1. Entry Capacity Buy Backs Feeder 7 Shutdown July 2006 National Grid NTS Dave Adlam 3 August 2006

2. Summary  Feeder 7 outage  Reasons for constraints during July  Commercial implications of constraint  Entry Capacity Neutrality

3. Feeder 7 Shutdown - Overview  Feeder 7 – Shutdown at Asselby  To accommodate connection of new number 29 feeder between Ganstead & Asselby  Summary of planned works  3 – 5 th July - Decommission section of feeder between Asselby & South Duffield  6 – 15 th July - Cutting of the pipeline and insertion of valves for new connection  16 th July – Re-commission feeder  Feeder 29 between Ganstead and Asselby to be commissioned later in year.

4. Feeder 7 Shutdown Rough Easington Towlaw Bishop Auckland Cowpen Bewley Elton Little Burdon Thrintoft Pannal Towton Asselby Rawcliffe Blyborough Thornton Curtis Paull Hornsea Hatton Teesside Burley Bank Baldersby Pickering Ganstead 13 7 7 6 Burton Agnes Saltend BP New Pipeline 2008 To Nether Kellet New Pipeline 2006/7

5. Reasons for constraint action  Assess the best time to plan the maintenance  Demand Levels  Supply Inputs  3 rd – 5 th July decommisioning of Feeder 7  System configured to deal with anticipated supply / demand profile  Supply / Demand changes  St Fergus  Interconnector  Constraint at Teesside  Low level of supplies in Bacton area  5 Th – 9 th July  System reconfigured to provide better supply / demand balance  St Fergus constraint  10 th July  Feeder 7 recommisioned  St Fergus constraint lifted

6. Entry Capacity Buybacks -Teesside

7. Entry Capacity Buybacks –St Fergus Prices up to nearly 10 p/kWh Previous highest approx 0.60 p/kWh

8. Locational Actions

9. Total Cost of Capacity Buy Backs and Locational Actions Entry Capacity Buy Back – St Fergus £27,386,761 Entry Capacity Buy Back – Teesside £ 639,062 Loc. Buys – Bacton & adjacent area £ 984,821 Loc. Sells – St Fergus & adjacent area - £ 623,797 Total Cost of actions £28,386,847

10. Entry Capacity Neutrality  For all relevant ASEPs the difference between amounts received or payable by National Grid in respect of Relevant Capacity Charges shall be payable to or recoverable from relevant Users.  Relevant Capacity Revenues include:  Capacity sold on the day  Interruptible capacity  Capacity sold in excess of baseline in the daily auctions  Locational Sell actions  Overrun charges  Relevant Capacity Costs include:  Capacity Management Charges  Constraint costs resulting from the buy back of entry capacity  Locational Buy actions

11. Entry Capacity Neutrality  For each day there will be a net financial position  This is the difference between the revenues generated across the Network (at all ASEPs) and the costs generated  This is then smeared across all Shippers who hold firm entry capacity  If the net financial position for a day was a cost of £1,000,000 and a Shipper held 10% of the firm entry capacity (across all ASEPs) on that day then they would be required to pay £100,000