1. Consideration of issues raised by UNC Modification Proposal 0244
23 July 2009

2. Background Reduced demand at DM Supply Points as a consequence of
economic downturn
Mothballed plant
Reduced / curtailed production
Current UNC rules limit opportunities for the reduction of
Registered DM Capacity
Concerns raised by Consumers at Gas Customer Forum
UNC Modification Proposal 0244 (and 2 alternates) sought
changes to UNC regime governing reduction of the
Ofgem rejected all three proposals in May 2009
Decision letter “…it may be appropriate for GDNs to consider whether some form of transitional relief is appropriate…”, “…The industry may wish to consider whether…they wish to consider developing further proposals…”, “…We therefore consider that the GDNs should consider alternative solutions to target the potential problem identified…”

3. Proposed Approach xoserve ‘Rules and Options Analysis’ in progress
Raise UNC Review Proposal – Convene Review Group
Involves all UNC parties in consideration of whether change is necessary
Requires participation of Users and consumers to accurately identify the scale and significance of the issue
Opportunity to identify and collate evidence
Ofgem identified that there was a lack of analysis in respect of the 0244 Mods
Priority given to discussion and development of short term measures
Xoserve’s analysis used as necessary
Feedback welcome in respect of the scope of work:
possible ‘transitional relief’ (short term).
Focus on charging regime?
UNC or other e.g. supply contract remedy?
possible changes to the BSSOQ / ratchet regimes (long term)
In respect of any solutions identified
mitigation measures to prevent inappropriate behaviours
likely impact of any changes on consumers affected
likely impact of changes on other consumers charges (i.e. costs that are recovered from the rest of the GDN consumer base)
the impact on investment decisions
Raise UNC Modification Proposal if necessary (can be
during course of group discussion)

4. Proposed timetable of events
xoserve ‘Rules and Options
Analysis’ request raised
Publish proposed timetable to
UNC Distribution Workstream
Gas Customer Forum
Raise Review Proposal at UNC
Modification Panel. Identify and
agree Terms of Reference (to
include a requirement to Identify
possible short and long term
solutions). Convene group
Review Report to UNC
Modification Panel
Raise UNC Modification
Proposal (if required)
Develop and implement process
and systems solutions (if
required) onwards
1st June 2009
23rd July 2009
27th July 2009
6th August 2009
December 2009
January 2010
Short term measures pursued as a priority (eg: UNC Mod)