1. Project Nexus Workgroup Read Validation following Transfer of Ownership 13 th October 2015 1

2. Background Proposals raised via the ‘Requirements Log’ at September PN UNC, action (0904) taken to provide examples of the proposals Three process improvements have been identified around actual read submission following an estimated transfer read; –Read tolerance validation of a read following an estimated transfer read –For Class 1 & 2, actual read following an estimated transfer read –Applying ‘Round the Clock Count’ (TTZ) following an estimated transfer read The following slides provide the options & recommendations on the treatment of the above scenarios 2

3. Read Validation following an Estimated Transfer Read Where an actual read is received following an estimated transfer read the current tolerance validations will reject the actual read if less than the transfer read Options: 1.Introduce negative tolerances 2.Reject the read, would need to continue to reject until the actual read is equal to or greater than the estimated read 3.Validate the read using the last actual read 3

4. Read Validation following an Estimated Transfer Read – Option 1 4 Transfer of Ownership Estimated Opening Read Actual read Actual read 150025003500 In order for the actual read to be accepted the Shipper would need to replace the estimated transfer read or Introduce negative tolerance checks for validating the read Validate read using Negative tolerances Class 3 & 4

5. Read Validation following an Estimated Transfer Read – Option 2 5 Transfer of Ownership Estimated Opening Read Actual read Actual Read Accepted 1500 3510 3500 Reject any actual reads until the read equals or is greater than the estimated transfer read Consumption & energy calculated between the actual read and the transfer read, the energy between the two reads used to validate the read against the read validation tolerances Reconciliation calculated from the transfer read Class 3 & 4 Actual Read Rejected 2500 Read validation & Reconciliation

6. Read Validation following an Estimated Transfer Read – Option 3 - Recommended 6 Transfer of Ownership Estimated Opening Read Actual read Actual read 150025003500 Validate the read using the previous actual read Consumption & energy calculated between the two actual reads, the energy between the two reads used to validate the read against the read validation tolerances Reconciliation calculated from the transfer read Validate read to the previous actual read Class 3 & 4

7. Read Validation following an Estimated Transfer Read – Option 3 change in Class NDM to DM 7 Transfer of Ownership Estimated Opening Read Actual read Actual read 150025003500 Validate the read using the previous actual read Consumption & energy calculated between the two actual reads, the energy between the two reads used to validate the read against the read validation tolerances Validate read to the previous actual read Class 4 Class 2

8. Read Validation following an Estimated Transfer Read – Option 3 change in Class DM to NDM 8 Transfer of Ownership Estimated Opening Read Actual read Actual read 150025003500 Validate the read using the previous actual read Consumption & energy calculated between the two actual reads, the energy between the two reads used to validate the read against the read validation tolerances Reconciliation calculated from the transfer read Validate read to the previous actual read Class 2 Class 4

9. Class 1 & 2; Actual Read following an Estimated Transfer Read Where an actual read is received following an estimated transfer read, if the actual read is less than the estimate this will create a negative energy for allocation. Negative energy for a GFD should not be used for allocation processes, not correct & affects unidentified gas For normal daily processes, no transfer in ownership, ‘better estimates’ will be created between the two actual reads Proposal: Following an estimated transfer read, re- calculate the estimate(s) back to the previous actual read, including the estimated transfer read 9

10. Class 1 & 2; Actual Read following an Estimated Transfer Read 10 Transfer of Ownership Estimated Opening Read Actual read Actual read 150027004500 Estimated read 6500 Estimated read Estimated read 3500 Estimated read 2500 5500 -Actual daily reads not received for a period for a Class 1 or 2 -On the transfer of ownership date an estimated read created as no actual received & notified to the Outgoing Shipper -When the actual read received after the transfer date is less than any of the estimated reads this will result in negative energy being used for allocation processes -3800

11. Class 1 & 2; Actual Read following an Estimated Transfer Read - Recommended 11 Transfer of Ownership Estimated Opening Read Actual read Actual read 150027004500 Estimated read 6500 Estimated read Estimated read 3500 Estimated read 2500 5500 1700 1900 2100 23002500 All the estimated reads between the actuals are re-calculated to create new estimated reads: ‘Better Estimate’, including the transfer read The re-calculated estimated consumption within GFD+5 will be used for allocation processes, reads outside GFD+5 will be used for Reconciliation The new estimated transfer read will be notified to the outgoing Shipper and will create a Reconciliation. Estimated transfer read can be replaced which would create a Re-rec.

12. Class Change; Actual Read following an Estimated Transfer Read - Recommended 12 Transfer of Ownership Estimated Opening Read Actual read Actual read 150027004500 Estimated read 6500 Estimated read 5500 2100 23002500 All the estimated reads between the actuals are re-calculated to create new estimated reads: ‘Better Estimate’, including the transfer read The re-calculated estimated consumption within GFD+5 will be used for allocation processes, reads outside GFD+5 will be used for Reconciliation The new estimated transfer read will be notified to the outgoing Shipper and will create a Reconciliation. Estimated transfer read can be replaced which would create a Re-rec. Class 4 Class 2 Reconciliation

13. Class Change; Actual Read following an Estimated Transfer Read - Recommended 13 Transfer of Ownership Estimated Opening Read Actual read Actual read 150027004500 Estimated read 3500 Estimated read 2500 Estimated transfer read would not be replaced as it does not feed Allocation processes Reconciliation from the actual read to the transfer read Class 2 Class 4 Reconciliation

14. Applying ‘Round the Clock Count’ (TTZ) following an Estimated Transfer Read Where an actual read is received following an estimated transfer read, the TTZ count must be based on the estimated transfer read. If the estimate is higher than the actual read a negative TTZ must be provided Option: 1.Continue to base the TTZ count on the estimated transfer read 2.Base the TTZ count on the previous actual read where the transfer read is an estimate Applies to all Classes of meter point 14

15. Applying ‘Round the Clock Count’ (TTZ) following an Estimated Transfer Read – Example Option 1 15 Transfer of Ownership Estimated Opening Read Actual read Actual read 150025003500 Use the estimated transfer read for applying the TTZ count In the example above the Shipper would provide a TTZ count of -1 A negative TTZ has been allowed for in the file formats TTZ count based on Estimated transfer read All Classes

16. Applying ‘Round the Clock Count’ (TTZ) following an Estimated Transfer Read Example Option 2 - Recommended 16 Transfer of Ownership Estimated Opening Read Actual read Actual read 950005001500 Use the previous actual read for applying the TTZ count The Incoming Shipper will be notified of the previous actual read In the example above the Shipper would provide a TTZ count of 1 TTZ count based on previous read All Classes