD
GT & Users Share Costs (Class 3 & 2 Mixed) No
Partial
Change
No MOD
Report and Share Benefit
User pays if wanted
Yes
Use Assets for
Regulated Services?
xoserve No
Continue

3. Key Points from Funding Model
Route already exists to fund non-UNC change, so concentrate on UNC change
May need changes to relevant objectives to allow more user driven changes to be treated as UNC modifications
Scope limited to impacts on Agency

4. UNC User Pays Decision Tree
Change Proposed
User pays is limited to the scope of Agency services
Unless specifically funded by Price Control, treat as user pays
Impacts Agency Activities? N
Outside Scope Y Y
Core/Price Control?
Outside Scope N

5. UNC User Pays Decision Tree (2)
Analysis may not be required in all cases
Cost of analysis added to user pays accounts
Material value based on cost of user pays processing
Cost of development/usage added to user pays accounts
Analysis Required? N Y
Carry Out Analysis
Price Control Funded N
Material? Y
Share Costs Amongst Users

6. Conclusions From Last Meeting
Everything could fall under user pays in the first instance
Upfront assessment of modifications will improve the modifications process
Funding of assessments should be a ‘pass through’ arrangement
Sharing of costs needs to be simple, with a limited set of alternatives and a default if agreement is not reached

7. Issues to Consider Some types of mod could be treated as core, e.g.
Failure to meet existing obligation
Detrimental impacts on other UNC activities
Criteria for determining whether analysis is required
Criteria for determining if cost is material
Transparency and governance of development costs
User pays accounts mechanism
Late joiners
IPR
Sharing Mechanisms

8. Sharing Mechanisms Which market(s) are impacted?
What method should be used for charging for development?
Is there an appropriate usage basis for ongoing charges?
If not usage based, split of charges by supply point, AQ or neither
In the event of failure to conclude on above, development and ongoing charges split in proportion to transportation charges