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Review Group 0221- Action 012

Review Group 0221- Action 012. 27 November 2008. RG0221 – 012 Option C & Interim Arrangements. Option C: Security is needed for any capacity currently allocated to the User . Advantages & Disadvantages were identified as: Advantages:

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Review Group 0221- Action 012

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  1. Review Group 0221- Action 012 27 November 2008

  2. RG0221 – 012 Option C & Interim Arrangements. • Option C: Security is needed for any capacity currently allocated to the User. • Advantages & Disadvantages were identified as: • Advantages: • Would affect the balance of risk between Users and community in the community’s favour • Treats all Users the same • Crystallises and quantifies current socialised risk • Disadvantages • Sudden increase in industry wide requirement to provide security may require delayed implementation for Security Instrument Providers to provide instruments required and for National Grid to assess them. • Some Users may not be able to comply with new arrangements and may face increased risk of failure or sanctions. • There is an assumption that for future QSEC Auctions all security arrangements will be in place within 28 days of Capacity Allocation.

  3. RG0221 – 012 Options for Interim Arrangements • Following Approval of Modification Proposal by the Authority the new security arrangements are put in place to take effect before the next QSEC Auction, i.e. to be effective for September 2009 or March 2010 auctions (Mod 230). • What needs to be done to overcome disadvantages described on previous slide? • Could Users get security in place in, say, 6-9 months? • If security required in this period would an EBCC type arrangement (limited duration) be effective to try and mediate risks to Users/Community and could it be created / implemented in the same timescale, i.e. 6-9 months? • Who would sit on this committee, what would its remit be e.g. sanctions, and would there be an appeal route? • Following Approval of the Modification Proposal by the Authority the new security arrangements are put in place to take effect after the next QSEC Auctions, i.e. 2010, 2011, 2012….. • What would the appropriate lead time be that would balance the risk on Users of having to put arrangements in place and that of giving such a long lead time that the current risks to the Community are not dealt with? • Should introduction of the new arrangements be phased to cover capacity released in previous auctions? (Example schedule on next slide)

  4. RG0221 – 012 Options for Interim Arrangements (2)

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