AQ OverviewAQ Overview

Annual Quantity (AQ) is a value held for each meter point that reflects the expectation as to the volume of gas that a meter point will consume within 1 gas year. The AQ is derived from historic consumption and consumption patterns to derive the most accurate AQ

AQs or derivatives of AQ, are utilised in many xoserve and Shipper processes, including: Network Analysis & Planning Energy Balancing Safety GT Pricing Billing / RbD & Transportation Charges Read Frequency Emergency Contacts Site Classification

AQ – Definition

RMQ – Relevant Metered Quantity Calculation: (Read 2 – Read 1) * Asset * CV Value (No. Of Days * 365)

* Calculation of Consumption Only – Not AQ

Actual Uniform Network Code Defined xoserve System Calculation (H.3.4.1):

1: AQ System Calculation :The Uniform Network Code Defined AQ Calculation (NDM Only)

RMQ: Relevant metered Quantity or Consumption

based on Reads and Asset

INCLUDES: Actual CV values and not default value

CWAALP: Cumulative Weather Adjusted Annual Load Profile

Includes Daily Adjustment Factors, Load Profiles, Normal Seasonal Variables, Weather Sensitivity etc. for both actual and

forecasts

UNWC Section: H.3

AQ System Calculation will use any valid read on xoserve systems.

Aim to identify erroneous AQ calculations.

System Calculation starts in April each year.

If system is unable to determine 2 reads within specified parameters, AQ will be Carried Forward – same AQ Value for previous Gas Year will be applied in next Gas Year.

Manual Analysis will take place on: Threshold Crossers LSP AQ Calculation WC Calculation Primes & Subs

1: AQ Calculation :Important Points

1 Years Consumption for DM sites is 365 Days (or 366 days for Leap Years)

Section 1: AQ System Calculation Daily Metered (DM) AQ Calculation

UNWC Section: G.1.6.2

Consumption 1Start Read

Consumption 2End Read

DM Consumption: 1 YEAR

System Calculation

Date

Reads on a day denote the end of the previous days consumption, therefore consumption 365 (End Read) will be derived from the read on day 366

DM AQs are NOT Adjusted to seasonal normal temperature (NDM AQs are)

1: AQ System Calculation: Non-Daily Metered (NDM) AQ Calculation

UNWC Section: H.3

All Reads used in System AQ Calculation have to be within 3 years of the calculation date.

End Read is the latest dated valid read prior to the system calculation

Target Read Date (Start Read) is End Read minus 50 weeks for Monthly Read Meters, 42 Weeks for Non-Monthly Read Meters

Start Read is the latest valid read prior to Target Read Date (but not less than 3 years since calculation date) OR if no valid read exists before the Target Read Date, the earliest dated read after the Target Read Date BUT before the End Read minus 6 months & 1 day

If no valid read exists earlier than the End Read minus 6 months and 1 day, no AQ calculation will take place, current AQ will be carried forward

D - 3Years SystemCalculation

Date

End Read

Target Read Date

NDM ConsumptionEnd Read minus 42 / 50 Weeks

Start Read OR Start Read Read 2 minus 6 Months & 1 Day

April xoserve Recalculates SSP Meter Point AQs May xoserve Recalculates LSP Meter Point AQs May xoserve Recalculates Meter Point Winter Consumptions

(WC) By June 6th All SSP & Threshold Crosser T04 Notification Files Released June 7th SSP AMENDMENT WINDOW OPENS By June 30th All LSP T04 Notification Files Released July 1st LSP AMENDMENT WINDOW OPENS July 31st AQ Appeals Window Closes August 13th Last Day For Shipper Amendment Files September 1st Supply Point Revision Commences September 14th NRO / NRL Files Released to Shippers (S91, S92, T68) September 15th Appeals Window Opens October 1st AQs IMPLEMENTED

AQ Timetable

An AQ Amendment is a challenge by the owning Shipper to change the AQ Value to be applied on 1st October

Shipper is challenging the data that xoserve has used to calculate AQ by using new or more valid data

Amendments occur during the AQ Review period ONLY

If the amendment is Accepted, the amended AQ will go live automatically on 1st October

If the amendment is Rejected, the xoserve calculated AQ will go live on 1st October

Section 3: AQ Amendments

UNWC Section: G.1.6

1: Reads An Amendment can be submitted where:

The Read/s used by xoserve are incorrect therefore resulting in an erroneous calculation -The Shipper has more recent reads available than those used by xoserve

2: Meter Asset Discrepancy An Amendment can be submitted where:

xoserve has calculated the AQ using incorrect MATERIAL asset data. This Includes:

• Imperial / Metric Indicator• No. of Dials• No. of Units• Correction Factor

- Each of the above will have a direct impact on the calculated AQ

In addition to the Amendment, the Asset change should be submitted to xoserve to ensure future accuracy of consumption and AQ calculations

3: AQ Amendments: Reasons For Amendment

UNWC Section: G.1.6

3: Carry Forwards xoserve has been unable to recalculate the AQ & the current AQ is applied.

Reasons for Carry Forwards can include:

xoserve has been unable to calculate an AQ due to a lack of consumption history Analysis has determined that the proposed AQ may be erroneous

For Amendments where the Supply Point is a Smaller Supply Point and will remain as a Smaller Supply Point (<73,200):

Amended AQ must change by +/- 20% The Shipper requested AQ is measured against the xoserve proposed AQ

(not current AQ) Amendments within this tolerance will be automatically rejected

N.B: Uniform Network Code states: Focus of Amendments should be balanced: Amendment requests should reflect the true, seasonally adjusted, annual consumption anticipated at the Supply Meter Point requiring increases as well as reductions in the AQ

3: AQ Amendments: Reasons For Amendment

UNWC Section: G.1.6

AQ Amendments

Total AQ Amendments Received 2,521,057 Total Accepted 2,372,206 (94.1%) Total Rejected 148,851 (5.9%)

- Inclusive of Referrals

Total Referrals 12,647 Total Accepted 4,943 (39.1%) Total Rejected 7,704 (60.9%)

AQ Review 2007AQ Review 2007

Meter Points Calculated

Large Supply PointsTotal Meter Points Calculated 421,704

Current Energy 268 TWH First Sweep calc 272 TWH * xoserve Calculated Energy 260 TWH Final Applied Energy 01/10 251 TWH

(Incl. 4.5 TWH SSP - LSP – 39,106 M.Points)

Small Supply PointsTotal Meter Points Calculated 21,080,879

Current Energy 399 TWH First Sweep calc 402 TWH* xoserve Calculated Energy 395 TWH Final Applied Energy 01/10 385 TWH

(Incl. 2.3 TWH LSP - SSP – 51,491 M.Points) * = Approximate figures

AQ Review 2007AQ Review 2007

SSP Energy Movement

385

398402

399

370375380385390395400405410

Curent AQPre 01/10/07

First Sweep XoserveCalculated

AQ

Final AppliedAQ at 1/10/07

En

erg

y (

TW

H)

Small Supply Point (Domestic) MovementSmall Supply Point (Domestic) Movement

AQ Review 2007AQ Review 2007

WHAT IS AN AQ APPEAL?

An AQ (Annual Quantity) Appeal is a challenge to the current AQ value on UK Link.

The AQ Appeals window is open from 15th September until 31st July Applies to the following categories of site

Large Supply Point to Large Supply Point Changes (>73,200 to >73,200)

Small Supply Point to Large Supply Point Changes (<73,201 to >73,200)

Large Supply Point to Smaller Supply Point Changes (>73,200 to < 73,201)

Small Supply Point to Small Supply Point changes cannot be Appealed

AQ Appeal: Process Flow

Can An AQ

Appeal Be Raised?

Can An AQ

Appeal Be Raised?

Can an AQ

Appeal be raised?

Can an AQ

Appeal be raised?

Shipper determines current AQ value is not reflective of actual consumption

Shipper determines current AQ value is not reflective of actual consumption

Shipper unable to raise AQ Appeal – AQ will be recalculated during next AQ Review – Shipper

will have opportunity to raise Amend

Shipper unable to raise AQ Appeal – AQ will be recalculated during next AQ Review – Shipper

will have opportunity to raise Amend

Shipper Submits Speculative Calculator

Request File: ASI File

T19 Record

Shipper Submits Speculative Calculator

Request File: ASI File

T19 Record

Spec Calc File Rejected with Rejection Reason: ASO File will include S72 Rejection Record

Spec Calc File Rejected with Rejection Reason: ASO File will include S72 Rejection Record

Shipper Receives

Recalculated AQ Value

Shipper Receives

Recalculated AQ Value

Is AQ Acceptable?

Is AQ Acceptable?

Shipper Submits Appeal File as Per

Spec Calc Response File:

API File T17 Record

Shipper Submits Appeal File as Per

Spec Calc Response File:

API File T17 Record

xoserve Responds to Appeal File to Shipper:

• APO File • T18 Record

• AC, RJ or RF Outcome

xoserve Responds to Appeal File to Shipper:

• APO File • T18 Record

• AC, RJ or RF Outcome

Amendment File Rejected with Rejection Reason: APO File will include S72 Rejection Record

Amendment File Rejected with Rejection Reason: APO File will include S72 Rejection Record

Shipper Receives Appeal File and submits

re-nomination & confirmation using Appeal Reference

Shipper Receives Appeal File and submits

re-nomination & confirmation using Appeal Reference

NONO

YESYES

xoserve Responds with Speculative

Calculation Response File to Shipper:

• ASO File • T20 Record

• AC or RJ Outcome

xoserve Responds with Speculative

Calculation Response File to Shipper:

• ASO File • T20 Record

• AC or RJ Outcome

NONO

YESYES

Is AQ Acceptable?

Is AQ Acceptable?

REJECTREJECT

AC

CE

PT

AC

CE

PT

REJECTREJECT

ACCEPTACCEPT

AQ Goes live on xoserve System on Confirmation

Effective Date

AQ Goes live on xoserve System on Confirmation

Effective Date

Exceptions

Manual Appeals– Non confirmed supply points where the incoming shipper disagrees with the prevailing site AQ

BTU FormsNew Business Appeals – Where RSU picks up a site and believes AQ to be incorrect.MOD99 – Again on shipper transfer where a domestic property has an AQ above the LSP threshold (73,200 KwH per annum.)

Manifest Errors – Where there is a dramatic change in supply point usage. (E.G. site has closed or built a new CHP system etc.)

Appeal Activity 2007 – January to October

N.B. The appeals window was closed from 31 July to 15 September 2007.

AQ Review 2007AQ Review 2007

Issues

Xoserve’s role Change to xoserve workload - Flatter profile Amendments would no longer exist. Current process relies on xoserve impartiality No xoserve manual review before AQ reset Potential increase in meter read traffic. (Limit of 400,000 meter reads per day.) Changing the AQ.

There could be more Appeals spread through the year. There could be a dramatic increase in read replacement activity

Poor quality RGMA flows mean:- Erroneous reads could load. Correct reads fail to load.

How will read replacement work? A single read can be replaced up to 99 times Does this mean that the AQ can be altered 99 times? Does this open up gaming issues. Replacement cannot be retrospective from an energy perspective Reconciliation would take place back to date of original reading

Issues 2

Reconfirmation process. Would need to be at least 14 days before AQ could go live. NRL/NRO files to be issued Impacts on Gemini. Issues on shipper transfer. Potential to change AQs at a given point in time (E.G. Monthly, Quarterly)

Which reads should be used to drive AQ changes? Cyclic Read replacements OSER POS Opening reads Not OPNT estimates Shippers could chose which meter reads to submit.

Funding. Who pays? Networks User Pays

Demand Estimation