1. Enduring Solution – Stage 2 (ES-S2)
Harmonisation of electricity retail market operations
Presentation by:
Michael Atkinson – ES-S2 Project Team
23 September 2009

2. Context – Enduring Solution Project
ESB implemented market facing systems in December 2004
Tested in recent high levels of switching in domestic market in RoI
NIE implemented interim solution in November 2007
Constrained by need to further upgrade / replace existing systems
Options to remove constraints explored with NIAUR during 2008
Agreed with NIAUR to procure an Enduring Solution (ES) that would
Upgrade existing systems and provide for business separation
Provide a base for harmonisation and smart metering
Procurement process commenced at end 2008
Industry Group (ESSG) established early 2009
RfP issued in May 09 ; responses to RfP received July 09
Outline timeline initially to deliver end 2011
Private and Confidential

3. Move to Full Harmonisation
Harmonisation on agenda from start of ES project
High level NIAUR views - April 2008 and Nov 2008 consultation papers
Approach discussed with SIG and ESSG
ES planned initially on parallel and incremental approach
Progress to extent possible at RfP and include further updates at BAFO - with likelihood of significant post Go Live release
Some ten additional messages included at RfP
Significant joint progress with NIAUR / CER since spring 09
Strong desire now to maximise extent of harmonisation included in main contract for enduring solution
Private and Confidential

4. Private and Confidential
What is Harmonisation?
Harmonisation considered in context of:
Alignment with other jurisdictions
Focus on market operations from perspective of suppliers
Initially wide scope, now focused on alignment with RoI
Harmonisation – the objective may be:
Common set of messages
Common set of business rules
Market procedures to describe consistent set of rules for supplier interactions
Integrated governance mechanism
to the extent that can be implemented with an acceptable impact on overall enduring solution timetable and cost
In place from start, to get to best short term position within ES, and then remains to ensure further convergence
Private and Confidential

5. Aspiration and Approach
A joint project is being established between NIE and ESB
Aspiration - harmonisation bringing real benefits to suppliers
developed for inclusion in core ES project contract
Principal scope is market messages and associated processes
alignment of technical solutions will also be considered
Overall approach
Recognise existing differences between jurisdictions
Consider options for alignment on a case by case basis
Engage with appropriate stakeholders
Develop pragmatic outcomes – which are cost effective and efficient
Private and Confidential

6. Joint Arrangements with NIE and ESB
Overall plan is to work in a cyclical manner through messages
Clustered probably in six groups
Working together on schema and process alignment
Approximate three month timeline
Teams established and actively engaged
Outcomes will be discussed with industry steering group
Stakeholder engagement at critical points
Detailed plans being developed
Need for commitment from all involved parties to work within an acceptable impact on enduring solution procurement timetable
Private and Confidential

7. Meeting the challenges – leading to best outcome
Suppliers
Outcome must bring real benefits with savings to customers
Suppliers will incur cost depending on level of system changes
Network Operators
Ultimately the outcome must be deliverable and cost effective
Significant changes to systems / processes may arise with costs
Enduring Solution Project
Harmonisation will impact cost and timeline – Stage 2 and Stage 3
Project Team will not go to contract until requirements well defined
Need a sensible balance of ‘ideal’ solution vs what is achievable within acceptable impact on ES timetable
Balance extent of harmonisation vs timetable to deliver ES
Private and Confidential

8. Messages and Associated Processes - Options
Five principal options identified
Full harmonisation – Development of new schema and processes
Full Harmonisation – Substantive adoption of RoI schema and processes
Full Harmonisation – Substantive adoption of NI schema and processes
Partial Harmonisation – Common schema, different processes
Deferred Harmonisation – Limited change in enduring solution
Private and Confidential

9. High Level Assessment of Options
Full
Partial
Defer
New
Based on RoI
Based on NI
Messages only
Existing ES
Suppliers active in RoI and NI
Costs
Highest for Full
Lowest for Full
Mid range for Full
Cheaper than Full
Lowest initially – costly long run
Benefits
Similar for all Full harmonisation options, once end target realised
Limited
Very limited
NIEES and ESBCS
Costs NIEES
Mid range, lower than Full
Limited, lower than Partial
Costs ESBCS
Limited or none, given present focus of market operations
Avoids change
Network operators
Costs NIE
Costs ESBN
None direct, benefit is ability to support retail market
Risks
Implementation risks higher, longer term benefits earlier and more assured
Cost/benefit tradeoff
Long term benefits uncertain
Private and Confidential

10. Private and Confidential
Governance
Intention is to establish:
Project Steering Group, to provide overall direction
Project Working Group, to go through detailed proposals within brief defined by Steering Group, and to report any unresolved issues to it
Aligned governance from end 2009 also required to ensure:
Alignment arising from project does not drift due to incremental decisions taken separately in each jurisdiction
Further convergence around areas not fully aligned within ES
Principles of that governance likely to include
Common set of principles applying to further development
Single change control process, possibly working in parallel in separate jurisdictions
Private and Confidential

11. Examples of Areas Where Full Harmonisation May Not Be Achieved in Short Term
RoI
Fieldwork Appointments
Schedule appointment
Request appointment
Thresholds – Meters & Tariffs
70kVA
30kVA/100kVA
New Connections
No energisation without registration
Energisation possible without registration
HH Meter Intervals
Half Hourly
Quarter Hourly
Meter Read Cycles
Three months
Two months
Estimated Reads
Different rules
Meter Types
Different categories
Prepayment Meters
Keypad, customer choice, in competitive market
Token, financial hardship, not in competitive market
Private and Confidential

12. Private and Confidential
Next Steps
Seeking views today on overall approach and proposed options
Builds on presentation to ESSG last week
Initial paper setting out approach and analysis of options circulated
Regulators will determine appropriate way forward, in particular
Focus of harmonisation alignment
Appropriate timescales for delivery and impact on ES project
Approach to dealing with issues likely to fall outside those timescales
Steering Group and Working Group arrangements
Private and Confidential