Application of User Pays Principles to Existing Service Lines

1. Application of User Pays Principlesto Existing Service Lines 22nd November 2006

2. User Pays Criteria for Existing Services • The key stakeholder of a service line is the party who has the most interest in the way the service operates. • The key stakeholder is not necessarily • The recipient of the output from the service line or • The owner of the obligation. • Criteria for applying user pays arrangements to an existing service: • The key stakeholders are Users and • Users have discretion on whether to use the service and • [Users have discretion on how to use the service and] • The cost of the service line is usage dependent.

3. User Portfolio Report • User portfolio report (Part 3 – 35). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • The cost of the service line is usage dependent - ? • Issues • Not sending a report may be more expensive than sending to all.

4. Supply Point Information Services • Provision of relevant data to gas shippers or their agents or non-domestic customers of a gas supplier or persons acting on their behalf (Part 2 – 8). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • The cost of the service line is usage dependent -  • Issues • Internet Access to Data is largely fixed cost. • Different approach for different aspects of a single service line.

5. Record Meter Reference Number • Record the number for a New Supply Meter Point on the Supply Point Register. (Part 1E - 18). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • The cost of the service line is usage dependent - ? • Issues

6. Must Reads • Notify user and obtain meter read following failure by user to provide valid meter read for a monthly read meter. (Part 1E – 16). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • The cost of the service line is usage dependent -  • Issues • A charge is already made.

7. SPA Data From iGTs • Validation of relevant supply point administration data submitted to a network operator by a connected system operator or independent gas transporter in relation to an NDM CSEP. (Part 1E - 12). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • The cost of the service line is usage dependent -  • Issues

8. User Admission • Coordinate admission requirements for an applicant user. (Part 1E – 1). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • The cost of the service line is usage dependent -  • Issues • Could include provision of IX equipment (Part 3 – 8)

9. Energy Balancing • Credit Risk Management and Cash Collection. (Part 1D). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • Users have discretion on how to use the service - ? • The cost of the service line is usage dependent -  • Issues • Transporters have a strong interest in the financial incentives to balance the system. • Unlikely to provide incentive to manage costs imposed on xoserve.

10. Invoicing • Submission of supporting data for Invoice Documents. (Part 1C - 4). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • The cost of the service line is usage dependent - ? • Issues • Not sending supporting information may be more expensive than sending to all.

11. User Provisional Annual Quantity • Respond to notification of User Provisional Annual Quantity. (Part 1B - 17). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • Users have discretion on how to use the service -  • The cost of the service line is usage dependent -  • Issues

12. Retention of Meter Reads • In relation to NDM Supply Meters maintain a record of valid Meter Readings for no longer than 5 years. (Part 1B - 5). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • The cost of the service line is usage dependent -  • Issues

13. Query Management • Standards of service query management. (Part 1A - 25). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • Users have discretion on how to use the service -  • The cost of the service line is usage dependent -  • Issues

14. Supply Point Nomination • Respond to Supply Point Nomination. (Part 1A - 3). • Criteria • The key stakeholders are Users -  • Users have discretion on whether to use the service -  • Users have discretion on how to use the service -  • The cost of the service line is usage dependent - ? • Issues

15. Summary of User Pays Analysis (1)

16. Summary of User Pays Analysis (2)

17. Summary of User Pays Analysis (3)

18. User Pays Analysis Caveats • Not all individual service lines are appropriate for user pays, even within a user pays category. • Service lines identified as user pays candidates can have a significant fixed cost element. • It’s likely that if a materiality criteria were to be applied, the number of user pays service lines would reduce.