2. UNC MOD 213: USER PAYS GOVERNANCE ARRANGEMENTS
GOVERNANCE WORKSTREAM
19 June 2008
Stefan Leedham

3. COST ESTIMATE BUSINESS RULES
Pre DMR Stage Mod Panel Request limited to type 1/bargain bucket appraisal
At DMR Stage if cost appraisal required panel to decide on type of appraisal and determine timeline for production of this
To aid panel’s the decision guidelines should be developed
GTs also able to make representations to the panel on what they believe should be an indicative timeline
If GTs are unable to meet this timetable then they should provide a written explanation to the UNC Panel at the earliest opportunity and no later than 2 business days after the target deadline has passed
Different targets for different types of cost appraisals?
Panel to set targets dependent on appraisal – in agreement with GTs?

4. COST ESTIMATE COSTS
The cost of providing cost estimates to be funded from a pot of money administered by the Joint Office, with the cost of implemented user pays mods refunded by xoserve upon implementation notice
The pot of money at the start of a Gas Year will be £200,000 and will be funded by Transporters based on their funding of xoserve
Upon implementation of this proposal the value of the pot will be calculated pro rata based on how far through the Gas Year the proposal is implemented
Provides control measure for cost estimates approved by panel
Similar to funding arrangements in electricity
Covers Shipper and GT mods
Could make use of the accumulation mechanism

5. IMPLEMENTED COST ESTIMATE COSTS
For all User Pays proposals implemented by Ofgem the cost of providing a cost estimate will be recovered as an overhead cost of xoserve smeared across all xoserve services on an annual basis
Costs of providing cost estimates should be viewed as business as usual
Could make use of accumulation mechanism
Similar to commercial arrangements

6. WAY FORWARD Next Steps Stefan.leedham@edfenergy.com 0203 126 2312
Produce and agree final set of business rules
Complete development workgroup report

7. THANK YOU