MOD Proposal 0224 Facilitating the MOD Proposal 0224 Facilitating the use of AMR in the Daily Metered use of AMR in the Daily Metered

Elective Regime Elective Regime

28 May 200928 May 2009

Code User Pays ServicesCode User Pays Services

2

Objectives

Background to Mod 0224

Development costs

Forecast service demand

DME Services Core Service Reconciliation Consumption Adjustments

User Pays proposed charges

3

Background

Mod 0224 seeks to allow users to elect for a daily settlement regime, rather than use the Non Daily Metered (NDM) demand profile

Implementation will allow shippers to submit Daily Metered (DM) reads for eligible sites within their portfolio, based on Meter Point EUC band

Phased approach still being assumed for costing / demand purposes

Proposed solution is to enhance existing DN systems and processes to achieve tactical solution ahead of Project Nexus

Mod 0224 is to be a Code User Pays service. Ongoing services will be included in the Agency Charging Statement (ACS) and follow the approved methodology

4

DME Development Cost

The re-charge methodology has been agreed as part of the Mod Proposal

Development cost is c.£565k and will be recovered up front

Re-charge for all shippers, based on eligible Meter Points as at 28 April 2009

Phase 1 EUC 6,7,8,9 £29.00 per MP

Phase 2 EUC 5 £21.50 per MP

Phase 3 EUC 4 £14.50 per MP

5

Demand Forecast

Demand provided by users and collated by Ofgem based on potential price ranges, as shown below

To support charges a linear demand take up has been assumed, so full demand for each phase is not reached until final month of phase

£25 - 49 £50 - 99 £100 - 200 £201 - 400 £401 - 600

Phase 1 (12 months) 667 667 616 584 49

Phase 2 (12 - 18 months) 1,019 1,019 939 280 158

Phase 3 (18+ months) 2,980 2,980 1,442 1,031 670

Total Demand 4,666 4,666 2,997 1,895 877

6

Demand Profile

Linear demand profile assumed for DME Core Service

Phase 1(12 months)

Phase 2(12 - 18 months)

Phase 3(18 - 24 months)

667

1,019

3,176

Met

er P

oint

s

1,686

1,490

7

Code User Pays Services

The DME services will be charged under two categories and follows the approved User Pays charging methodology

DME Core Services The core activities required by all users to participate in the regime will

be charged at a daily rate per Meter Point

“Non performance” related services There will be a transactional charge per individual “non performance”

Reconciliation Investigations Consumption Adjustments

8

DME Core Service

Core DME service activities will be performed by xoserve to facilitate the regime. These include;

Receipt and processing of daily DME reads Manual validation of reconciliations (as per next slide) Provision of mandatory reports

Monthly DME uptake report Weekly DMSP notification report

Invoicing services User Pays charges DME read incentive

Shippers will incur charges on a daily basis, following confirmation of Meter Point to DM Elective regime

9

Reconciliation Investigation

xoserve validates all DM reconciliations. This activity is included in the DME Core Service charge

Types of validation checks include; Daily energy (GRE, NRE, ZRE charges) Resynchronisation data Excessive charges not created Duplicate checks

Output of validation; Approved reconciliation – no direct charge Reconciliation requires further investigation and resolution, due to

user error – TRANSACTIONAL CHARGE

10

Consumption Adjustments

Shipper submits a consumption adjustment to xoserve, which is validated and processed offline. Online adjustments are managed through shipper file submission and included within development costs

Adjustments (after D+5 close out) must be submitted via ADJ1 form and during investigation xoserve may be required to liase with shipper to gain further information to process adjustment

Types of valid adjustments include; Asset resynchronisation Faulty equipment Incorrect asset set up

Consumption adjustments will be charged following processing and receipt on DM invoice - TRANSACTIONAL CHARGE

11

Proposed Price for Core DME Service

Charge is per Meter Point per day and to forecast to remain static for first 2 years, based on demand

Costs and demand will be published in ACS and will be reviewed as part of the wider ACS review process

Any prices changes will be discussed in principle at the User Pays User Committee

Service Trigger Charge Type Price

DME Core Service Confirmation of DME Meter Point Daily £0.26

12

Proposed Transactional Prices

All prices are for delivery of each activity

The costs are based on the estimated time taken to complete the activity and the associated costs of this time

There is also two additional Non Code User Pays reports that will be made available, these will be agreed through User Pays User Committee

Service Trigger Charge Type Price

Reconciliation Investigation

Manual investigation / resolution of DM reconciliation due to shipper error Per Transaction £47

Consumption Adjustments Submission of ADJ1 file Per Transaction £38

13

Year 3 Forecast

Assuming; Operational cost remain as forecast First 2 years demand achieved Maximum demand reached in 6 month of year 3

Year 3 daily rate c.£0.07 - £0.12 per MP

Phase 1(12 months)

Phase 2(12 - 18 months)

Phase 3(18 - 24 months)

667

1,019

3,176

Met

er P

oint

s

1,686

1,490

24 - 36 months

1,490

4,666