1. © 2007 E.ON Nexus AQ Requirements To support the current business processes We need to maintain performance and enable market operation as is using current AQ process To enable movement to a fully smart/AMR world AQ will be less important if we move to meter point allocation on a daily basis, much as DM AQ is less important in the current framework To support interim processes through the change period Moving from the current annual process to enable AQ changes to more accurately reflect current consumption would be feasible through the introduction of rolling AQ, as defined in Mod 209

2. © 2007 E.ON12 October 2014, E.ON, Page 2 Allocation workshop has recommended daily allocation at a site level This may be using daily information supplied from the CCP This may use estimated daily allocation reconciled on a regular basis Where daily allocation takes place AQ will be less relevant Where any estimation is required (missing read information) then AQ would be likely to form the basis of any estimation process Any form of estimation using AQ would have the same issues as current profiling

3. © 2007 E.ON12 October 2014, E.ON, Page 3 AQ is a historic calculation and does not reflect changing consumption behaviour of consumers – this was particularly evident over the past 12 months of recession impact on LSP and energy efficiency within SSP  Rolling AQ would help ensure AQ was reflective of changing behaviour as soon as possible  Implementing Rolling AQ would enable benefits in the transition period  A fully AMR/Smart world could also feed into rolling AQ to ensure any estimation was based on current values