-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VPqiR9vG+fyQDfxL0RN5PWQfQqcjGNTbgD/l5ev52o6h0hzERNOgwgUoAyLAeyp5 NKIJUKuxFVzXmy5z3CbLww== 0001019672-98-000002.txt : 19980630 0001019672-98-000002.hdr.sgml : 19980630 ACCESSION NUMBER: 0001019672-98-000002 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980629 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN INVESTMENTS UK PLC CENTRAL INDEX KEY: 0001019672 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 333-09033 FILM NUMBER: 98655641 BUSINESS ADDRESS: STREET 1: SOUTHERN COMPANY SERVICES, INC. STREET 2: 333 PIEDMONT AVE, NE CITY: ATLANTA STATE: GA ZIP: 30308 BUSINESS PHONE: 404-506-71 MAIL ADDRESS: STREET 1: 800 PARK AVENUE AZTEC WEST ALMONDSBURY STREET 2: BRISTOL BS12 4SE CITY: ENGLAND STATE: X0 10-K405 1 FORM 10-K FOR YEAR ENDED MARCH 31, 1998 ============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended March 31, 1998 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Registrant, State or other Jurisdiction Commission of Incorporation or Organization, I.R.S. Employer File Number Address and Telephone Number Identification No. ----------- --------------------------------------- ------------------ 333-09033 Southern Investments UK plc None (Registered in England & Wales) 800 Park Avenue Aztec West Almondsbury Bristol BS32 4SE, UK (01144) 1454 201101 =============================================================================== Securities registered pursuant to Section 12(b) of the Act: None. Securities registered pursuant to Section 12(g) of the Act: None. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( X ) Aggregate market value of voting stock held by non-affiliates: $0 A description of the registrant's common stock follows: Description of Shares Outstanding Registrant Common Stock at May 31, 1998 - ---------- ------------- ------------------ Southern Investments UK plc Par Value(pound)1 Per Share 500,400,587
Table of Contents PART I PAGE Item 1 Business General.............................................................................................. I-1 Overview of the Electric Utility Industry in Great Britain........................................... I-2 SWEB's Main Businesses............................................................................... I-2 SWEB's Other Business Activities..................................................................... I-6 Risk Management...................................................................................... I-6 UK Environmental Regulation.......................................................................... I-7 Employee Relations................................................................................... I-8 Item 2 Properties.............................................................................................. I-8 Item 3 Legal Proceedings....................................................................................... I-8 Item 4 Submission of Matters to a Vote of Security Holders..................................................... I-9 PART II Item 5 Market for Registrants' Common Equity................................................................... II-1 Item 6 Selected Financial Data................................................................................. II-1 Item 7 Management's Discussion and Analysis of Results of Operations and Financial Condition Introduction......................................................................................... II-2 Results of Operations................................................................................ II-3 Financial Condition.................................................................................. II-7 Item 7A Quantitative and Qualitative Disclosures about Market Risk.............................................. II-9 Item 8 Financial Statements and Supplementary Data............................................................. II-10 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.................................................................. II-30 PART III Item 10 Directors and Executive Officers of the Registrant...................................................... III-1 Item 11 Executive Compensation.................................................................................. III-2 Item 12 Security Ownership of Certain Beneficial Owners and Management.......................................... III-3 Item 13 Certain Relationships and Related Transactions.......................................................... III-4 PART IV Item 14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K.......................................................................................... IV-1
Cautionary Statement Regarding Forward-Looking Information The Company's 1998 Annual Report Form 10-K contains forward-looking statements in addition to historical information. The Company cautions that there are various important factors that could cause actual results to differ materially from those indicated in the forward-looking statements; accordingly, there can be no assurance that such indicated results will be realized. These factors include legislative and regulatory issues (such as the results of the current review of regulation, see Item 1 "Business - Supply Business", and the results of the supply and distribution price reviews scheduled to take effect April 1, 2000); the extent and timing of the entry of additional competition in the supply market; potential business strategies, including acquisitions or dispositions of assets or internal restructuring that may be pursued by the Company or SWEB; changes in or application of environmental and other laws and regulations to which the Company and SWEB are subject; political, legal and economic conditions and developments in which the Company and SWEB operate; financial market conditions and the results of financing efforts; changes in commodity prices and interest rates; weather and other natural phenomena; the performance of projects undertaken by the Company or SWEB and the success of efforts to invest in and develop new opportunities; and other factors discussed in the reports, filed from time to time by the Company with the SEC. i SELECTED DEFINITIONS When used in this report, the following terms will have the meanings indicated. "Accentacross" means Accentacross Limited, a Director of the Company. "Authorized Area" means a REC's designated service area as determined by its PES license. "Calendar Year" means a year ended December 31. "CFDs" means contracts for differences. "Company" means Southern Investments UK plc. "Distribution Price Control Formula" ("DPCF") is determined by the PES license. It means a formula of P+RPI-Xd where P reflects the previous maximum average price per unit of electricity distributed, RPI reflects the percentage change in the Retail Price Index between the previous year and the current year and the Xd factor is established by the Regulator following review. "Electricity Act" means the Electricity Act 1989. "EMFs" means electromagnetic fields. "Fiscal Year" means a year ended March 31. "Fossil Fuel Levy" means a levy system instituted to reimburse the generators and the RECs for the extra costs involved in generating electricity from non-fossil fuel plants as compared to generating electricity from fossil fuel plants. "Holdings" means SWEB Holdings Limited (formerly Southern Investments UK Holdings Limited), the direct parent company of the Company. "Mighteager" means Mighteager Limited, a Director of the Company. "NFFOs" means obligations of RECs to obtain a specified amount of generating capacity from non-fossil fuel sources. "NGG" means the National Grid Group plc. "Own-Generation limits" means the limit imposed by the PES license on the extent of generation capacity in which a REC may hold an interest. "OFFER" means the Office of Electricity Regulation, the body appointed by the Government of the UK to regulate the electricity industry in Great Britain. "Outage" means a disruption to the supply of electricity. "PES" means public electricity supplier licensed by the Regulator. "PMDC" means PMDC UK, a direct shareholder in Holdings and an indirect wholly owned subsidiary of PP&L Resources. "PMDC Directors" means Accentacross and Mighteager. ii "Pool" means the wholesale trading market for electricity in England and Wales. "Pooling and Settlement Agreement" means the agreement which governs the constitution and operation of the Pool and the calculation of payments to and from generators and suppliers. "PP&L Resources" means PP&L Resources, Inc., a public stock corporation, and ultimate parent of PMDC and the registered utility Pennsylvania Power and Light. "Predecessor Company" means South Western Electricity plc and its subsidiaries prior to its acquisition by the Company. "Price Cap" means a maximum price per unit of electricity supplied for various tariffs as established by the Regulator. "Pro Forma Fiscal Year 1996" means unaudited pro forma information for the fiscal year 1996. "PSB" means NGG's pumped storage electricity generation business. "REC" means one of the 12 regional electricity companies in England and Wales licensed to distribute, supply, and, to a limited extent, generate electricity. "Regulated Supply Customers" means customers whose electricity prices are subject to regulation. The group comprises mainly domestic and small commercial customers. "Regulator" means The Director General of Electricity Supply in Great Britain. "SEC" means the Securities and Exchange Commission. "SFAS" means US Statement of Financial Accounting Standard. "Southern" means The Southern Company, the ultimate parent company of the Southern Company system. "Southern Company system" means Southern and its subsidiaries. "Southern Energy" means Southern Energy Inc., an affiliate of the Company and a wholly-owned subsidiary of Southern. "Successor Company" means Southern Investments UK plc and its subsidiaries. "Supply Price Control Formula" ("SPCF") is determined by the PES license. It relates to Franchise Supply Customers and applied until March 31, 1998. It means P+RPI-Xs+Y, where P reflects the maximum average price unit of electricity supplied, RPI reflects the percentage change in the Retail Price Index between the previous year and the current year, the Xs factor is established by the Regulator following review and the Y term is a pass through of certain costs. "SWEB" means South Western Electricity plc, a subsidiary of the Company. "Unregulated Supply Customers" are defined until March 31, 1998, as customers with a demand greater than 100kW and, from April 1, 1998, as customers who are non-domestic and have an annual consumption in excess of 12,000kWh. "UK" means the United Kingdom. "UK GAAP" means accounting principles generally accepted in the UK. "US" means the United States of America. "US GAAP" means accounting principles generally accepted in the US. iii PART I Item 1. BUSINESS Solely for the convenience of the reader, certain pounds sterling amounts have been translated into US dollars at the Noon Buying Rate on March 31, 1998 of $1.6765 = (pound)1.00; see Note 1 in the "Notes to the Financial Statements". General The Company is a wholly-owned subsidiary of Holdings. Throughout the period under review, 75% of Holdings was owned indirectly by Southern and 25% was owned indirectly by PP&L Resources. On June 18, 1998, Southern sold a further share of its ownership in Holdings to PP&L Resources; see Note 13 in the "Notes to the Consolidated Financial Statements". The Company was incorporated as a public limited company under the laws of England and Wales in June 1995 as a vehicle for the acquisition of SWEB, one of the 12 RECs in England and Wales licensed to distribute, supply and, to a limited extent, generate electricity. In September 1995, the Company gained effective control of SWEB, and subsequently replaced SWEB's board of directors and certain senior managers with officers and employees of companies from within the Southern Company system. The Company's sole investment and only significant asset is the entire share capital of SWEB, which is headquartered in Bristol, England. At March 31, 1998 the Company had consolidated assets of (pound)1.728 billion ($2.897 billion). SWEB's two main business lines are the distribution of electricity and supply of electricity to approximately 1.3 million customers in its Authorized Area in southwest England. The distribution business and the supply business are distinct business segments and produced operating income of (pound)106 million ($178 million) and (pound)22 million ($37 million), respectively, in fiscal year 1998, representing substantially all of the Company's consolidated operating income in that fiscal year. SWEB's Authorized Area covers approximately 5,560 square miles extending from Bristol and Bath in the northeast, 188 miles southwest along the peninsula to Land's End and 28 miles beyond to the Isles of Scilly, and has a resident population of approximately 2.8 million. The southwest of England, of which the Authorized Area forms the greater part, has benefitted from economic growth (as measured by Gross Domestic Product) which on average has exceeded the UK rate over the long term and on average was broadly similar to it from 1992 through 1997. The area has also benefitted from an average unemployment rate during calendar year 1997 of approximately 4.4% which was below the UK average of 5.6% according to a 1998 study by Cambridge Econometrics. The largest cities and towns in SWEB's Authorized Area are Bath, Bristol, Exeter, Plymouth and Taunton. Business activity is generally concentrated in the population centers around Bristol, Bath and Plymouth. The Bristol and Bath area is served by the M4 and M5 motorways, a strong rail network including a link between Bristol and London, and a commercial port at Avonmouth. The Company and SWEB have undertaken to make SWEB a more focused and competitive company concentrating on the main electricity businesses of distribution and supply. Several businesses not related to distribution and supply have been sold, and the remaining ancillary businesses have been redirected to focus on support for the main electricity businesses. Change of Government in the UK The first budget of the newly elected Labour government had a significant impact on the profitability of the Company in the fiscal year 1998. The Labour Party's election manifesto included the commitment to introduce "a one-off windfall levy on the excess profits of the privatized utilities", and on July 2, 1997 the government presented its first budget which included such a levy. Based upon the legislation, SWEB estimated its liability to be approximately (pound)90 million ($151 million). The levy is payable in two equal installments. The first installment was paid on December 1, 1997 and the second will be paid on or before December 1, 1998. The legislation also reduced the UK corporation tax rate from 33% to 31% with effect from April 1, 1997. Such a decrease resulted in an accounting credit reducing SWEB's provision for deferred income taxes by approximately (pound)22 million ($37 million). Both items were included in the second quarter's earnings. On March 17, 1998 the government announced its second budget proposing a further reduction in the UK corporation tax rate to 30%. This will become effective from April 6, 1999, but only after receiving Royal assent which is I-1 expected to be in August 1998. From that date, SWEB should be able to further reduce its provision for deferred income taxes by approximately (pound)11 million ($18 million). Overview of the Electric Utility Industry in Great Britain In 1990, the electric utility industry in Great Britain was privatized, and SWEB was created along with the other 11 RECs in England and Wales. In connection with the privatization, distribution assets in England and Wales, previously owned indirectly by Her Majesty's Government, were allocated among the RECs, licensing requirements were established for the RECs and price controls were implemented in the areas of distribution and supply. In England and Wales, generation assets (other than nuclear facilities) were allocated to two generating companies, and the high voltage transmission assets were allocated to NGG. The high voltage transmission system in England and Wales, which is generally referred to as the "national grid", carries the generated electricity in bulk from the power stations to the regional and local distribution systems. This transmission system is owned and operated by NGG. Distributors transfer electricity over their networks, generally at lower voltage than the national grid, from supply points on the national grid to final consumers. The distribution systems in England and Wales are owned by the 12 RECs. Virtually all customers in England and Wales are connected to the distribution system of the RECs and have no choice as to the distribution system from which they receive their electricity. Distribution prices charged by the RECs are regulated by the Distribution Price Control Formula. Suppliers sell electricity to end users. Each REC is required to have a PES license which authorizes it to supply electricity to any customers within its Authorized Area. Electricity customers fall into two categories, Regulated Supply Customers (largely domestic and small commercial) and Unregulated Supply Customers. Prices for supply of electricity to Regulated Supply Customers were regulated by the Supply Price Control Formula until March 31, 1998. The exclusive right to supply Regulated Supply Customers was scheduled to be phased out over a six-month period commencing April 1, 1998, after which all supply customers would have the ability to choose their electricity supplier. An announcement by the Regulator on October 16, 1997 stated that the phasing out of the exclusive right to supply Regulated Supply Customers should be phased in from September 1998. Each REC has an authorized start date for competition to commence in its Authorized Area, and SWEB's is towards the end of calendar year 1998. Once a REC's Authorized Area is open to competition, then it can compete in the Authorized Area of other RECs where competition has commenced, and vice versa. From April 1, 1998, prices which a REC may charge to Regulated Supply Customers within its Authorized Area are subject to a Price Cap determined by the Regulator. Unregulated Supply Customers (as defined prior to April 1, 1998) may already be supplied by any company which has obtained the required license. Such suppliers, including SWEB, compete for business nationally and at prices determined by competitive bids or negotiation. At the time of privatization, the Pool was established for bulk trading of electricity in England and Wales between generators and suppliers. The Pool reflects two principal characteristics of the physical generation and supply of electricity from a particular generator to a particular supplier. First, it is not possible to trace electricity from a particular generator to a particular supplier. Second, it is not practicable to store electricity in significant quantities, creating the need for a constant matching of supply and demand. Subject to certain exceptions, all electricity generated in England and Wales must be sold and purchased through the Pool. All licensed generators and suppliers must become signatories to a Pooling and Settlement Agreement, which governs the constitution and operation of the Pool and the calculation of payments due to and from generators and suppliers. Prices for electricity are set by the Pool daily for each half hour of the following day based on the bids of the generators and a complex set of calculations matching supply and demand and taking account of system stability, security and other costs. SWEB's Main Businesses Distribution Business SWEB's distribution business is the ownership, management and operation of the electricity distribution network within SWEB's Authorized Area. The primary activity of the distribution business is the receipt of electricity from the national grid transmission system and its distribution to end users of electricity that are connected to SWEB's power lines. Virtually all electricity supplied (whether by SWEB's independent supply business or by other suppliers) to consumers in SWEB's Authorized Area is transported through its distribution I-2 network, thus providing SWEB with distribution volume that is stable from year to year. As a holder of a PES license, SWEB is subject to a regulatory framework that provides economic incentives to increase the number of units of electricity distributed and to operate in a more cost-efficient manner. SWEB's distribution business has grown in both its customer base and in the number of units distributed, primarily reflecting economic growth in the southwest of England. At March 31, 1998 SWEB had experienced a 5-year compound annual growth rate of 0.9% in customers and 1.9% in units distributed. Strategy Since being acquired by the Company, SWEB has reviewed and refined its distribution strategy and has established key goals of cost savings and improved customer service. Staff reductions play a key role in cost savings. Since acquisition, SWEB has implemented a plan of voluntary and other staff reductions, mainly in the distribution business. By March 31, 1998 staff numbers had been reduced by 743 (22%). Part of these reductions were made possible due to new work practices which SWEB has developed with the cooperation of SWEB's unions. Team restructuring in the engineering group and the establishment of multi-skilled independent field teams have been achieved. In addition, management restructuring has produced a flatter organizational structure by reducing management levels from seven to three. Improvements in customer service in the distribution business are part of SWEB's strategy and are expected to enable SWEB to meet or exceed the performance criteria established by the Regulator who is responsible for setting the performance standards of the RECs. SWEB believes that achieving these goals is important both for improving customer satisfaction and for maintaining good relations with the Regulator. Improvements in customer service are being pursued, in part, through improvements in system performance, measured primarily in terms of customer minutes lost, number of outages and the time necessary to restore customers after an outage. To that end, several initiatives are being pursued including: * refurbishment of 11kv aluminum overhead lines; * eliminating a backlog of tree-trimming near distribution lines; * introduction of rubber glove working techniques, allowing work to take place on the network without disrupting supplies to customers; * implementing a program of network improvements that creates more dual routing; * reordering the priorities of SWEB's capital expenditure program to focus on improving system reliability; * implementation of a computerized telecontrol system, allowing the move to one centralized Control Room, providing a speedier, more accurate and reliable service to customers; * continuous process improvement and training at our call center supported by new computerized information systems; and, * monthly measurement of customer satisfaction through individual telephone surveys. Customers Most of SWEB's distribution customers are Regulated Supply Customers. This customer group consists predominantly of residential and small commercial consumers which provides SWEB a stable customer base. SWEB's fastest growing category of distribution customers, in terms of units distributed and revenues, is commercial and small industrial customers. Commercial activity of SWEB's customers is mostly service based and includes financial services, electronics and technology-related businesses. SWEB also distributes electricity to industrial concerns in its Authorized Area. The principal activities of SWEB's I-3 largest distribution customers include china clay extraction, ship repair, fertilizer production, aerospace, defense engineering, cement and paper manufacturing and water supply. SWEB's 20 largest distribution customers in its Authorized Area accounted for 11% of total electricity distributed by SWEB in fiscal year 1998 in terms of units distributed, with no single customer exceeding 3% of total electricity distributed. The following table sets out details of SWEB's distribution customers, units distributed and distribution revenues.
Distribution Business - ------------------------------------------------------------------------------------------------------------------------ Distribution Customers Electricity Units Distributed Revenues(4) ------------------------------- ----------------------------- ----------- % of 5 year Volume % of 5 year % of Number(1) Total CAGR(2) Twh(3) Total CAGR(2) Total -------- ----- ------- ------ ----- ------- ----- not more than 100kW........... 1,329,069 99.78 0.93% 8.4 61 0.91% 79 above 100kW to 1MW............ 2,715 0.20 4.58 2.4 17 4.83 12 above 1MW..................... 250 0.02 4.56 3.0 22 2.53 9 --------- ------ ---- ---- --- ---- --- Total 1,332,034 100.00 0.94 13.8 100 1.88 100 ========= ====== ==== ==== === ==== === - --------------- (1) At March 31, 1998. (2) Represents the compound annual growth rate ("CAGR") for the period from April 1, 1993 through March 31, 1998. (3) In terawatt hours for fiscal year 1998. (4) For fiscal year 1998.
Distribution Facilities Electricity is transported across the national grid transmission system at 400kv or 275kv to ten grid supply points connected to SWEB's distribution network, where it is transformed to 132kv and enters SWEB's distribution system. Two of these grid supply points are situated in neighboring RECs' Authorized Areas. Substantially all electricity which enters SWEB's system is received at these ten grid supply points. At March 31, 1998, SWEB's electricity distribution network (excluding service connections to consumers) included overhead lines and underground cables at the operating voltage levels indicated in the table below:
Overhead lines Underground cables Operating voltage: (Circuit miles) (Circuit miles) --------------- --------------- 132kv.............................................................. 907 37 33kv............................................................... 1,747 610 11kv............................................................... 11,825 3,945 6.6kv.............................................................. 15 77 480 or 415/240v.................................................... 5,537 7,027 ------ ------ Total......................................................... 20,031 11,696 ====== ======
In addition to the circuits referred to above, SWEB's distribution facilities also include approximately:
Aggregate Capacity (mega Volt- Number Amperes) ------ ------------------- Transformers: 132kv/lower voltages 91 5,340 33kv/11kv or 6.6kv 573 7,342 11kv or 6.6kv/lower voltages (including 36,535 pole mounted transformers) 48,147 6,605 Substations: 132kv/33kv 46 33kv/11kv or 6.6kv 312 11kv or 6.6kv/415v or 240v 12,047
I-4 Substantially all substations are owned in freehold, and most of the balance are held on leases which will not expire within 10 years. Operation and control of SWEB's distribution system is continuously monitored and coordinated from a control center located in Exeter. Electricity is received by customers at various voltages depending upon their requirements. At March 31, 1998, SWEB's distribution system was connected to over 1.3 million customers. Supply Business SWEB's supply business is selling electricity to end users, purchasing such electricity, primarily from the Pool, and arranging for its distribution to those end users. SWEB's supply business is comprised predominantly of supplying Regulated Supply Customers (largely domestic and small commercial). In fiscal year 1998, these customers accounted for approximately 73% of all units of electricity supplied by SWEB. Prices for these customers were regulated, and SWEB's costs of purchasing, hedging, and delivering electricity were collected from them on an actual cost basis. The exclusive right to supply Regulated Supply Customers (as defined prior to April 1, 1998) was scheduled to be phased out over a six-month period commencing April 1, 1998, after which all supply customers would have the ability to choose their electricity supplier. An announcement by the Regulator on October 16, 1997 stated that the phasing out of the exclusive right to supply Regulated Supply Customers should be phased in from September 1998. Each REC has an authorized start date for competition to commence in its Authorized Area, and SWEB's is towards the end of calendar year 1998. Once a REC's Authorized Area is open to competition, then it can compete in the Authorized Area of other RECs where competition has commenced, and vice versa. SWEB intends to maintain a significant share of these customers by providing superior service and competitive pricing. The Regulator has also proposed a penalty on all RECs, including SWEB, related to the delay in opening the remainder of the supply market to competition beyond the April 1, 1998 deadline; any penalty imposed on SWEB is not expected to have a material impact on earnings. The supply tariffs for Regulated Supply Customers in fiscal years 1999 and 2000 represent maximum price restraints ("Price Cap") intended to protect such customers. The market to supply Unregulated Supply Customers (as defined prior to April 1, 1998) is fully competitive, principally with other RECs and the major generators. Unregulated Supply Customers are typically supplied through individual contracts with a duration of from one to two years with competitively bid or negotiated prices. Strategy Since its acquisition by the Company, SWEB has completed a review of the supply market, established new goals for its supply business and adopted new strategies for achieving those goals. The key goals established are the retention of its current Regulated Supply Customers as supply customers after the opening of the market, and a profitable increase in SWEB's share of electricity supplied to Unregulated Supply Customers both inside and outside SWEB's Authorized Area. SWEB's strategy for retaining its Regulated Supply Customers is to build customer loyalty and to offer competitive prices. SWEB seeks to build customer loyalty by providing superior, responsive service in dealing with billing and other matters and providing other service enhancements. Initiatives in relation to the Regulated Supply Customers include: * a single-number, local rate, telephone service call center (which has been in place since April 1996); * improvements and enhancements to the billing and customer service system which will enable employees at the call center to act on or resolve customer billing and account inquiries on line during their calls (which has already begun and should be fully operational in 1998); and * increasing meter reads to reduce estimated readings. In the UK, most meters are located within structures and meter readers are required to obtain access from occupants in order to read meters. I-5 SWEB's strategy for sales to Regulated Supply Customers outside its Authorized Area is to respond to any request received for a quotation, and to actively pursue high margin/low acquisition cost customers. SWEB's strategy for Unregulated Supply Customers both inside and outside its Authorized Area is to offer competitive pricing and, with respect to its Unregulated Supply Customers inside its Authorized Area, to build customer loyalty through the measures described above. Additional initiatives to support growth in market share in both the Supply Customer markets include: * the expanded use of account managers; * increasing the number of proposals and bids made to customers, potential customers, brokers and agents; * development of an integrated system for contract customer sales, electronic registration and marketing with full customer life-cycle management and tracking facilities (which was brought into service during February 1997); and * further enhancement of a competitive price setting system used to determine appropriate contract supply prices; Regulated Supply Market Under the terms of its PES license, SWEB currently holds the right to supply approximately 1.3 million Regulated Supply Customers within its Authorized Area. See "Business-General". During fiscal year 1998, sales to Regulated Supply Customers (as defined prior to April 1, 1998) represented 73% of total units supplied by SWEB and produced 81% of SWEB's total supply revenues. As discussed above, the exclusive right to supply Regulated Supply Customers is scheduled to be phased out and SWEB intends to maintain a significant share of these customers by providing superior customer service and competitive pricing. In fiscal year 1998, SWEB met or exceeded the Regulator's standards of performance targets for all of the services measured by the Regulator. SWEB has moved from worst to best in a national ranking of RECs in respect of customer complaints received. Unregulated Supply Market In addition to competing for Unregulated Supply Customers in its Authorized Area, SWEB holds the required license to compete with RECs and other suppliers to provide electricity to Unregulated Supply Customers outside its Authorized Area. At the end of fiscal year 1998, SWEB had approximately 1,770 Unregulated Supply Customers, consisting primarily of large commercial and industrial accounts. Revenue from Unregulated Supply Customers during fiscal year 1998 accounted for 19% of total supply revenues. SWEB's Other Business Activities SWEB also has ancillary business activities that support its main electricity distribution and supply businesses, including electricity generation. SWEB owns generating assets with 16 MW of capacity used to back up the distribution network as well as minority investments in windfarms, a landfill gas generation project, and a 7.69% interest in Teesside Power Limited, owner of a 1,875 MW combined cycle plant. SWEB derives small amounts of revenue from the lease of fibers within the fiber optic cables carried on its distribution network, and also markets and develops property no longer used in the main electricity businesses. Risk Management SWEB's distribution business does not involve the purchase and sale of electricity, and therefore SWEB's risk management efforts are focused on the supply business which is exposed to Pool price volatility. SWEB uses CFDs to hedge against Pool price volatility. CFDs are contracts predominantly between generators and suppliers which fix the price of electricity for a contracted quantity of electricity over a specific time period. Differences between the actual price set by the Pool and the agreed prices give rise to difference payments between the parties to the particular CFD. At the present time, SWEB's forecast total demand for fiscal year 1999 is substantially hedged through various types of agreements including CFDs. I-6 The most common contracts for supply to Unregulated Supply Customers are for a twelve-month term and contain fixed rates. SWEB is exposed to two principal risks associated with such contracts: load shape risk (the risk associated with a shift in the customer's usage pattern, including absolute amounts demanded and timing of amounts demanded) and purchasing price risk (the cost of purchased electricity relative to the price received from the supply customer). SWEB employs risk management methods to maximize its return consistent with an acceptable level of risk. SWEB manages load shape risk by setting individual customer sales prices based on their expected load shape and including an additional premium to cover the risk of load shape variation. Variable volume CFDs are also used when available at a competitive price. SWEB hedges purchasing price risk by employing a variety of risk management tools, including management of its supply contract portfolio, hedging contracts and other means which mitigate risk of future Pool price volatility. SWEB's ability to manage its purchasing price risk depends, in part, on the future availability of properly priced risk management mechanisms such as CFDs. SWEB intends to purchase cover at competitive prices and constantly evaluates market conditions. No assurance can be given that an adequate, transparent market for such products will in fact be available and thus that contracts will be available at competitive prices. SWEB constantly evaluates whether owning its own source of generation or contracting for such source or sources is the most appropriate method for managing purchase price risk, but no assurance can be given that such methods would be available to, or economically appropriate for, SWEB. The Company and SWEB utilize certain financial derivative contracts for the sole purpose of hedging business exposure in connection with fluctuations in interest rates and currency rates. Interest rate swaps are used to assure the stability of future interest charges by effectively converting a portion of outstanding variable-rate debt into fixed rates. In addition, the US dollar liabilities associated with certain of the Company's and SWEB's debt are converted into pounds sterling by entering into foreign currency hedging contracts. UK Environmental Regulation SWEB's businesses are subject to numerous regulatory requirements with respect to the protection of the environment. The Electricity Act obligates the President of the Board of Trade and Secretary of State for Trade and Industry to take into account the effect of electricity generation, transmission and supply activities upon the physical environment in approving applications for the construction of generating facilities and the location of overhead power lines. The Electricity Act requires SWEB to have regard to the desirability of preserving natural beauty and the conservation of natural and man-made features of particular interest when it formulates proposals for development in connection with certain of its activities. SWEB mitigates the effects its proposals have on natural and man-made features and is required to carry out an environmental assessment when it intends to lay cables, construct overhead lines or carry out any other development in connection with its licensed activities. SWEB also has produced an Environmental Policy Statement which sets out the manner in which it intends to comply with its obligations under the Electricity Act. The Environmental Protection Act 1990 addresses waste management issues and imposes certain obligations and duties on companies which handle and dispose of waste. Some of SWEB's distribution activities produce waste, but SWEB believes that it is in compliance with applicable standards in such regard. Possible adverse health effects of EMFs from various sources, including transmission and distribution lines, have been the subject of a number of studies and increasing public discussion. The scientific research is currently inconclusive as to whether EMFs may cause adverse health effects. The only UK standards for exposure to power frequency EMFs are those promulgated by the National Radiological Protection Board and relate to the levels above which non-reversible physiological effects may be observed. SWEB fully complies with these standards. However, there is the possibility that the introduction and passage of legislation and change of regulatory standards would require measures to mitigate EMFs, with resulting increases in capital and operating costs. In addition, the potential exists for public liability with respect to lawsuits brought by plaintiffs claiming damages for adverse health effects caused by EMFs. SWEB believes that it has taken and continues to take measures to comply with the applicable laws and governmental regulations for the protection of the environment. There are no material legal or administrative proceedings pending against SWEB or the Company with respect to any environmental matter. I-7 Employee Relations At March 31, 1998, SWEB had 2,597 employees (2,523 full time equivalent) and the Company had no employees. Of SWEB's employees, 96% are represented by labor unions. All SWEB employees who are not party to a personal employment contract are subject to one of two collective bargaining agreements. One is called The Electricity Business Agreement, which covered 2,381 employees at March 31, 1998 (2,307 full time equivalent); it may be amended by agreement between SWEB and the unions and is terminable with 12 months notice by either side. The other is called the SWEB Data Collection Services Agreement, which covered 104 employees at March 31, 1998 (103 full time equivalent); it may be amended by agreement between SWEB and the unions and is terminable by written notice (with no period specified) by either side. SWEB believes that its relations with its employees are favorable. Legal proceedings concerning the Electricity Supply Pension Scheme involving a company other than SWEB were taken. These proceedings may affect SWEB in the future. See "Item 3 - Legal Proceedings". Item 2. PROPERTIES SWEB has both network and non-network land and buildings. Network Land and Buildings At March 31, 1998 SWEB had freehold and leasehold interests in approximately 12,000 network properties, comprising principally substation sites. The recorded cost of total network land and buildings at March 31, 1998 was (pound)72 million ($121 million). Non-Network Land and Buildings At March 31, 1998 SWEB had freehold and leasehold interests in non-network properties comprising chiefly offices, former retail outlets, depots, warehouses and workshops and including the freehold of its principal executive offices in Bristol. The recorded cost of total non-network land and buildings at March 31, 1998 was (pound)37 million ($62 million). The number of properties in each category is:
Freehold or Long Leasehold Leasehold -------------- --------- Depots................................................... 18 1 Offices.................................................. 8 - Surplus property(1)...................................... 54 13
- --------- (1) Largely unused retail sites (shops). The number of freeholds and leaseholds is approximated. For a discussion of other properties and other assets of SWEB, see Item 1 "Business - SWEB's Main Businesses - Distribution Facilities". Item 3. LEGAL PROCEEDINGS The Company and SWEB are routinely party to legal proceedings arising in the ordinary course of business which are not material, either individually or in the aggregate. The Company is not a party to any material legal proceedings nor is it currently aware of any threatened material legal proceedings, except as described below. The Pensions Ombudsman (a UK statutorily appointed independent arbitrator) had issued a determination in favor of complaints made by members of the Electricity Supply Pension Scheme ("ESPS") relating to another employer's use of ESPS surplus to offset the employer's costs of providing early pensions on redundancies and certain other items. Under that determination the Pensions Ombudsman directed the employer to pay into ESPS the amount of that use of the surplus plus interest. The determination was challenged in the High Court by the employer, and the High Court upheld the employer's appeal in a judgment delivered on June 10, 1997. The High Court also granted the complainants leave to appeal to a higher court. No date has yet been set for any hearing in the I-8 Appeal Court. If the complainants' appeal is successful, either at the Appeal Court or on a subsequent appeal to the House of Lords, it will have an adverse effect on SWEB. Unless the High Court decision is reversed, this case should not impact SWEB significantly; however it is not practical to make an estimate of the exposure at the present time. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. I-9 PART II Item 5. MARKET FOR REGISTRANTS' COMMON EQUITY There is no established public trading market for the Company's common stock, all of which is owned indirectly by Southern and PP&L Resources. Item 6. SELECTED FINANCIAL DATA
(In Millions) Period from | inception (1)| Period from (June 23, | April 1, Fiscal Fiscal 1995) to | 1995 to Fiscal Fiscal Year Year March 31, | September Year Year 1998 (2) 1997 (2) 1996 (2) | 17, 1995 1995 1994 Successor Successor Successor | Predecessor Predecessor Predecessor --------- --------- --------- | ----------- ----------- ----------- Operating Revenues.............(pound) 760 $ 1,274 (pound) 848 (pound) 481 |(pound) 299 (pound) 776 (pound) 808 Net (Loss) Income (3).......... (15) (25) 55 59 | 24 86 88 Total Assets................... 1,728 2,897 1,721 1,690 | 795 820 831 Long-term Debt................. 301 505 301 - | 95 95 92 Preferred Securities (4)....... 50 84 50 - | - - - Common Dividend Declared....... 34 57 37 191 | 75 30 29 - ------------- (1) The Company was incorporated on June 23, 1995, as a vehicle for the acquisition of SWEB. Effective control was gained on September 18, 1995 and designated as the acquisition date; the operating results of SWEB have been included in the Company's financial statements from that date. (2) Successor periods are not comparable to predecessor periods due to acquisition related adjustments (including the revaluation of assets and liabilities) and to increases in debt as a result of the acquisition, as discussed in Item 7 "Management's Discussion and Analysis of Operations and Financial Condition - Introduction - Accounting for the Acquisition". (3) The Net Loss in fiscal year 1998 is stated after a one-off windfall levy charge of (pound)90 million ($151 million), and an accounting credit reducing the Company's provision for deferred income taxes by (pound)22 million ($37 million). (4) Company Obligated Mandatorily Redeemable Preferred Securities of Southern Investments UK Capital Trust I Holding Company Junior Subordinated Debentures. See Note 10 in the "Notes to the Financial Statements".
II-1 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following discussion should be read in conjunction with the consolidated financial statements and the notes thereto. The consolidated financial statements discussed in this Section are presented in accordance with US GAAP. Solely for the convenience of the reader, certain pounds sterling amounts have been translated into US dollars at the Noon Buying Rate on March 31, 1998 of $1.6765 = (pound)1.00; see Note 1 in the "Notes to the Financial Statements". INTRODUCTION Background The Company was incorporated as a public limited company under the laws of England and Wales in June 1995, as a vehicle for the acquisition of SWEB. In September 1995, the Company gained effective control of SWEB and subsequently replaced SWEB's board of directors and certain senior managers with officers and employees of companies from within the Southern Company system. Total consideration for the acquisition was (pound)1.065 billion ($1.785 billion) excluding a special dividend of (pound)52 million ($87 million) paid by SWEB to its former shareholders (other than those whose shares the Company had purchased in the open market). Such dividend, when considered in aggregate with the final dividend of (pound)23 million ($39 million) paid in October 1995 in respect of fiscal year 1995, yields the (pound)75 million ($126 million) payment of pre-acquisition dividends disclosed in the financial statements located elsewhere in this document. Accounting for the Acquisition The recorded assets and liabilities of SWEB immediately prior to the time the Company gained effective control of SWEB were (pound)855 million ($1.433 billion) and (pound)528 million ($885 million), respectively. As a result of the purchase method of accounting, the amount of SWEB's assets recorded on the books of the Company was increased by (pound)927 million ($1.554 billion) to their fair value of (pound)1.782 billion ($2.987 billion), and the amount of SWEB's liabilities recorded on the books of the Company was increased by (pound)372 million ($624 million) to their fair value of (pound)900 million ($1.509 billion). The increase in liabilities included the establishment of reserves totalling (pound)44 million ($74 million) related principally to staff reductions and the disposition of ancillary businesses. The resulting difference between the purchase price of (pound)1.065 billion ($1.785 billion) and the fair value of the assets and liabilities acquired, including the reserves established, resulted in goodwill of (pound)183 million ($307 million). The information presented for the Pro Forma Fiscal Year 1996 consists of the historical results of operations of the Predecessor Company prior to the acquisition and the results of operations of the Successor Company subsequent to the acquisition, both of which have been adjusted for the effects of the acquisition as though it had taken place on April 1, 1995. The effects of the acquisition that are reflected in Pro Forma Fiscal Year 1996 include: (i) depreciation expense based on property, plant and equipment valued according to the purchase method of accounting as if the acquisition had occurred on April 1, 1995, (ii) amortization of goodwill valued according to the purchase method of accounting as if the acquisition had occurred on April 1, 1995, (iii) fair valuation of existing liabilities and the related interest expense as if the acquisition had occurred on April 1, 1995, (iv) debt issued to finance the acquisition and the related interest expense as if the acquisition had occurred on April 1, 1995, and (v) recognition of pension fund surplus and the reduction of pension expense in the accounts of the Company. The information for Pro Forma Fiscal Year 1996 has been prepared for illustrative purposes only and, because of its nature, cannot give a complete picture of the Company's results of operations for that year had the transactions been consummated on the date assumed and does not project the Company's financial position or results of operations for any future date or period. Unaudited amounts have been prepared based upon the audited consolidated financial statements of the Company, which have been prepared in accordance with US GAAP. II-2 Significant Events The first budget of the newly elected Labour government included a "one-off windfall levy on the excess profits of the privatized utilities". SWEB estimated its liability to be approximately (pound)90 million adversely impacting earnings for the fiscal year 1998. The budget also reduced the UK corporation tax rate from 33% to 31%. This decrease resulted in an accounting credit reducing SWEB's provision for deferred income taxes by approximately (pound)22 million in the fiscal year 1998. During fiscal year 1996, the sale by SWEB of its shares in NGG and related actions produced a nonrecurring pre-tax gain of (pound)14 million over the fair value established at the time of the Company's acquisition of SWEB and resulted in net pre-tax cash flow of (pound)241 million. This followed a listing for the NGG shares on the London Stock Exchange. The listing was conditional upon the prior demerger of NGG's pumped storage electricity generation business ("PSB") which was sold in December 1995. SWEB had received (pound)36 million of its share of the total proceeds from that sale by the end of fiscal year 1996 and a further (pound)7 million by the end of fiscal year 1997. The fair value of this asset at acquisition was assessed at (pound)39 million. In fiscal year 1996 SWEB paid to the Company and the Company paid to Holdings a dividend of (pound)191 million which was made possible because of the proceeds from the sale of SWEB's interest in NGG. See Note 11 in the "Notes to the Financial Statements". SWEB has progressively withdrawn from its involvement in non-core businesses. Neither the contribution to SWEB's or the Company's operating income from the disposed businesses nor the effect of the dispositions on SWEB's or the Company's net income was material after taking into account the reserves established in connection with the acquisition. SWEB sold its appliance retailing business in June 1995; its appliance servicing business in February 1996; its creditor and warranty insurance business and electrical installation and contracting business in March 1996; and its interest in a cable television and telecommunications company in July 1996. SWEB has also restructured its gas retailing business, which includes a teaming arrangement with another organization effective from October 1, 1997. RESULTS OF OPERATIONS SWEB was acquired in September 1995 and has undergone certain restructuring, and the level and cost of financing has changed significantly. Where relevant, the results for fiscal year 1996 have been presented on a pro forma basis to provide a comparison with fiscal years 1998 and 1997. Fiscal Year 1998 Compared with Fiscal Year 1997 Compared with Pro Forma Fiscal Year 1996 Earnings Earnings in fiscal year 1998 were adversely affected by a (pound)90 million windfall levy assessed against SWEB and an accounting credit reducing the Company's provision for deferred income taxes by (pound)22 million, as discussed in "Significant Events" above. The remainder of this discussion is on items other than the windfall levy and deferred income taxes. Operating income increased by (pound)7 million (6%) to (pound)132 million in the fiscal year 1998 from (pound)125 million in the fiscal year 1997. This increase is due to a (pound)10 million increase in operating income from the supply business, partly offset by a (pound)2 million decrease in the distribution business and a (pound)1 million decrease from other businesses. Operating income decreased by (pound)4 million (3%) to (pound)125 million in the fiscal year 1997 from (pound)129 million in the Pro Forma Fiscal Year 1996. This decrease was due to a (pound)4 million decrease in operating income from the distribution business, a (pound)3 million decrease in operating income from the supply business, partly offset by a (pound)3 million increase in operating income from the ancillary businesses. Net income decreased by (pound)2 million (4%) to (pound)53 million in the fiscal year 1998, before the windfall levy and effect of the tax rate change on deferred income taxes, from (pound)55 million in the fiscal year 1997. This decrease was principally due to increased interest expense and customary income tax charges more than offsetting an increase in operating income discussed above. II-3 Net income increased by (pound)6 million (12%) to (pound)55 million in the fiscal year 1997 from (pound)49 million in the Pro Forma Fiscal Year 1996. This increase was primarily attributable to reduced after-tax interest expense of (pound)9 million resulting from the repayment during the second half of Pro Forma Fiscal Year 1996 of debt issued to finance the acquisition and increased gains on the sale of investments, offset by decreased operating income as described above. Revenues Operating revenues decreased by (pound)88 million (10%) to (pound)760 million in the fiscal year 1998 from (pound)848 million in fiscal year 1997 which had increased by (pound)68 million (9%) from (pound)780 million in Pro Forma Fiscal Year 1996 as follows:
Operating Revenues Operating Revenues Increase (Decrease) from the Increase (Decrease) from the Fiscal Year 1997 Pro Forma Fiscal Year 1996 to the Fiscal Year 1998 to the Fiscal Year 1997 --------------------------------------------------------------------------------- ((pound)millions, except %) ((pound)millions, except %) Electricity distribution (3) (21) Electricity supply (82) 62 Other (13) 9 Intra-business(1) 10 18 --- -- Total operating revenues (88) 68 === == Percentage change (10%) 9%
- ------------- (1) Intra-business revenues relate to the elimination of intra-business revenues in consolidation, principally distribution sales to the supply business. Two factors determine the amount of revenues produced by the distribution business: the unit price of the electricity distributed (which is controlled by the Distribution Price Control Formula) and the number of electricity units distributed. In July 1995, the Regulator announced the result of distribution price review which was precipitated by certain market events in the UK electric utility industry. For SWEB, such announcement meant a real reduction of 11% in allowable distribution income for the twelve months from April 1, 1996, followed by an efficiency factor of X = 3% for each year thereafter. The number of units distributed depends on the demand of SWEB's customers for electricity. That demand varies based in part upon weather conditions and economic activity. Revenues from the distribution business decreased by (pound)3 million (1%) to (pound)228 million for the fiscal year 1998 from (pound)231 million for the fiscal year 1997 which had decreased by (pound)21 million (8%) from Pro Forma Fiscal Year 1996 as a result of the following factors:
Operating Revenues from Operating Revenues from Electricity Distribution Electricity Distribution Increase (Decrease) from the Increase (Decrease) from the Fiscal Year 1997 Pro Forma Fiscal Year 1996 to the Fiscal Year 1998 to the Fiscal Year 1997 -------------------------------------------------------------------------- ((pound)millions, except %) ((pound)millions, except %) Application of Distribution Price Control Formula (2) (19) Sales growth 1 1 Other revenue attributable to distribution business (2) (3) -- --- Total distribution revenues (3) (21) == === Percentage change (1%) (8%)
Two factors determine the amount of revenues produced by the supply business: the unit price of the electricity supplied (which, in the case of the Regulated Supply Customers until March 31, 1998, is controlled by the Supply Price Control Formula) and the number of electricity units supplied. From April 1, 1998 the unit price of electricity supplied to Regulated Supply Customers is subject to Price Cap regulation and, until late 1998, SWEB is expected to have the exclusive right to supply all Regulated Supply Customers in its Authorized Area. Regulated Supply Customers are generally residential/domestic and small commercial customers. The volume of unit sales of electricity for Regulated Supply Customers is influenced largely by the number of customers in the Authorized Area, weather conditions and prevailing economic conditions. Unit sales to Unregulated Supply Customers are determined primarily by the success of the supply business in entering into contracts to supply customers with electricity. II-4 Revenues from the supply business decreased by (pound)82 million (10%) to (pound)706 million for the fiscal year 1998 from (pound)788 million for the fiscal year 1997. The number of electricity units supplied in the fiscal year 1998 also decreased by 10%, which mainly arose from a reduction in units supplied to Unregulated Supply Customers. In addition to units supplied reducing, revenues were also reduced due to a reduction in the fossil fuel levy for the fiscal year 1998, which is passed through to customers. Revenues from Regulated Supply Customers reduced by 5% mainly due to the reduction in the fossil fuel levy, together with a reduction in allowable income as set by the Supply Price Control Formula. Revenues from the supply business increased by (pound)62 million (9%) to (pound)788 million for the fiscal year 1997 from (pound)726 million for the Pro Forma Fiscal Year 1996. In the fiscal year 1997, the number of electricity units supplied increased by 23% but total revenues produced by the supply business increased by only 9%, because a majority of the increase in total units supplied was to Unregulated Supply Customers, who are the larger energy users charged at generally lower average unit prices than those charged to Regulated Supply Customers. Within the regulated market, the number of electricity units increased by 1%, offset by a reduction in allowable income as set by the Supply Price Control Formula. Revenues from ancillary business decreased by (pound)13 million (21%) to (pound)50 million in the fiscal year 1998 from (pound)63 million for the fiscal year 1997. The decrease was principally due to the lower activity in the gas retailing business due to a restructuring of that business, including a teaming arrangement with another organization effective from October 1, 1997. Intra-business eliminations for fiscal year 1998 decreased by (pound)10 million (4%) from fiscal year 1997 which decreased by (pound)18 million (7%) from Pro Forma Fiscal Year 1996. Decreases in both years were primarily as the result of the decrease in revenues from the distribution business described above. Cost of Sales Cost of sales decreased by (pound)103 million (17%) to (pound)491 million in the fiscal year 1998 from (pound)594 million in the fiscal year 1997. The decrease principally arose from the reduction in energy purchases due to the decrease in units supplied, together with a decrease in the fossil fuel levy as mentioned above, and lower volumes in the gas retailing business. Cost of sales increased by (pound)90 million (18%) to (pound)594 million in the fiscal year 1997 from (pound)504 million in the Pro Forma Fiscal Year 1996. This increase was principally the result of an increase in the supply business cost of sales of (pound)68 million reflecting an increase in purchases of electricity to supply the increase in unit sales as discussed above. Operating Expenses Operating expenses increased by (pound)8 million (6%) to (pound)137 million in the fiscal year 1998 from (pound)129 million in the fiscal year 1997. The increase was principally due to a (pound)6 million increase in selling, general and administrative costs, together with a (pound)3 million increase in depreciation and amortization, partly offset by a (pound)1 million decrease in maintenance costs. The increase in selling, general and administrative costs is primarily due to the activities and restructuring of the gas retailing business. Operating expenses decreased by (pound)18 million (12%) to (pound)129 million in the fiscal year 1997 from (pound)147 million in the Pro Forma Fiscal Year 1996. This decrease was primarily due to a (pound)4 million decrease in maintenance costs and a (pound)15 million decrease in selling, general and administrative costs, which were partially offset by a (pound)1 million increase in depreciation and amortization resulting from the application of the purchase method of accounting. The decrease in selling, general and administrative costs included a decrease in certain classes of computer software development costs which were expensed during the first half of Pro Forma Fiscal Year 1996 but which were capitalized subsequently, having satisfied the criteria for capitalization under the Company's accounting policy (see Note 1 in the "Notes to the Financial Statements"). The decrease in selling, general and administrative costs also included a decrease in labor costs resulting from a reduction in personnel. II-5 Interest Expense Interest expense increased by (pound)5 million to (pound)57 million in the fiscal year 1998 from (pound)52 million in the fiscal year 1997. In the latter part of the fiscal year 1997, the Company effectively replaced (pound)325 million of short term bank financed debt with higher margin long term debt. This, together with an approximate 1% increase in bank borrowing rates during the fiscal year 1998, and increases in debt as mentioned below, has contributed to the increase in interest expense. The weighted average balance of debt outstanding during the fiscal year 1998 was (pound)654 million at a weighted average interest rate of 7.9% compared to (pound)621 million at 7.5% during the fiscal year 1997. The change in level of debt is primarily due to payment of the windfall levy in December 1997. Interest expense decreased by (pound)14 million to (pound)52 million in the fiscal year 1997 from (pound)66 million in the Pro Forma Fiscal Year 1996, principally as a result of the financing costs associated with the amount of debt issued for the acquisition. Interest expense for Pro Forma Fiscal Year 1996 reflects interest expense recorded in connection with the acquisition as if the acquisition had occurred on April 1, 1995, and had been 100% financed with short-term borrowings at an interest rate of 6% per year. However, in the fiscal year 1997, the Company benefitted from the retirement of (pound)96 million of debt and the conversion of (pound)500 million of debt to equity during the second half of fiscal year 1996. The weighted average balance of debt outstanding during the fiscal year 1997 was (pound)621 million at a weighted average interest rate of 7.5% compared to (pound)876 million at 7.0% during the Pro Forma Fiscal Year 1996. Gain on Sale of Investments In the fiscal year 1998 there was no gain on the sale of investments. The gain on the sale of investments was (pound)6 million in the fiscal year 1997. There was no gain in the Pro Forma Fiscal Year 1996. The gain in the fiscal year 1997 related principally to additional proceeds of (pound)4 million relating to the demerger of the PSB associated with the sale of NGG and the sale by SWEB of its interest in a cable television and telecommunications company. See "Significant Events" above. Investment Income Investment income increased by(pound)3 million (50%) to(pound)9 million in the fiscal year 1998 from(pound)6 million in the fiscal year 1997, mainly due to additional dividends from an investment in generating plant. Future Earnings Potential The results of operations discussed above are not necessarily indicative of future earnings potential. The level of future earnings depends on numerous factors including the success of the implementation of reorganization plans, future regulatory price reviews and the level of energy sales and customer growth/retention in the electricity business. The largest portion (approximately 80%) of SWEB's operating income is derived from its distribution business - essentially the operation and maintenance of the electricity network in its Authorized Area in the southwest of England. SWEB is the only distributor of electricity in this area, and management believes that economic, environmental and regulatory factors are likely to prevent competitors from entering this business in SWEB's Authorized Area. Distribution revenues are subject to price-cap regulation. Current regulation is expected to continue until March 31, 2000. A regulatory review has commenced which will determine the regulation to apply thereafter. In March 1998 the government published a discussion paper ("Green Paper") on the regulation of the water, electricity, gas and telecommunications utilities within the UK entitled "A Fair Deal for Consumers: Modernizing the Framework for Utility Regulation". The government's stated objective for the review is to set a long term stable framework for utilities which is seen to be fair by all the interested groups involved. The guiding principles are that regulation must be transparent, consistent and predictable. The closing date for responses was May 31, 1998. In May 1998 OFFER issued a consultation paper concerning the separation of businesses in the context of the reviews of the PES's price controls post 2000. It is OFFER's view that full separation of supply and distribution would be desirable. However, they recognize that it is likely that interim arrangements will be necessary. II-6 As these papers are only consultative at this time, it is not possible for the Company to precisely determine the impact until after these issues have been finalized by the government, and firm proposals are made by OFFER. The supply market is subject to change as it is currently partially open to competition and competition is scheduled to be extended to the remaining customers as discussed in Item 1 "Business - SWEB's Main Businesses - Supply Business". A possible further impact on future earnings is a court ruling related to a pension matter. See Note 2 in the "Notes to the Financial Statements" herein for discussion of this matter. Additionally, other contingencies, including the possibility of changes in the valuation of the Teesside contract, and other matters that may affect future earnings potential are discussed in Notes 3 and 4. SWEB is heavily dependent upon complex computer systems for all phases of its operations. The year 2000 issue, common to most corporations, concerns the inability of certain software and databases to properly recognize date-sensitive information related to the year 2000 and thereafter. This problem could result in a material disruption to the Company's operations, if not corrected. SWEB has assessed and developed a detailed strategy to prevent or at least minimize problems related to the year 2000 issue. During 1997, resources were committed and implementation began to modify affected information systems. The total costs related to the project are not expected to materially impact earnings. Implementation is currently on schedule. Although the degree of success of this project can not be determined at this time, management believes there will be no significant effect on the Company's operations. New Accounting Standard The Financial Accounting Standards Board ("FASB") has issued Statement No. 130, "Reporting Comprehensive Income", which will be effective for the fiscal year 1999. This statement establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. The objective of the statement is to report a measure of all changes in equity of an enterprise that result from transactions and other economic events of the period other than transactions with owners (comprehensive income). Comprehensive income is the total of net income and all other non-owner changes in equity. The Company will adopt this statement for fiscal year 1999. Currently, the adoption of this statement will not have a material effect on the Company's financial results. FINANCIAL CONDITION Overview The major change in the Company's financial condition during the fiscal year 1998 was the addition by SWEB of approximately (pound)81 million in property, plant, and equipment, largely in respect of the distribution network. The funds required for the plant additions were derived primarily from operations. It is expected that SWEB's capital requirements in the foreseeable future for investment in property will be generated from operating activities. Demand for electricity in Great Britain, in general, and in SWEB's Authorized Area, in particular, is seasonal, with demand being higher in the winter months and lower in the summer months. SWEB balances the effect of this and other cyclical influences on its working capital needs with drawings under its available credit facilities. The Company's sole investment and only significant asset is the entire share capital of SWEB. The Company is therefore dependent upon dividends from SWEB for its cash flow. SWEB can make distribution of dividends to the Company under English law to the extent that it has distributable reserves, subject to the retention of sufficient financial resources to conduct its supply and distribution businesses as required by its regulatory license. The Company believes that currently sufficient distributable reserves will continue to exist at SWEB to allow for reasonable and necessary dividends from SWEB, through operations, to be distributed to the Company. In the UK, the Accounting Standards Board is currently reviewing the treatment of deferred income tax accounting. If full provision for deferred tax were required, SWEB's distributable reserves could be eliminated. II-7 Derivative Financial Instruments The Company and SWEB have non-trading operations that are exposed to certain market risks including changes in interest rates, cross currency exchange rates and the volatility of prices of electricity purchased in the Pool. To mitigate changes in cashflow attributed to these exposures the Company has entered into various derivative financial instruments, the sole purpose of which is to hedge exposure in these areas. Interest rate swaps are used to hedge specific debt issuances and therefore qualify for hedge accounting. Where debt is issued in US dollars, currency swaps effectively convert the exposure to sterling. The interest rate differential is reflected as an adjustment to interest expense over the life of the instruments. Derivative exposures for interest rate and cross currency swaps are measured using mark-to-market valuations. If the Company sustained a 100 basis point change in interest rates for all variable rate debt, the change would affect annualized interest expense by approximately (pound)1 million i.e. 1% on (pound)78 million variable rate debt as at March 31, 1998. Based on the Company's overall interest rate exposure as at March 31, 1998, including derivative and other interest rate sensitive instruments, a 100 basis point change in interest rates would not materially affect the consolidated financial statements. In addition, SWEB utilizes CFD's to mitigate its exposure to volatility in the prices of electricity purchased through the Pool. The gains and losses on such contracts are deferred and recognized as electricity is purchased. The Company does not have an exposure to changes in exchange rates between (pound) sterling and the US dollar as it uses both long term and short term cross-currency agreements to fully hedge any debt issued in US dollars. Therefore a 10% sustained decline of the US dollar would not affect these swaps in respect of the consolidated financial statements. Financing Activities During the fiscal year 1998 the Company and SWEB entered into (pound)100 million of fixed rate sterling interest swaps, (pound)25 million ($42 million) in December 1997 and (pound)75 million ($125 million) in January 1998. At March 31, 1998, the Company and SWEB have sterling interest rate swaps expiring between 2001 and 2012, with notional amounts totalling (pound)600 million ($1,006 million), and have cross currency swaps expiring between 2001 and 2007, with notional amounts totalling (pound)350 million ($587 million). Sources of Capital The Company has a US commercial paper program under which the maximum available is $520 million. This program is supported by a swingline and revolving credit facility provided by a syndicate of banks. The amount available under the program, which is supported by the swingline and revolving credit facility, at March 31, 1998 was $164 million. SWEB enters into foreign currency contracts to hedge the currency risk associated with the interest and principal of each utilization under this program. SWEB actively manages its short-term debt, which includes a number of bank lines of credit in addition to the commercial paper program. At March 31, 1998 the Company and SWEB together had short-term debt of (pound)363 million ($608 million) outstanding ($134 million from commercial paper, $222 million from swingline and revolving credit facility, and $252 million in other short-term loans). The increase in short-term debt is largely due to the payment of the first installment of the windfall levy. To meet short-term cash needs and contingencies, the Company and SWEB together had at March 31, 1998 approximately (pound)5 million of cash and (pound)180 million of unutilized committed lines of credit with banks. Also available was $164 million of the swingline and revolving credit facility mentioned above. The Company currently has sufficient liquidity to meet the second installment of the windfall levy, and the pension matter, discussed in Item 1 - "Business", and Note 2 in the "Notes to the Financial Statements" herein. II-8 Cautionary Statement Regarding Forward-Looking Information The Company's 1998 Annual Report Form 10-K contains forward-looking statements in addition to historical information. The Company cautions that there are various important factors that could cause actual results to differ materially from those indicated in the forward-looking statements; accordingly, there can be no assurance that such indicated results will be realized. These factors include legislative and regulatory issues (such as the results of the current review of regulation, see Item 1 "Business - Supply Business", and the results of the supply and distribution price reviews scheduled to take effect April 1, 2000); the extent and timing of the entry of additional competition in the supply market; potential business strategies, including acquisitions or dispositions of assets or internal restructuring that may be pursued by the Company or SWEB; changes in or application of environmental and other laws and regulations to which the Company and SWEB are subject; political, legal and economic conditions and developments in which the Company and SWEB operate; financial market conditions and the results of financing efforts; changes in commodity prices and interest rates; weather and other natural phenomena; the performance of projects undertaken by the Company or SWEB and the success of efforts to invest in and develop new opportunities; and other factors discussed in the reports, filed from time to time by the Company with the SEC. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Reference is made to information in the Company's "Management's Discussion and Analysis - Derivative Financial Instruments" above, and to Notes 1 and 8 in the "Notes to the Consolidated Financial Statements" under the heading "Financial Instruments" contained herein. II-9 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Southern Investments UK plc and Subsidiaries (Successor Company) and South Western Electricity plc and Subsidiaries (Predecessor Company) Index to the Consolidated Financial Statements
Page Management's Report................................................................ II-11 Report of Independent Public Accountants........................................... II-12 Consolidated Statements of Income.................................................. II-13 Consolidated Statements of Changes in Stockholder's Equity......................... II-14 Consolidated Statements of Cash Flows.............................................. II-15 Consolidated Balance Sheets........................................................ II-16 Notes to the Consolidated Financial Statements..................................... II-18
II-10 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) MANAGEMENT'S REPORT 1998 Annual Report The management of the Company has prepared -- and is responsible for -- the consolidated financial statements and related information included in this report. These statements were prepared in accordance with generally accepted accounting principles appropriate in the circumstances and necessarily include amounts that are based on the best estimates and judgments of management. Financial information throughout this annual report is consistent with the financial statements. The Company maintains a system of internal accounting controls to provide reasonable assurance that assets are safeguarded and that books and records reflect only authorized transactions of the Company. Limitations exist in any system of internal controls, however, based on a recognition that the cost of the system should not exceed its benefits. The Company believes its system of internal accounting controls maintains an appropriate cost/benefit relationship. The Company's system of internal accounting controls is evaluated on an ongoing basis by the Company's internal audit staff. The Company's independent public accountants also consider certain elements of the internal control system in order to determine their auditing procedures for the purpose of expressing an opinion on the financial statements. Management believes that its policies and procedures provide reasonable assurance that the Company's operations are conducted according to a high standard of business ethics. In management's opinion, the consolidated financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows of the Company and its subsidiaries in conformity with generally accepted accounting principles in the United States. /s/ Richard J. Pershing /s/ Carson B. Harreld Richard J. Pershing Carson B. Harreld Chief Executive Officer Chief Financial and Accounting Officer June 19, 1998 II-11 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Southern Investments UK plc: We have audited the accompanying consolidated balance sheets of SOUTHERN INVESTMENTS UK plc (the "Company" being a company incorporated in England and Wales) and SUBSIDIARIES as of March 31, 1998 and 1997, the related consolidated statements of income, changes in stockholder`s equity and cash flows for the years ended March 31, 1998 and 1997 and for the period from inception (June 23, 1995) to March 31, 1996. In addition we have audited the accompanying consolidated statements of income, changes in stockholder's equity, and cash flows of SOUTH WESTERN ELECTRICITY plc and SUBSIDIARIES for the period from April 1, 1995 to September 17, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Southern Investments UK plc and subsidiaries as of March 31, 1998 and 1997 and the consolidated results of its operations, changes in stockholder's equity and cash flows for the years ended March 31, 1998 and 1997 and for the period from inception (June 23, 1995) to March 31, 1996, and the consolidated results of the operations, changes in stockholders' equity, and cash flows of South Western Electricity plc and subsidiaries for the period from April 1, 1995 to September 17, 1995, in conformity with generally accepted accounting principles in the United States. /s/ Arthur Andersen ARTHUR ANDERSEN Bristol, England June 19, 1998 II-12 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) FOR THE YEARS ENDED MARCH 31, 1998 AND 1997, AND FOR THE PERIOD FROM INCEPTION (JUNE 23, 1995) TO MARCH 31, 1996 SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) FOR THE PERIOD FROM APRIL 1, 1995 TO SEPTEMBER 17, 1995 CONSOLIDATED INCOME STATEMENTS (In Millions)
1998 1997 Inception | April 1, (June 23, | 1995 to 1995) to | September March 31, | 17, 1995 1996 (1) | (1) Successor Successor Successor | Predecessor --------- --------- --------- | ----------- | OPERATING REVENUES (pound) 760 $ 1,274 (pound) 848 (pound) 481 |(pound) 299 COST OF SALES 491 823 594 318 | 186 ----------- ------- ----------- ----------- |----------- GROSS MARGIN 269 451 254 163 | 113 ----------- ------- ----------- ----------- |----------- | OPERATING EXPENSES: | Maintenance 34 57 35 21 | 18 Depreciation and amortization 46 77 43 22 | 15 Selling, general and administrative 57 96 51 34 | 40 ----------- ------- ----------- ----------- |----------- Total operating expenses 137 230 129 77 | 73 ----------- ------- ----------- ----------- |----------- Operating income 132 221 125 86 | 40 ----------- ------- ----------- ----------- |----------- | OTHER INCOME (EXPENSE): | Interest income 2 4 2 7 | 2 Interest expense (57) (96) (52) (28) | (5) Gain on sale of investments - - 6 14 | - Investment income 9 15 6 - | - Other, net - - - 2 | 1 ----------- ------- ----------- ----------- |----------- Total other income (expense) (46) (77) (38) (5) | (2) ----------- ------- ----------- ----------- |----------- | INCOME BEFORE INCOME TAXES 86 144 87 81 | 38 | PROVISION FOR INCOME TAXES: | Customary (33) (55) (32) (28) | (13) Effect of change in tax rates (Note 6) 22 37 - - | - Windfall levy (Note 6) (90) (151) - - | - ----------- ------- ----------- ----------- |----------- (LOSS) INCOME FROM CONTINUING OPERATIONS | (15) (25) 55 53 | 25 Extraordinary gain on early extinguishment | of debt, net of income tax effect of (pound)3, for | the Successor Company, and income from | discontinued operations - - - 6 | (1) ----------- ------- ----------- ----------- |----------- NET (LOSS) INCOME (pound) (15) $ (25) (pound) 55 (pound) 59 |(pound) 24 =========== ======= =========== =========== |=========== - ------------- (1) See Note 14 for Details of Pro Forma Fiscal Year 1996. The accompanying notes are an integral part of these consolidated statements.
II-13
SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) FOR THE YEARS ENDED MARCH 31, 1998 AND 1997, AND FOR THE PERIOD FROM INCEPTION (JUNE 23, 1995) TO MARCH 31, 1996 SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) FOR THE PERIOD FROM APRIL 1, 1995 TO SEPTEMBER 17, 1995 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (In Millions) Number of Ordinary Share Retained Total Ordinary Share Shares of Premium Earnings/ Stockholders' Shares Capital 50p Each Account (Deficit) Equity ------------------------------------------------------------------------------------ PREDECESSOR COMPANY Balance, March 31, 1995 111 (pound) 56 (pound) - (pound) 6 (pound) 304 (pound) 366 Issue of share capital 1 - 2 - - 2 Dividends: 20p per share for 111 million shares - - - - (23) (23) 65p per share for 81 million shares - - - - (52) (52) Net income - - - - 24 24 ----- ----------- ----- ----- ----- ----- Balance, September 17, 1995 112 56 2 6 253 317 ===== =========== ===== ===== ===== ===== SUCCESSOR COMPANY Balance, June 23, 1995 - - - - - - Net income - - - - 59 59 Proceeds from sale of NGG reflected as dividends (Note 12) - - - - (191) (191) Conversion of advances to equity (Note 12) 315 315 - - - 315 Equity contribution (Note 12) 185 185 - - - 185 ----- ----------- ----------- ----------- ----------- ----------- Balance, March 31, 1996 500 500 - - (132) 368 Net income - - - - 55 55 Dividends declared on common stock - - - - (37) (37) Balance, March 31, 1997 500 500 - - (114) 386 ----- ----------- ----------- ----------- ----------- ----------- Net loss (1) - - - - (15) (15) Dividends declared on common stock - - - - (34) (34) ----- ----------- ----------- ----------- ----------- ----------- Balance, March 31, 1998 500 (pound) 500 (pound) - (pound) - (pound)(163) (pound) 337 ===== =========== =========== =========== =========== =========== - ------------- (1) The Net Loss is stated after a one-off windfall levy charge of (pound)90 million, and an accounting credit reducing the Company's provision for deferred income taxes by (pound)22 million The accompanying notes are an integral part of these consolidated statements.
II-14
SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) FOR THE YEARS ENDED MARCH 31, 1998 AND 1997, AND FOR THE PERIOD FROM INCEPTION (JUNE 23, 1995) TO MARCH 31, 1996 SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) FOR THE PERIOD FROM APRIL 1, 1995 TO SEPTEMBER 17, 1995 CONSOLIDATED STATEMENTS OF CASH FLOWS (In Millions) 1998 1997 Inception | April 1, (June 23, | 1995 to 1995) to | September March 31, | 17, 1995 1996 | Successor Successor Successor | Predecessor CASH FLOWS FROM OPERATING ACTIVITIES: --------- --------- --------- | ----------- Net (loss) income (pound) (15) $ (25) (pound)55 (pound) 59 | (pound) 24 ------------ ------ --------- ----------- | ------------- Adjustments to reconcile net income to net cash | provided from operating activities: | Depreciation and amortization 54 91 43 22 | 15 Changes in assets and liabilities: | Receivables, net 33 55 (17) (20) | 33 Accounts payable (10) (17) 3 9 | (9) Income taxes, accrued/deferred 36 60 23 19 | 4 Other, net (38) (63) (48) (64) | 2 ----------- ----- --------- ----------- | ------------ Total adjustments 75 126 4 (34) | 45 ----------- ----- --------- ----------- | ------------ Net cash provided from operating activities 60 101 59 25 | 69 ----------- ----- --------- ----------- | ------------ CASH FLOWS FROM INVESTING ACTIVITIES: | Consideration for purchase of SWEB paid to former | shareholders - - - (1,023) | - Capital expenditures (81) (136) (70) (37) | (22) Proceeds from sales of investments 1 2 17 270 | 26 Other 2 3 5 - | (26) ----------- ----- --------- ----------- | ------------ Net cash used for investing activities (78) (131) (48) (790) | (22) ----------- ----- --------- ----------- | ------------ CASH FLOWS FROM FINANCING ACTIVITIES: | Proceeds from advances from parent - - - 315 | - Capital contribution received - - - 185 | - Proceeds from issuance of notes - - - 650 | - Proceeds from issuance of bonds - - 300 597 | - Repayment of notes and bonds - - - (696) | - Change in short term borrowings 79 132 (366) - | (23) Issue of share capital - - - - | 2 Issue of mandatorily redeemable preferred securities - - 50 - | - Payment of preacquisition dividends - - - (75) | - Payment of dividends (59) (99) (12) (191) | - ------------ ------ --------- ----------- | ------------ Net cash provided from (used for) financing 20 33 (28) 785 | (21) ------------ ------ --------- ----------- | ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 2 3 (17) 20 | 26 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 3 5 20 - | 27 ------------ ----- -------- ---------- | ------------ | CASH AND CASH EQUIVALENTS AT END OF PERIOD (pound) 5 $ 8 (pound) 3 (pound) 20 | (pound 53 ============ ===== ======== ========== | =========== | SUPPLEMENTAL CASH FLOW INFORMATION: | Cash paid during the year for: | Interest (pound) 51 $ 86 (pound) 48 (pound)21 | (pound) 5 ============ ====== ========= ========== | ============ Income taxes: | Customary 20 34 11 26 | 6 Windfall levy (Note 6) 45 75 - - | - ----- ------ --------- ---------- | ------------ Total cash paid for income taxes (pound) 65 $ 109 (pound) 11 (pound)26 | (pound) 6 ============ ====== ========= ========== | ============ Conversion of debt to equity (pound) - $ - (pound) - (pound)315 | (pound) - ============ ====== ========== ========== | ============ The accompanying notes are an integral part of these consolidated statements.
II-15
SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) CONSOLIDATED BALANCE SHEETS MARCH 31, 1998 AND 1997 (In Millions) ASSETS 1998 1997 - --------------------------------------------------------------------- ------------------------------ ---------------- PROPERTY, PLANT, AND EQUIPMENT (pound) 1,389 $ 2,329 (pound) 1,312 Less accumulated depreciation 109 183 59 ------------- -------- ------------- Property, plant, and equipment, net 1,280 2,146 1,253 ------------- -------- ------------- OTHER ASSETS Investments 17 29 19 Prepaid pension cost 116 194 105 Goodwill, net of accumulated amortization of (pound)11 ($18) at March 31, 1998 and(pound)7 at March 31, 1997 172 288 176 ------------- -------- ------------- Total other assets 305 511 300 ------------- -------- ------------- CURRENT ASSETS: Cash and cash equivalents 5 8 3 Investments 17 29 18 Receivables: Customer accounts, less provision for uncollectables of (pound)9 ($15) at March 31, 1998 and(pound)12 at March 31, 1997 85 143 120 Other 14 23 12 ------------- -------- ------------- Receivables, net 99 166 132 Materials and supplies 4 7 3 Prepaid expenses 18 30 12 ------------- -------- ------------- Total current assets 143 240 168 ------------- -------- ------------- Total assets (pound) 1,728 $ 2,897 (pound)1,721 ============= ======== ============ The accompanying notes are an integral part of these consolidated balance sheets.
II-16
SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) CONSOLIDATED BALANCE SHEETS MARCH 31, 1998 AND 1997 (In Millions) STOCKHOLDER'S EQUITY AND LIABILITIES 1998 1997 - ----------------------------------------------------------------------------- ------------------------------ -------------- STOCKHOLDER'S EQUITY Common stock, (pound)1 par value, 500,400,587 shares authorized, issued and outstanding (pound) 500 $ 838 (pound) 500 Retained earnings (deficit) (163) (273) (114) -------------- ------- ------------- Total stockholder's equity 337 565 386 -------------- ------- ------------- COMPANY OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES OF SOUTHERN INVESTMENTS UK CAPITAL TRUST I HOLDING COMPANY JUNIOR SUBORDINATED DEBENTURES (Note 10) 50 84 50 NON-CURRENT LIABILITIES Long-term debt 301 505 301 Deferred income taxes 361 605 377 Provision for loss contracts (Note 4) 72 121 69 Other 46 77 59 -------------- ------- ------------- Total non-current liabilities 780 1,308 806 -------------- ------- ------------- CURRENT LIABILITIES: Commercial paper 80 134 250 Short-term borrowings 283 474 34 Accounts payable 50 84 60 Accrued income taxes 82 137 31 Unearned revenue 4 7 5 Common dividend declared - - 25 Accrued interest 8 13 9 Other 54 91 65 -------------- ------- ------------- Total current liabilities 561 940 479 COMMITMENTS AND CONTINGENT MATTERS (NOTES 2, 3 and 4) -------------- ------- ------------- Total stockholder's equity and liabilities (pound) 1,728 $ 2,897 (pound) 1,721 ============== ======= ============= The accompanying notes are an integral part of these consolidated balance sheets.
II-17 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1998 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Southern Investments UK plc (the "Company") is a wholly-owned subsidiary of SWEB Holdings Limited ("Holdings"). Throughout the period under review, 75% of Holdings was owned indirectly by Southern and 25% was owned indirectly by PP&L Resources. On June 18, 1998, Southern sold a further share of its ownership in Holdings to PP&L Resources as set out in Note 13. The Company was incorporated as a public limited company under the laws of England and Wales on June 23, 1995 as a vehicle for the acquisition of South Western Electricity plc (together with its subsidiaries, "SWEB"). On September 18, 1995, the Company gained effective control of SWEB, having acquired approximately 84% of its shares (the "Acquisition"). Accordingly, the Company has designated September 18, 1995 as the effective date of the Acquisition (the "Acquisition Date"). Given that SWEB represents substantially all of the current operations of the Company, SWEB is considered the Predecessor Company (the "Predecessor Company"). All references in the financial statements to the Successor Company represent the Company and its subsidiaries and to the Predecessor Company represent South Western Electricity plc and its subsidiaries. See Note 7 for a further discussion of the Acquisition. The pro forma accounts for 1996 are based on the adjusted results for these two entities for the 12 months to March 31, 1996, as set out in Note 14. Basis of Presentation The financial statements of the Company are presented in pounds sterling ((pound)) and in conformity with accounting principles generally accepted in the United States. The accompanying financial statements have not been prepared in accordance with the policies of Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation" ("SFAS No. 71"). This pronouncement, under which most US electric utilities report financial statements, applies to entities which are subject to cost-based rate regulation. By contrast, SWEB is not subject to rate regulation, but, rather is subject to price cap regulation (Note 3) and therefore the provisions of SFAS No. 71 do not apply. Financial statements presented in accordance with SFAS No. 71 contain deferred items which have not yet been included in rates charged to customers in compliance with the respective regulatory authorities, but which would have been included in the income statement of enterprises in general under US GAAP. The accompanying financial statements of the Company do not contain such deferrals. The consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries and have been prepared from records maintained by SWEB in the United Kingdom. All significant intercompany accounts and transactions have been eliminated in consolidation. Investments in companies in which the Company's ownership interests range from 20% to 50% and the Company exercises significant influence over operating and financial policies are accounted for using the equity method. Other investments are accounted for using the cost method (Note 11). Solely for the convenience of the reader, certain pounds sterling amounts included in the financial statements have been translated into US dollars at the exchange rate of $1.6765 = (pound)1.00, the noon buying rate in New York City for cable transfers in pounds sterling as certified for customs purposes by the Federal Reserve Bank of New York on March 31, 1998. The following table sets out this rate for previous periods:
Fiscal Year Period end Average (1) High Low ----------- ---------- ----------- ---- --- ($ per (pound)1.00) 1993............................... 1.48 1.50 1.59 1.42 1994............................... 1.57 1.53 1.64 1.46 1995.............................. 1.55 1.58 1.64 1.53 1996.............................. 1.53 1.53 1.56 1.50 1997.............................. 1.64 1.59 1.71 1.49 1998.............................. 1.68 1.65 1.69 1.61 (1) The average of the Noon Buying Rates in effect on the last business day of each month during the relevant period.
II-18 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Use of Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Revenue Recognition SWEB records revenue net of value added tax ("VAT") and accrues revenues for services provided but unbilled at the end of each reporting period. SWEB purchases power primarily from a market for the bulk trading of electricity (the "Pool"). The Company has a diversified base of customers. No single customer comprises 10% or more of revenues. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. Property, Plant, and Equipment Property, plant, and equipment are recorded at fair market value as adjusted at the acquisition date in accordance with Accounting Principles Board Opinion No. 16, "Accounting for Business Combinations" ("APB No. 16"). Items capitalized subsequent to the Acquisition are recorded at original cost, which includes materials, labor, appropriate administrative and general costs, and the estimated cost of funds used during construction. The cost of maintenance, repairs, and replacement of minor items of property is charged to maintenance expense. Depreciation of the recorded cost of depreciable property, plant, and equipment is provided by using primarily composite straight-line rates, which approximate 3.2% per year (2.5% per year for depreciable utility plant in service). Upon the retirement or sale of assets, the costs of such assets and the related accumulated depreciation are removed from the balance sheet and the gain or loss, if any, is included in income. Information Technology Consultancy and Development Costs Significant information technology ("IT") consultancy and development costs are capitalized when they become technologically feasible and are amortized over their estimated useful economic life from the date of first use. Other IT consultancy and development costs are charged to income in the period in which they are incurred. This policy was adopted effective October 1, 1995 as the Company embarked on a significant program of investment and will be incurring significant development costs which are fundamental to the future performance of the business and which will benefit the business for a number of years. The Directors are of the opinion that in relation to the planned development costs to be incurred in the future, the policy followed by the Predecessor Company of writing off such costs to the Statement of Income does not give a fair reflection of the period over which the benefits will accrue. Prior to this change in accounting policy the Company expensed all IT consultancy and development costs as incurred. The effect of adopting this policy has resulted in the capitalization of (pound)14 million of costs in the fiscal year 1998 and (pound)11 million of costs in the fiscal year 1997. II-19 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Goodwill The Company amortizes costs in excess of fair value of net assets of the business acquired using the straight-line method over a period of 40 years. Recoverability (performed on the basis of undiscounted operating cash flow analysis) is reviewed annually or sooner if events or changes in circumstances indicate that the carrying amount may exceed fair value, in accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of". Goodwill shown in the accompanying consolidated financial statements relates to the acquisition of SWEB. Investments The Company accounts for its current investments in accordance with SFAS No. 115, "Accounting for Investments for Certain Debt and Equity Securities". These investments represent investments in debt securities, which management classifies as available-for-sale securities in accordance with SFAS No. 115. The Company's long-term investments consist of investments accounted for using the cost method (Note 11). Income Taxes SFAS No. 109, "Accounting for Income Taxes", requires the asset and liability approach for financial accounting and reporting for deferred income taxes. The Company uses the liability method of accounting for deferred income taxes and provides deferred income taxes for all significant income tax temporary differences. Financial Instruments Non-trading derivative financial instruments are used to hedge exposures to volatility in electricity prices and fluctuations in interest rates and foreign currency exchange rates. Gains and losses on qualifying hedges are deferred and recognized either in income or as an adjustment to the carrying amount when the hedged transaction occurs. Reclassifications Certain prior years' data presented in the consolidated financial statements has been reclassified to conform with the current year presentation. 2. RETIREMENT BENEFITS Pension Plans SWEB has two pension plans, a defined contribution plan and a defined benefit plan. Defined Contribution Plan The defined contribution plan was established in fiscal year 1994. The assets of the defined contribution plan are held and administered by an independent trustee. Contributions to the plan by SWEB on behalf of its employees were (pound)0.2 million ($0.3 million) for the fiscal year 1998, and (pound)0.1 million for the fiscal year 1997. Contributions in prior periods were not material. Defined Benefit Plan SWEB participates in the Electricity Supply Pension Scheme, which provides pension and other related defined benefits, based on final pensionable pay, to substantially all employees throughout the Electricity Supply Industry in the UK. Contributions to the plan by SWEB on behalf of its employees were (pound)0.3 million ($0.5 million) for the fiscal year 1998, (pound)0.6 million for the fiscal year 1997, (pound)4.8 million for the period from inception (June 23, 1995) through March 31, 1996, and (pound)3.7 million for the period from April 1, 1995 to September 17, 1995. II-20 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued) In accordance with SFAS No. 87, as of the date of the Acquisition, the assignment of the purchase price to individual assets acquired and liabilities assumed includes the plan assets in excess of the projected benefit obligation. SWEB uses the "entry age normal method with a frozen initial liability" actuarial method for funding purposes. Amounts funded to the pension trust are primarily invested in equity and fixed-income securities. SFAS No. 87 requires use of the "projected unit credit" actuarial method for financial reporting purposes.
The following table shows the actuarial results and assumptions for pension benefits as computed under SFAS No. 87 (in millions): March 31, 1998 March 31, 1997 -------------- -------------- Actuarial present value of benefit obligation Vested benefits .............................................. (pound) (504) $ (845) (pound) (493) Nonvested benefits............................................ - - - ------------- ------- ------------- Accumulated benefit obligations................................... (504) (845) (493) Effect of future salary increases................................. (38) (64) (37) ------------- ------- ------------- Projected benefit obligations..................................... (542) (909) (530) Less: Fair value of plan assets.................................. 701 1,175 641 Prior service cost......................................... 3 5 3 Unrecognized net gain...................................... (46) (77) (9) ------------- ------- ------------- Prepaid asset recognized in the consolidated balance sheet........ (pound) 116 $ 194 (pound) 105 ============= ======= ============= The weighted average rates assumed in the actuarial calculations were as follows:
1998 1997 ---- ---- Discount rate..................................................... 7.50% 8.50% Annual salary rate increase....................................... 4.75% 5.75% Long term rate of return on plan assets........................... 9.50% 9.50%
The components of the plan's net pension income are shown below (in millions): Period from | inception | Period from (June 23, | April 1, 1995) to | 1995 to Fiscal Year Fiscal Year March 31, | September 1998 1997 1996 | 17, 1995 Successor Successor Successor | Predeccessor --------------------- -------------------- ---------- | ------------- Benefits earned during the period................ (pound) 7 $ 12 (pound) 9 (pound) 2 | (pound) 3 Interest cost on projected benefit obligation.... 43 72 44 22 | 20 Actual return on plan assets..................... (95) (159) (66) (50) | (69) Net amortization and deferral.................... 37 62 9 22 | 42 -- -- --- -- | -- Gross pension benefit............................ (8) (13) (4) (4) | (4) Employee contributions........................... (3) (5) (4) (2) | (2) --- --- --- --- | --- Net pension benefit (11) (18) (8) (6) | (6) === === === === | ===
II-21 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Pensions Contingency The Pensions Ombudsman (a UK statutorily appointed independent arbitrator) has issued a determination in favor of complaints made by members of the Electricity Supply Pension Scheme ("ESPS") relating to another employer's use of ESPS surplus to offset the employer's costs of providing early pensions on redundancies and certain other items. Under that determination the Pensions Ombudsman directed the employer to pay into ESPS the amount of that use of the surplus plus interest. The determination was challenged in the High Court by the employer, and the High Court upheld the employer's appeal in a judgment delivered on June 10, 1997. The High Court also granted the complainants leave to appeal to a higher court. No date has yet been set for any hearing in the Appeal court. If the complainants' appeal is successful, either at the Appeal court or on a subsequent appeal to the House of Lords, it will have an adverse effect on SWEB. Unless the High Court decision is reversed, this case should not impact SWEB significantly; however it is not practical to make an estimate of the exposure at the present time. 3. REGULATORY MATTERS Distribution OFFER controls the revenues generated by SWEB in its distribution business by applying a price control formula, P + RPI -X, where P is the price level at the beginning of each new regulatory period, RPI is the change in the Retail Price Index and X is an adjustment factor determined by OFFER. X is currently 3%. The DPCF is usually set for a five-year period, subject to more frequent adjustments as determined necessary by the Regulator. At each review, the Regulator can require a one-time price adjustment. An initial review by the Regulator of allowable income in the distribution business led to a reduction of the price level by 14% for SWEB starting April 1, 1995, followed by efficiency factors of X = 2% for each year until March 2000. On July 6, 1995, the Regulator announced the result of a further distribution price review which was precipitated by certain market events in the UK electric utility industry. For SWEB, such announcement meant a real reduction of 11% in allowable distribution income for the twelve months from April 1, 1996, followed by an efficiency factor of X = 3% for each year, before an allowed increase for inflation. The Regulator is currently undertaking the next DPCF review expected to become effective from April 1, 2000. Supply Within the supply business, customers fall into the two categories of Unregulated and Regulated Supply Customers. Until March 31, 1998, Unregulated Supply Customers were defined as customers who had an electricity demand of more than 100kW. From April 1, 1998, Unregulated Supply Customers are defined as customers who are non-domestic and who have an annual consumption in excess of 12,000kWh. Unregulated Supply Customers may contract for their electricity from any holder of a PES license. However, those customers who were Regulated Supply Customers until the change in definition must continue to take supply from their host REC until competition commences in that REC's Authorized Area (see below). Regulated Customers are those customers who are not Unregulated Supply Customers and largely comprise domestic and small business customers. Prices charged to Regulated Supply Customers by a REC within its Authorized Area are controlled by regulation. Until March 31, 1998, the calculation of the maximum supply charge was based on a SPCF, similar to the DPCF, plus an ability to pass through certain costs, principally the costs of energy purchases, transmission and distribution use of system charges. For the four-year period ending March 31, 1998, an efficiency factor of X = 2% (before an allowed increase for inflation) was applied to SWEB, offset by an allowance for both unit and customer growth. From April 1, 1998 supply business charges to Regulated Supply Customers is subject to a Price Cap instead of being based on the SPCF; the concept of pass through costs no longer applies. II-22 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Following the announcement by the Regulator on October 16, 1997, in respect of its latest supply price review for Regulated Supply Customers effective from April 1, 1998, SWEB has implemented a tariff reduction of 2.8% effective from that date. A further 3% reduction (before an allowed increase for inflation) will be implemented for fiscal year 2000. This average tariff reduction primarily reflects the expected reduction in power purchase costs after March 31, 1998 when expensive CFDs, (Note 8), agreed by the government at the time of privatization of the electricity industry, will end, and the fossil fuel levy will be further reduced. The exclusive right to supply Regulated Supply Customers (as defined prior to April 1, 1998) was scheduled to be phased out over a six-month period commencing April 1, 1998, after which all supply customers would have the ability to choose their electricity supplier. An announcement by the Regulator on October 16, 1997 stated that the exclusive right to supply Regulated Supply Customers should be phased out from September 1998. Each REC has an authorized start date for competition to commence in its Authorized Area, and SWEB's is towards the end of calendar year 1998. Once a REC's Authorized Area is open to competition, then it can compete in the Authorized Area of other RECs where competition has commenced, and vice versa. The Regulator has also proposed a penalty on all RECs, including SWEB, related to the delay in opening competition to Regulated Supply Customers beyond the April 1, 1998 deadline; any penalty imposed on SWEB is not expected to have a material impact on earnings. The supply tariffs in fiscal years 1999 and 2000 represent maximum price restraints intended to protect each REC's Regulated Supply Customers, which it supplies within its Authorized Area. 4. COMMITMENTS AND CONTINGENT MATTERS Power Purchase Agreements SWEB has entered into a contract relating to the purchase of 200 megawatts of capacity from a 7.69% owned related party, Teesside Power Limited ("Teesside"), for a period of 15 years beginning April 1, 1993. The contract sets escalating electricity purchase prices at predetermined levels. The Company has recognized an accrual at the acquisition date for the excess of these Teesside power purchase costs in each year over an estimate of the equivalent Pool costs in that respective year. These costs have been discounted at an appropriate rate to their present value of (pound)72 million ($121 million) at March 31, 1998 and (pound)69 million at March 31, 1997. Over the past two years, the Pool prices have been less than anticipated when the accrual was recognized. The Company is continuing to review the trend of Pool prices and an adjustment to the provision may be required in the future. Operating Leases SWEB has commitments under operating leases with various terms and expiration dates. Expenses associated with these commitments totalled (pound)5 million ($8 million) for the fiscal year 1998, (pound)4 million for the fiscal year 1997, (pound)3 million for the period from inception (June 23, 1995) to March 31, 1996, and (pound)3 million for the period from April 1, 1995 to September 17, 1995. Estimated minimum rental commitments for noncancelable operating leases were as follows at March 31, 1998 (in millions): Fiscal year 1999................................. (pound) 5 $ 8 2000................................. 4 6 2001................................. 1 2 2002................................. 1 2 2003................................. 1 2 Thereafter........................... 7 12 ---------- ---- Total minimum payment.................. (pound) 19 $ 32 ========== ==== II-23 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Labor Subject to Collective Bargaining Agreements Substantially all of SWEB's employees are subject to one of two collective bargaining agreements. Such agreements are ongoing in nature, and SWEB's employee participation level is consistent with that of the electric utility industry in the UK. 5. SEGMENT AND RELATED INFORMATION Effective March 31, 1998, the Company adopted FASB Statement No. 131, "Disclosure About Segments of an Enterprise and Related Information". The Company is primarily engaged in two electric industry segments: distribution, which involves the transmission of electricity across its network and its transfer and delivery to its customers, and supply, which involves bulk purchase of electricity from the Pool and arranging for its sale and transfer to its customers. Information about the Company's operations in these individual segments, which also reflect its products and services, is detailed below. All revenues are in respect of sales to customers in the UK.
Business Segments - ----------------- (in millions) Fiscal Year Distribution Supply Other Eliminations Consolidated - ---------- ------------ ------------------ ------------ ------------ ------------ 1998 (Successor) - ---------------- Operating revenues (pound) 228 $ 382 (pound)706 $ 1,184 (pound)50 $ 84 (pound)(224) $ (376)(pound)760 $ 1,274 Depreciation and Amortization 39 65 - - 7 12 - - 46 77 Operating income 106 177 22 37 4 7 - - 132 221 Total assets employed at period-end 1,540 2,582 110 184 78 131 - - 1,728 2,897 Capital expenditures 78 131 1 2 3 5 (1) (2) 81 136 1997 (Successor) - ---------------- Operating revenues (pound) 231 (pound) 788 (pound) 63 (pound) (234) (pound) 848 Depreciation and Amortization 37 - 6 - 43 Operating income 108 12 6 (1) 125 Total assets employed at period-end 1,481 133 107 - 1,721 Capital expenditures 64 3 3 (1) 69 Inception (June 23, 1995) to - --------------------------- March 31,1996 (Successor) - --------------------------- Operating revenues (pound) 147 (pound) 450 (pound) 31 (pound) (147) (pound) 481 Depreciation and Amortization 19 - 3 - 22 Operating income 72 13 1 - 86 Total assets employed at period-end 1,426 102 162 - 1,690 Capital expenditures 32 1 4 - 37 April 1, 1995 to September 17, 1995 - ------------------------------------ (Predecessor) - ------------- Operating revenues (pound) 105 (pound) 276 (pound) 23 (pound) (105) (pound) 299 Depreciation and Amortization 12 - 3 - 15 Operating income 42 2 (4) - 40 Total assets employed at period-end 537 54 289 (45) 835 Capital expenditures 19 - 2 - 21 Included in "Other" above are insignificant operating subsidiaries of SWEB, as well as corporate activities and assets not allocated to specific segments. Interest expense and taxes are wholly allocated to "Other" and are disclosed in the Consolidated Income Statements. With the exception of total assets employed, the values above exclude discontinued operations. The eliminations above primarily relate to internal sales from the distribution business to the supply business for the use of the network. Such sales are priced at rates applicable to SWEB and other suppliers operating in the SWEB's Authorized Area.
II-24 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
6. INCOME TAXES Details of the income tax provisions are as follows (in millions): Period from | Period from inception (June | April 1, 1995 Fiscal Year Fiscal Year 23, 1995) to | to September 1998 1997 March 31, 1996 | 17, 1995 Successor Successor Successor | Predecessor ----------- ---------- -------------- | ------------ Total provision for income taxes: | Customary | Currently payable (pound) 27 $ 45 (pound) 21 (pound) 12 | (pound) 10 Deferred 6 10 11 19 | 3 ------ ---- ---------- ---------- | ---------- 33 55 32 31 | 13 Effect of change in tax rates (22) (37) - - | - Windfall levy 90 151 - - | - ----------- ---- --------- --------- | ---------- Total income taxes charged to operations (pound) 101 $169 (pound) 32 (pound) 31 | (pound) 13 =========== ==== ========== ========== | ==========
On July 2, 1997 the newly elected Labour government presented its first budget which included a "one-off windfall levy on the excess profits of the privatized utilities". Based upon the legislation, SWEB estimated its liability to be approximately (pound)90 million. The levy is payable in two equal installments. The first installment was paid on December 1, 1997 and the second will be paid on or before December 1, 1998. The legislation also reduced the UK corporation tax rate from 33% to 31% with effect from April 1, 1997. Such a decrease resulted in an accounting credit reducing the Company's provision for deferred income taxes by approximately (pound)22 million. The tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases, which give rise to deferred tax assets and liabilities, are as follows (in millions):
March 31, March 31, 1998 1997 --------- ---------- Deferred tax liabilities: Property, plant, and equipment basis differences..................... (pound)361 $ 605 (pound) 363 Pensions............................................................. 38 64 35 ----- ---- ---- Total........................................................ 399 669 398 Deferred tax assets: Accruals, including acquisition related items............... 38 64 21 ---------- ----- ----------- Net deferred tax liabilities in consolidated balance sheet............. (pound)361 $ 605 (pound) 377 ========== ===== ===========
The effect of a change in tax rates and windfall levy, both as discussed above, would reduce the effective rate by 26% and increase the effective rate by 105%, respectively. Excluding these two items, the reconciliation of the UK statutory rate to the effective customary income tax rate is as follows:
Period from | Period from inception (June| April 1, 1995 to Fiscal Year Fiscal Year 23, 1995) to | September 17, 1998 1997 March 31, 1996 | 1995 Successor Successor Successor | Predeccessor ----------- ----------- -------------- | -------------- | UK statutory rate 31% 33% 33% | 33% Nondeductible amortization of goodwill 2 2 1 | - Other permanent differences 5 1 - | 2 ---- --- ---- | ---- Effective customary income tax rate 38% 36% 34% | 35% ==== ==== ==== | ====
II-25 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued) 7. ACQUISITION The acquisition of SWEB in the amount of (pound)1.065 ($1.785) billion was accomplished through the purchase of shares via both cash and non-cash consideration (see accompanying consolidated statement of cash flows) between July and November 1995, and was accounted for using the purchase method of accounting in accordance with APB No. 16. The purchase price of SWEB has been allocated to the underlying assets and liabilities based on estimated fair values at the acquisition date. The acquisition cost exceeded the fair market value of net assets acquired, including (pound)28 million ($47 million) of acquisition related costs, by (pound)183 million ($307 million) and is considered goodwill. The operating results of SWEB have been included in the Company's financial statements from the effective date of the acquisition. The following unaudited pro forma information has been prepared assuming that the acquisition had occurred at the beginning of the respective periods. The pro forma adjustments made are detailed in Note 14. The pro forma information is presented for informational purposes only and may not be indicative of the results of operations as they would have been had the acquisition occurred at the beginning of the respective periods, nor is the information necessarily indicative of the results of operations which may occur in the future. Pro Forma Fiscal Year Ended March 31 -------------------------- 1996 ------------ (millions) Operating Revenues (pound) 780 $ 1,308 Net Income 49 82 8. FINANCIAL INSTRUMENTS SWEB utilizes CFDs to mitigate its exposure to volatility in the prices of electricity purchased through the Pool. Such contracts allow the Company to effectively convert the majority of its anticipated Pool purchases from market prices to fixed prices. SWEB's goal is to obtain competitively priced contracts to cover the majority of its purchase requirements. The gains and losses on such contracts are deferred and recognized as electricity is purchased. Management believes that the fair value of these contracts at present is not materially different than the fair value determined at acquisition. SWEB also has commitments to purchase capacity under its long term contracts. See Note 4 where these contracts are discussed in greater detail. The Company and SWEB utilize interest rate swaps to minimize borrowing costs and mitigate their exposure to fluctuations in interest rates by allowing them to convert their outstanding variable rate debt into fixed rate debt. These swaps are designated as hedges of underlying debt obligations and, as such, the interest rate differential is reflected as an adjustment to interest expense over the life of the swaps. At March 31, 1998, sterling interest rate swaps expiring between 2001 and 2012 with notional amounts totalling (pound)600 million ($1,006 million), resulted in an unrealized loss of (pound)39 million ($65 million). Foreign currency swaps are used by the Company and SWEB to hedge exposure to currency fluctuations for US dollar denominated debt. Gains and losses on these hedges are deferred and recognized as an adjustment to the carrying amount when the hedged transaction occurs. At March 31, 1998, currency swaps expiring between 2001 and 2007 with notional amounts totalling (pound)350 million ($587 million), resulted in an unrealized profit of (pound)4 million ($6 million). The Company is exposed to losses in the event of nonperformance by counterparties to its financial instrument contracts. To mitigate this credit risk, the Company selects counterparties based on their credit ratings, limits its exposure to any one counterparty under defined guidelines, and monitors the market position of the programs and its relative market position with each counterparty. The Company does not expect any of the counterparties to fail to meet their obligations. II-26 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued) 9. CAPITAL BUDGET The Company's capital expenditure for the fiscal year 1998 was (pound)81 million ($136 million); for the fiscal years 1999 and 2000 capital expenditures are estimated to be (pound)71 million and (pound)67 million respectively. The capital budget is subject to periodic review and revision, and actual capital cost incurred may vary from the above statement because of numerous factors. The factors include: changes in business conditions; revised load growth projections; change in regulatory requirements; and increasing costs of labor, equipment, and materials. 10. FINANCING The Company has $500 million Senior Notes in the US, of which some $168 million of the Senior Notes are due for redemption in 2001 and $332 million in 2006; the Senior Notes are at rates of 6.375% and 6.8% respectively. The Company entered into currency swap transactions that effectively convert the US dollar obligations of the Senior Notes into pounds sterling obligations, with a nominal value of (pound)300 million. The Company has a US commercial paper program under which the maximum available is $520 million. This program is supported by a swingline and revolving credit facility provided by a syndicate of banks. The amount available under the program, which is supported by the swingline and revolving credit facility, at March 31, 1998 was $164 million. SWEB enters into foreign currency contracts to hedge the currency risk associated with the interest and principal of each utilization under this program. During the fiscal year 1998 the Company and SWEB entered into a further (pound)100 million of fixed rate sterling interest swaps. At March 31, 1998, the Company and SWEB have sterling interest rate swaps expiring between 2001 and 2012 with notional amounts totalling (pound)600 million ($1,006 million), and cross currency swaps expiring between 2001 and 2007 with notional amounts totalling (pound)350 million ($587 million). Southern Investments UK Capital Trust I (the "Trust"), issued $82 million of its 8.23% preferred securities and invested the proceeds thereof in 8.23% subordinated debentures issued by the Company, which are scheduled to mature on February 1, 2027. The Company guarantees the Trust's obligations under the preferred securities. The Company has also entered into foreign currency swap contracts to hedge the currency risk associated with the interest and principal on the preferred securities, by swapping the US dollar liabilities back to pounds sterling for the period to February 2007. The nominal value of the swapped liabilities is (pound)50 million. The Company owns all of the common securities of the Trust, all of the assets of which are the aforementioned subordinated debentures of the Company in the aggregate principal amount of $84.5 million. The Company considers that the mechanisms and obligations relating to the preferred securities, taken together, constitute a full and unconditional guarantee by the Company of the Trust's payment obligations with respect to the preferred securities. 11. INVESTMENTS The Company's long-term investments accounted for under the cost method consist of its 7.69% ownership of Teesside (Note 4), the fair value of which is not readily determinable. The Company's short-term investments are classified as available-for-sale under SFAS No. 115, the fair value of which approximated cost at March 31, 1998. During fiscal year 1996, SWEB sold its share of NGG into the market, following the listing of the NGG shares on the London Stock Exchange in December 1995. At the Acquisition Date, the eventual listing of shares in NGG was not certain as it required numerous actions by the 12 RECs, NGG and the UK government, followed by the consent of the shareholders given at meetings of each of the 12 RECs on the terms of a listing. Management determined that it had all the facts necessary to complete a calculation of the fair value of its long term investment in NGG, and it utilized a discounted cash flow methodology to determine the asset's fair value shortly after the Acquisition Date in accordance with APB No. 16. II-27 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The Company's valuation of (pound)199 million was within the range of independent appraisals of NGG performed during the same period. Subsequently, certain facts and circumstances changed which increased the value of the Company's investment in NGG. SWEB disposed of its shares for (pound)213 million, resulting in a pretax gain of (pound)14 million. This gain is nonrecurring in nature as it is the result of changes in circumstances after the fair valuation of the investment in NGG resulting from the application of APB No. 16 which valuation was finalized shortly after the Acquisition Date. The offering of NGG was conditional on the prior demerger of PSB which was completed in November 1995. The fair value of SWEB's holdings at acquisition in PSB was assessed at (pound)39 million. PSB was subsequently sold. At March 31, 1997, proceeds of (pound)43 million had been received; a gain of (pound)4 million had been recognized in fiscal year 1997. 12. COMMON STOCKHOLDER'S EQUITY As discussed in Note 7, the Company obtained effective control of SWEB in September 1995. During October 1995, (pound)315 million of advances from the parent of the Company were converted to share capital, an equity contribution of (pound)185 million was received from the parent of the Company, and a combination of short-term and long-term debt financing was obtained to facilitate the payment of the former shareholders. These transactions are reflected in the consolidated statements of cash flows. Dividends in the amount of (pound)191 million were declared and paid by the Company during the period ending March 31, 1996 as proceeds from the sale of the Company's shares in NGG (Note 11) provided cash in addition to that provided from operations during the period. The Company's sole investment and only significant asset is the entire share capital of SWEB. The Company is therefore dependent upon dividends from SWEB for its cash flow. SWEB can make distribution of dividends to the Company under English law to the extent that it has distributable reserves, subject to the retention of sufficient financial resources to conduct its supply and distribution businesses as required by its regulatory license. The Company believes that currently sufficient distributable reserves will exist at SWEB to allow for any and all cash flow generated at SWEB through operations to be distributed to the Company through dividends to the Company. In the UK, the Accounting Standards Board is currently reviewing the treatment of deferred income tax accounting. If full provision for deferred tax were required, SWEB's distributable reserves could be eliminated. 13. SUBSEQUENT EVENT On June 18, 1998, Southern sold an additional 26 percent interest in Holdings to PP&L Resources for $170 million. PP&L Resources initially purchased a 25 percent stake in Holdings in July 1996. This further sale will increase PP&L Resources' economic interest in Holdings to 51 percent. Under the terms of the agreement, Southern will retain operational and management control of SWEB and the Holdings group. Southern will continue to hold a majority of the voting shares in Holdings and will retain a majority of the Board of Directors. In addition, all members of SWEB's senior management team will remain in place. II-28 SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (SUCCESSOR COMPANY) AND SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (PREDECESSOR COMPANY) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued) 14. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE 12 MONTHS ENDED MARCH 31, 1996 The following unaudited pro forma statement of income from continuing operations is based upon the audited consolidated statement of income for the period from inception (June 23, 1995) to March 31, 1996 of the Successor Company and the audited consolidated statement of income of the Predecessor Company for the period from April 1, 1995 to September 17, 1995, adjusted to reflect the items described in notes (1) to (5) below as if the purchase business combination had occurred at the beginning of the period.
(In Millions) -------------------------------------------------------------------------------------------- Successor Period | Predecessor Inception (June 23, | Period April 1, Pro forma for 1995) to March 31, | 1995 to the Year 1996 | September 17, Ended March (audited) | 1995 31, 1996 US GAAP | (audited) | US GAAP Adjustments US GAAP ---------------------|----------------------------------------------------------------------- | ` | 1 2 3 4 5 | OPERATING REVENUES (pound) 481 | (pound) 299 - - - - - (pound) 780 COST OF SALES 318 | 186 - - - - - 504 ---------- | ---------- --- --- --- --- --- --------- GROSS MARGIN 163 | 113 - - - - - 276 ---------- | ---------- --- --- --- --- --- --------- OPERATING EXPENSES: | Maintenance 21 | 18 - - - - - 39 Depreciation and amortization 22 | 15 3 2 - - - 42 Selling, general, and administrative 34 | 40 - - - - (8) 66 ---------- | ----------- --- --- --- --- --- --------- Total operating expenses 77 | 73 3 2 - - (8) 147 ---------- | ---------- --- --- --- --- --- --------- Operating income 86 | 40 (3) (2) - - 8 129 ---------- | ---------- --- --- --- --- --- --------- OTHER INCOME (EXPENSE): | Interest income 7 | 2 - - - - - 9 Interest expense (28) | (5) - - (1) (32) - (66) Gain on sale of investments 14 | - - - - - (14) - Other, net 2 | 1 - - - - - 3 ---------- | ---------- --- --- --- --- --- --------- Total other income (expense) (5) | (2) - - (1) (32) (14) (54) ---------- | ----------- --- --- --- --- --- --------- INCOME BEFORE INCOME TAXES 81 | 38 (3) (2) (1) (32) (6) 75 | PROVISION FOR INCOME TAXES 28 | 13 (1) (1) - (11) (2) 26 ---------- | ---------- --- --- --- --- --- --------- INCOME FROM CONTINUING | OPERATIONS (pound) 53 | (pound) 25 (2) (1) (1) (21) (4) (pound) 49 ========== | ========== === === === === === ========= (1) Depreciation expense which would have been recorded based on the valuation of property, plant, and equipment recorded in connection with the purchase business combination, as if such combination had occurred on April 1, 1995. It has been provided using composite straight line rates which approximate 3.1% on an asset value of (pound)1,190 million for 170 days, less depreciation already charged to the Predecessor Company's consolidated statement of income. (2) Amortization of goodwill recorded in connection with the purchase business combination as if the combination had occurred on April 1, 1995. (3) Reflect the fair value of long-term debt obligations and associated interest expense recorded in connection with the purchase business combination as if the combination had occurred on April 1, 1995. The charge relates to notional interest ((pound)2 million) on a discounted provision for onerous purchase contracts ("Teesside"), partly offset by a reduction in interest to market rates on the HM Government debt put in place at privatization ((pound)1 million). (4) Reflect the interest expense recorded in connection with the purchase business combination as if the combination had occurred on April 1, 1995 and had been 100% financed with short-term borrowings at an interest rate of 6% per year. The impact of a 1/8% change in the assumed interest rate would change income from continuing operations by (pound)0.4 million. (5) Remove gain on sale of investment in NGG and costs incurred by the Predecessor Company relating to bid defense associated with the Acquisition. An extraordinary gain of (pound)6 million ($10 million) on early extinguishment of debt during the successor period above, normally shown after income from continuing operations, has also been removed.
II-29 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. II-30 PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT MANAGEMENT The following table sets forth certain information with respect to the directors and executive officers of the Company as of March 31, 1998:
Name Age Position ---- --- ------------------------------------------------- Richard J. Pershing.............................. 51 Director, Chief Executive Officer C. B. (Mike) Harreld............................. 53 Director, Chief Financial and Accounting Officer Thomas G. Boren.................................. 48 Director Gale E. Klappa................................... 47 Director Barney S. Rush................................... 45 Director C. Philip Saunders............................... 45 Director Robert A. Symons................................. 45 Director Accentacross Limited............................. Director Mighteager Limited............................... Director
Richard J. Pershing has been a Director of the Company since June 1995 and Chief Executive Officer since July 1996. From February 1994 to the present, Mr. Pershing has served as Senior Vice President and International Executive Officer of Southern Energy, an indirect wholly-owned subsidiary of Southern. From June 1992 to February 1994, he served as Vice President of International Business Development at Southern Energy. C. B. (Mike) Harreld has been a Director of the Company since September 1995 and Chief Financial and Accounting Officer of the Company since July 1996. He has also been the Finance Director of SWEB since September 1995. From February 1986 to August 1995, he served as Vice President, Comptroller and Chief Accounting Officer of Georgia Power. Thomas G. Boren has been a Director of the Company since July 1995 and President and Chief Executive Officer of Southern Energy since February 1992. Gale E. Klappa has been a Director of the Company since September 1995. He has also been Chief Executive Officer of SWEB since that date. From February 1992 to September 1995, he served as Senior Vice President of Marketing for Georgia Power. Barney S. Rush has been a Director of the Company since October 1997, and President of Southern Energy Developments -Europe Ltd. since that date. He has also been Vice President of Southern Energy since May 1996. From April 1990 to May 1996, he served as Executive Vice President of Oxbow Power Corporation. C. Philip Saunders has been a Director of the Company since September 1995. He has also been Supply Director of SWEB since that date. From February 1994 to September 1995, he served as Western Region Director and Power Marketing Director for US business development at Southern Energy. From May 1992 to February 1994, Mr. Saunders was Assistant to the Senior Vice President of Marketing at Georgia Power. Robert A. Symons has been a Director of the Company since October 1997. He has also been Operations Director of SWEB since that date. From December 1994 to September 1997, Mr. Symons served as Network Services Manager in Plymouth for SWEB. From October 1994 to November 1994, he was in Network Services, West and from April 1992 to September 1994, Mr. Symons served as Meter Test Manager for SWEB. Accentacross Limited ("Accentacross") has been a Director of the Company since July 1996. Robert D. Fagan represents Accentacross at meetings of the Directors of the Company. Mr. Fagan has represented Accentacross at meetings of the Directors of the Company since July 1996. From November 1994 to the present, Mr. Fagan has served as President of PP&L Global. From April 1989 to November 1994, he served as Vice President and General Manager of Mission Energy Company ("Mission Energy"). III-1 Mighteager Limited ("Mighteager") has been a Director of the Company since July 1996. Roger L. Petersen represents Mighteager at meetings of the Directors of the Company. Mr. Petersen has represented Mighteager at meetings of the Directors of the Company since July 1996. From January 1995 to the present, Mr. Petersen has served as Vice President of PP&L Global. From October 1986 to December 1994, Mr. Petersen served as Vice President of Mission Energy. Accentacross and Mighteager were elected by PMDC as members of the board of directors of the Company pursuant to a Shareholders' Agreement dated July 1, 1996 (the "Shareholders' Agreement") among Southern Electric International-Europe Inc. ("SEI-Europe"), PMDC and Holdings. The Shareholders' Agreement provides that each shareholder of Holdings owning 10 percent or more of the shares of Holdings has the right to elect one director for every 10 percent held. This right applies not only to the board of directors of Holdings but also extends to the board of directors of the Company as a wholly-owned subsidiary of Holdings. Thus, PMDC, as holder of 25 percent of the shares of Holdings during the period under review, had the right to elect two directors to the board of the Company. Accentacross and Mighteager are represented on the board of directors of the Company by Messrs. Fagan and Petersen, respectively. On June 18, 1998, Southern sold a further share of its ownership in Holdings to PP&L Resources; see Note 13 in the "Notes to the Consolidated Financial Statements". Item 11. EXECUTIVE COMPENSATION Accentacross and Mighteager (the "PMDC Directors") do not receive compensation for their services as Directors of the Company. Mr. Symons has received, and will continue to receive, compensation in respect of services performed as a SWEB Officer, SWEB being his primary employer and a subsidiary of the Company. He receives no cash or non-cash compensation as a result of these arrangements beyond that which he would otherwise receive from SWEB for the services performed by him for SWEB. The other officers and directors listed in Item 10 above (such officers and directors, with the exception of the PMDC Directors, each a "Southern Company system Officer or Director", as applicable) have received, and will continue to receive, compensation in respect of services performed by such persons in their capacities as Southern Company system Officers or Directors of the Company from Southern Energy, their primary employer and an affiliate of the Company. The salaries, including a portion of the overhead costs associated with each, for Messrs. Klappa, Harreld and Saunders are paid by Southern Energy, and Southern Energy is reimbursed by the Company, in accordance with a services agreement between the Company and Southern Energy. Southern Company system Officers and Directors receive no cash or non-cash compensation as a result of these arrangements beyond that which they would otherwise receive from Southern Energy for the services performed by them for Southern Energy. III-2 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Security ownership of certain beneficial owners. The authorized share capital of the Company consists of 500,400,587 ordinary shares of (pound)1 each, all of which have been issued fully paid and are held by Holdings. The following table sets forth, as of March 31, 1998, certain information regarding beneficial ownership of Holdings' common stock held by each person known by the Company to own beneficially more than 10% of Holdings' outstanding common stock. On June 18, 1998, Southern sold a further share of its ownership in Holdings to PP&L Resources; see Note 13 in the "Notes to the Consolidated Financial Statements". Name and Address Amount and Nature Percent of Beneficial of Beneficial of Title of Class Owner Ownership Class - -------------------------------------------------------------------------------- A Ordinary The Southern Company 18,650,001 (1) 100% 270 Peachtree Street, N.W. Atlanta, Georgia 30303 B Ordinary PP&L Resources, Inc. 6,216,667 (2) 100% 2 North Ninth Street Allentown, Pennsylvania 18101 (1) Such shares are owned by Southern Electric International-Europe Inc., an indirect wholly-owned subsidiary of Southern. (2) Such shares are owned by PMDC UK, an indirect wholly-owned subsidiary of PP&L Resources. The A Ordinary shares and the B Ordinary shares have the same voting rights, and the only material difference between the A Ordinary shares and the B Ordinary shares is that the holders of the B Ordinary shares are entitled to a smaller proportion of dividends paid in respect of earnings during calendar year ending December 31, 1996 than the holders of the A Ordinary shares. Security ownership of management. The following table shows the number of shares of Southern common stock owned by the directors, nominees and executive officers as of March 31, 1998. It is based on information furnished by the directors, nominees and executive officers. The shares owned by all directors, nominees and executive officers as a group constitute less than one percent of the total number of shares outstanding on March 31, 1998.
Name of Directors, Nominees and Number of Shares Executive Officers Title of Class Beneficially Owned 1,2 - ----------------- -------------- ---------------------- Richard J. Pershing Southern Common 27,268 Carson B. Harreld Southern Common 10,302 Thomas G. Boren Southern Common 45,464 Gale E. Klappa Southern Common 42,659 Barney S. Rush Southern Common 352 C. Philip Saunders Southern Common 8,555 The directors, nominees, and executive officers as a group (9 persons) Southern Common 134,600 1 As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security and/or investment power with respect to a security, or any combination thereof. 2 The shares shown include shares of Southern common stock of which certain directors and executive officers have the right to acquire beneficial ownership within 60 days pursuant to the Executive Stock Plan, as follows: Mr. Pershing 4,440 shares; Mr. Harreld 6,429 shares; Mr. Boren 32,395 shares; Mr. Klappa 24,266 shares; and Mr. Saunders 2,201 shares. Mr. Symons and the two corporate directors, Accentacross Limited and Mighteager Limited, do not own any equity securities of the Company or any of its parents or subsidiaries.
III-3 Changes in control. On June 18, 1998, Southern sold a further share of its ownership in Holdings to PP&L Resources; see Note 13 in the "Notes to the Consolidated Financial Statements". Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Transactions with management and others. None. Certain business relationships. See Item 11 herein. Indebtedness of management. None. Transactions with promoters. None. III-4 PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) The following documents are filed as a part of this report on this Form 10-K: (1) Financial Statements: The financial statements and the related reports of independent public accountants filed as a part of this annual report are listed under Item 8 herein. (2) Financial Statement Schedules: Reports of Independent Public Accountants as to Schedules for SOUTHERN INVESTMENTS UK plc and Subsidiaries (Successor Company) and SOUTH WESTERN ELECTRICITY plc and Subsidiaries (Predecessor Company) are included herein on pages S-1 through S-2. Financial Statement Schedules for the Company are included herein on page S-3. (3) Exhibits: Exhibits are listed in the Exhibit Index on page E-1 and E-2. (b) Reports on Form 8-K: The registrant has not filed any reports on Form 8-K during the last quarter of the fiscal year ended March 31, 1998. IV-1 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant, Southern Investments UK plc, a public limited company incorporated and existing under the laws of England and Wales, has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia, on the 19th day of June, 1998. SOUTHERN INVESTMENTS UK plc /s/ Richard J. Pershing By: Richard J. Pershing Director and Chief Executive Officer By: /s/ Wayne Boston Wayne Boston Attorney-in-Fact Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following directors and officers of Southern Investments UK plc in the capacities and on the date indicated: Signature Title Date RICHARD J. PERSHING Chairman and Chief Executive Officer CARSON B. HARRELD Chief Financial and Accounting Officer THOMAS G. BOREN | | GALE E. KLAPPA | | BARNEY S. RUSH | | C. PHILIP SAUNDERS | | ROBERT A. SYMONS | | Directors ACCENTACROSS LIMITED | | By: Robert D. Fagan | Director | | MIGHTEAGER LIMITED | | By: Roger L. Petersen | Director | /s/ Wayne Boston June 19, 1998 Wayne Boston Attorney-in-Fact IV-2 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULE To the Board of Directors of Southern Investments UK plc: We have audited in accordance with generally accepted auditing standards, the financial statements of SOUTHERN INVESTMENTS UK plc AND SUBSIDIARIES (Successor Company) included in this report and have issued our report thereon dated June 19, 1998. Our audit was made for the purposes of forming an opinion on the basic financial statements taken as a whole. The schedule listed in Item 14 (a) (2) is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. /s/ Arthur Andersen ARTHUR ANDERSEN Bristol, England June 19, 1998 S-1 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULE To the Board of Directors of South Western Electricity plc: We have audited in accordance with generally accepted auditing standards, the financial statements of SOUTH WESTERN ELECTRICITY plc AND SUBSIDIARIES (Predecessor Company) included in this report and have issued our report thereon dated June 19, 1998. Our audit was made for the purposes of forming an opinion on the basic financial statements taken as a whole. The schedule listed in Item 14 (a) (2) is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. /s/ Arthur Andersen ARTHUR ANDERSEN Bristol, England June 19, 1998 S-2 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR THE YEARS ENDED MARCH 31, 1998 AND 1997, AND FOR THE PERIODS FROM INCEPTION (JUNE 23, 1995) TO MARCH 31, 1996 AND FROM APRIL 1, 1995 TO SEPTEMBER 17, 1995 (In Millions)
Additions ----------------------------- Balance at Charged Charged to Balance at Beginning (Credited) Other End of of Period to Income Accounts Deductions Period (pound) (pound) (pound) (pound) (pound) ---------- --------- -------- ---------- ---------- Provision for Uncollectable Accounts Predecessor Company Period from April 1, 1995 to September 17, 1995 12 2 - (3) 11 == = = === == Successor Company Period from Inception (June 23, 1995) to March 31, 1996........................ 15 (1) 3 - (1) 17 == = = === == Year-Ended March 31, 1997................ 17 (1) (2) - (3) 12 == === = === == Year-Ended March 31, 1998................ 12 (2) - (1) 9 == === = === == - ------------- (1) In the period from inception (June 23, 1995) to March 31, 1996, the value shown includes an additional (pound)4 million of provision created resulting from application of purchase accounting at the acquisition. In the year ended March 31, 1997, (pound)2 million of this provision was reversed as part of the review of the purchasing accounting adjustments.
S-3 EXHIBIT INDEX
The following exhibits indicated by an asterisk preceding the exhibit number are filed herewith. The balance of the exhibits have heretofore been filed with the SEC, respectively, as the exhibits and in the file numbers indicated and are incorporated herein by reference. 3.1 -- Memorandum of Association of the Company. (Designated in Form S-1 Registration No. 333-09033 as Exhibit 3.1.) 3.2 -- Articles of Association of the Company. (Designated in Form S-1 Registration No. 333-09033 as Exhibit 3.2.) 4.1 -- Trust Indenture dated as of November 21, 1996, between the Company and Bankers Trust Company, as trustee. (Designated in Form S-1 Registration No. 333-09033 as Exhibit 4.1). 4.2 -- First Supplemental Indenture dated as of November 21, 1996 between the Company and Bankers Trust Company, as trustee. (Designated in Registration No. 333-26939 as Exhibit 4.2). 4.3 -- Deposit Agreement dated as of November 21, 1996 between the Company and Bankers Trust Company, as book-entry depositary. (Designated in Registration No. 333-26939 as Exhibit 4.3). 4.4 -- Subordinated Debenture Indenture dated as of January 29, 1997, among the Company, Bankers Trust Company, as trustee, and Bankers Trust Luxembourg S.A., as paying agent and transfer agent. (Designated in Registration No. 333-26939 as Exhibit 4.1.) 4.5 -- Certificate of Trust of Southern Investments UK Capital Trust I (Designated in Registration No. 333-26939 as Exhibit 4.3.) 4.6 -- Amended and Restated Declaration of Trust dated as of January 29, 1997 of Southern Investments UK Capital Trust I. (Designated in Registration No. 333-26939 as Exhibit 4.4.) 4.7 -- Form of Exchange Guarantee of the Company relating to the Exchange Capital Securities. (Designated in Registration No. 333-26939 as Exhibit 4.6.) 4.8 -- Capital Securities Guarantee dated as of January 29, 1997 of the Company relating to the Original Capital Securities. (Designated in Registration No. 333-26939 as Exhibit 4.8.) 4.9 -- Common Securities Guarantee dated as of January 29, 1997 of the Company relating to the Common Securities. (Designated in Registration No. 333-26939 as Exhibit 4.9.) 4.10 -- Deposit Agreement dated as of January 29, 1997 between the Company and Bankers Trust Company, as book-entry depositary. (Designated in Registration No. 333-26939 as Exhibit 4.10.)
E-1
10.1 -- SWEB Public Electricity Supply License dated January 31, 1996. (Designated in Form S-1 Registration No. 333-09033 as Exhibit 10.1.) *10.2 -- Modifications of License Conditions dated March 31, 1998, January 23, 1998, December 30, 1997, and March 7, 1997. *10.3 -- Pooling and Settlement Agreement (as amended and restated at July 28, 1997) together with modifications dated September 19, 1997 and May 14, 1998 between SWEB, Energy Settlements and Information Services (as Settlement System Administrator), Energy Pool Funds Administration Limited (as Pool Funds Administrator), NGC (as Grid Operator and Ancillary Services Provider) and Other Parties. 10.4 -- Master Connection and Use of System Agreement dated as of March 30, 1990 among NGC and its users (including SWEB). (Designated in Form S-1 Registration No. 333-09033 as Exhibit 10.4.) 10.5 -- Form of Supplemental Agreement between NGC and SWEB. (Designated in Form S-1 Registration No. 333-09033 as Exhibit 10.5.) *10.6 -- Variations dated April 1, 1998, March 31, 1998 and March 31, 1998 to the Master Connection and Use of System Agreement dated as of March 30, 1990 among NGC and its users (including SWEB) and to the Form of Supplemental Agreement between NGC and SWEB. 10.7 -- Master Agreement dated as of October 25, 1995 among The National Grid Holding plc, NGC, SWEB and the other RECs. (Designated in Form S-1 Registration No. 333-09033 as Exhibit 10.6.) 10.8 -- Memorandum of Understanding between The National Grid Group plc, SWEB and each of the RECs, dated November 17, 1995. (Designated in Form S-1 Registration No. 333-09033 as Exhibit 10.7.) *10.9 -- Form of SWEB Use of Distribution System Agreement. 10.10 -- Form of Agreement for the Connection of an Exit Point, generally applicable to commercial customers. (Designated in Form S-1 Registration No. 333-09033 as Exhibit 10.9.) *10.11 -- Form of Agreement for the Connection of an Exit Point, generally applicable to residential customers. 10.12 -- Services Agreement dated as of January 1, 1996 between Southern Electric International, Inc. (now Southern Energy, Inc.) and the Company. (Designated in Form S-1 Registration No. 333-09033 as Exhibit 10.10.) 10.13 -- Services Agreement dated as of January 1, 1996 between Southern Electric International, Inc. (now Southern Energy, Inc.) and SWEB. (Designated in Form S-1 Registration No. 333-09033 as Exhibit 10.11.) 10.14 -- Services Agreement dated as of January 1, 1996 between SWEB and Holdings. (Designated in Form S-1 Form S-1 Registration No. 333-09033 as Exhibit 10.12.) 10.15 -- Services Agreement dated as of January 1, 1996 between the Company and SWEB. (Designated in Form S-1 Registration No. 333-09033 as Exhibit 10.13.) *21.1 -- Subsidiaries of Registrant. *24.1 -- Power of Attorney and Resolution. *27.1 -- Financial Data Schedule.
E-2
EX-10 2 EX 10.2 EXHIBIT 10.2 SWEB plc 800 Park Avenue Aztec West Almondsbury, Bristol BS12 4SE Our ref. AW/EH/3082 31 March 1998 MODIFICATIONS OF LICENCE CONDITION Whereas - (1) South Western Electricity plc ("the Licensee") has been granted a licence ("the licence") under section 6(1)(c) of the Electricity Act 1989 ("the Act") to supply electricity to any premises in the authorised area designated in Schedule I of the licence subject to the Conditions contained in the licence; (2) In accordance with Section 11(2) of the Act the Director General of Electricity Supply ("the Director") gave notice of his intention to make modifications to Condition 3, 3A, 3B, 3D, 3E, 3G and Schedule 3 (being part of the charge restriction conditions as defined in the licence) of the licence by advertising the modifications in the London Gazette' and the Financial Times requiring any objections or representations to the modifications to be made to him on or before 20 February 1998; (3) The Director has considered the representations or objections which were duly made and not withdrawn; (4) In accordance with Section 11(4) of the Act the Director gave notice of his intention to make the modifications to the Secretary of State and has not received a direction not to make the modification; (5) The Licensee has given its consent to the modifications set out in the attached schedule. Now in accordance with the powers contained in Section 11(1) of the Act and with the consent of the Licensee, the Director hereby modifies the licence in the manner specified in the attached schedule, with effect from and including 1 April 1998. Andrew Walker Authorised on behalf of The Director General of Electricity Supply SCHEDULE The following modifications shall apply on and after 1 April 1998. 1. In paragraph I of Condition 3, the following definitions shall be deleted: "regulated quantity supplied" "regulated supply revenue" and "regulated unit supplied". 2. Condition 3A shall be deleted and shall be replaced by new Condition 3A the terms of which are set out in Annex 1. 3. Conditions 3B, 3D and 3E shall be replaced by new Conditions 3B,3D and 3E the terms of which are set out in Annex 2. 4. In Condition 3G, the date in paragraph 3(c) shall be replaced with "31 March 2000". 5. Parts A,B and C of Schedule 3 shall be deleted and shall be replaced by new Parts A,B and C the terms of which are set out in Annex 3. 6. In Parts D and E of Schedule 3, the references in paragraphs D1 and E10 to paragraph 8 of Condition 3E shall be changed to references to paragraph 7 of Condition 3E; and the references in paragraphs D5 and E11 to paragraph 11 of Condition 3E shall be changed to references to paragraph 10 of Condition 3E. 8. Part F of Schedule 3 shall be deleted. Mr R Westlake Regulation Manager SWEB plc 800 Park Avenue Aztec West Almondsbury, Bristol BS12 4SE 16 March 1998 MODIFICATIONS OF THE PES LICENCE As you will know, a Section 11 notice was published on the 23 January and subsequently served on your company, relating to the proposed modification of price control arrangements (including PES licence condition 3A and 3B). The Director General has considered the representations made to him following the publication of the Section 11 notice and now wishes to proceed with the attached modification. You have until the 26 March to provide written confirmation that South Western Electricity plc consents to the modification. If you fail to do so the Director General would need to consider referring the matter to the MMC pursuant to Section 12 of the Electricity Act. Yours sincerely Andrew Walker Director - Price Control (18 March 1998) [Modifications to each public electricity supply licence for England and Wales] SCHEDULE The following modifications shall apply on and after 1 April 1998. 1. In paragraph 1 of Condition 3, the following definitions shall be deleted: "regulated quantity supplied" "regulated supply revenue" and "regulated unit supplied". 2. Condition 3A shall be deleted and shall be replaced by new Condition 3A the terms of which are set out in Annex 1. 3. Conditions 3B, 3D and 3E shall be replaced by new Conditions 3B,3D and 3E the terms of which are set out in Annex 2. 4. In Condition 3G, the date in paragraph 3(c) shall be replaced with "31 March 2000". 5. Parts A,B and C of Schedule 3 shall be deleted and shall be replaced by new Parts A,B and C the terms of which are set out in Annex 3. 6. In Parts D and E of Schedule 3, the references in paragraphs D1 and E10 to paragraph 8 of Condition 3E shall be changed to references to paragraph 7 of Condition 3E, and the references in paragraphs D5 and E11 to paragraph 11 of Condition 3E shall be changed to references to paragraph 10 of Condition 3E. 8. Part F of Schedule 3 shall be deleted. Notice under section 11(2) of the Electricity Act 1989 The Director General of Electricity Supply (hereinafter referred to as "the Director") pursuant to section 11 of the Electricity Act 1989 (hereinafter referred to as "the Act") hereby gives notice as follows: (i) In relation to each of the licences which have been granted under section 6(1)(c) of the Act in respect of an authorised area in England and Wales (hereinafter a "PES licence"), he proposes to make modifications to Conditions 3, 3A, 3B, 3D, 3E, 3G and Schedule 3 (being part of the charge restriction conditions as defined in a PES licence); (ii) The reasons why he proposes to make the modifications and their effect were published by the Director in a statement on 16 October 1997; (iii)In summary the effect of the modifications will be to amend the charge restriction conditions so that: - from 1 April 1998, the control of charges for the supply of electricity will apply only to domestic customers and to other customers consuming no more than 12000 kWh per year; - except with the consent of the Director such customers shall continue to be offered the tariffs at present available to them, - for the year commencing 1 April 1998, in respect of such customers - the average price must fall, in comparison with the average price obtaining on 1 August 1997, by the following percentage in real terms: being 8.9 for Eastern Electricity plc, 6.3 for East Midlands Electricity plc, 11.8 for London Electricity plc, 5.8 for Manweb plc, 7.1 for Midlands Electricity plc, 4.2 for Northern Electric plc, 3.4 for Norweb plc, 6.0 for Seeboard plc, 3.2 for Southern electricity plc, 8.5 for South Wales Electricity plc, 6.6 for South Western Electricity plc and 3.7 for Yorkshire Electricity Group plc; - the prices charged to those on standard domestic tariff who consume 3300 kWh in that year must fall by the same percentage in real terms; - the prices charged to other domestic customers must fall by 3 per cent in real terms; - the prices charged to non-domestic customers must not increase in real terms; - no standing charge may be increased in real terms; - the prices to customers on a domestic prepayment tariff must be reduced by the same proportion as prices on the Comparable domestic credit tariff; - for the subsequent year, prices must be reduced by 3 per cent in real terms; - adjustments may be made to prices to take account of changes in the rate of fossil fuel levy, over-recovery in previous years, delay in introducing competition or unexpected movement in costs; - from 1 April 1998, the allowed maximum average charge per unit of electricity distributed by each licence holder - shall be increased to account for the costs of establishing and operating certain services which each licence holder is required by its PES licence to undertake in order to facilitate competition in electricity supply; - may be adjusted downwards in circumstances: in which the introduction of competition in electricity, supply to any part of Great Britain is delayed beyond April 1998; and in which the phased introduction of competition into the authorised area of each licence holder is delayed at any stage beyond July 1998. A copy of the statement of 16 October 1997 and of the present draft of the modifications can be obtained (free of charge) from the Office of Electricity Regulation. Any representations or objections to the proposed modifications may be made on or before 20 February 1998 to the Director at the Office of Electricity Regulation, Hagley House, 83-85 Hagley Road, Edgbaston, Birmingham, B16 8QG. A J WALKER Authorised on behalf of the Director 23 January 1998 The Company Secretary South Western Electricity plc 800 Park Avenue Aztec West Almondsbury Bristol BS32 4SE 30 December 1997 MODIFICATIONS OF PUBLIC ELECTRICITY SUPPLY LICENCE Whereas - 1. South Western Electricity plc ('the Licensee') has been granted a licence ('the Licence') under section 6(1)(c) of the Electricity Act 1989 ('the Act') to supply electricity to premises within the authorised area designated in Schedule 1 to the Licence subject to the conditions contained in the Licence. 2. In accordance with section 11(2) of the Act the Director General of Electricity Supply ('the Director') gave notice that he proposed to make modifications to the Conditions of the Licence - to the effect and for the purposes specified in that notice - by advertising the modifications in the London Gazette and the Financial Times on 30 September 1997 and requiring any representations or objections to the modifications to be made to him on or before 28 October 1997. 3. The Director has considered the representations or objections which were duly made to him and not withdrawn. 4. In accordance with section 11(4) of the Act the Director gave notice to the Secretary of State of his intention to make the modifications and has not received a direction not to make the modifications. 5. The Licensee has given its consent to the modifications as set out in the attached Schedule. Now, in accordance with the powers contained in section 11(1) of the Act and with the consent of the Licensee the Director hereby modifies the Licence in the manner specified in the attached Schedule with effect on and after 31 December 1997. 30 December 1997 A J BOORMAN Authorised on behalf of the Director General of Electricity Supply Ms N Richardson Assistant Regulatory Manager South Western Electricity Plc 800 Park Avenue Aztec West, Almondsbury Bristol, BS12 4SE 7 March 1997 Our Ref: 97/03/024/Lic/Jem Dear Ms Richardson EXTENSION OF A SECOND TIER SUPPLY LICENCE TO SUPPLY ELECTRICITY The Director General of Electricity Supply directs (a) pursuant to paragraph 2 of Condition 13 of the second tier supply licence granted under Section 6 of the Electricity Act to South Western Electricity Plc on 25 March 1991, that paragraph 1 of Condition 13 shall cease to have effect on 31 March 1998 or such later date as the Director may from time to time direct; and (b) pursuant to paragraph 3 of Condition 14 of that licence, that paragraph 1 of Condition 14 shall cease to have effect on 31 March 1998 or such later date as the Director may from time to time direct. E J SAUNDERS Authorised on behalf of the DIRECTOR GENERAL OF ELECTRICITY SUPPLY EX-10 3 EXHIBIT 10.3 POOLING AND SETTLEMENT AGREEMENT Exhibit 10.3 THIS AGREEMENT is made on 30th March, 1990 BETWEEN:- (1) THE PERSONS whose names, registered numbers and registered or principal offices are set out in Part I of Schedule 1; (2) THE PERSONS whose names, registered numbers and registered or principal offices are set out in Part II of Schedule 1; (3) ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED (registered number 2444282) whose registered office is situate at Fairham House, Green Lane, Clifton, Nottingham NG11 9LN as Settlement System Administrator; (4) ENERGY POOL FUNDS ADMINISTRATION LIMITED (registered number 2444187) whose registered office is situate at 185 Park Street, London SE1 9DY as Pool Funds Administrator; (5) THE NATIONAL GRID COMPANY plc (registered number 2366977) whose registered office is situate at National Grid House, Kirby Corner Road, Coventry CV4 8JY as Grid Operator and Ancillary Services Provider; (6) SCOTTISH POWER plc (registered number 117120) whose principal office is situate at 1 Atlantic Quay, Glasgow G2 8SP, Scotland as an Externally Interconnected Party; (7) ELECTRICITE DE FRANCE, SERVICE NATIONAL whose principal office is situate at 3 Rue de Messine, 75008 Paris, France as an Externally Interconnected Party; and (8) THE OTHER PARTIES whose names, registered numbers and registered or principal offices are set out in Schedule 2. WHEREAS:- (A) it is a Condition of the NGC Transmission Licence that, subject to its removal or resignation as Settlement System Administrator hereunder, NGC shall implement, maintain and operate a settlement system which will provide inter alia for the calculation of any payments which become due to or owing by Authorised Electricity Operators in respect of sales and purchases of electricity under the terms of this Agreement and such Licence further provides that NGC may comply with its said obligations by participation in this Agreement in the manner provided in such Licence; (B) it is a Condition of the Generation Licence granted to each of the Founder Generators in England and Wales requiring such a Licence that the licensee shall be a party to and a pool member under, and shall comply with the provisions of, this Agreement insofar as the same shall apply to it in its capacity as a party to this Agreement and/or as a pool member being a generator of electricity as the case may be; (C) it is a Condition of the PES Licence granted to each of the Founder Suppliers whose names are set out in Part A of Part II of Schedule 1 that the licensee shall be a pool member under, and comply with the provisions of, this Agreement; (D) it is a Condition of the Second Tier Supply Licence granted to each of the Founder Suppliers whose names are set out in Part B of Part II of Schedule 1 that the licensee shall be a pool member under, and comply with the provisions of, this Agreement insofar as the same shall apply to it in its capacity as a private electricity supplier (as that expression is defined in section 17(1) of the Act); (E) this Agreement sets out, inter alia, the rules and procedures for the operation of an electricity trading pool and for the operation of a settlement system (including the calculation of payments due) and in compliance with the conditions of their respective Licences those parties subject to such conditions have agreed to become parties hereto with the intent that this Agreement shall be and shall remain approved by the Director; (F) in addition to the rules and procedures set out herein, payments to the Grid Operator connected with the Transmission Services Activity (as that term is defined in the Transmission Licence) are dealt with pursuant to specific arrangements between the Grid Operator and certain parties to this Agreement; and (G) in relation to this Agreement each of the Secretary of State and the Director enjoys the rights, powers and authorities conferred upon him inter alia by the Act and the Licences. NOW IT IS HEREBY AGREED as set out on the following pages of this Agreement. PART I PRELIMINARY 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions: In this Agreement (including the Recitals and the Schedules), except where the context otherwise requires:- "Accession Agreement" means an accession agreement in or substantially in the form set out in Schedule 3 or in such other form (to which the Settlement System Administrator has no reasonable objection) as the Executive Committee may for the time being and from time to time approve; Accountable Interest" has the meaning given to that term in Schedule 20; "Accounting Date" means, in relation to any Accounting Period, the last day of such Accounting Period; "Accounting Period" means each successive period of 12 months beginning on 1st April in each year or of such other length and/or beginning on such other date as may be determined in accordance with the terms hereof, provided that the first such period shall begin on and include 31st March, 1990 and shall end on and include 31st March, 1991; "Act" means the Electricity Act 1989; "Active Energy" means the electrical energy produced, flowing or supplied by an electric circuit during a time interval, and being the integral with respect to time of the instantaneous power, measured in units of watt-hours or standard multiples thereof, that is:- 1000Wh = 1kWh 1000kWh = 1MWh 1000MWh = 1GWh 1000GWh = 1TWh; "Active Power" means the product of voltage and the in-phase component of alternating current measured in units of watts and standard multiples thereof, that is:- 1000 Watts = 1kW 1000kW = 1MW 1000MW = 1GW 1000GW = 1TW; "Admission Application" means an application in or substantially in the form set out in Schedule 5 or in such other form as the Executive Committee may for the time being and from time to time approve; "Agreed Procedure" means each of the agreed procedures specified in the Agreed Procedures Index and which is agreed to be treated as an Agreed Procedure for the purposes of this Agreement either:- (a) by the Executive Committee and the Settlement System Administrator and (where the agreed procedure imposes obligations on the Grid Operator) the Grid Operator; or (b) where such agreed procedure concerns the duties and responsibilities of the Pool Funds Administrator, by the Executive Committee and the Pool Funds Administrator as the same (i) may be amended or substituted from time to time by the Executive Committee with the prior written consent of the Settlement System Administrator and (where such Agreed Procedure imposes obligations on the Grid Operator) the Grid Operator (in each case, such consent not to be unreasonably withheld or delayed); or (ii) shall be amended or substituted from time to time by the Executive Committee at the request of the Settlement System Administrator and with the prior written consent of the Executive Committee and (where such Agreed Procedure imposes obligations on the Grid Operator) the Grid Operator (in each case, such consent not to be unreasonably withheld or delayed), Provided that the reference to the Grid Operator in this definition shall be construed as if it were a reference to such term prior to the creation of Meter Operator Parties and the associated amendments to this Agreement, but this shall be without limitation to any right to agree any adoption, amendment or substitution under this definition; "Agreed Procedures Index" means an index of agreed procedures agreed to be treated as Agreed Procedures in accordance with and for the purposes of this Agreement; "Agreement" means this Agreement (including the Schedules), as amended, varied, supplemented, modified or suspended from time to time in accordance with the terms hereof; "Allocated Generating Unit" has the meaning given to that term in Clause 11.2.2(a); "Ancillary Service" means a System Ancillary Service and/or a Commercial Ancillary Service, as the case may be; "Ancillary Services Agreement" means an agreement between a User and the Ancillary Services Provider for the payment by the Ancillary Services Provider to that User in respect of the provision by such User of Ancillary Services; "Ancillary Services Business" means the business relating to Ancillary Services carried on by the Ancillary Services Provider; "Ancillary Services Provider" means the person who for the time being and from time to time is required by the terms of a Transmission Licence to contract for Ancillary Services; "Annual Conference" has the meaning given to that term in Clause 9.6.1; "Apparatus" means all equipment in which electrical conductors are used or supported or of which they may form a part; "Approved Recommendation" has the meaning given to that term in Clause 5.8; "ASP Accounting Procedure" means the accounting procedure set out in Schedule 18, as amended, varied or substituted from time to time in accordance with the terms hereof; "Authorised Electricity Operator" means any person who is authorised under the Act to generate, transmit or supply electricity and shall include any person transferring electricity to or from England and Wales across an interconnector (as such term is used in the NGC Transmission Licence), other than the Grid Operator in its capacity as operator of the NGC Transmission System; "Banking System" has the meaning given to that term in Section 1.1 of Schedule 11; "Billing System" has the meaning given to that term in Section 1.1 of Schedule 11; "BPS Goal" has the meaning given to that term in Appendix 2 to Schedule 9; "British Grid Systems Agreement" means the agreement of that name made or to be made between NGC, Scottish Hydro-Electric PLC and Scottish Power plc inter alia regulating the relationship between their respective grid systems; "Bulk Supply Point" means any or (as the context may require) a particular point of supply where Metering Equipment for the purposes of the Bulk Supply Tariff is or would have been located and, in the event of any dispute as to location, as determined in accordance with Clause 83; "Bulk Supply Tariff" means the basis of payment for Active Energy as levied by the Generating Board prior to the Effective Date; "Central Despatch" means the process of Scheduling and issuing direct instructions by the Grid Operator referred to in paragraph 1 of Condition 7 of the NGC Transmission Licence and "Centrally Despatched" shall be construed accordingly; "Change Management Policies" means the policies, procedures and guidelines for the co-ordination by the Settlement System Administrator of the implementation of changes to the Settlement System entitled respectively "Change Management Policy", "Settlement Change Co-ordinator Operating Procedures" and "Change Management Implementation Guidelines" in the form initialled for the purposes of identification as at 29th November, 1991 by or on behalf of the Executive Committee and the Settlement System Administrator, as the same have been or may be amended from time to time in accordance with the terms of the Initial Settlement Agreement or this Agreement; "Charging Procedure" means the charging procedure set out in the Appendix to Schedule 4, as amended, varied or substituted from time to time in accordance with the terms hereof; "Chief Executive" has the meaning given to that term in Clause 17.1.1; "Chief Executive's Office" means the Chief Executive, the Contract Manager and the personnel referred to in Clause 17.2.1; "Code of Practice" means each of the codes of practice in relation to any Metering Equipment or any part or class thereof which are specified in the Synopsis of Metering Codes, as the same may be amended or substituted from time to time by the Executive Committee with the agreement or approval of:- (i) in the case of any Code of Practice in respect of Metering Equipment in respect of which it is the Operator, the Grid Operator; (ii) in the case of any Code of Practice in respect of Metering Equipment relating to Reactive Energy, the Ancillary Services Provider; and (iii) in the case of any change to any Code of Practice prior to 1st April, 1998 in respect of standards of accuracy of Metering Equipment required for Second Tier Customers up to (and including) 100kW or Non-Pooled Generators, the Suppliers in separate general meeting, (provided that, prior to the date on which the transitional arrangements regarding metering of Reactive Power at Grid Supply Points are brought into effect (the "RP Date") in the case of a Code of Practice or part thereof which relates to Reactive Power metering at Grid Entry Points, such Code or part thereof may only be amended or substituted by agreement between the Ancillary Services Provider and all Committee Members), and any other code of practice which is agreed from time to time to be treated as a Code of Practice for the purposes of this Agreement by the Executive Committee (or, where appropriate, prior to the RP Date all Committee Members) and, where appropriate, the Grid Operator and/or the Ancillary Services Provider and/or the Suppliers; "Commercial Ancillary Services" means Ancillary Services, other than System Ancillary Services, utilised by the Grid Operator in operating the Total System if a User has agreed to provide them under a Supplemental Agreement with payment being dealt with under an Ancillary Services Agreement or, in the case of Externally Interconnected Parties or External Pool Members, under any other agreement; "Commissioned" means (i) in relation to any Plant or Apparatus connected to the NGC Transmission System or to any External Interconnection or any Distribution System, commissioned for the purposes of the Connection Agreement relating to such Plant or Apparatus; or (ii) in relation to any Metering System or Metering Equipment, commissioned in accordance with the relevant Code of Practice; "Committee Member" means a member of the Executive Committee appointed in accordance with the provisions of Part IV; "Communications Equipment" means, at or relating to any Site, in respect of any Metering Equipment (i) the terminating equipment (which may include a modem) necessary to convert data from such Metering Equipment into a state for transmission to the Settlement System Administrator; and (ii) in the case of Sites which are not 1993/1994 Tariff Qualifying Sites (as defined in the Tariff which is entitled Tariff for 1993/1994 Sites) the exchange link which is dedicated to that terminating equipment, but (iii) it shall not include an Outstation; "Competent Authority" means the Secretary of State, the Director and any local or national agency, authority, department, inspectorate, minister, ministry, official or public or statutory person (whether autonomous or not) of, or of the government of, the United Kingdom or the European Community; "Computer Systems" means all and any computer systems used by the Settlement System Administrator and required in connection with the operation of the Settlement System; "Connection Agreements" means the Master Connection and Use of System Agreement, the Supplemental Agreements, the Supplier's Connection Agreements, the Supplier's Use of System Agreements and the Interconnection Agreements, and "Connection Agreement" means any or (as the context may require) a particular one of them; "Connection Point" means a Grid Supply Point or Grid Entry Point, as the case may be; "Constituent" has the meaning given to that term in Clause 23.6.5; "Consumer Metered Demand" has the meaning given to that term in Part I of Appendix 1 to Schedule 9; "Contract Management Rules" has the meaning given to that term in sub-section 1.1 of Schedule 4; "Contract Manager" has the meaning given to that term in sub-section 1.1 of Schedule 4; "Contributory Share" means, in relation to any Pool Member, the Contributory Share for the time being and from time to time of such Pool Member calculated in accordance with Schedule 13; "Control" has the meaning set out in section 840 of the Income and Corporation Taxes Act 1988 and "Controlled" shall be construed accordingly; "Custodian" has the meaning given to that term in Clause 45.1; "Customer" means a person to whom electrical power is provided (whether or not he is the provider of such electrical power); "De-energisation" means the movement of any isolator, breaker or switch or the removal of any fuse whereby no electricity can flow to or from the relevant User System through the User's Plant or Apparatus connected to such User System and, in relation to any External Pool Member, the termination of such External Pool Member's rights to use any relevant External Interconnection; "Default Calling Creditor" means any Pool Creditor, the Settlement System Administrator and the Pool Funds Administrator; "Default Interest Rate" has the meaning given to that term in Section 1.1 of Schedule 11; "Defaulting Pool Member" has the meaning given to that term in Clause 66.3.1; "Despatch" means the issue by the Grid Operator of instructions for Generating Plant and/or Generation Trading Blocks to achieve specific Active Power (and, in relation to Generating Plant, Reactive Power or target voltage) levels within their Generation Scheduling and Despatch Parameters or Generation Trading Block Scheduling and Despatch Parameters, as the case may be, and by stated times; "Development Policies" means the policies, procedures and practices for the development of the Computer Systems in the forms initialled for the purposes of identification as at 29th November, 1991 by or on behalf of the Executive Committee and the Settlement System Administrator, as the same have been or may be amended from time to time in accordance with the terms of this Agreement; "Directive" includes any present or future directive, requirement, instruction, direction or rule of any Competent Authority (but only, if not having the force of law, if compliance with the Directive is in accordance with the general practice of persons to whom the Directive is addressed) and includes any modification, extension or replacement thereof then in force; "Director" means the Director General of Electricity Supply appointed for the time being pursuant to section 1 of the Act; "Distribution Code" means the Distribution Code required to be drawn up by each Public Electricity Supplier and approved by the Director, as from time to time revised with the approval of the Director; "Distribution System" means the system consisting (wholly or mainly) of electric lines owned or operated by a Public Electricity Supplier and used for the distribution of electricity from Grid Supply Points or Generating Units or other entry points to the point of delivery to Customers or other Users and includes any Remote Transmission Assets (as defined in the Grid Code) operated by such Public Electricity Supplier and any Plant and Apparatus and meters owned or operated by such Public Electricity Supplier in connection with the distribution of electricity, but does not include any part of the NGC Transmission System; "EdF Documents" means any agreement for the time being and from time to time made between NGC and Electricite de France, Service National relating to the use or operation of the relevant External Interconnection; "Effective Date" means 2400 hours on 30th March, 1990; "electricity" means Active Energy and Reactive Energy; "Electricity Arbitration Association" means the unincorporated members' club of that name formed inter alia to promote the efficient and economic operation of the procedure for the resolution of disputes within the electricity supply industry by means of arbitration or otherwise in accordance with its arbitration rules; "Embedded" means having a direct connection to a Distribution System or the System of any other User to which Customers and/or Power Stations are connected, such connection being either a direct connection or a connection via a busbar of another User or of NGC (but with no other connection to the NGC Transmission System); "Embedded Non-Franchise Site" means:- (i) a Site which is Embedded and which is at the point of connection to a Second Tier Customer; or (ii) a site which is Embedded where the customer to which that site is at a point of connection is eligible to receive supplies from a Second Tier Supplier in the period between 1st April, 1994 and 31st March, 1998; "Equipment Owner" means, in relation to a Metering System, the person which is the owner of that Metering System; "ERS"means the electronic registration system operated by the Settlement System Administrator in accordance with Clause 60.5; "ERS First Tier Customer" means a Customer with a demand greater than 100kW, other than a Second Tier Customer, of a Public Electricity Supplier in respect of whom that Public Electricity Supplier has registered in ERS the Metering System which is associated with supplies to that Customer; "Escrow Agreement" has the meaning given to that term in Clause 45.1; "ESIS" means Energy Settlement and Information Systems Limited (registered number 2444282) whose registered office is at Fairham House, Green Lane, Clifton, Nottingham NG11 9LN; "Event of Default" means any event declared as such pursuant to Clause 66.1.1 or 66.2.1, as the case may be; "Executive Committee" means the committee established pursuant to Clause 14; "Export" means, in respect of any Party, a flow of electricity from the Plant or Apparatus of such Party to the Plant or Apparatus of another Party and, in relation to any Party which is an External Pool Member, the External Interconnection in respect of which that Party has the right to deliver or take electricity to or from the NGC Transmission System shall be treated as the Plant or Apparatus of such Party and the verb "Export" and its respective tenses shall be construed accordingly; "External Interconnection" means Apparatus for the transmission of electricity to or from the NGC Transmission System into or out of an External System; "Externally Interconnected Party" means a person operating an External System which is connected to the NGC Transmission System by an External Interconnection (which person may or may not also be an External Pool Member); "External Pool Member" means a Party supplying electricity to or taking electricity from the NGC Transmission System through an External Interconnection and which has been or (where appropriate) is to be admitted as a Pool Member in the capacity of a Generator and/or a Supplier; "External System" means, in relation to an Externally Interconnected Party, the transmission or distribution system which it owns or operates and any Apparatus or Plant which connects that system to the External Interconnection and which is owned or operated by such Externally Interconnected Party; "Final Metering Scheme" means a national metering scheme to be installed in accordance with the relevant Codes of Practice and to come into effect on the FMS Date; "First Quarter" means, in respect of any year, the months of January, February and March; "FMS Codes of Practice" means the Codes of Practice B, C, E, J, K1 and K2 and, to the extent that they relate to Metering Equipment the data derived from which was not used as Settlement Metering Data immediately prior to the FMS Date, F and G, and Codes of Practice 1, 2, 3, 4 and 5; "FMS Date" means 1st April, 1993; "FMS Metering Equipment" means Metering Equipment comprising a Metering System at or in relation to the commercial boundary in accordance with paragraph 7.1.2 of Schedule 21 in relation to the requirements to be met from the FMS Date; "FMS Trading Date" means 10th January, 1994; "Following Quarter" means, in respect of any Quarter Day or Quarter, the period of three months immediately following such Quarter Day or Quarter; "Force Majeure" means, in relation to any Party, any event or circumstance which is beyond the reasonable control of such Party and which results in or causes the failure of that Party to perform any of its obligations under this Agreement including act of God, strike, lockout or other industrial disturbance, act of the public enemy, war declared or undeclared, threat of war, terrorist act, blockade, revolution, riot, insurrection, civil commotion, public demonstration, sabotage, act of vandalism, lightning, fire, storm, flood, earthquake, accumulation of snow or ice, lack of water arising from weather or environmental problems, explosion, fault or failure of Plant and Apparatus (which could not have been prevented by Good Industry Practice), governmental restraint, Act of Parliament, other legislation, bye-law and Directive (not being any order, regulation or direction under section 32, 33, 34 or 35 of the Act) provided that lack of funds shall not be interpreted as a cause beyond the reasonable control of that Party. For the avoidance of doubt, Force Majeure shall not apply in respect of the Settlement System Administrator where and to the extent that the Settlement System Administrator can perform its obligations under this Agreement by using the back-up arrangements required by Service Line 6 (Off-Site Security) or by acting in accordance with Clause 52 or Section 31 of Schedule 9; "Founder Generators" means the parties to this Agreement of the first part at 30th March, 1990; "Founder Suppliers" means the parties to this Agreement of the second part at 30th March, 1990; "Fourth Quarter" means, in respect of any year, the months of October, November and December; "Fuel Security Code" means the document of that title designated as such by the Secretary of State, as from time to time amended; "Funds Transfer Agreement" has the meaning given to that term in Section 1.1 of Schedule 11; "Funds Transfer Business" has the meaning given to that term in Section 1.1 of Schedule 11; "Funds Transfer Hardware" has the meaning given to that term in Section 1.1 of Schedule 15; "Funds Transfer Software" has the meaning given to that term in Section 1.1 of Schedule 15; "Funds Transfer System" has the meaning given to that term in Section 1.1 of Schedule 11; "the Generating Board" has the meaning given to that term in the Act; "Generating Plant" means a Power Station subject to Central Despatch; "Generating Unit" means any Apparatus which produces electricity and, in respect of an External Pool Member, means a Generation Trading Block; "Generation Licence" means a licence granted or to be granted under section 6(1)(a) of the Act; "Generation Scheduling and Despatch Parameters" means those parameters listed in Appendix A1 to SDC1; "Generation Trading Block" means a notional Centrally Despatched Generating Unit of an External Pool Member treated as such for the purposes of the Grid Code; "Generation Trading Block Scheduling and Despatch Parameters" means those parameters listed in Appendix A1 to SDC1 relating to Generation Trading Blocks; "Generator" means:- (i) a person who generates electricity under licence or exemption under the Act; or (ii) a person who is an External Pool Member who delivers electricity or on whose behalf electricity is delivered to the NGC Transmission System; or (iii)a person who is acting as the agent for any such person who is referred to in paragraph (i) or (ii) above, and, in any such case, for the time being party to this Agreement, and:- (a) who is a Founder Generator; or (b) who was admitted as a Party in the capacity of a Generator; or (c) who, in accordance with Clause 3.10, has changed capacity(ies) such that it participates as a Party in the capacity of a Generator, and, where the expression is used in Part III or Part IV, who is also or (where appropriate) is to become a Pool Member; "Generator Weighted Vote" has the meaning given to that term in Clause 11.2.1; "Generic Dispensation" shall have the meaning ascribed thereto in paragraph 14.1(b) of Schedule 21; "Genset Metered Generation" has the meaning given to that term in Part I of Appendix 1 to Schedule 9; "Gigawatt" means 1000MW; "GOALPOST" has the meaning given to that term in the Pool Rules; "Good Industry Practice" means, in relation to any undertaking and any circumstances, the exercise of that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced operator engaged in the same type of undertaking under the same or similar circumstances; "Grid Code" means the Grid Code drawn up pursuant to the Transmission Licence, as from time to time revised in accordance with the Transmission Licence; "GridCode Review Panel" has the meaning given to that term in the Grid Code; "Grid Entry Point" means the point at which a Power Station which is not Embedded connects to the NGC Transmission System; "Grid Operator" means the person who for the time being and from time to time is required by the terms of a Transmission Licence, inter alia, to implement the Grid Code; "Grid Supply Point" means the point of supply from the NGC Transmission System to Public Electricity Suppliers or to other Users with User Systems with Customers connected to them or Non-Embedded Customers; "GW" means Gigawatt; "GWh" means Gigawatt-hour; "Hardware" means at any time the computer equipment and accessories used by the Settlement System Administrator on or in connection with which the Software functions or is intended to function at such time (other than Second Tier Hardware) and for the avoidance of doubt the Hardware at 1st April, 1996 is specified in version 1.0 of the Contract Management Rules; "Host PES" means, in respect of a Metering System, either:- (i) the Public Electricity Supplier to whose Distribution System such Metering System is connected; or (ii) where such Metering System is connected directly to the NGC Transmission System, the Public Electricity Supplier whose Consumer Metered Demand determined in accordance with the Pool Rules is calculated by the Settlement System Administrator using data from such Metering System; "Identified Pool Member" has the meaning given to that term in Clause 11.2.2(a) or, as the context may require, paragraph 2(A) of Schedule 13; "Import" means, in respect of any Party, a flow of electricity to the Plant or Apparatus of such Party from the Plant or Apparatus of another Party and, in relation to any Party which is an External Pool Member, the External Interconnection in respect of which it has the right to deliver or take electricity to or from the NGC Transmission System shall be treated as the Plant or Apparatus of such Party and the verb "Import" and its respective tenses shall be construed accordingly; "Independent Generators" means Generators other than:- (i) the Founder Generators; (ii) any Generator which is an External Pool Member; and (iii) any Generator which is an affiliate or related undertaking of (a) any person referred to in paragraph (i) or (ii) above, (b) any person referred to in paragraph (i) of the definition of Independent Suppliers, or (c) any Public Electricity Supplier; "Independent Suppliers" means Suppliers other than:- (i) Eastern Group plc, East Midlands Electricity plc, London Electricity plc, Manweb plc, Midlands Electricity plc, Northern Electric plc, NORWEB plc, SEEBOARD plc, Southern Electric plc, South Wales Electricity plc, South Western Electricity plc, Yorkshire Electricity Group plc, National Power PLC, PowerGen plc, Nuclear Electric plc, British Nuclear Fuels plc, Electricite de France, Service National, Scottish Power plc and Scottish Hydro-Electric PLC; (ii) Public Electricity Suppliers; (iii) any Supplier which is an External Pool Member; and (iv) any Supplier which is an affiliate or related undertaking of any person referred to in paragraph (i), (ii) or (iii) above; "Information Systems" has the meaning given to that term in Section 1.1 of Schedule 11; "Initial Settlement Agreement" means the agreement of even date herewith made between the Parties as at such date modifying and suspending the provisions of this Agreement for an initial period and setting out inter alia the rules and procedures for the operation of the electricity trading pool referred to in Recital (E) and for the operation of a settlement system and the procedures for the development of the phases and pool rules during such initial period, as amended, varied, supplemented, modified or suspended from time to time; "Interconnection Agreement" means an agreement between NGC and an Externally Interconnected Party and/or an External Pool Member relating to an External Interconnection and/or an agreement under which an External Pool Member can use an External Interconnection; "IS Committee Member" means an RS Committee Member elected in order to represent the interests of Independent Suppliers on the Executive Committee; "IS Nominee" has the meaning given to that term in Clause 15.6.4(c); "IS Preference List" has the meaning given to that term in Clause 15.6.4(i); "IS Pool Member" means an Independent Supplier:- (i) which is not a Public Electricity Supplier; (ii) which is not in the same Pool Member's Group as an MP Pool Member; and (iii) whose Weighted Votes constitute one per cent. or less of the Total Weighted Votes; "kVAr" means kilovoltamperes reactive; "kW" means kilowatt; "kWh" means kilowatt-hour; "Licences" means all Generation Licences, PES Licences, Second Tier Supply Licences and Transmission Licences and "Licence" means any or (as the context may require) a particular one of them; "lost opportunity costs" means, in relation to any Generator, the profit foregone by such Generator in respect of a Generating Unit during a period when it is out of service for the purposes of maintenance, repair, modification, renewal or replacement needed to comply with a proposal made by such Generator to restore the Generating Unit's Reactive Power capability to that required by the Grid Code or, where relevant, the applicable Supplemental Agreement, whichever capability is lower provided that:- (i) the period when it is taken out of service is:- (a) outside the period identified for the Generating Unit concerned pursuant to Section OC2 of the Grid Code as at the time when the failure to have Reactive Power capability was notified or determined; and (b) approved by the Grid Operator; and (ii) the Generator gives credit for any savings in loss of profit by carrying out other repair work at the same time as that required for the purposes of Reactive Power; "MainSite" means those sites specified in paragraphs (i), (ii) and (v) of the definition of Site; "Majority Default Calling Creditors" means:- (i) in respect of each calendar quarter other than the first, any single or group of Default Calling Creditors to whom, in respect of the aggregate of (a) all Notified Payments payable on the last five Business Days of the immediately preceding calendar quarter and (b) all sums due to the Settlement System Administrator, the Pool Funds Administrator and the Ancillary Services Provider and outstanding under this Agreement on the last Business Day of such immediately preceding calendar quarter, more than 50 per cent. of the total amount of all such Notified Payments and such other sums were due; and (ii) in respect of the first calendar quarter, all Pool Members other than the Defaulting Pool Member; "Master Connection and Use of System Agreement" means the agreement envisaged in Condition 10B of the NGC Transmission Licence; "Membership Vote" has the meaning given to that term in Clause 11.1; "Meter" means a device for measuring Active Energy and/or Reactive Energy; "Meter Operator Party" means each person admitted in the capacity as such and for the time being and from time to time party to Schedule 21 in accordance with the provisions thereof, and shall include any successor(s) in title to, or permitted assign(s) of, such person; "Meter Operator Party Accession Agreement" means an accession agreement in or substantially in the form set out in Annex 3 to Schedule 21 or in such other form (to which the Settlement System Administrator has no reasonable objection) as the Executive Committee may for the time being and from time to time approve; "Meter Operator Party Admission Application" means an application in or substantially in the form set out in Annex 1 to Schedule 21 or in such other form as the Executive Committee may for the time being and from time to time approve; "Meter Operator Party Resignation Notice" means a resignation notice in or substantially in the form set out in Annex 2 to Schedule 21 or in such other form as the Executive Committee may for the time being and from time to time approve; "Metering Equipment" means Meters, measurement transformers (voltage, current or combination units), metering protection equipment including alarms, circuitry, their associated Communications Equipment and Outstations, and wiring which are part of the Active Energy and/or Reactive Energy measuring and transmitting equipment at or relating to a Site; "Metering System" means all or that part of the Commissioned Metering Equipment at or relating to a Site linked to a single Outstation at or relating to that Site and includes, for the avoidance of doubt, such Outstation. Without prejudice to the generality of the foregoing, a set of non-exhaustive diagrammatic representations of Metering Systems is contained in Annex 5 to Schedule 21; "Moderator" means a person nominated for the time being and from time to time by the Pool Chairman (failing whom, by the Chief Executive) to perform certain obligations pursuant to Clause 15; "MP Committee Member" has the meaning given to that term in Clause 15.5; "MP Nominee" has the meaning given to that term given in Clause 15.5.1; "MP Nominee List" has the meaning given to that term in Clause 15.5.2; "MP Pool Member" means a Pool Member which is neither an Independent Supplier nor a Small Generator but shall include: (i) a Pool Member which is an Independent Supplier if: (a) it is a Public Electricity Supplier; or (b) its Weighted Votes constitute more than one per cent. of the Total Weighted Votes; and (ii) a Pool Member which is an Independent Supplier or Small Generator which is a member of a Pool Member's Group in which there is at least one other Pool Member which is neither: (a) an Independent Supplier (not being a Public Electricity Supplier) with Weighted Votes constituting one per cent. or less of the Total Weighted Votes; or (b) a Small Generator; "MP Preference List" has the meaning given to that term in Clause 15.5.3(f); "MVAr" means megavar; "MVArh" means megavar-hours; "MW" means megawatt; "MWh" means megawatt-hours; "NGC" means the National Grid Company plc (registered number 2366977) whose registered office is situate at National Grid House, Kirby Corner Road, Coventry CV4 8JY; "NGC Site" means a site owned (or occupied pursuant to a lease, licence or other agreement) by NGC at which there is a Connection Point and, for the avoidance of doubt, a site owned by a User but occupied by NGC as aforesaid is an NGC Site; "NGC Transmission Licence" means the Transmission Licence granted or to be granted to NGC; "NGC Transmission System" means the system consisting (wholly or mainly) of high voltage electric lines owned or operated by NGC and used for the transmission of electricity from one Power Station to a sub-station or to another Power Station or between sub-stations or to or from any External Interconnection and includes any Plant and Apparatus and meters owned or operated by NGC in connection with the transmission of electricity but does not include any Remote Transmission Assets (as defined in the Grid Code); "Non-Embedded Customer" means any Customer, other than a PES, receiving electricity direct from the NGC Transmission System irrespective of from whom it is supplied; "Non-Pooled Generation" means generation from any site which is directly connected to the Distribution System of a Public Electricity Supplier where (i) the output is accounted for in Settlement and (ii) the Generator owning such site:- (a) is exempted from holding a Generation Licence; or (b) would be exempted from holding a Generation Licence if such site were the only site owned by that Generator; "Non-Pooled Generation System" means any Metering System of a Non-Pooled Generator which has been registered with the Settlement System Administrator by a Second Tier Supplier or Public Electricity Supplier and from which the Settlement System Administrator or any Second Tier Agent is required to collect, aggregate, adjust or transmit data for the purposes of taking a supply of electricity; "Non-Pooled Generator" means a Generator who produces Non-Pooled Generation, provided that a Generator shall be a Non-Pooled Generator only to the extent that it owns sites which produce Non-Pooled Generation; "Non-Second Tier System" means a metering system at premises eligible for supply under a Second Tier Supply Licence in the authorised area of a Supplier holding a PES Licence but not being a Metering System in respect of which a Second Tier Supplier is the Registrant; "Notified Payment" has the meaning given to that term in Section 1.1 of Schedule 11; "Operator" means, in relation to any Metering System:- (i) used to measure the supply to a Second Tier Customer or from a Non-Pooled Generator, the Meter Operator Party who is appointed as such by the Second Tier Customer, the Non-Pooled Generator or by the Registrant (with the consent of that Second Tier Customer or, as the case may be, Non-Pooled Generator) and who agrees to act as Operator in relation to such Metering System; or (ii) not within (i) above or (iii) to (v) below, the Meter Operator Party who is appointed as such by the Registrant of such Metering System and who agrees to act as Operator in relation to such Metering System; or (iii)where new Metering Equipment is to be added to an existing Metering System, the Operator of such existing Metering System; or (iv) the Meter Operator Party which continues as the Operator in accordance with the transitional arrangements set out in paragraph 23 of Schedule 21; or (v) the Party who is deemed to be the Operator and Meter Operator Party in respect thereof in accordance with the terms of Clause 60.4.4; "Outgoing Committee Member" has the meaning given to that term in Clause 15.12; "Outstation" means equipment which receives and stores data from a Meter(s) for the purpose, inter alia, of transfer of that metering data to the Settlement System Administrator and which may perform some processing before such transfer. This equipment may be in one or more separate units or may be integral with the Meter; "Party" means each person for the time being and from time to time party to this Agreement acting in a capacity, or deemed to be acting in a capacity, other than that of Operator or Meter Operator Party, and shall include any successor(s) in title to, or permitted assign(s) of, such person; "Period Metered Demand" has the meaning given to that term in Part I of Appendix 1 to Schedule 9; "PES Licence" means a licence granted or to be granted under section 6(1)(c) of the Act; "PFA Accounting Procedure" means the procedure for the recovery of certain moneys set out in Section 20 of Schedule 15; "Plant" means fixed and moveable items used in the generation and/or supply and/or transmission of electricity, other than Apparatus; "Pool Auditor" means the firm of accountants appointed for the time being and from time to time pursuant to Clause 47.1; "PoolAuditor's Report" has the meaning given to that term in Clause 9.7.1; "PoolBanker" has the meaning given to that term in Section 1.1 of Schedule 11; "Pool Chairman" has the meaning given to that term in Clause 16.1; "PoolCreditor" has the meaning given to that term in Section 1.1 of Schedule 11; "Pool Funds Administrator" means the person for the time being and from time to time appointed pursuant to Schedule 15 to act as Pool Funds Administrator; "Pool Member" means each of the Founder Generators and Founder Suppliers and any other person who is admitted to pool membership in accordance with Clause 8.2, in each case until it shall have resigned from pool membership or otherwise ceased to be a member in accordance with this Agreement, and "Pool Membership" shall be construed accordingly; "PoolMember's Group" in relation to any Pool Member means that Pool Member and any affiliate (as defined in Clause 1.2.3) of that Pool Member; "Pool Membership Application" means an application in or substantially in the form set out in Schedule 6 or in such other form as the Executive Committee may for the time being and from time to time approve; "Pool Rules" means the rules referred to in Clause 7.4 and set out in Schedule 9, as amended, varied or substituted from time to time in accordance with the terms hereof; "PORTHOLE" means the database which allows the transfer of operational information from the Grid Operator to the Settlement System Administrator; "Potential Operator" means a Meter Operator Party which is appointed as the operator pursuant to an agreement or arrangement:- (i) in respect of a Metering System or Metering Equipment at a Site or Sites but which is not yet registered as Operator in respect of that Metering System; or (ii) in respect of Metering Equipment where such Metering Equipment has not been registered as comprising a Metering System; "Power Station" means an installation comprising one or more Generating Units (even where sited separately), other than an External Interconnection, owned and/or controlled by the same Generator, which may reasonably be considered as being managed as one Power Station; "Preferred IS Nominee" has the meaning given to that term in Clause 15.6.4(e); "Preferred MP Nominee" has the meaning given to that term in Clause 15.5.3(b); "Preferred RS Nominees" has the meaning given to that term in Clause 15.6.4(e); "Preferred SG Nominee" has the meaning given to that term in Clause 15.6.4(d); "Public Electricity Supplier" or "PES" means a person for the time being party to this Agreement who is a public electricity supplier (as that expression is defined in the Act) and, in relation to Clauses 15.4 and 15.5 and Schedules 14 and 22, means a person for the time being party to this Agreement who is a public electricity supplier in England and Wales; "Qualifying Site" means an Embedded Non-Franchise Site qualifying in accordance with the terms of the relevant Tariff for payments to be made for the provision of installation and maintenance services; "Quarter" means the period of three calendar months ending on a Quarter Day; "Quarter Day" means 31st March, 30th June, 30th September and 31st December; "Reactive Energy" means the integral with respect to time of the Reactive Power; "Reactive Power" means the product of voltage and current and the sine of the phase angle between them measured in units of voltamperes reactive and standard multiples thereof, that is:- 1000VAr = 1kVAr 1000kVAr = 1MVAr; "Redistributed Votes" has the meaning given to that term in Clause 11.4.3(a); "Register" means the register to be maintained by the Settlement System Administrator pursuant to Clause 60.5; "Registered Capacity" has the meaning given to that term in the Grid Code; "Registrant" means, in relation to a Metering System at or in relation to any Site which is:- (i) a Grid Entry Point, the Pool Member which operates Generating Plant at such Site; or (ii) a Grid Supply Point or Bulk Supply Point, the Pool Member whose System is directly connected to the NGC Transmission System at or in relation to such Grid Supply Point or Bulk Supply Point; or (iii) the point of connection of a Customer of a Supplier and the NGC Transmission System, the Supplier which is the supplier to that Customer; or (iv) the point of connection to a Distribution System of a Generator which is Embedded or of a Second Tier Supplier or of a Second Tier Customer or of an ERS First Tier Customer, the Party which is such Generator which is Embedded or such Second Tier Supplier or the Second Tier Supplier in respect of such Second Tier Customer or the Public Electricity Supplier in respect of such ERS First Tier Customer, as the case may be; or (v) the point of connection of a Non-Pooled Generator to a Distribution System, the party which is the Supplier or Second Tier Supplier, as the case may be, in respect of such Metering System of such Non-Pooled Generator; or (vi) the point of connection of two or more Distribution Systems, the Authorised Electricity Operator of one of such Distribution Systems which is nominated in accordance with the provisions of this Agreement; or (vii) the point of connection of an External Interconnection to the NGC Transmission System or a Distribution System, the Externally Interconnected Party; "Resignation Notice" means a resignation notice in or substantially in the form set out in Schedule 10; "RP Date" has the meaning given to that term in the definition of Code of Practice; "RS Committee Member" means a member of the Executive Committee elected by RS Pool Members in accordance with provisions of Clause 15.6; "RS Nominee" has the meaning given to that term in Clause 15.6.1; "RS Nominee List" has the meaning given to that term in Clause 15.6.2; "RS Pool Member" means an IS Pool Member or a SG Pool Member, as the context may require; "Schedule Day" has the meaning given to that term in Part I of Appendix 1 to Schedule 9; "Scheduling" means the process of compiling and issuing a Generation Schedule (as that expression is defined in the Grid Code), as set out in SDC1; "Scheduling and Despatch Code" or "SDC" means that portion of the Grid Code which is identified as such in the Grid Code; "Scheme" means the scheme set out in Clause 53 and, separately, each further scheme implemented pursuant to Clause 56.2; "Scheme Admission Application" means an application form setting out the Scheme Admission Conditions and requiring such information as the Executive Committee may consider necessary to enable it to consider the application, in such form as the Executive Committee may from time to time determine; "Scheme Admission Conditions" means the conditions set out in Clause 54; "Scheme Genset" means a Centrally Despatched Generating Unit which is admitted to a Scheme under Clause 53.3; "Scheme Planned Availability" or "SPA" has the meaning given to that term in Clause 55; "Scheme Year" means, in respect of each Scheme Genset, each successive period of twelve months, the first such period commencing on 1st April, 1990; "Second Quarter" means, in respect of any year, the months of April, May and June; "Second Tier Agent" means an agent appointed pursuant to Clause 60.16.1; "Second Tier Computer Systems" means all and any computer systems used by any Second Tier Agent in connection with the operation of the Second Tier Data Collection System operated by such Second Tier Agent; "Second Tier Customer" means a person who is supplied with or sold electricity by a Second Tier Supplier; "Second Tier Data Collection System" means those parts of the Settlement System which relate to the obligations of the Settlement System Administrator under this Agreement in relation to collecting, estimating and aggregating data as may be required for the proper functioning of Settlement from Metering Systems at the point of connection between the Distribution System of a Public Electricity Supplier and:- (i) a Second Tier Customer, an ERS First Tier Customer or Non-Pooled Generator; (ii) the System of an Authorised Electricity Operator other than the Public Electricity Supplier; (iii) an Embedded Generator not subject to Central Despatch; and (iv) the Distribution System of another Public Electricity Supplier, and providing such data to the Settlement System Administrator; "Second Tier Hardware" means at any time the computer equipment and accessories used by any Second Tier Agent on or in connection with which the Second Tier Software functions or is intended to function at such time; "Second Tier Software" means at any time the computer programs and codes and associated documents and materials which are used by any Second Tier Agent in connection with the operation of the Second Tier Data Collection System operated by such Second Tier Agent; "Second Tier Supplier" means a person for the time being party to this Agreement who is the holder of a Second Tier Supply Licence; "Second Tier Suppliers' Non-Pooled Generation System Charge" means the amount determined by the Executive Committee for the purposes of Clause 34A.3; "Second Tier Suppliers' System Charge" means the amount determined by the Executive Committee for the purposes of Clause 34A.2; "Second Tier Supply Licence" means a licence granted or to be granted under section 6(2)(a) of the Act; "Second Tier System" means any Metering System from which the Settlement System Administrator or any Second Tier Agent is required to collect, aggregate, adjust or transmit data for the purposes of a supply pursuant to a Second Tier Supply Licence; "Secretary" means the person for the time being and from time to time holding office as secretary of the Executive Committee; "Secretary of State" has the meaning given to that term in the Act; "Security Cover" has the meaning given to that term in Section 1.1 of Schedule 11; "Security Period" has the meaning given to that term in the Fuel Security Code; "Service Line" has the meaning given to that term in Section 1.1 of Schedule 4; "Settlement" means the operation of the Settlement System under this Agreement; "Settlement Account" has the meaning given to that term in Section 1.1 of Schedule 11; "Settlement Day" has the meaning given to that term in Part I of Appendix 1 to Schedule 9; "Settlement GOAL" has the meaning given to that term in Appendix 2 to Schedule 9; "Settlement Metering Data" shall mean Metered Data as defined in, and used in accordance with Section 3 of Schedule 9 and relevant metered data in accordance with Appendix 6 to Schedule 9 of this Agreement, which is used for the purposes of Settlement; "Settlement Period" has the meaning given to that term in Part I of Appendix 1 to Schedule 9; "Settlement System" means those assets, systems and procedures for the calculation in accordance with the Pool Rules of payments which become due thereunder, as modified from time to time; "Settlement System Administrator" means ESIS in its capacity as Settlement System Administrator or any replacement therefor as Settlement System Administrator from time to time appointed pursuant to this Agreement; "Settlements Business" means the business of the Settlement System Administrator in operating the Settlement System under this Agreement; "SG Committee Member" means an RS Committee Member elected in order to represent the interests of Small Generators on the Executive Committee; "SG Nominee" has the meaning given to that term in clause 15.6.4(b); "SG Pool Member" means a Small Generator which is not in the same Pool Member's Group as an MP Pool Member; "SG Preference List" has the meaning given to that term in Clause 15.6.4(h); "Site" means:- (i) a Grid Entry Point; (ii) a Grid Supply Point or Bulk Supply Point; (iii) the point of connection to a Distribution System or the NGC Transmission System of a Generator which is Embedded or of a Second Tier Supplier or of a Second Tier Customer or of an ERS First Tier Customer, or the point of connection of a Non-Pooled Generator to a Distribution System; (iv) the point of connection of two Distribution Systems; or (v) the point of connection of an External Interconnection to the NGC Transmission System; "Small Generator" means any Independent Generator with Generating Units the aggregate Registered Capacity of which does not exceed 100MW; "Software" means at any time all the computer programs, codes and associated documents and materials which are at such time used by or on behalf of the Settlement System Administrator and required in the operation of the Settlement System; "Specification" means at any time the computer specification(s) giving effect to the Pool Rules and such other matters as may be agreed between the Executive Committee and the Settlement System Administrator at the time; "SSA Arrangements" means this Agreement, the Service Lines, the Agreed Procedures and the Codes of Practice; "SSA System" means all operating systems, compilers and other software necessary to or used for the operation or testing of the Hardware and the Settlement System (excluding, for the avoidance of doubt, Developed Application Software and Licensed Application Software, each as defined in sub-section 10.1 of Schedule 4); "Supplemental Agreement" means any agreement entered or to be entered into between NGC and any User party to the Master Connection and Use of System Agreement and expressed to be supplemental thereto; "Supplier" means a person for the time being party to this Agreement:- (i) who is a Founder Supplier; or (ii) who was admitted as a Party in the capacity of a Supplier; or (iii) who, in accordance with Clause 3.10, has changed capacity(ies) such that it participates as a Party in the capacity of a Supplier, and, where the expression is used in Part III, Part IV or Part XI or Schedule 14 or 18, who is also or (where appropriate) is to become a Pool Member; "Supplier Weighted Vote" has the meaning given to that term in Clause 11.2.2; "Supplier's Connection Agreement" means the agreement for connection to any User System envisaged in Condition 8B of a PES Licence and Condition 3 of a Second Tier Supply Licence; "Supplier's System Charge" means the amount determined by the Executive Committee in accordance with the provisions of Clause 34A.4; "Supplier's Use of System Agreement" means the agreement for use of system envisaged in Condition 8B of a PES Licence and Condition 3 of a Second Tier Supply Licence; "Synopsis of Metering Codes" means a synopsis maintained and updated as necessary by the Executive Committee listing each Code of Practice approved as such from time to time in accordance with this Agreement; "System" means any User System or the NGC Transmission System, as the case may be; "System Ancillary Services" means Ancillary Services which are required for System reasons and which must be provided by Users (but in some cases only if a User has agreed to provide the same under a Supplemental Agreement); "Tariff" for any period of one year in respect of any Site (which whenever used in this definition shall include all Qualifying Sites) means the tariff approved by the Director and published by the Executive Committee on or before that tariff becomes effective and providing for amounts payable to Tariff Operators of certain Sites in a class of which that Site is a member in respect of the provision of installation and maintenance services in respect of Communications Equipment; and the "relevant Tariff" in respect of any Site (or Metering Equipment or Metering System in respect of a Site) shall be the Tariff which is so expressed by its terms to apply to that class of Sites to which such Site so belongs; "Tariff Operator" means a Meter Operator Party which is an Operator or which is appointed as the operator pursuant to an agreement or an arrangement in respect of Metering Equipment at a Qualifying Site; "Third Quarter" means, in respect of any year, the months of July, August and September; "Total Second Tier System Charges" means, in respect of any Specified Accounting Period (as defined in Clause 34A.1), the aggregate of the costs, expenses and charges incurred by all Second Tier Agents in respect of the relevant Specified Accounting Period and relating to the collection, aggregation, adjustment and transmission of data from Second Tier Systems, Non-Pooled Generation Systems and any other Metering Systems registered in ERS pursuant to any requirement of this Agreement, or when the collection, aggregation, adjustment and the transmission of data from Second Tier Systems, Non-Pooled Generation Systems and any other Metering Systems registered in ERS pursuant to any requirement of this Agreement is performed by the Settlement System Administrator the costs, expenses and charges directly incurred by the Settlement System Administrator plus the deficit (if any) or (as the case may be) less the surplus (if any) in the amount of Total Second Tier System Charges recovered for the immediately preceding Specified Accounting Period carried forward in accordance with the provisions of Clause 34A.5; "Total System" means the NGC Transmission System and all User Systems in England and Wales; "Total Weighted Votes" means at any time the aggregate number of Weighted Votes to which all Pool Members (in whatever capacity) are entitled at such time before the application of Clause 11.4; "Trading Site" shall be determined in accordance with Schedule 17; "Transferee Pool Member" has the meaning given to that term in Clause 11.2.2(a) or, as the context may require, paragraph 2(A) of Schedule 13; "Transmission Licence" means a licence granted or to be granted under section 6(1)(b) of the Act, the authorised area of which is England and Wales or any part of either thereof; "Transport Uplift" has the meaning given to that term in Appendix 1 to Schedule 9; "TW" means terrawatt; "TWh" means terrawatt-hours; "undertaking" has the meaning given to that term by section 259 of the Companies Act 1985 as substituted by section 22 of the Companies Act 1989 and, if that latter section is not in force at the date of this Agreement, as if such latter section were in force at such date; "User" means a term utilised in various sections of the Grid Code to refer to a person using the NGC Transmission System and includes an Externally Interconnected Party, all as more particularly identified in each section of the Grid Code concerned; "User Site" means a site owned (or occupied pursuant to a lease, licence or other agreement) by a User in which there is a Connection Point; "User System" means:- (i) other than in relation to an External Pool Member or an Externally Interconnected Party, any system owned or operated by a User comprising Generating Units and/or Distribution Systems (and/or other systems consisting, wholly or mainly, of electric lines which are owned or operated by a person other than a PES) and Plant and/or Apparatus connecting Generating Units, Distribution Systems (and/or other systems consisting, wholly or mainly, of electric lines which are owned or operated by a person other than a PES) or Non-Embedded Customers to the NGC Transmission System or (except in the case of Non-Embedded Customers) to the relevant other User System, as the case may be, including any Remote Transmission Assets (as defined in the Grid Code) operated by such User or other person and any Plant and/or Apparatus and meters owned or operated by the User or other person in connection with the distribution of electricity, but does not include any part of the NGC Transmission System; and (ii) in relation to an External Pool Member or an Externally Interconnected Party, the External System connected to the relevant External Interconnection; "VAr" means voltamperes reactive; "Votes Calculation Period" means:- (i) in relation to the First Quarter in any year, the Third Quarter in the immediately preceding year; (ii) in relation to the Second Quarter in any year, the Fourth Quarter in the immediately preceding year; (iii) in relation to the Third Quarter in any year, the First Quarter of the same year; and (iv) in relation to the Fourth Quarter in any year, the Second Quarter in the same year; "Voting Paper" has the meaning given to that term in Clause 15.5.3(a) or (as the context may require) Clause 15.6.4(a); "Weighted Vote" means a Generator Weighted Vote or a Supplier Weighted Vote or the sum of the two for each Pool Member, as the context may require; "Weighted Votes" means, in relation to a Pool Member, the number of votes to which such Pool Member is entitled pursuant to Clause 11.2; "Wh" means watt-hours; "working day" has the meaning given to that term in the Act; and "Works Programme Manager" has the meaning given to that term in Clause 5.13. 1.2 Construction of certain references: In this Agreement, except where the context otherwise requires, any reference to:- 1.2.1 an Act of Parliament or any Part or section or other provision of, or Schedule to, an Act of Parliament shall be construed, at the particular time, as including a reference to any modification, extension or re-enactment thereof then in force and to all instruments, orders or regulations then in force and made under or deriving validity from the relevant Act of Parliament; 1.2.2 another agreement or any deed or other instrument shall be construed as a reference to that other agreement, deed or other instrument as the same may have been, or may from time to time be, amended, varied, supplemented or novated; 1.2.3 an "affiliate" means, in relation to any person, any holding company or subsidiary of such person or any subsidiary of a holding company of such person, in each case within the meaning of sections 736, 736A and 736B of the Companies Act 1985 as substituted by section 144 of the Companies Act 1989 and, if that latter section is not in force at the date of this Agreement, as if such latter section were in force at such date; 1.2.4 a "Business Day" means any week day (other than a Saturday) on which banks are open for domestic business in the City of London; ------------ 1.2.5 a "day" means a period of 24 hours (or such other number of hours as may be relevant in the case of changes for daylight saving) ending at 12.00 --- midnight; 1.2.6 a "holding company" means, in relation to any person a holding company of such person within the meaning given to that term in Clause 1.2.3; --------------- 1.2.7 a "month" means a calendar month; 1.2.8 a "person" includes any individual, partnership, firm, company, corporation, joint venture, trust, association, organisation or other entity, in each case whether or not having separate legal personality; 1.2.9 a "related undertaking" means, in relation to any person, any undertaking in which such person has a participating interest as defined by section 260(1) of the Companies Act 1985 as substituted by section 22 of the Companies Act 1989 and, if that latter section is not in force at the date of this Agreement, as if such latter section were in force at such date; 1.2.10 a "subsidiary" means, in relation to any person, a subsidiary of such person within the meaning given to that term in Clause 1.2.3; and ---------- 1.2.11 a "year" means a calendar year. For all purposes of this Agreement no Party shall be an associate or a related undertaking of any other Party only by reason of all or any of the share capital of any Party being owned directly or indirectly by the Secretary of State. 1.3 Interpretation: 1.3.1 In this Agreement:- (a) references to the masculine shall include the feminine and references in the singular shall include references in the plural and vice versa; (b) references to the word "include" or "including" are to be construed without limitation; (c) references to time are to London time; (d) except where the context otherwise requires, references to a particular Part, Clause, sub-clause, paragraph, sub-paragraph or Schedule shall be a reference to that Part, Clause, sub-clause, paragraph, sub-paragraph or Schedule in or to this Agreement; (e) except where the context otherwise requires, references in a Schedule to a particular Section, sub-section, Annex or Appendix shall be a reference to that Section, sub-section, Annex or Appendix in or to that Schedule; and (f) the table of contents, the headings to each of the Parts, Clauses, sub-clauses, paragraphs, sub-paragraphs, Schedules, Sections, sub-sections, Annexes and Appendices are inserted for convenience only and shall be ignored in construing this Agreement. 1.3.2 With respect to Part XV of and Schedule 21 to this Agreement (but not elsewhere or otherwise):- (a) in the event that any person is required to give or is entitled to withhold its consent or approval to terms and conditions of this Agreement or an Agreed Procedure or Code of Practice or to any other act, matter or thing under or referred to in this Agreement or has agreed to revise such terms and conditions or an Agreed Procedure or Code of Practice or any dispensation therefrom, such person shall act in good faith and be reasonable in giving or withholding of such consent or approval or in imposing conditions to such consent or approval or in agreeing revised terms and conditions of Part XV of or Schedule 21 to this Agreement or any Agreed Procedure or Code of Practice; and (b) where any person is required to perform any act or give any consent or notification or do any other thing, it shall, in the absence of any specified time limit, perform, give or do or (as the case may be) notify its withholding of its consent or approval to the same as soon as is reasonably practicable in all the circumstances. 1.4 Hierarchy: If the provisions of an Agreed Procedure, a Code of Practice, a Service Line or the Development Policies are inconsistent with the provisions of this Agreement, the provisions of this Agreement shall prevail to the extent of such inconsistency. If the provisions of a Service Line are inconsistent with the provisions of an Agreed Procedure or a Code of Practice, the provisions of the Service Line shall prevail to the extent of such inconsistency. 1.5 (a) The Parties undertake to review the Agreed Procedures, the Codes of Practice and the Service Lines by no later than the date (the "Review End Date") falling 30 days after the date on which this Clause 1.5 takes effect in accordance with a workplan in form and content agreed by the Executive Committee and the Settlement System Administrator as at the date on which this Clause 1.5 takes effect, such workplan to include the principle that ESIS will provide discussion drafts of the Service Lines to the Executive Committee and that these redrafts will then be the subject of the joint review by ESIS and the Executive Committee. (b) In reviewing the Agreed Procedures, the Codes of Practice and the Service Lines:- (i) the product of each Service Line shall remain unaltered and if any Agreed Procedure or Code of Practice shall have a product which is part of the current working practice of ESIS but which is not currently in a Service Line, that product shall be incorporated into the relevant Service Line; (ii) subject to (i) above, each of the Agreed Procedures, the Codes of Practice and the Service Lines shall be brought into line with Parties' working practices current at the date on which this Clause 1.5 takes effect and made consistent inter se. (c) Each of the Parties undertakes to comply at all times with its obligations under or pursuant to the Service Lines notwithstanding that the same are being reviewed as provided in this Clause 1.5. (d) (i) Each of the Parties undertakes to comply at all times with the Agreed Procedures and the Codes of Practice insofar as applicable to such Party provided that:- (A) subject to (B) below, pending completion of the review of the Agreed Procedures and Codes of Practice pursuant to this Clause 1.5, if Parties' working practices current at the date on which this Clause 1.5 takes effect are inconsistent with the terms of any Agreed Procedure or Code of Practice, such working practices shall prevail (but without prejudice and subject to the requirements of Clause 1.5(b)(i)); and (B) if the review of a Service Line, Agreed Procedure or Code of Practice pursuant to this Clause 1.5 is not completed by the Review End Date then, until it is completed, the Parties shall continue to comply with the Parties' working practices then current. (ii) The Executive Committee shall provide copies of the Agreed Procedures and Codes of Practice to a Party upon request. (e) Nothing in this Clause 1.5 shall affect Clause 1.4 or any other review of Agreed Procedures, Codes of Practice or Service Lines required or permitted elsewhere pursuant to this Agreement. 1.6 Obligation on Generators with respect to Availability Declarations: In respect of each of its Centrally Despatched Generating Units a Generator shall submit an Availability Declaration or a re-declared Availability Declaration to ensure that its Genset Offered Availability and Genset Re-Offered Availability do not exceed at any time the maximum Gross/Net generation which it, acting as a prudent operator using Good Industry Practice, would reasonably expect to achieve if such Centrally Despatched Generating Unit were to be despatched at that level. In this Clause 1.6 capitalised terms not defined in Clause 1.1 shall have the respective meanings given to them in the Pool Rules. 1.7 1998: The provisions of Schedules 22, 23, 24 and 25 shall have effect. 1.8 1998 Framework Agreement: The Parties and the Meter Operator Parties agree that, to accommodate the removal of the franchise limit generally contained in Condition 2 of the Second Tier Supply Licences scheduled for 31st March, 1998 (the "1998 Programme"), changes may be needed to this Agreement. The Parties and Meter Operator Parties therefore authorise the Chief Executive to maintain a document (the "1998 Framework Agreement") which shall contain points of principle and text relating to the implementation of the 1998 Programme which have been approved in principle by either the Executive Committee or Pool Members in general meeting. It is the intention of Pool Members that the 1998 Framework Agreement will be revised as further principles and/or text are agreed by the Executive Committee or Pool Members in general meeting so that, in good time before 31st March, 1998, the 1998 Framework Agreement will contain all text necessary to be included in this Agreement in order to implement the 1998 Programme. Notwithstanding the Agreement of Pool Members or the Executive Committee to the inclusion of such principles and/or text in the 1998 Framework Agreement, it is agreed by the Parties and Meter Operator Parties that no part of the 1998 Framework Agreement shall have effect or shall alter, amend or replace any part of this Agreement until included in this Agreement by way of a supplemental agreement hereto and the process in this Clause 1.8 shall not bind or commit any Party or Meter Operator Party or otherwise affect in any way the rights and discretions of any Party or Meter Operator Party to withhold or qualify its agreement to any supplemental agreement to this Agreement. 2. THE EFFECTIVE DATE Commencement: The rights and obligations of each of the Parties under this Agreement shall commence on the Effective Date. 3. ADDITIONAL PARTIES 3.1 General: Subject to the following provisions of this Clause 3, the Parties shall admit as an additional party to this Agreement any person (the "New Party") (not, for the avoidance of doubt, being a successor Settlement System Administrator, Pool Funds Administrator, Grid Operator or Ancillary Services Provider, to which the provisions of Clause 3.11, 3.12, 3.13 or, as the case may be, 3.14 apply) who applies to be admitted, in the capacity or, as the case may be, capacities requested by the New Party. 3.2 Admission Application: A New Party wishing to be admitted as an additional party to this Agreement shall complete an Admission Application and shall deliver it to the Executive Committee together with the fee (which shall be non-refundable) and other documents (if any) therein specified. 3.3 Executive Committee response: 3.3.1 Upon receipt of any Admission Application duly completed the Executive Committee shall notify (for information only) all Parties and the Director of such receipt and of the name of the New Party. 3.3.2 Within 60 days after receipt of a duly completed Admission Application from a New Party the Executive Committee shall notify the New Party and the Director either:- (a) that the New Party shall be admitted as a Party, in which event the provisions of Clause 3.6 shall apply; or (b) that the Executive Committee requires the New Party to produce evidence satisfactory to the Executive Committee ("Additional Evidence") demonstrating the New Party's fulfilment of the admission conditions relevant to it set out in its Admission Application, in which event the provisions of Clause 3.4 shall apply. If the Executive Committee shall fail so to notify the New Party and the Director, the New Party may within 28 days after the expiry of the said 60 day period refer the matter to the Director pursuant to Clause 3.5, in which event the provisions of that Clause shall apply. 3.4 Additional Evidence: Within 28 days (or such longer period as the Executive Committee in its absolute discretion may allow) after the Executive Committee has given notice pursuant to Clause 3.3.2(b) the New Party shall:- 3.4.1provide the Executive Committee with the Additional Evidence, in which event the provisions of Clause 3.6 shall apply; or 3.4.2 refer the matter to the Director pursuant to Clause 3.5, in which event the provisions of that Clause shall apply, failing which the New Party's application for admission shall lapse and be of no effect and the New Party shall not be, and shall not be entitled to be, admitted as a Party consequent upon such application (but without prejudice to any new application for admission it may make thereafter). 3.5 Reference to the Director: 3.5.1 If:- (a) any dispute shall arise between the Executive Committee and a New Party over whether the New Party has fulfilled the admission conditions relevant to it; or (b) the Executive Committee shall have failed to notify the New Party as provided in Clause 3.3 within the 60 day period therein specified, the issue of whether the New Party has fulfilled the admission conditions relevant to it may be referred by way of written application of the New Party, copied to the Executive Committee, to the Director for determination. The determination of the Director, which shall be made within 28 days after receipt of the said written application and shall be to the effect set out in paragraph (a) or (b) of Clause 3.5.2, shall be final and binding for all purposes. The Director shall publish reasons supporting his determination. 3.5.2 (a) If the determination is to the effect that the New Party has fulfilled the said admission conditions, the New Party shall be admitted and the provisions of Clause 3.6 shall apply. (b) If the determination is to the effect that the New Party has not fulfilled the said admission conditions, the New Party's application for admission shall lapse and be of no effect and the New Party shall not be, and shall not be entitled to be, admitted as a Party consequent upon such application (but without prejudice to any new application it may make thereafter). 3.6 Admission: If:- 3.6.1 the Executive Committee shall notify the New Party and the Director as provided in Clause 3.3.2(a); or 3.6.2 following a request for Additional Information pursuant to Clause 3.3.2(b), the New Party provides the same within the period specified in Clause 3.4; or 3.6.3 the New Party is to be admitted as a Party pursuant to Clause 3.5, the Executive Committee shall forthwith prepare or cause to be prepared an Accession Agreement. Subject to the Executive Committee making all notifications and filings (if any) required of it for regulatory purposes and obtaining all regulatory consents and approvals (if any) required to be obtained by it, the Executive Committee shall instruct the Chief Executive or another person authorised by the Executive Committee for the purpose to prepare an Accession Agreement and to sign and deliver the Accession Agreement on behalf of all Parties other than the New Party and the New Party shall also execute and deliver the Accession Agreement and, on and subject to the terms and conditions of the Accession Agreement, the New Party shall become a Party for all purposes of this Agreement with effect from the date specified in such Accession Agreement (and, if no such date is so specified, the date of such Accession Agreement). The New Party shall pay all costs and expenses associated with the preparation, execution and delivery of its Accession Agreement. Each Party hereby authorises and instructs the Chief Executive and each person authorised for the purpose by the Executive Committee to sign on its behalf Accession Agreements and undertakes not to withdraw, qualify or revoke such authority and instruction at any time. The Executive Committee shall promptly notify all Parties and the Director of the execution and delivery of each Accession Agreement. 3.7 Additional Agreements: Upon and as a condition of admission as a Party, a New Party shall execute and deliver such further agreements and documents and shall do all such other acts, matters and things as the Executive Committee may reasonably require. 3.8 Application fees: All fees received by the Executive Committee in respect of any application by a New Party to become a Party shall be used to defray the costs and expenses of the Executive Committee and shall be paid to such account as the Executive Committee may direct. The application fee shall be (pound)250 or such other amount as the Executive Committee may, with the prior approval of the Director, from time to time prescribe. 3.9 Compliance: Each Party shall procure that for so long as it is a Party it shall at all times satisfy or otherwise comply with the admission conditions set out in its Admission Application applicable to it (and/or such further or other conditions as the Executive Committee may from time to time reasonably specify) and upon request from time to time shall promptly provide the Executive Committee with evidence reasonably satisfactory to the Executive Committee of such satisfaction and compliance. 3.10 Change of capacities: 3.10.1 Any Founder Generator, any Founder Supplier, any Externally Interconnected Party and any Party admitted as an additional party to this Agreement pursuant to this Clause 3 may, upon application to the Executive Committee and satisfaction of such conditions (if any) as the Executive Committee may reasonably require, change the capacity(ies) in which it participates as a Party. 3.10.2 If upon receipt of any Admission Application the Executive Committee shall consider that the New Party should either:- (a) not be admitted as a Party in the capacity in which it has applied so to be admitted but should be admitted in another capacity; or (b) be admitted both in the capacity in which it has applied so to be admitted and in another capacity, then the Executive Committee shall within the period specified in Clause 3.3.2 notify the New Party and the Director accordingly and shall specify what, if any, additional evidence the Executive Committee requires the New Party to produce to demonstrate its fulfilment of the admission conditions relevant to its admission in such other capacity(ies). The provisions of Clauses 3.4, 3.5 and 3.6 shall apply mutatis mutandis but as if the references therein to Additional Evidence were read and construed as references to the said additional evidence. 3.11 Successor Settlement System Administrator: Any successor Settlement System Administrator requiring to be admitted as a Party in that capacity shall, upon application to the Executive Committee, be so admitted by way of Accession Agreement modified insofar as is necessary to take account of the capacity in which such successor is to be admitted. The provisions of Clause 3.6 shall apply mutatis mutandis to any such admission. 3.12 Successor Pool Funds Administrator: Any successor Pool Funds Administrator appointed in accordance with the provisions of Schedule 15 shall be admitted as a Party in that capacity at such time and on such terms and conditions as the Executive Committee may reasonably require. 3.13 Successor Grid Operator: Any successor Grid Operator requiring to be admitted as a Party in that capacity shall, upon application to the Executive Committee, be so admitted by way of Accession Agreement modified insofar as is necessary to take account of the capacity in which such successor is to be admitted. The provisions of Clause 3.6 shall apply mutatis mutandis to any such admission. 3.14 Successor Ancillary Services Provider: Any successor Ancillary Services Provider requiring to be admitted as a Party in that capacity shall, upon application to the Executive Committee, be so admitted by way of Accession Agreement modified insofar as is necessary to take account of the capacity in which such successor is to be admitted. The provisions of Clause 3.6 shall apply mutatis mutandis to any such admission. PART II OBJECTS, REVIEW AND PRIORITY 4. OBJECTS AND PURPOSE OF THE AGREEMENT 4.1 Principal objects and purpose: The principal objects and purpose of this Agreement are:- 4.1.1 to provide a set of rules which, when implemented, will quantify:- (a) the financial obligations owed by certain Pool Members to other Pool Members in respect of the former Pool Members' purchases of electricity produced or delivered by such other Pool Members; (b) the financial obligations owed by the Grid Operator to the Ancillary Services Provider in respect of the purchase of Ancillary Services; and (c) the financial obligations owed by the Grid Operator to certain Pool Members in respect of Transport Uplift (exclusive of any element thereof relating to Ancillary Services); 4.1.2 to establish, maintain and operate efficiently computer and other systems (whether or not computer related) which will implement the rules referred to in Clause 4.1.1; and 4.1.3 by following the procedures for amending this Agreement set out or referred to herein, to keep under review and promote the implementation, administration and development of the systems referred to in Clause 4.1.2 in a way which takes into account, and balances, the respective interests of actual and potential generators and suppliers of electricity and of consumers of electricity and providers of Ancillary Services. 4.2 Interpretation: In the construction and interpretation of this Agreement due regard shall be had to the principal objects and purpose set out in Clause 4.1. 4.3 Exercise of rights: In exercising its rights under this Agreement, each Party shall exercise and enforce such rights and perform its obligations in good faith having due regard both to its own legitimate commercial interests and the principal objects and purpose set out in Clause 4.1. 5. TRANSITIONAL ARRANGEMENTS AND REVIEWS 5.1 [Not used]. Transitional Arrangements 5.2 Transitional Arrangements: The Parties acknowledge and agree that the arrangements described or referred to in the first column of Schedule 12 ("Transitional Arrangements") have been designed as transitional arrangements only. The Parties undertake with each other to use all reasonable endeavours (including, where appropriate, through their representation on the Executive Committee) to give effect to the principle (the "New Principle") set opposite the relevant Transitional Arrangement in the second column of Schedule 12 by the date set opposite such Transitional Arrangement in the third column of that Schedule. Clauses 5.9 to 5.14 (inclusive) shall have effect in relation to all Transitional Arrangements. Regular Reviews 5.3 Conduct of reviews: Within a period (the "Review Period") of six months beginning on each of the dates referred to in Clause 5.5 (the "Review Dates") the Executive Committee shall review in consultation with the Settlement System Administrator and the Pool Auditor the operation in practice of this Agreement and the Settlement System to assess whether the principal objects and purpose set out in Clause 4.1 are being or could be better achieved. In carrying out each such review the Executive Committee shall give due consideration to any matter referred to it by any Party, the Pool Auditor, the Director or the Secretary of State. Clauses 5.5 to 5.15 (inclusive) shall have effect in relation to the reviews described in this Clause 5.3, and such reviews shall be in addition to the reviews associated with the Transitional Arrangements. 5.4 [Not used]. 5.5 Review Dates: The Review Dates are:- 5.5.1 those dates falling 12 and 24 months after the Effective Date; 5.5.2those dates falling on the last day of each successive period of two years, the first such period beginning on 30th March, 1992; and 5.5.3 such other date(s) as the Pool Members in general meeting may from time to time determine. 5.6 Reports: Promptly (and in any event within one month) after the end of each Review Period the Executive Committee shall prepare or cause to be prepared a written report of its review containing such matters as are referred to in Clause 5.7 and a copy of such report shall be sent to each Party, the Pool Auditor, the Director and the Secretary of State. 5.7 Content of reports: Each report referred to in Clause 5.6 shall set out:- 5.7.1 the scope of the review conducted; 5.7.2 the matters reviewed and the investigations and enquiries made; 5.7.3 the findings of such review; 5.7.4 the recommendations (if any) as to the changes to be made to this Agreement and the Settlement System so as to achieve or better to achieve the principal objects and purpose set out in Clause 4.1; 5.7.5 the effect which any such recommendation referred to in Clause 5.7.4 would, if implemented, have on the role of the Pool Auditor under this Agreement and any comments of the Pool Auditor thereon; 5.7.6 the financial effects (if any) which any such recommendation referred to in Clause 5.7.4 would, if implemented, have on Pool Members; and 5.7.7 such other matters as the Executive Committee shall consider appropriate. If any Committee Member shall disagree with any of the recommendations made in any such report, such report shall set out the reasons for such disagreement and any alternative proposals of such Committee Member. 5.8 General Meeting approval: Within two months after the end of each Review Period the Executive Committee shall convene an extraordinary general meeting of Pool Members to consider and, if thought fit, approve (in whole or in part) the recommendations (the "Recommendations") made in the report referred to in Clause 5.6. If any Recommendation is so approved (an "Approved Recommendation") then, subject to Clause 13.5, the provisions of Clauses 5.9 to 5.14 (inclusive) shall have effect in relation thereto. If any Recommendation is not so approved, no further action shall be taken in respect thereof arising from such report. Works Programme 5.9 Works Programme: In respect of each Transitional Arrangement and each Approved Recommendation the Executive Committee shall:- 5.9.1 in the case of a Transitional Arrangement, by the date set opposite such Transitional Arrangement in the fourth column of Schedule 12; and 5.9.2 in the case of an Approved Recommendation, by the date stipulated by the Pool Members in general meeting or (if no date is stipulated) within a reasonable time, prepare (or cause to be prepared) in consultation with the Pool Auditor a programme (the "Works Programme", which expression shall include any associated documentation hereinafter referred to in this Clause 5.9) which programme shall (unless otherwise resolved by the Executive Committee after consultation with those Parties not being Pool Members who might reasonably be expected to be affected by the Works Programme) include:- (a) a detailed timetable for the implementation of the New Principle or (as the case may be) the Approved Recommendation, including (where appropriate) a series of milestone and/or target dates for the achievement of specified parts of such programme; (b) a full explanation of how such New Principle or Approved Recommendation is to be implemented, including a detailed analysis of such New Principle or Approved Recommendation and the objectives which it is intended to achieve, the work involved, the resources required and the amendments likely to be required to this Agreement, the Specification and to any other relevant agreement or document and of any changes required to be made to the Software or the Hardware; and (c) an estimate of the cost of such implementation supported by a breakdown of such cost and a detailed commentary on each element thereof together with proposals for the recovery of such cost, and (unless otherwise resolved by the Executive Committee after consultation with those Parties not being Pool Members who might reasonably be expected to be affected by the Works Programme) shall be supported by:- (i) any draft legal documentation required to give effect to the amendments referred to in paragraph (b) above; and (ii) the outline form of agreement appointing the Works Programme Manager as project manager for the implementation of the Works Programme (which form shall, where the Settlement System Administrator is or, in the Executive Committee's opinion, is likely to be the Works Programme Manager or where the Works Programme involves changes to the Specification or the Software, be prepared in consultation with the Settlement System Administrator). 5.10 Review: The Executive Committee shall arrange for a copy of each Works Programme to be sent to each Party, the Pool Auditor and the Director for review under cover of a letter setting a deadline for receipt of comments on such Works Programme (being no earlier than one month and no later than two months after the date of despatch of copies of the Works Programme for comment) and indicating to whom such comments should be addressed. Within such time as is reasonable after the deadline set for receipt of comments but, in any event, within two months thereafter, the Executive Committee shall revise (or cause to be revised) the Works Programme to take into account (so far as it considers desirable) the comments received from the Parties, the Pool Auditor and the Director. 5.11 General Meeting referral: As soon as a Works Programme has been revised as provided in Clause 5.10 (or, if the Executive Committee considers no such revision desirable, within one month after the deadline set under Clause 5.10 for receipt of comments on such Works Programme), the Executive Committee shall convene an extraordinary general meeting of Pool Members to consider and, if thought fit, approve such Works Programme (with or without amendment). 5.12 Approval of the Works Programme: 5.12.1 A Works Programme shall not be given effect to unless and until approved by the Pool Members in general meeting. Additionally, if a Works Programme or any part thereof shall involve a matter requiring the approval of Generators or Suppliers in separate general meeting under Clause 13.2 (a "Class Issue"), then such Works Programme shall not be given effect to unless and until approved by the relevant class of Pool Members. ----------- If a Works Programme shall not be duly approved (with or without amendment), then the Executive Committee shall revise (or cause to be revised) the same to take account of the wishes of the Pool Members in general meeting and/or (as the case may be) in separate general meeting and thereafter such revised Works Programme shall be re-submitted to the Pool Members in general meeting and, if such revised Works Programme or any part thereof shall involve a Class Issue, to the relevant Pool Members in separate general meeting, in each case for approval (with or without amendment). This revision and re-submission procedure shall be repeated as often as may be required until such time as the Pool Members in general meeting and, as necessary, in separate general meetings approve the Works Programme. 5.12.2 Notwithstanding the provisions of Clause 5.12.1, the Executive Committee and each Party shall be entitled at any time prior to the approval of a Works Programme by the Pool Members in general meeting and (where required under Clause 5.12.1) by the relevant class of Pool Members in separate general meeting to apply to the Director requesting that the implementation of the New Principle or (as the case may be) the Approved Recommendation should not proceed or should not proceed in the manner set out by such Works Programme and, in such event, effect shall not be given to the Works Programme pending the determination of the Director and then (subject as provided in Clause 5.14) only to the extent (if at all) that the Director in his absolute discretion shall approve. 5.13 Implementation: The implementation of all Works Programmes shall be project managed by the Settlement System Administrator or (if the Settlement System Administrator is unable or unwilling so to project manage) such other person as the Executive Committee shall nominate (the "Works Programme Manager") upon and subject to such terms and conditions as are agreed by the Executive Committee with the Works Programme Manager and the cost thereof recovered in accordance with the terms of the relevant Works Programme. Cost overruns, liquidated damages and all other financing costs, incentives and penalties shall be financed, levied and/or paid at the times and in the manner provided for in such Works Programme. Costs incurred by the Settlement System Administrator shall be recovered in accordance with the Charging Procedure. The Executive Committee shall require the Works Programme Manager to prepare and submit to the Executive Committee no less frequently than quarterly a written report giving a detailed commentary on the progress of implementing each Works Programme, including a comparison of actual progress made against the timetable set by such Works Programme and of actual costs incurred against budgeted costs. 5.14 Pool Auditor's approval: At the completion of the work required by each Works Programme but prior to effect being given to the New Principle or (as the case may be) the Approved Recommendation the Executive Committee shall request the Pool Auditor to issue an opinion in form and content satisfactory to the Executive Committee confirming to all Parties and the Director that the Pool Auditor has inspected and tested the arrangements giving effect to the New Principle or (as the case may be) the Approved Recommendation and is satisfied (without qualification or reservation) that such arrangements do give effect to the New Principle or Approved Recommendation in the manner required by the Works Programme. The Executive Committee shall use all reasonable endeavours to make (or procure to be made) such modifications to such arrangements as are necessary to enable the Pool Auditor to give its opinion without qualification or reservation, and the costs of any such modification shall be recovered in accordance with the relevant Works Programme. If the Pool Auditor's opinion can be given only with qualification or reservation, the Executive Committee shall convene an extraordinary general meeting of Pool Members and, where required under Clause 5.12.1, a separate general meeting of Generators and/or (as the case may be) Suppliers to consider and, if thought fit, approve such arrangements in the knowledge that the Pool Auditor's opinion can be given only with qualification or reservation. Subject to the provisions of Clause 6, each of the Parties undertakes with each of the other Parties promptly following the issue of the Pool Auditor's opinion (but, where such opinion has a qualification or reservation, only after approval as aforesaid by the Pool Members in general meeting and, where required under Clause 5.12.1, by the relevant class of Pool Members in separate general meeting) to execute and deliver any amending agreement or other documents and to take such other action as may reasonably be required of it to give effect to such arrangements, in any such case at its own cost and expense. 5.15 Secretary of State's approval: In respect of the Secretary of State's decision as set out in his letter of 11th December, 1991 to the Chief Executive concerning the selling of the output of plant by Generators with on-site demand under this Agreement:- 5.15.1 each of the Parties undertakes with each of the other Parties forthwith to take all such steps (including as to the execution of any document) as may be required to give full force and effect to the decision of the Secretary of State. Each of the Parties shall take all such steps at its own cost and expense except that the Settlement System Administrator, the Pool Funds Administrator and the Ancillary Services Provider shall be entitled to recover any such costs and expenses in accordance with the terms of this Agreement; and 5.15.2 each of the Parties acknowledges and agrees that damages would not be an adequate remedy for any failure by it to give in accordance with Clause 5.15.1 full force and effect to the decision of the Secretary of State pursuant to this Clause 5.15 and that, accordingly, each of the other Parties and the Director shall be entitled to the remedies of injunction, specific performance and other equitable relief for any threatened or actual such failure and that no proof of special damages shall be necessary for enforcement. 5.16 Director's modifications: 5.16.1 Where the Monopolies and Mergers Commission has issued a report on a reference under section 12 of the Act which:- (a) includes conclusions to the effect that any of the matters specified in the reference operate, or may be expected to operate, against the public interest; (b) specifies effects adverse to the public interest which those matters have or may be expected to have; (c) includes conclusions to the effect that those effects could be remedied or prevented by modifications of the conditions of any Licence and such modifications would require a change to the Pooling and Settlement Agreement; and (d) specifies modifications by which those effects could be remedied or prevented, the Director may, subject to the following provisions of this Clause, require such modifications to this Agreement as are requisite for the purpose of remedying or preventing the adverse effect specified in the report. 5.16.2 Before requiring modifications to be made pursuant to this Clause, the Director shall have regard to the modifications specified in the report. Further, the Director shall not, and shall not be entitled to, require a modification to be made to this Agreement which modification could not have been achieved lawfully through a modification of one or more Licences consequent upon the report (but as if, for this purpose, only those Parties who are holders of Licences were parties to this Agreement). 5.16.3 Before requiring modifications to be made pursuant to this Clause, the Director shall give notice:- (a) stating that he proposes to make the modifications and setting out their effect; (b) stating the reasons why he proposes to make the modifications; and (c) specifying the period (not being less than 28 days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made, and shall consider any representations or objections from any person which are duly made and not withdrawn. 5.16.4 A notice under Clause 5.16.3 shall be given:- (a) by publishing the notice in such manner as the Director considers appropriate for the purpose of bringing the matters to which the notice relates to the attention of persons likely to be affected by the making of the modifications; and (b) by serving a copy of the notice on each Party, the Executive Committee and the Pool Auditor. 5.16.5 After considering any representations or objections which are duly made and not withdrawn pursuant to Clause 5.16.3, the Director may by notice published as provided in Clause 5.16.4(a) and served on those referred to in Clause 5.16.4(b) specify the modifications to this Agreement which he requires to be made and the date upon which such modifications are to take effect and each of the Parties undertakes with each other of the Parties promptly to take all such steps as may be necessary to give full force and effect to the modifications so required. Any costs incurred by the Settlement System Administrator in giving effect to such modifications shall be recovered in accordance with the Charging Procedure. 6. ENTRENCHED PROVISIONS, INCONSISTENCIES AND CONFLICTS Entrenched Provisions 6.1 Secretary of State's consent: The Parties acknowledge and agree that, notwithstanding any other provision of this Agreement, no amendment to or variation of any of the matters dealt with in any of the following provisions of this Agreement shall take effect without the prior written consent of the Secretary of State:- 6.1.1 Clause 5.15, Part XIV and Section 28 of Schedule 9; and 6.1.2 this Clause 6.1. 6.2 Director's consent: The Parties acknowledge and agree that, notwithstanding any other provision of this Agreement, no amendment to or variation of any of the matters dealt with in any of the following provisions of this Agreement shall take effect without the prior written consent of the Director:- 6.2.1(a) Clauses 3.5, 4, 5.12.2, 5.15, 5.16, 6.11, 11, 13, 15.6, 53.6, 67.3, 67.4, 83, 84 and 85 and Section 8 of Schedule 14 and Section 7 of Schedule 20; (b) sub-section 19.1 of Schedule 14; and (c) paragraphs 1.4, 2.2.3, 3.3, 3.4, 3.7, 4.4.1, 6.4, 6.5, 17.3 and 22.5 of Schedule 21; 6.2.2 without prejudice to Clause 6.2.3, the Pool Rules or any of them, other than an amendment or variation which:- (a) involves only a change of a technical nature in the systems, rules and procedures contemplated by this Agreement; and (b) will not increase the liability or decrease the rights of any Party under this Agreement beyond what may reasonably be regarded as de minimis in relation to such Party, but in any event including Section 22 thereof; 6.2.3 any provision of this Agreement which requires or permits any matter to be referred to the Director for approval, consent, direction or decision or confers any rights or benefits upon the Director; and 6.2.4 this Clause 6.2. 6.3 Settlement System Administrator's consent: The Parties acknowledge and agree that, notwithstanding any other provision of this Agreement, insofar as directly affects in any material respect the rights, benefits, duties, responsibilities, liabilities and/or obligations of the Settlement System Administrator no amendment to or variation of any of the matters dealt with in any of the following provisions of this Agreement shall take effect:- 6.3.1without the prior written consent of the Settlement System Administrator:- (a) the definitions in Clause 1.1 of "Agreed Procedure", "Charging Procedure", "Code of Practice", "Force Majeure", "Good Industry Practice", "Hardware", "SSA Arrangements" and "SSA System"; (b) Clauses 6.9, 7.3, 7.6, 9.5, 10.9, 10.10, 19.4, 34.1, 34.2, 35.3, 35.6, 36.2, 37, 66, 68, 69, 74 and 78.2; (c) Schedule 4; (d) Sections 1.6 (and its application to any other Section of Schedule 9), 1.7 and 3 of Schedule 9; and (e) this Clause 6.3; 6.3.2 without the prior written consent of the Settlement System Administrator (such consent not to be unreasonably withheld or delayed):- (a) Clauses 18.1.2, 18.1.4, 19.5, 41, 45, 47.1, 47.3, 48.1, 48.2, 48.9, 60, 70, 71.1, 71.4 and 71.5; (b) Part XXII (other than Clauses 74 and 78.2); (c) Section 30 of, and Appendix 4 to, Schedule 9; (d) Section 2(b) of Part C to Schedule 17; and (e) paragraphs 4 to 16 (inclusive), 18, 19, 21 and 22 of Schedule 21. 6.4 Pool Funds Administrator's consent: The prior written consent of the Pool Funds Administrator may be needed to certain amendments to or variations of this Agreement, as provided in Schedule 15. 6.5 Grid Operator's consent: The Parties acknowledge and agree that, notwithstanding any other provision of this Agreement, insofar as directly affects in any material respect the rights, benefits, duties, responsibilities, liabilities and/or obligations of the Grid Operator, no amendment to or variation of any of the matters dealt with in any of the following provisions shall take effect:- 6.5.1 without the prior written consent of the Grid Operator:- (a) Clauses 6.9, 7.3, 7.6, 9.5, 10.9, 10.10, 19.4, 25, 37.3, 47 to 50 (inclusive), 66, 68, 69, 72, 74 and 78.2; (b) sub-section 3.1 of Appendix 2 to Schedule 9; and (c) this Clause 6.5; and 6.5.2 without the prior written consent of the Grid Operator (such consent not to be unreasonably withheld or delayed), any other provision of this Agreement, Provided that the references to Parties and to the Grid Operator in this Clause 6.5 shall be construed as if they were references to such terms prior to the creation of Meter Operator Parties and the associated amendments to this Agreement, but this shall be without limitation to any right of the Grid Operator to consent to any amendment or variation to this Agreement under this Clause 6.5. 6.6 Ancillary Services Provider's consent: The Parties acknowledge and agree that, notwithstanding any other provision of this Agreement, insofar as directly affects in any material respect the rights, benefits, duties, responsibilities, liabilities and/or obligations of the Ancillary Services Provider, no amendment to or variation of any of the following provisions shall take effect:- 6.6.1 without the prior written consent of the Ancillary Services Provider:- (a) Clauses 6.9, 7.3, 7.6, 9.5, 10.9, 10.10, 19.4, 25, 52.3, 66, 68, 69, 72, 74 and 78.2; (b) Part XI and the provisions expressly incorporated therein by reference; (c) Sections 1.8, 23, 24.8 and 28 of Schedule 9; and (d) this Clause 6.6; and 6.6.2 without the prior written consent of the Ancillary Services Provider (such consent not to be unreasonably withheld or delayed), any other provision of this Agreement. 6.7 Amendments generally: 6.7.1 The following provisions of this Clause 6.7 are without prejudice to the rights, powers and privileges of the Secretary of State and the Director under the Act or any Licence or otherwise howsoever. 6.7.2 In relation to Schedule 4 (including its Appendix), and save as provided in Clause 6.7.3, where that Schedule provides for an amendment to the SSA Arrangements, the Menus of Prices or the Variation Menus (or any or any part thereof) to be agreed between certain designated persons and those persons agree in writing the amendment to be made, then the SSA Arrangements, the Menu of Prices or, as the case may be, the Variation Menus (or the relevant one or part thereof) shall be so amended without the need for any other Party to execute or deliver any amending or confirmatory document and each Party hereby consents to such amendments being made in such a manner and undertakes not to withdraw that consent. 6.7.3 In the following cases the amendment procedure set out in Clause 6.7.2 shall itself be modified as hereinafter provided:- (a) if Schedule 4 refers to "formal documentation" being agreed to give effect to the amendment, an amending agreement executed by all Parties shall be required; (b) if the consent of a particular person is required to be obtained under Clauses 6.1 to 6.6 (inclusive), the amendment shall not take effect until that consent has been obtained. 6.7.4 Subject to:- (a) any consent of a particular person required to be obtained under Clauses 6.1 to 6.6 (inclusive) being obtained; (b) the requirements of Clauses 6.7.5 and 13.2, and save as provided otherwise in this Agreement, any amendment to or variation of this Agreement shall be effective if approved by Pool Members in general meeting pursuant to Clause 13.1 or 13.2 and all Parties agree promptly to execute and deliver all agreements and other documentation and to do all such other acts, matters and things as may be necessary to give effect to such amendment or variation. 6.7.5 Where any change is proposed to be made to this Agreement which, if made:- (a) would introduce provisions dealing with matters not then dealt with in or expressly contemplated by this Agreement; and (b) would in any material respect directly affect the rights, benefits, duties, responsibilities, liabilities and/or obligations under this Agreement of the Settlement System Administrator, the Grid Operator, the Ancillary Services Provider and/or any Externally Interconnected Party, such change shall not be made without the prior written consent of the relevant one of them (in each case not to be unreasonably withheld or delayed) provided that the reference to the Grid Operator in this Clause 6.7.5 shall be construed as if it was a reference to such term prior to the creation of Meter Operator Parties and the associated amendments to this Agreement, but this shall be without limitation to any right to consent to any amendment or variation of this Agreement under this Clause 6.7.5. Inconsistencies and Conflicts 6.8 Internal inconsistencies and conflicts: In the event of any inconsistency or conflict:- 6.8.1 the Pool Rules shall prevail over the other provisions of this Agreement (except Clause 4); 6.8.2 the provisions of this Agreement shall prevail over the Specification; and 6.8.3 the Specification shall prevail over the Software, and the Parties shall use all reasonable endeavours promptly to secure the elimination of such inconsistency or conflict. 6.9 External inconsistencies and conflicts: 6.9.1 Each of the Parties hereby acknowledges and agrees the desirability of achieving and maintaining consistency and absence of conflict between the provisions of this Agreement and the Grid Code but recognises that, due principally to the different functions and objectives of this Agreement and the Grid Code, the fact that there may be Parties who are not bound by the Grid Code and the different procedures in this Agreement and the Grid Code for review of their respective terms, it will not in all circumstances be possible to avoid inconsistency or conflict. 6.9.2 Where at the Effective Date there is an inconsistency or conflict between the provisions of this Agreement and the Grid Code the Executive Committee shall first consider the matter and make recommendations and thereafter the Parties shall negotiate in good faith to eliminate such inconsistency and/or conflict having regard to the different functions and objectives of the Grid Code and this Agreement. 6.9.3 Each of the Parties shall use its reasonable endeavours to ensure that where any change to this Agreement is proposed to be made which may reasonably be expected to require a change to the Grid Code (or vice versa) such change is brought by the Executive Committee to the attention of the Grid Code Review Panel in good time to enable it to consider what corresponding change, if any, should be made to the Grid Code or (as the case may be) this Agreement. In any such consideration, the Parties acknowledge and agree that it would be desirable in the event of any inconsistency or conflict between the provisions of this Agreement and the Grid Code if regard were had by the Grid Code Review Panel to the principles set out in Clause 6.9.4. 6.9.4 The principles referred to in Clause 6.9.3 are that:- (a) where by reason of any inconsistency or conflict the security, quality of supply and/or safe operation of the NGC Transmission System under both normal and/or abnormal operating conditions would necessarily be compromised and/or the Grid Operator would necessarily be in breach of its obligations under the Act or its Transmission Licence, the provisions of this Agreement should be made to conform (to the extent of such inconsistency or conflict) to those of the Grid Code; and (b) in any other case, where by reason of such inconsistency or conflict there is or is likely to be a material financial effect on any class of Pool Members or on all or a significant number of Pool Members, the provisions of the Grid Code should be made to conform (to the extent of such inconsistency or conflict) to those of this Agreement. 6.9.5 The Parties acknowledge that changes to the Grid Code are required to be approved by the Director. 6.9.6 Where there is any conflict or inconsistency between the Grid Code and the Pool Rules, no Party shall be liable hereunder or under the Grid Code as a result of complying with its obligations under this Agreement or under the Grid Code. 6.10 Breaches of the Pool Rules: If at any time any Party believes that there has been a breach of the Pool Rules, such Party shall promptly report the same in writing to the Executive Committee. 6.11 Director's requests: The Executive Committee shall:- (i) give due and prompt consideration to any matter referred to it in writing by the Director; (ii) advise the Director in writing of any decision or action of the Executive Committee in relation to such matter; (iii) provide the Director in writing with an explanation in reasonable detail of the reasons for such decision or action; and (iv) if reasonably requested by the Director (having regard, in particular, to the resources available to the Executive Committee), in relation to any proposal by the Director for a change to any provision of this Agreement provide or procure the provision of advice and assistance to the Director as soon as reasonably practicable as to the implications of the change and the actions necessary to implement it (including any relevant feasibility study). PART III POOL MEMBERSHIP AND GENERAL MEETINGS 7. INTRODUCTION 7.1 Obligations contractually binding: Each Pool Member acknowledges and agrees that it is bound to each other Pool Member as a matter of contract and will comply with its obligations under this Agreement. 7.2 Externally Interconnected Parties: Each Externally Interconnected Party acknowledges and agrees that it is bound to each Pool Member as a matter of contract and undertakes to comply with the Pool Rules so far as they may be applicable to it and each Pool Member acknowledges and agrees that it is bound to each Externally Interconnected Party as a matter of contract and will comply with its obligations under this Agreement. 7.3 Parties not Pool Members: The Settlement System Administrator, the Pool Funds Administrator, the Grid Operator and the Ancillary Services Provider shall not be Pool Members and shall not be bound as against other Pool Members or the Executive Committee except as expressly provided for in this Agreement, the Escrow Agreement and the Funds Transfer Agreement in their respective roles as Settlement System Administrator, Pool Funds Administrator, Grid Operator and Ancillary Services Provider. 7.4 Pool Rules: 7.4.1 The Pool Rules as at 1st April, 1996 are set out in Schedule 9. The Settlement System calculations shall be carried out on the basis of the Settlement System and the Pool Rules. 7.4.2 The Pool Rules shall be developed under the control of the Executive Committee. Subject to Clause 6, the Executive Committee may at any time and from time to time change all or any of the Pool Rules upon notification to all Parties and Meter Operator Parties, and any such change shall be binding on all Parties and Meter Operator Parties without further action being required on the part of any person. 7.5 Pool Member's obligations: 7.5.1 Save as otherwise expressly provided in this Agreement, the obligations of each Pool Member under this Agreement are several and a Pool Member shall not be responsible for the obligations or liabilities of any other Pool Member. The failure of any Pool Member to carry out all or any of its obligations under this Agreement shall not relieve any other Pool Member of all or any of its obligations hereunder. 7.5.2 In respect of those obligations of a Pool Member (the "Indemnifying Pool Member") under this Agreement which are expressed to be several, the Indemnifying Pool Member shall indemnify and keep indemnified each other Pool Member from and against all losses, costs (including legal costs) and expenses which such other Pool Member may suffer or incur as a result of being held liable by operation of law (or contesting any such liability) for the performance or non-performance of all or any of such obligations of the Indemnifying Pool Member. 7.6 Information: In respect of all data and other information which a Pool Member or an Externally Interconnected Party (not being a Pool Member) is required to notify to the Settlement System Administrator under or pursuant to this Agreement (other than (i) Metered Data (as defined in paragraph 3.1.2 of Schedule 9) and (ii) pursuant to paragraph 2.3.2 of Schedule 9, the relevant Pool Member or (as the case may be) Externally Interconnected Party shall use all reasonable endeavours to ensure that all such data and other information is complete and accurate in all material respects. 8. POOL MEMBERSHIP 8.1 Initial Pool Members: The initial Pool Members shall be the Founder Generators and the Founder Suppliers. 8.2 Additional Pool Members: 8.2.1 Subject to the following provisions of this Clause 8.2 and Clause 8.13 and to the fulfilment by the Party concerned of the conditions set out or referred to in Clause 8.3 (the "Pool Membership Conditions"), any Party shall, upon application to the Executive Committee, be admitted as a Pool Member. 8.2.2 For the purposes of this Clause 8, "Party" shall include any person who is applying to be admitted as a Party pursuant to Clause 3 contemporaneously with being admitted as a Pool Member but shall exclude the Settlement System Administrator, the Pool Funds Administrator, the Grid Operator and the Ancillary Services Provider. 8.2.3 Subject to Clause 8.2.4, the admission of a Party as a Pool Member shall take effect on the date (the "Admission Date") specified by the Executive Committee (with the prior agreement of the Settlement System Administrator) in a notice given by the Executive Committee to the relevant Party no later than 28 days after the Satisfaction Date, provided that the Admission Date shall be a date falling no earlier than the Satisfaction Date and (unless otherwise agreed by the Executive Committee, the Settlement System Administrator and such Party) no later than 90 days after the Satisfaction Date. In default of such notification being given by the Executive Committee within the said 28 days, the admission shall take effect on the day falling 35 days after the Satisfaction Date. For the purposes of this Clause, the "Satisfaction Date" shall be the day on which the last of the Pool Membership Conditions required to be fulfilled by such Party shall have been fulfilled by it. 8.2.4 No person shall be admitted as a Pool Member unless prior to or contemporaneously with such admission it shall have been or (as the case may be) shall be admitted as a Party. 8.2.5 Prior to a Party's admission as a Pool Member the Executive Committee shall, where appropriate, determine and notify the relevant Party of the amount of Security Cover (if any) to be provided by such Party. 8.3 Pool Membership Conditions: 8.3.1 Where a person has been admitted as a Party pursuant to Clause 3 otherwise than contemporaneously with being admitted as a Pool Member pursuant to Clause 8, the Pool Membership Conditions applicable to it shall (unless otherwise determined by the Director upon the application of such person or the Executive Committee) be those that would have been applicable to it if it had applied to be admitted as a Pool Member at the date of its admission as a Party and, subject as aforesaid, such person shall not be required to fulfil any further or other Pool Membership Conditions introduced after such date unless the applicant notifies the Executive Committee in writing prior to or contemporaneously with its application for admission as a Pool Member that it wishes such further or other conditions to apply, in which case the Pool Membership Conditions applicable to it shall (subject as aforesaid) be those applicable on the date of its application for admission as a Pool Member. 8.3.2 The Pool Membership Conditions required to be fulfilled by a Party prior to its admission as a Pool Member are:- (a) the due completion by the Party and the delivery to the Executive Committee of a Pool Membership Application; (b) in respect of any Metering System required to be taken into account for the purposes of Settlement and which relates to the Party, the provision of evidence reasonably satisfactory to the Executive Committee that:- (i) there is a Registrant and an Operator for such Metering System; (ii) such Registrant has provided to the Settlement System Administrator the information required for standing data purposes as required by this Agreement or the relevant Agreed Procedure; and (iii) such Metering System conforms with the requirements of Part XV, all relevant Agreed Procedures and all Codes of Practice and is compatible with the Settlement System; (c) the Party has entered into and has in full force and effect all appropriate Connection Agreements or, if the Party is applying to be admitted as an External Pool Member, that all appropriate Connection Agreements with the relevant Externally Interconnected Party in relation to the relevant Interconnection are in full force and effect; (d) the provision of such information as the Executive Committee may reasonably require to enable the Executive Committee to ascertain whether any of the provisions of Clause 11.4 are applicable to that Party, to determine whether that Party is an Independent Generator, Small Generator and/or Independent Supplier and to calculate the initial Weighted Votes and Points of that Party as a Pool Member under Clause 11.3 and Schedule 13 respectively; (e) the provision of such information as the Executive Committee may reasonably require:- (i) to enable the Executive Committee to ascertain whether (and, if so, on what basis) that Party is entitled to take the benefit of any exception in Clause 8.5 claimed by it; and (ii) to assist the Executive Committee in making any determination under Clause 8.5 relevant to that Party; (f) if the Party is a Generator (other than an External Pool Member), the provision of evidence reasonably satisfactory to the Executive Committee that the Party operates or has under its control one or more Generating Units, which Generating Unit(s) has (have) provided electricity to the Total System or will be capable of so providing electricity within such period as the Executive Committee may specify; and (g) if the Party is an External Pool Member, the provision of evidence reasonably satisfactory to the Executive Committee that the Party has the right to use one or more Generation Trading Blocks and/or the right to take electricity across an External Interconnection under an Interconnection Agreement then in full force and effect. 8.4 Compliance: Each Pool Member shall procure that for so long as it is a Pool Member it shall at all times satisfy or otherwise comply with those Pool Membership Conditions (whether set out in this Agreement or in its Pool Membership Application) applicable to it (and/or such further or other conditions as the Executive Committee may from time to time reasonably specify). Each Pool Member shall upon request from time to time promptly provide the Executive Committee with such information as the Executive Committee may reasonably require (i) to enable the Executive Committee to ascertain whether (and, if so, on what basis) that Pool Member is entitled to take the benefit of any exception in Clause 8.5 claimed by it, and (ii) to assist the Executive Committee in making any determination under Clause 8.5 relevant to that Party, and further with evidence reasonably satisfactory to the Executive Committee of such satisfaction and compliance. 8.5 Restrictions applicable to Pool Members: 8.5.1 At each of its Sites, or where any such Site forms part of a Trading Site, such Trading Site, each Generator shall sell its entire Exports of electricity to Pool Members pursuant to this Agreement except:- (a) for its Exports of electricity from any generating station in respect of which (but for other generating stations owned or operated by it) it would not be required to hold a Generation Licence, being Exports at any Site or, as the case may be, Trading Site for which the Generator is not required to complete a Supplemental Agreement to the Master Connection and Use of System Agreement Provided that the Generator has given the Executive Committee either on the Effective Date or not less than 10 Business Days before that Site or, as the case may be, Trading Site is withdrawn from the requirements of this provision, written notice that the circumstances described in sub-paragraph (a) apply; or (b) for the output of electricity from any of its Generating Units in circumstances which the Executive Committee resolves by a vote passed by 80 per cent. or more of the votes of all Committee Members (after consultation with the Director) are exceptional. 8.5.2 In respect of all its requirements for electricity which a Supplier wishes to purchase from Pool Members, the Supplier shall purchase the same pursuant to this Agreement, provided that nothing in this Agreement shall prevent or restrict the purchase by a Supplier otherwise than pursuant to this Agreement:- (a) in circumstances where the Supplier is acting otherwise than in its capacity as a consumer, of all or part of that output of electricity from any Generating Unit which is not required to be sold to Pool Members pursuant to Clause 8.5.1 or of electricity which has been purchased by an External Pool Member at its associated External Interconnection as an export from the NGC Transmission System pursuant to this Agreement; or (b) in circumstances where the Supplier is acting in its capacity as a consumer:- (i) of electricity from any Supplier which has purchased that electricity pursuant to this Agreement; or (ii) of such output of electricity as is referred to in paragraph (a) above; or (c) in circumstances where the Supplier is a Supplier holding a PES Licence and is acting in its capacity as a PES, of electricity from any Supplier which is a Supplier holding a PES Licence, which operates a Distribution System directly connected to the Distribution System operated by the Supplier first mentioned in this paragraph (c) and which has purchased that electricity pursuant to this Agreement; or (d) in circumstances which the Executive Committee resolves by a vote passed by 80 per cent. or more of the votes of all Committee Members (after consultation with the Director) are exceptional, from any person. For the purposes of this Clause 8.5.2 a "consumer" means a person who purchases electricity from a Supplier for its own consumption at premises owned or occupied by that person. 8.6 Restrictions applicable to non-Pool Members: Save as otherwise expressly provided, a Party which is not a Pool Member shall not be entitled to any of the rights and benefits accorded to Pool Members under this Agreement. 8.7 Resignation: Subject as provided in Clause 8.8:- 8.7.1 a Party (other than the Settlement System Administrator, the Pool Funds Administrator, the Grid Operator, the Ancillary Services Provider and each Externally Interconnected Party) shall be entitled at any time to resign as a Party by delivering a Resignation Notice to the Secretary; and 8.7.2such resignation shall take effect 28 days after receipt of the Resignation Notice by the Secretary. Promptly after receipt of a duly completed Resignation Notice from a Party, the Secretary shall notify (for information only) all of the other Parties, the Executive Committee and the Director of such receipt and of the name of the Party wishing to resign. 8.8 Restrictions on resignation: A Party may not resign as a Party (and any Resignation Notice delivered pursuant to Clause 8.7.1 shall lapse and be of no effect) unless:- 8.8.1 as at the date its resignation would otherwise become effective all sums due from such Party to the Executive Committee or any other Party under (a) this Agreement, (b) the Funds Transfer Agreement or (c) any agreement entered into pursuant to this Agreement (whether by or on behalf of such Party) and notified for the purposes of this Clause 8.8 by the Executive Committee to such Party prior to the date of its resignation, have been paid in full; and 8.8.2 it would not be a breach of any Licence condition applicable to such Party so to resign. 8.9 Release as a Party: Without prejudice to Clause 66.7 and its accrued rights and liabilities and its rights and liabilities which may accrue in relation to the period during which it was a Party under this Agreement, the Funds Transfer Agreement or any agreement referred to in Clause 8.8.1(c), upon a Party's resignation becoming effective in accordance with Clause 8.7:- 8.9.1 such Party (if it is a Pool Member) shall cease automatically to be a Pool Member; 8.9.2 such Party shall be automatically released and discharged from all its obligations and liabilities under this Agreement, the Funds Transfer Agreement and any agreement referred to in Clause 8.8.1(c); and 8.9.3 each of the other Parties shall be automatically released and discharged from its obligations and liabilities to such Party under this Agreement, the Funds Transfer Agreement and any agreement referred to in Clause 8.8.1(c). Each Party shall promptly at its own cost and expense execute and deliver all agreements and other documentation and do all such other acts, matters and things as may be necessary to confirm such cessation, release and discharge. 8.10 Withdrawal as a Party: If a Party (the "Withdrawing Party") shall apply on three occasions to be admitted as a Pool Member pursuant to this Clause 8 and on each such occasion it is not so admitted by reason of its failure to fulfil the relevant Pool Membership Conditions then with effect from the date the Withdrawing Party is deemed to receive notification from the Executive Committee pursuant to Clause 75 that it has failed for the third time to fulfil such conditions, without prejudice to Clause 66.7 and its accrued rights and liabilities, and its rights and liabilities which may accrue in relation to the period during which it was a Party, under any agreement entered into pursuant to this Agreement (whether by or on behalf of the Withdrawing Party) and notified to it for the purposes of this Clause 8.10 by the Executive Committee prior to the date of its cessation as a Party:- 8.10.1 the Withdrawing Party shall automatically cease to be a Party and shall be automatically released and discharged from all its obligations and liabilities under this Agreement and any such agreement; 8.10.2 each of the other Parties shall be automatically released and discharged from its obligations and liabilities to the Withdrawing Party under this Agreement and any such agreement; and 8.10.3 each Party shall promptly, at the cost and expense of the Withdrawing Party, execute and deliver all agreements and other documentation and do all such other acts, matters and things as may be necessary to confirm such cessation, release and discharge. 8.11 External Pool Members: A person who has been admitted as an External Pool Member shall immediately cease to be a Pool Member (such cessation to be without prejudice to Clause 66.7) upon either:- 8.11.1 all of its rights under an Interconnection Agreement to use the relevant External Interconnection(s) for taking or delivering electricity from or to the NGC Transmission System having permanently ceased; or 8.11.2 the relevant External Interconnection(s) permanently ceasing to be connected to the NGC Transmission System. 8.12 Change of capacities: Any Pool Member may, upon application to the Executive Committee and satisfaction of those of the Pool Membership conditions relevant to its new capacity and such other conditions (if any) as the Executive Committee may reasonably require, change the capacity(ies) in which it participates as a Pool Member and any Pool Member who acquires an additional capacity in which it participates as a Pool Member shall be deemed to have been admitted as a new Pool Member pursuant to Clause 8.2 in that additional capacity. 8.13 Saving: The Executive Committee shall have the right to waive compliance by a Party with all or any of the Pool Membership Conditions either absolutely or on terms if, in the opinion of the Executive Committee, this is necessary to ensure or help ensure that the Settlement process operates efficiently or that the interests of other Pool Members are safeguarded. 9. GENERAL MEETINGS 9.1 Annual general meeting: Once in, and no later than 31st March of, each year Pool Members shall hold a general meeting as their annual general meeting in addition to any other meetings of Pool Members in that year, and notices calling such general meeting shall specify it as the annual general meeting. At each annual general meeting the Pool Members shall be required to consider and, where appropriate, resolve upon the following, namely:- 9.1.1 a business plan prepared by the Executive Committee for the next following Accounting Period and the four Accounting Periods thereafter (or for such shorter period as the Pool Members in general meeting shall from time to time determine) in relation to the operation of the Settlement System and the Funds Transfer System and all other matters which are the subject of this Agreement; 9.1.2 a report prepared by the Executive Committee, which report shall include:- (a) a review against the business plan prepared by the Executive Committee for the current Accounting Period including a reconciliation based on the then latest available figures against budget for all items within such business plan for that Accounting Period; (b) a review of the operation of the Settlement System and the Funds Transfer System during that Accounting Period; (c) a report on the performance by the Settlement System Administrator of its obligations under Schedule 4 and the related Service Lines during that Accounting Period; (d) a report on the performance by the Pool Funds Administrator of its obligations under Schedules 11 and 15 during that Accounting Period; (e) a report on the performance of the Chief Executive's Office (taken as a whole) during that Accounting Period; and (f) such other information or matters as the Executive Committee shall consider appropriate (including any proposed revision to this Agreement); 9.1.3 the appointment of Committee Members pursuant to Clause 15; 9.1.4 the election of the Pool Chairman pursuant to Clause 16; 9.1.5 such matters as any Pool Member present in person may wish to raise at such meeting, notice of which has been given to the Secretary no later than seven days before the date of such meeting, it being acknowledged and agreed that failure by a Pool Member so to notify shall not prejudice the right of any Pool Member to ask questions at such meeting on any matter then before such meeting; and 9.1.6 such other matters as the Executive Committee sees fit to propose and of which notice has been given in accordance with Clause 9.4.1. 9.2 General meetings: All general meetings of Pool Members other than annual general meetings shall be extraordinary general meetings. 9.3 Calling meetings: All general meetings of Pool Members shall be called by 14 days' notice in writing at the least, provided that a general meeting of Pool Members shall, notwithstanding that it is called by shorter notice, be deemed to have been duly called if it is so agreed by a majority in number of the Pool Members having a right to attend and vote at such meeting, being a majority in number together holding not less than 95 per cent. of the Total Weighted Votes. 9.4 Convening meetings: 9.4.1 An annual general meeting shall be convened by the Secretary on the instructions of the Executive Committee and any notice convening such a meeting shall set out or append details of any such matters as are referred to in Clause 9.1.6 and shall be accompanied by a copy of the business plan referred to in Clause 9.1.1 and of the report referred to in Clause 9.1.2. The Secretary shall use its reasonable endeavours to notify the Pool Chairman and Pool Members in advance of the relevant annual general meeting of any such matters referred to in Clause 9.1.6 of which the Secretary has received notice in accordance with that Clause. 9.4.2 Extraordinary general meetings shall be convened:- (a) by the Secretary on the instructions of the Executive Committee or of any one or more Committee Members pursuant to Clause 13.4; or (b) by the Executive Committee, forthwith upon receipt of a Pool Members' requisition being a requisition of Pool Members holding together at the date of the deposit of the requisition not less than two per cent. of the Total Weighted Votes of all Pool Members; or (c) by the Secretary on the instructions of the Pool Chairman. 9.4.3 A Pool Members' requisition shall state the objects of the meeting and must be signed by or on behalf of the requisitionists and deposited at the office of the Secretary, and may consist of several documents in like form each signed by one or more requisitionists. If the Executive Committee does not within 21 days from the date of the deposit of the requisition proceed duly to convene an extraordinary general meeting for a date not later than two months after the said date of deposit, the requisitionists may themselves convene a meeting, but any meeting so convened shall not be held after the expiration of three months from such date. A meeting convened under this Clause 9.4 by requisitionists shall be convened in the same manner, as nearly as possible, as that in which meetings are to be convened by the Executive Committee. 9.5 Notice of general meetings: Any notice convening any general meeting of Pool Members shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and shall specify the place, the day and the hour of the meeting and the general nature of the business of such meeting and shall be given to all Parties, all Committee Members, the Pool Chairman, the Chief Executive (if any), the Pool Auditor and the Director. The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting. In every such notice there shall appear with reasonable prominence a statement that a Pool Member entitled to attend and vote is entitled to appoint a proxy to attend, speak and (subject to Clause 12.1) vote in its place and that a proxy need not also be a Pool Member. 9.6 Annual conference: 9.6.1 In each year, on a date falling as near as practicable to, but in any event not later than, eight months after the immediately preceding annual general meeting, a meeting of Pool Members shall be convened and held which shall not be the annual general meeting but which may (but need not) be convened as an extraordinary general meeting (the "Annual Conference"). 9.6.2 At the Annual Conference a report shall be presented by the Executive Committee on the matters referred to in Clause 9.1.2, such report to cover the period commencing on the day after the immediately preceding annual general meeting and ending on the day falling one calendar month before the date for which the Annual Conference has been convened. In addition, the Executive Committee shall arrange for such other matters to be discussed, presentations to be made and Pool Member activities to be organised at the Annual Conference as it may resolve to be appropriate. 9.7 Pool Auditor's Report: 9.7.1 The Secretary shall provide to all Pool Members annually by the last day of the first Quarter following the end of the then most recent Accounting Period a copy of a report prepared by the Pool Auditor on the Settlement System and its operation during such Accounting Period (the "Pool Auditor's Report"). 9.7.2 The Pool Auditor's Report shall include: (i) a summary of the audits, reviews, tests and/or checks referred to in Part IX carried out by the Pool Auditor during that Accounting Period; (ii) any recommendation which the Pool Auditor wishes to make regarding the operation of the Settlement System, the Charging Procedure, the PFA Accounting Procedure, the ASP Accounting Procedure and/or the Funds Transfer System; and (iii)such other information or matters which the Executive Committee may reasonably require or the Pool Auditor shall consider appropriate. 9.7.3 If the Executive Committee so resolves, the Secretary shall convene a meeting of all Pool Members in order to discuss the Pool Auditor's Report. 10. PROCEEDINGS AT GENERAL MEETINGS 10.1 General: Save as provided in Clause 12.8 and Part IV, all business of Pool Members shall be transacted at general meetings of Pool Members, the proceedings for the conduct of which are set out in this Clause 10. 10.2 Quorum: No business shall be transacted at any general meeting of Pool Members unless a quorum of Pool Members is present at the time when the meeting proceeds to business. Save as herein otherwise provided, a quorum shall be Pool Members present in person representing:- 10.2.1 50 per cent. or more of the aggregate number of Weighted Votes to which all Generators are entitled under Clause 11.2.1; and 10.2.2 50 per cent. or more of the aggregate number of Weighted Votes to which all Suppliers are entitled under Clause 11.2.2. 10.3 Lack of quorum: If within half an hour from the time appointed for the general meeting a quorum is not present, the meeting shall stand adjourned to the same day in the next week, at the same time and place or to such other day and at such other time and place as the Executive Committee may determine and, if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the Pool Member(s) present shall be a quorum. 10.4 Chairman: The Pool Chairman shall preside as chairman at every general meeting and separate general meeting of Pool Members (other than one convened to consider his removal) or, if there is no Pool Chairman or if he shall not be present within 15 minutes after the time appointed for the holding of the meeting or is unwilling to act or if the relevant meeting has been convened to consider the removal of the Pool Chairman, the Chief Executive (if any) shall preside as chairman or, if the Chief Executive shall not be present or is unwilling to act or if the relevant meeting has been convened to consider the removal of the Chief Executive, the Pool Members present shall choose one of their number to be chairman of the meeting. 10.5 Adjournments: The chairman of the meeting may, with the consent of any general meeting of Pool Members at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for 30 days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. 10.6 Demand for a poll: At any general meeting of Pool Members a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded:- 10.6.1 by the chairman of the meeting; or 10.6.2 by at least two Pool Members present in person or by proxy; or 10.6.3 by any Pool Member present in person or by proxy and holding not less than two per cent. of the Total Weighted Votes of all Pool Members. Unless a poll be so demanded a declaration by the chairman of the meeting that a resolution has on a show of hands been carried or carried unanimously, or by a particular majority, or lost and an entry to that effect in the book containing minutes of the proceedings of general meetings shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution. The demand for a poll may be withdrawn. 10.7 Timing of poll: Except as hereinafter provided in this Clause 10.7, if a poll is duly demanded it shall be taken in such manner as the chairman of the meeting directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. A poll demanded on the election of the chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs, and any business other than that upon which a poll has been demanded may be proceeded with pending the taking of the poll. 10.8 No casting vote: In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall not be entitled to a second or casting vote. 10.9 Representation of non-Pool Members: Each of the Chief Executive (if any) or his duly appointed representative, the Settlement System Administrator, the Pool Funds Administrator, the Grid Operator and the Ancillary Services Provider shall be obliged to attend, and each other Party, each Committee Member, the Pool Auditor and the Director (or its or his duly appointed representative) shall have the right to attend, at each general meeting of Pool Members, and each of them shall have the right to speak (but not to vote) thereat. 10.10 Minutes: The Secretary shall prepare minutes of all general meetings of Pool Members and shall circulate copies thereof to all Parties, each Committee Member, the Pool Chairman, the Chief Executive (if any), the Pool Auditor and the Director as soon as practicable (and in any event within ten working days) after the relevant meeting has been held. 11. VOTING 11.1 Membership Votes: Each Pool Member shall be entitled to one vote by reason of its Pool Membership (its "Membership Vote"). --------------- 11.2 Weighted Votes: Subject as provided in the following provisions of this Clause 11, in respect of any Quarter:- 11.2.1 each Pool Member which is a Generator shall be entitled in that capacity to one vote (each such vote a "Generator Weighted Vote") for each GWh of Genset Metered Generation of all its Allocated Generating Units for all Settlement Periods falling in the Votes Calculation Period relative to such Quarter, as determined from the final run of Settlement for each such Settlement Period and with the number of GWh being rounded up or down (0.5 being rounded upwards) to the nearest whole number; 11.2.2 the number of votes (each a "Supplier Weighted Vote") to which a Pool Member which is a Supplier shall be entitled in that capacity shall be calculated in accordance with the following formula:- GWV x SV (SIGMA) SV where: SV is equal to the total GWh of Consumer Metered Demand taken by the relevant Pool Member in all Settlement Periods falling in the Votes Calculation Period relative to the relevant Quarter, as determined from the final run of Settlement for each such Settlement Period and with the number of GWh being rounded up or down (0.5 being rounded upwards) to the nearest whole number; GWV is the total number of Generator Weighted Votes of all Pool Members for the relevant Quarter; and (SIGMA) means summed over the total SV of all Pool Members for the relevant Quarter, provided that the total number of Supplier Weighted Votes shall at all times equal the total number of Generator Weighted Votes and if, as a result of the foregoing, such would not be the case, the Pool Member with the greatest number of Generator Weighted Votes or of Supplier Weighted Votes calculated as aforesaid shall have deducted that number of Weighted Votes of the relevant class as will ensure that the total number of Supplier Weighted Votes equals the total number of Generator Weighted Votes. For the purposes of this Clause 11.2:- (a) a Generating Unit shall be an Allocated Generating Unit of a Pool Member (in this Clause, the "Identified Pool Member") if it belongs to the Identified Pool Member as of the date on which the Executive Committee calculates the Weighted Votes of Pool Members for the relevant Quarter pursuant to Clause 11.3.2. If at any time during such Quarter an Allocated Generating Unit shall belong to another Pool Member (in this Clause, the "Transferee Pool Member"), the Weighted Votes attributed to the Identified Pool Member for such Quarter by reason of the Allocated Generating Unit belonging to it shall (subject to Clause 11.4) be transferred to the Transferee Pool Member as of the date on which such Allocated Generating Unit first belongs to the Transferee Pool Member (and the Identified Pool Member and the Transferee Pool Member shall jointly notify the Executive Committee in writing of such date in good time before its occurrence); (b) a Generating Unit shall belong to a Pool Member if it is owned by that Pool Member and not leased to another person or if it is leased by that Pool Member from another person; (c) a Pool Member shall notify the Executive Committee promptly on request of its Allocated Generating Units and the Executive Committee and each other Party may rely on the information in that notification and in any notification under paragraph (a) above without further enquiry or need to verify that information; (d) in determining the meaning of "good time" for the purposes of paragraph (a) above one factor to be taken into account is that the Settlement System Administrator must be allowed sufficient time to effect the necessary changes in Settlement associated with the transfer of the relevant Allocated Generating Unit; and (e) the Executive Committee may, upon application of any Pool Member involved in any transfer of assets between Pool Members during any Quarter, adjust as between the Pool Members involved in such transfer, the number of Points and/or Weighted Votes to which they in their capacities as Suppliers are entitled in respect of the remaining part of that Quarter and/or one or both of the two immediately succeeding Quarters if, in the opinion of the Executive Committee, such adjustment would help accommodate the consequences of such a transfer and not prejudice the interests of any other Pool Member in any material respect. 11.3 Calculation of Weighted Votes: Subject as provided in the following provisions of this Clause 11:- 11.3.1 New Pool Members: (a) until the third Quarter Day next falling after the date of its admission as a Pool Member, any Party who is admitted as a Pool Member pursuant to Clause 8.2 shall have that number of Weighted Votes as fall to be determined in accordance with the following provisions of this Clause 11.3.1. Thereafter, such Pool Member's Weighted Votes shall be calculated in accordance with Clause 11.2; (b) until the third Quarter Day next falling after the date of admission of the relevant Pool Member as a Pool Member, such Pool Member shall have that number of Generator Weighted Votes and/or Supplier Weighted Votes as are accorded to it upon its admission as a Pool Member by the Executive Committee (which the Executive Committee shall do prior to the date of such admission) who shall have regard to the factors listed in paragraphs (c), (d) and/or (as the case may be) (e) below or as are determined by the Director in accordance with Clause 11.5; (c) the factors referred to in paragraph (b) shall in the case of a Generator include:- (i) the Registered Capacity of all Generating Units of such Generator; (ii) the Executive Committee's assessment of the likely availability of all such Generating Units for the period from the date of admission of such Pool Member as a Pool Member to the third Quarter Day next falling after such date, having regard to the registered Generation Scheduling and Despatch Parameters or (as the case may be) Generation Trading Block Scheduling and Despatch Parameters for such Generating Units; (iii) the Executive Committee's assessment of the likely output of all such Generating Units during such period having regard to the output of Generating Units which in the Executive Committee's opinion most nearly correspond to such Generating Units; (iv) the Executive Committee's assessment of the likely daily station load associated with the Power Stations of which such Generating Units form part during such period; and (v) where a Generating Unit of an existing Pool Member is transferred to, and then belongs to, such Generator at or soon after the time of such Generator's admission as a Pool Member, the Generator Weighted Votes most recently attributed to that existing Pool Member by reason of that Generating Unit shall be attributed to such Generator as if such Generator were a Transferee Pool Member under the provisions of paragraph (a) of Clause 11.2; (d) the factors referred to in paragraph (b) above shall in the case of a Supplier be the total GWh which would be supplied by the relevant Supplier in the period from the date of admission of such Pool Member as a Pool Member to the third Quarter Day next falling after such date on the basis of its Customers' metered demand or, where such metered information is not available, the load profiles of its Customers used for the purposes of estimating the consumption of Second Tier Customers; and (e) the factors referred to in paragraph (b) above shall in the case of an External Pool Member be whichever one or more of those factors referred to in paragraph (c) above and those referred to in paragraph (d) above as the Executive Committee considers to be most readily applicable to the Generating Units (if any) of such Pool Member and to the level of demand for Active Energy of that Pool Member across the relevant External Interconnection but as if the references to Customers in paragraph (d) were references to that Pool Member's own requirements; 11.3.2 Calculation: on or prior to each Quarter Day and on each admission, resignation or removal of a Party as a Pool Member or change in the capacity in which it participates as a Pool Member the Executive Committee shall, on the basis of information to be supplied by the Settlement System Administrator in accordance with Service Line 10 (Service to CEO and Pool Members), calculate the number of Weighted Votes to which each Pool Member whose Weighted Votes are to be calculated in accordance with Clause 11.2 is entitled in its capacity as a Generator or a Supplier for the Following Quarter (or, in the case of an admission, resignation or removal of a Party as a Pool Member or a change in the capacity in which it participates as a Pool Member, for the remainder of the then current Quarter), and shall notify each Pool Member and the Director in writing of the number of Generator Weighted Votes and Supplier Weighted Votes of all Pool Members (whether calculated in accordance with Clause 11.2 or 11.3.1). Subject to Clauses 11.5 and 11.6, the determination of the Executive Committee as to the number of Generator Weighted Votes and Supplier Weighted Votes of each Pool Member shall (in the absence of manifest error) be final and binding for all purposes of this Agreement; 11.3.3 Attribution: if a Pool Member shall not receive any Weighted Vote by reason of the calculations under Clause 11.2 or the foregoing provisions of this Clause 11.3, such Pool Member shall nevertheless be accorded one Generator Weighted Vote and/or one Supplier Weighted Vote, depending on the capacity(ies) in which it is participating as a Pool Member; and 11.3.4 Additional capacity: for the purposes of this Clause 11 any Pool Member who acquires an additional capacity in which it participates as a Pool Member shall be deemed to have been admitted as a new Pool Member pursuant to Clause 8.2 in that additional capacity and until the third Quarter Day next falling after the date such Pool Member's application to the Executive Committee pursuant to Clause 8.12 is approved, it shall have that number of Weighted Votes in that additional capacity as fall to be determined in accordance with the provisions of Clause 11.3.1. Thereafter, such Pool Member's Weighted Votes shall be calculated in accordance with Clause 11.2. 11.4 Cap on Weighted Votes: 11.4.1 The aggregate number of Weighted Votes to which a Pool Member shall be entitled (in whatever capacity) under Clauses 11.2 and 11.3 shall not at any time exceed 15 per cent. of the Total Weighted Votes. 11.4.2 The aggregate number of Weighted Votes to which all Pool Members which are members of the same Pool Member's Group are entitled (in whatever capacity) under Clauses 11.2 and 11.3 shall not at any time exceed 15 per cent. of the Total Weighted Votes. 11.4.3 If, by virtue of the number of Weighted Votes accorded to a Pool Member or to Pool Members which are members of the same Pool Member's Group pursuant to Clauses 11.2 and/or 11.3, a Pool Member or Pool Members would in the absence of this Clause 11.4.3 be in breach of Clause 11.4.1 or 11.4.2, the number of Weighted Votes to which that Pool Member or (as the case may be) those Pool Members which are members of the same Pool Member's Group shall be entitled shall be determined as follows:- (a) in the case of a Pool Member which would otherwise be in breach of Clause 11.4.1, the aggregate number of Weighted Votes to which that Pool Member shall be entitled shall be reduced by such number (in this paragraph (a) the "Redistributed Votes") as will ensure that, after redistribution of its Weighted Votes in accordance with Clause 11.4.5, such Pool Member shall have as nearly as practicable (but not in excess of) 15 per cent. of the Total Weighted Votes. The Redistributed Votes shall:- (i) consist of that number of Weighted Votes in excess of 15 per cent. of the Total Weighted Votes to which the relevant Pool Member is entitled; and (ii) comprise Generator Weighted Votes and Supplier Weighted Votes in the same proportion (as nearly as practicable) as the total number of Generator Weighted Votes and Supplier Weighted Votes of that Pool Member (before such redistribution) bear one to the other; (b) in the case of Pool Members which are members of the same Pool Member's Group and which would otherwise be in breach of Clause 11.4.2, the aggregate number of Weighted Votes to which those Pool Members shall be entitled shall be reduced by such number (in this paragraph (b), the "Redistributed Votes") as will ensure that, after redistribution of their Weighted Votes in accordance with Clause 11.4.6, such Pool Members shall together have as nearly as practicable (but not in excess of) 15 per cent. of the Total Weighted Votes. The Redistributed Votes shall:- (i) consist of that number of Weighted Votes in excess of 15 per cent. of the Total Weighted Votes to which all Pool Members which are members of that Pool Member's Group are, in aggregate, entitled; (ii) comprise Generator Weighted Votes and Supplier Weighted Votes in the same proportion (as nearly as practicable) as the total number of Generator Weighted Votes and Supplier Weighted Votes of all Pool Members which are members of that Pool Member's Group (before such redistribution) bear one to the other; and (iii) be taken from each Pool Member which is a member of that Pool Member's Group (in the case of Redistributed Votes which are Generator Weighted Votes) in the proportion (as nearly as practicable) which that Pool Member's Generator Weighted Votes (if any) bear to the total number of Generator Weighted Votes of all Pool Members which are members of that Pool Member's Group and (in the case of Redistributed Votes which are Supplier Weighted Votes) in the proportion (as nearly as practicable) which that Pool Member's Supplier Weighted Votes (if any) bear to the total number of Supplier Weighted Votes of all Pool Members which are members of that Pool Member's Group; and (c) in the case where both paragraphs (a) and (b) above apply in respect of a Pool Member, the provisions of paragraph (a) above shall be applied before those of paragraph (b) above. 11.4.4 Subject to Clause 11.4.7, where more than one Pool Member or Pool Member's Group would, in the absence of Clause 11.4.3, be in breach of Clause 11.4.1 or (as the case may be) 11.4.2, the redistribution of Weighted Votes pursuant to Clause 11.4.5 or (as the case may be) 11.4.6 shall commence with the Pool Member or Pool Member's Group that has the greatest percentage of Total Weighted Votes, shall continue with the Pool Member or Pool Member's Group with the next greatest percentage and so on, and the process of redistributing Weighted Votes in accordance with such Clauses shall continue until such time as no Pool Member or Pool Member's Group is in breach of Clause 11.4.1 or 11.4.2. 11.4.5 Where Clause 11.4.3(a) applies, the Redistributed Votes shall (subject as provided in Clauses 11.4.7 and 11.4.8) be allocated as follows:- (a) the Redistributed Votes which are Generator Weighted Votes shall be allocated across all other Pool Members in the proportions (as nearly as practicable) which their respective Generator Weighted Votes bear to each other (such proportions to be calculated before any redistribution of Weighted Votes pursuant to this Clause 11.4); and (b) the Redistributed Votes which are Supplier Weighted Votes shall be allocated across all other Pool Members in the proportions (as nearly as practicable) which their respective Supplier Weighted Votes bear to each other (such proportions to be calculated before any redistribution of Weighted Votes pursuant to this Clause 11.4). 11.4.6 Where Clause 11.4.3(b) applies, the Redistributed Votes shall (subject as provided in Clauses 11.4.7 and 11.4.8) be allocated as follows:- (a) the Redistributed Votes which are Generator Weighted Votes shall be allocated across all other Pool Members which are not members of the relevant Pool Member's Group in the proportions (as nearly as practicable) which their respective Generator Weighted Votes bear to each other (such proportions to be calculated before any redistribution of Weighted Votes pursuant to this Clause 11.4); and (b) the Redistributed Votes which are Supplier Weighted Votes shall be allocated across all other Pool Members which are not members of the relevant Pool Member's Group in the proportions (as nearly as practicable) which their respective Supplier Weighted Votes bear to each other (such proportions to be calculated before any redistribution of Weighted Votes pursuant to this Clause 11.4). 11.4.7 Redistributed Votes shall not be allocated pursuant to Clause 11.4.5 or 11.4.6 to any Pool Member which before such allocation is or, but for Clause 11.4.3, would be in breach of Clause 11.4.1 or 11.4.2. 11.4.8 Any allocation of Redistributed Votes in accordance with the foregoing provisions of this Clause 11.4 shall not be effected in the case of votes amounting to fractions of whole numbers and any Redistributed Votes which are incapable of allocation as a result of this or any other provision of this Clause 11.4 ("Fractional Redistributed Votes") shall, in the case of Generator Weighted Votes, be allocated automatically to the largest Generator in terms of Genset Metered Generation for the relevant Quarter or, in the case of Supplier Weighted Votes, to the largest Supplier in terms of Consumer Metered Demand for the relevant Quarter, to the extent that this does not cause a breach of Clause 11.4.1 or Clause 11.4.2. Thereafter, any unallocated Fractional Redistributed Votes shall be allocated in accordance with this Clause 11.4.8 to the next such largest Generator and/or Supplier and the process shall continue until all Fractional Redistributed Votes have been so allocated. 11.5 New Pool Member's reference to the Director: If any Pool Member referred to in Clause 11.3.1(a) shall dispute the calculation of or the number of Weighted Votes accorded to it in accordance with Clause 11.3.1, such Pool Member may refer such dispute to the Director for determination, whose determination as to the calculation of or the number of Weighted Votes to which such person shall be entitled shall be final and binding for all purposes of this Agreement. 11.6 Alteration of Weighted Votes: The Director may at any time by notice to the Executive Committee alter the calculation of Weighted Votes set out in Clauses 11.2.1 and 11.2.2 and/or the caps on Weighted Votes set out in Clauses 11.4.1 and 11.4.2 if, in his opinion, such alteration is required to achieve fair representation for all Pool Members. 11.7 Pool Member Group Information: Each Pool Member shall provide the Executive Committee with such details of its Pool Member Group as the Executive Committee may at any time and from time to time reasonably require for the purposes of this Clause 11 and such Pool Member shall be deemed to warrant to all other Pool Members that all such details are true and accurate in all material respects as at the date they are provided to the Executive Committee. The Executive Committee may rely on such details without further enquiry or need to verify them. 11.8 [Not used] 11.9 Records: The Executive Committee shall maintain, and retain for a period of not less than eight years, a register recording the Generator Weighted Votes and Supplier Weighted Votes of each Pool Member, which register shall be open for inspection by any Party at the office of the Secretary during normal business hours. 11.10 Voting on a show of hands: On a show of hands every Pool Member present in person shall have only its Membership Vote (that is, one vote). 11.11 Voting on a poll: On a poll every Pool Member shall have only its Weighted Votes. On a poll votes may be given either personally or by proxy. 11.12 Objections: No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the chairman of the meeting whose decision shall be final and conclusive. 11.13 Scrutiny: At each meeting at which a Pool Member casts a vote, the Secretary or another person specifically appointed for the purpose by the Secretary shall ensure that proper scrutiny of all such votes takes place, such that he is entirely satisfied that every vote cast was so cast properly and in accordance with all relevant provisions of this Agreement and any other applicable agreement between all Pool Members or rules or regulations governing such votes. 12. PROXIES 12.1 Authority: Any Pool Member entitled to attend and vote at any general meeting of Pool Members shall be entitled to appoint another person (whether a Pool Member or not) as its proxy to attend, speak and vote in its place, save that a proxy shall not be entitled to vote except on a poll. 12.2 Authentication of proxy: The instrument appointing a proxy shall be in writing either under seal or under the hand of an officer or attorney duly authorised. A proxy need not be a Pool Member. 12.3 Deposit of proxy: The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a certified copy of that power or authority shall be deposited at the office of the Secretary or at such other place within the United Kingdom as is specified for that purpose in the notice convening the relevant general meeting of Pool Members, not less than 48 hours before the time for holding the meeting or adjourned meeting, at which the person named in the instrument proposes to vote, or, in the case of a poll, not less than 24 hours before the time appointed for the taking of the poll, and in default the instrument of proxy shall not be treated as valid. 12.4 Form of proxy (1): An instrument appointing a proxy shall be in the following form or a form as near thereto as circumstances admit:- "POOLING AND SETTLEMENT AGREEMENT FOR THE ELECTRICITY INDUSTRY IN ENGLAND AND WALES dated 30th March, 1990 We, , of , being a Pool Member (as defined in the above-mentioned Agreement), hereby appoint of or, failing him, of , as our proxy to vote for us on our behalf at the [annual or extraordinary, as the case may be] general meeting of Pool Members, to be held on the day of 19 , and at any adjournment thereof. Signed this day of 19 ." 12.5 Form of proxy (2): Where it is desired to afford Pool Members an opportunity of voting for or against a resolution the instrument appointing a proxy shall be in the following form or a form as near thereto as circumstances admit:- "POOLING AND SETTLEMENT AGREEMENT FOR THE ELECTRICITY INDUSTRY IN ENGLAND AND WALES dated 30th March, 1990 We, , of , being a Pool Member (as defined in the above-mentioned Agreement), hereby appoint of or, failing him, of , as our proxy to vote for us on our behalf at the [annual or extraordinary, as the case may be] general meeting of Pool Members, to be held on the day of 19 , and at any adjournment thereof. Signed this day of 19 . This form is to be used in favour of the resolution. against Unless otherwise instructed, the proxy will vote as he thinks fit. Strike out whichever is not desired." 12.6 Authority to demand a poll: The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll. 12.7 Proxy valid: A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous revocation of the proxy or of the authority under which the proxy was executed, provided that no intimation in writing of such revocation shall have been received by the Secretary at his office before the commencement of the meeting or adjourned meeting at which the proxy is used. 12.8 Resolution in writing: A resolution in writing signed by all the Pool Members for the time being entitled to receive notice of and to attend and vote at general meetings of Pool Members (or by their duly authorised representatives) shall be as valid and effective as if the same had been passed at a general meeting of Pool Members duly convened and held and may consist of several instruments in like form and executed by or on behalf of one or more Pool Members. 12.9 Corporations acting by representatives at meetings: Any company, corporation, partnership, firm, joint venture, trust, association or other organisation which is a Pool Member may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any general meeting of Pool Members, and references in this Agreement to a Pool Member acting in person (howsoever expressed) shall be deemed to include Pool Members acting by their duly authorised representatives. 13. MATTERS RESERVED TO THE GENERAL MEETING: CLASS RIGHTS 13.1 Matters reserved generally: 13.1.1 As between the Pool Members each of the matters referred to in Clause 13.1.2 shall require the prior approval of Pool Members in general meeting before effect is given to the same, such approval to be (subject as provided in Sections 15, 16 and 17 of Schedule 4) by resolution of Pool Members passed by not less than 65 per cent. of the Membership Votes or (as the case may be) Weighted Votes of such Pool Members as (being entitled to do so) vote in person or by proxy at a general meeting of Pool Members of which notice specifying the intention to propose the resolution has been duly given. 13.1.2 The matters referred to in Clause 13.1.1 are:- (a) the removal of the Settlement System Administrator; (b) the appointment and removal of the Pool Auditor; (c) any amendment to or variation of this Agreement (other than any amendment or variation referred to in Clause 13.2.1, 13.2.2 or 13.2.3 or any amendment of or variation to Schedule 9 (including any amendment thereto made pursuant to Clause 56.2) or to Schedule 15); (d) the approval pursuant to Clause 5.8 of any Recommendation and pursuant to Clause 5.11 of any Works Programme and any approval pursuant to Clause 5.14; (e) the removal of the Pool Chairman; and (f) such other matters (not being matters referred to in Clause 9.1.8) which are otherwise designated under this Agreement for reference to the Pool Members in general meeting. 13.2 Matters reserved to particular classes of Pool Members: 13.2.1 As between the Pool Members any amendment to or variation of this Clause 13.2 shall require the prior approval of the Generators in separate general meeting. 13.2.2 As between the Pool Members each of the following matters shall require the prior approval of the Suppliers in separate general meeting:- (a) any change prior to 1st April, 1998 to the standards of accuracy of Metering Equipment required for Second Tier Customers up to (and including) 100kW or required for Non-Pooled Generators; (b) any amendment to or variation of Part XI and/or Schedule 18; and (c) any amendment to or variation of this Clause 13.2. 13.2.3 As between the Pool Members any amendment to or variation of Clauses 10.2, 10.6, 13.4, 13.5, 15, 16.2, 19.2, 22 or 83, or this Clause 13.2 shall, in addition to the applicable requirements of Clauses 13.2.1 and 13.2.2, require the prior approval of Pool Members in general meeting, such approval to be by resolution of Pool Members passed by not less than 84 per cent. of the Membership Votes or (as the case may be) Weighted Votes of such Pool Members as (being entitled to do so) vote in person or by proxy at a general meeting of Pool Members of which notice specifying the intention to propose the resolution has been duly given. 13.2.4 To every separate general meeting referred to in this Clause 13.2 the provisions of this Part III relating to general meetings of Pool Members (other than Clause 10.9, save in respect of the attendance by the Pool Auditor or the Director or its or his duly appointed representative) shall apply mutatis mutandis but so that:- (a) in the case of the Generators, the necessary quorum shall be two Pool Members of that class; (b) in the case of the Suppliers, the necessary quorum shall be eight Pool Members of that class; and (c) notice of any such separate general meeting need be given only to those entitled to attend the same, and any resolution put to any such separate general meeting shall, to be passed, require (in the case of the Generators) 75 per cent. and (in the case of the Suppliers) a simple majority of the Membership Votes or (as the case may be) Weighted Votes of such Pool Members as (being entitled to do so) vote in person or by proxy at such separate general meeting of which notice specifying the intention to propose the resolution has been duly given provided that any such resolution shall be deemed passed if it would have been passed but for the resolution being opposed by a single Pool Member or one or more Pool Members of a single Pool Member's Group. 13.2A As between the Pool Members any amendment to or variation of Schedule 22 shall require the approval of the Public Electricity Suppliers in separate general meeting in accordance with the provisions of that Schedule. 13.3 Provisions cumulative: The provisions of Clauses 13.1 and 13.2 are cumulative and not exclusive one of the other. 13.4 Executive Committee's referral: in the event of receipt by the Secretary from one or more of the Committee Members of a request that any matter resolved upon on a poll by the Executive Committee (or upon which it has been unable or has refused to resolve other than where the taking of a vote has been deferred pursuant to Clause 22.1) be remitted to the Pool Members in general meeting, such request having been received no later than five working days after the date on which the results of such poll were notified to Committee Members (exclusive of the date on which notice was given) (or, as the case may be, the date of its failure or refusal so to resolve), the matter the subject of the relevant resolution shall be remitted to the Pool Members in general meeting and, pending the decision of Pool Members in general meeting, such resolution shall not have effect. The provisions of this Clause 13.4 are subject to the provisions of Clause 61.9. 13.5 Dissentient Pool Member's right of appeal:- 13.5.1 Any Pool Member who:- (a) voted against a resolution passed or in favour of a resolution not passed by Pool Members in general meeting; or (b) voted against a resolution passed or in favour of a resolution not passed by Generators or (as the case may be) Suppliers in separate general meeting; or (c) is directly affected by Pool Creditors passing or failing to pass a resolution of Pool Creditors (but only where such resolution does not concern the enforcement or non-enforcement of any payment obligation), and each Externally Interconnected Party (not being a Pool Member) (each such Pool Member a "Dissentient Pool Member", which expression shall include each such Externally Interconnected Party) shall be entitled within ten working days after the date of such resolution to apply in writing to the Director seeking a ruling that the relevant resolution shall or shall not have effect on the grounds that either:- (i) the interests of a group of Pool Members (including the Dissentient Pool Member) or of the Dissentient Pool Member under this Agreement have been, are or will be unfairly prejudiced by the passing of or the failure to pass such resolution; or (ii) such resolution will breach, or will cause the Dissentient Pool Member to be in breach of, one or more provisions of this Agreement or of its Licence or of the Act. Any such application shall give detailed reasons and evidence in support and shall be copied to the Executive Committee. The Dissentient Pool Member shall be entitled to mark all or any part of such application as confidential and the Executive Committee shall give such weight as it sees fit to such marking in the copying of such application to those persons to whom it is obliged to copy such application. The Executive Committee shall promptly notify all other Pool Members, each Externally Interconnected Party (not being a Pool Member), the Pool Chairman, the Settlement System Administrator and the Pool Funds Administrator of receipt of such application. At the same time as the Executive Committee shall notify all such other Pool Members, each Externally Interconnected Party (not being a Pool Member), the Pool Chairman, the Settlement System Administrator and the Pool Funds Administrator of such receipt, the Executive Committee shall send each of them a copy of the relevant application (amended, if appropriate, to take account of any such marking where the Executive Committee shall have seen fit so to do). The Executive Committee, each Pool Member, each Externally Interconnected Party (not being a Pool Member), the Pool Chairman, the Settlement System Administrator and the Pool Funds Administrator and (if invited by the Director) the Pool Auditor shall each be entitled to make representations to the Director. If the Pool Auditor shall be so invited to make any such representations, the Executive Committee will provide it with a copy of the relevant application (amended, if appropriate, as aforesaid). 13.5.2 Any determination of the Director in respect of any such application as is referred to in Clause 13.5.1 shall be final and binding. Pending any determination of the Director in respect of any such application, the relevant resolution (if passed) shall not have effect provided that, if the Director shall decline to accept a reference or to make a determination (in either case, for whatsoever reason), such resolution shall take effect from the date that the Director notifies the Executive Committee that he declines to accept the reference or to make the determination. 13.5.3 The Parties acknowledge and agree that the satisfaction of either of the grounds referred to in Clause 13.5.1(i) or (ii) shall not of itself entitle the Dissentient Pool Member to a determination by the Director in its favour. PART IV THE EXECUTIVE COMMITTEE 14. ESTABLISHMENT OF THE EXECUTIVE COMMITTEE Establishment: The Pool Members hereby establish the Executive Committee upon the terms and subject to the conditions of this Agreement. 15. MEMBERSHIP OF THE EXECUTIVE COMMITTEE 15.1 Number of the Committee Members: The maximum number of Committee Members shall not at any time exceed twelve or such lesser number (subject to a minimum of six) as Pool Members may decide in general meeting not later than 90 days before each annual general meeting of Pool Members. Any such lesser number so decided upon prior to an annual general meeting of Pool Members shall be the maximum number of Committee Members during the entire term of office (according to Clause 15.4) of those Committee Members elected at that annual general meeting (or, as the case may be, a subsequent extraordinary general meeting). On the expiry of that term of office, the maximum number of Committee Members shall be twelve unless a lesser number shall have been decided upon in accordance with the procedures set out in this Clause 15.1. 15.2 Maximum number of Committee Members fewer than twelve: If Pool Members decide on a maximum number of Committee Members fewer than twelve in accordance with Clause 15.1, then:- 15.2.1 The number of Committee Members to be appointed in accordance with the provisions of Clause 15.5 shall be two fewer than the agreed maximum number of Committee Members and the number of Committee Members to be appointed in accordance with Clause 15.6 shall be two; and 15.2.2 The references to "ten" and its derivatives in Clauses 15.5.3(g) and 15.5.3(i) shall be substituted by the number that is two fewer than the maximum number of Committee Members agreed by Pool Members and the references to "nine" and "eleven" (and their respective derivatives) in Clause 15.5.3(i) shall be correspondingly altered. 15.3 Appointment and Removal: As from 1st April, 1997 and subject as provided in Clauses 15.2 and 15.8, ten Committee Members shall be appointed and removed in accordance with the provisions of Clauses 15.5 and 15.10 and two Committee Members shall be appointed and removed in accordance with the provisions of Clauses 15.6 and 15.10. 15.4 Term of Office: Subject to Clause 15.11, the term of office of Committee Members shall be from 1st April in the year of appointment to 31st March in the next following year provided that, if the meeting at which any Committee Member is appointed is held after 1st April, his term of office shall commence from the time of his appointment. A Committee Member whose term of office has expired or is to expire shall be eligible for re-election. 15.5 MP Committee Member election procedure: The procedures set out in this Clause 15.5 shall apply to the election of those Committee Members who are not RS Committee Members ("MP Committee Members"):- -------------------- 15.5.1 Each MP Pool Member shall be entitled, by notice to the Executive Committee given no earlier than 90 days and no later than 30 days before each annual general meeting of Pool Members or, failing election of any MP Committee Members at such meeting, no later than 15 days before an extraordinary general meeting convened for such purpose to propose, one individual (an "MP Nominee") to be an MP Committee Member. The MP Nominee need not be an officer or employee of a Pool Member but shall not be the Chief Executive or Pool Chairman or any then current nominee for the position of Chief Executive or Pool Chairman. Any such proposal to be valid shall be accompanied by a written statement from the MP Nominee stating that he is aware of the proposal and would be prepared to serve as a Committee Member if elected. 15.5.2 No later than 10 days before the date of the annual general meeting (or, as the case may be, extraordinary general meeting) the Executive Committee shall circulate (or cause to be circulated) to all Pool Members and the Director a list of all the names of the MP Nominees and of the Pool Members who proposed them (the "MP Nominee List"). The MP Nominee List shall also be circulated at the annual general meeting or, as the case may be, extraordinary general meeting to all Pool Members present in person; and 15.5.3 At the annual general meeting or extraordinary general meeting (as the case may be) of Pool Members held to appoint Committee Members the following procedures shall be applied in sequence:- (a) each MP Pool Member shall be given a voting paper (in this Clause 15.5, a "Voting Paper") with the name of every MP Nominee who appears on the MP Nominee List; (b) subject to paragraphs (c) and (d) below, an MP Pool Member shall rank each MP Nominee on its Voting Paper in order of preference by marking the MP Nominee which is its first choice for membership of the Executive Committee (its "Preferred MP Nominee") with the number "1" and continuing numbering sequentially in order of preference until it is indifferent as to the preference it accords to any remaining MP Nominees; (c) if an MP Pool Member has proposed an MP Nominee in accordance with Clause 15.5.1, then such MP Pool Member must choose that MP Nominee as its Preferred MP Nominee; (d) all MP Pool Members that are members of the same Pool Member's Group shall be obliged to rank the same MP Nominees in the same order of preference; (e) the Moderator shall collect in all Voting Papers and for each Preferred MP Nominee shall calculate the number of Weighted Votes cast by those MP Pool Members in his favour and for this purpose each MP Pool Member shall be deemed to have cast all its Weighted Votes in favour of its Preferred MP Nominee; (f) the Moderator shall prepare a list (the "MP Preference List") ranking the Preferred MP Nominees in order according to the number of Weighted Votes cast for each such Preferred MP Nominee, with the Preferred MP Nominee with the most number of Weighted Votes being at the head of the list; (g) when there are more than ten MP Nominees on the MP Preference List then, if the MP Nominee ranked tenth on the MP Preference List has more Weighted Votes cast in his favour than the sum of all Weighted Votes cast for all those MP Nominees ranked below him on the MP Preference List, those MP Nominees ranked first to tenth on the MP Preference List shall be elected as Committee Members and the voting procedure in this Clause 15.5.3 shall terminate; (h) if the condition in paragraph (g) above is not satisfied, the MP Nominee whose name appears last on the MP Preference List shall be removed from the MP Preference List and shall take no further part in the election process for the MP Committee Members and the Moderator shall transfer the Weighted Votes of all those MP Pool Members who voted for that MP Nominee to the MP Nominee(s) who is their respective second preference. The Moderator shall then prepare a revised MP Preference List to which paragraph (g) above shall be applied and the procedure set out in this paragraph (h) shall be repeated as often as may be necessary until the condition in paragraph (g) above is satisfied (on each occasion the MP Nominee whose name appears last on the MP Preference List being removed from it and the Moderator transferring the Weighted Votes of all those MP Pool Members attributable to that MP Nominee to the MP Nominee(s) who is their next respective preference); and (i) if the provisions of paragraph (h) above have been followed with the result that only eleven MP Nominees appear on the MP Preference List, and if the MP Nominee ranked tenth has more Weighted Votes cast in his favour than the MP Nominee ranked eleventh, then those MP Nominees ranked first to tenth on the MP Preference List shall be elected as Committee Members. If, however, the Weighted Votes cast in favour of the MP Nominees ranked tenth and eleventh on the MP Preference List are equal, then those MP Nominees ranked first to ninth on the MP Preference List shall be elected as Committee Members and the selection of the tenth Committee Member from the tenth and eleventh MP Nominee on the MP Preference List shall be decided by the drawing of lots in a manner to be determined by the Pool Chairman. 15.6 RS Committee Member election procedures: The procedures set out in this Clause 15.6 shall apply to the election of the RS Committee Members:- 15.6.1 Each RS Pool Member shall be entitled, by notice to the Executive Committee given no earlier than 90 days and no later than 30 days before each annual general meeting of Pool Members or, failing election of either RS Committee Member at such meeting, no later than 15 days before an extraordinary general meeting convened for such purpose to propose one individual (a "RS Nominee") to be a RS Committee Member. The RS Nominee need not be an officer or employee of a Pool Member but shall not be the Chief Executive or Pool Chairman or any then current nominee for the position of Chief Executive or Pool Chairman. Any such proposal to be valid shall be accompanied by a written statement from the RS Nominee stating that he is aware of the proposal and would be prepared to serve as a Committee Member if elected and identifying whether he is standing for the position of SG Committee Member or IS Committee Member; 15.6.2 No later than 10 days before the annual general meeting (or, as the case may be, the extraordinary general meeting) the Executive Committee shall circulate (or cause to be circulated) to all Pool Members and the Director a list of all the names of the RS Nominees and of the Pool Members who nominated them (the "RS Nominee List"). The Director may object to any RS Nominee by notice to the Executive Committee no later than 5 working --------------- days before the annual general meeting on the grounds that such RS Nominee could not reasonably be expected to represent the interests of Small Generators or (as the case may be) Independent Suppliers on the Executive Committee. Any RS Nominee to whom the Director so objects shall not be eligible for election at the relevant meeting of Pool Members as an RS Committee Member and his name shall be deleted from the RS Nominee List. The RS Nominee List (amended, if necessary, to take account of the Director's objections) shall be circulated at the annual general meeting or, as the case may be, extraordinary general meeting to all Pool Members present in person and (if practicable) to all Pool Members in advance of such meeting; 15.6.3 If there is no RS Nominee or no RS Nominee eligible for election as the SG Committee Member or (as the case may be) the IS Committee Member, the Director shall be entitled to appoint and remove an individual to serve in that capacity for the term of office referred to in Clause 15.4 and the procedures in Clause 15.6.4 shall not apply to the election of such RS Nominee; 15.6.4 At the annual general meeting or extraordinary general meeting (as the case may be) of Pool Members the following procedures shall be applied (subject to Clause 15.6.5) in sequence first for the election of the SG Committee Member and, secondly, for the election of the IS Committee Member immediately following the conclusion of the election procedures for the MP Committee Members in Clause 15.5:- (a) each RS Pool Member shall be given a voting paper (in this Clause 15.6, a "Voting Paper") with the name of every RS Nominee who appears on the RS Nominee List (amended, if appropriate, in accordance with Clause 15.6.2); (b) SG Pool Members shall be entitled to vote only for RS Nominees nominated by SG Pool Members and whose names appear on the Voting Paper ("SG Nominees"); (c) IS Pool Members shall be entitled to vote only for RS Nominees nominated by IS Pool Members and whose names appear on the Voting Paper ("IS Nominees"); (d) in the case of the election of the SG Committee Member, each SG Pool Member shall rank each SG Nominee on its Voting Paper in order of preference by marking the SG Nominee which is its first choice for membership of the Executive Committee (its "Preferred SG Nominee") with the number "1" and continuing numbering sequentially in order of preference until it is indifferent as to the preference it accords to any remaining SG Nominees; (e) in the case of the election of the IS Committee Member, each IS Pool Member shall rank each IS Nominee on its Voting Paper in order of preference by marking the IS Nominee which is its first choice for membership of the Executive Committee (its "Preferred IS Nominee") with the number "1" and continuing numbering sequentially in order of preference until it is indifferent as to the preference it accords to any remaining IS Nominees. Preferred SG Nominees and Preferred IS Nominees are, for the purposes of this Clause 15.6, known as the "Preferred RS Nominees"; (f) if a RS Pool Member has proposed a SG Nominee or an IS Nominee in accordance with Clause 15.6.1, then such RS Pool Member must choose that SG Nominee or (as the case may be) IS Nominee as its Preferred RS Nominee; (g) the Moderator shall collect in all Voting Papers and for each SG Nominee and each IS Nominee shall calculate the number of Weighted Votes cast by RS Pool Members in his favour and for this purpose each RS Pool Member shall be deemed to have cast all its Weighted Votes in favour of its Preferred RS Nominee; (h) the Moderator shall prepare a list (the "SG Preference List") ranking the Preferred SG Nominees in order according to the number of Weighted Votes cast for each such Preferred SG Nominee, with the Preferred SG Nominee with the most number of Weighted Votes being at the head of the list; (i) the Moderator shall prepare a list (the "IS Preference List") ranking the Preferred IS Nominees in order according to the number of Weighted Votes cast for each such Preferred IS Nominee, with the Preferred IS Nominee with the most number of Weighted Votes being at the head of the list; (j) if the RS Nominee ranked first on the SG Preference List or (as the case may be) IS Preference List has more Weighted Votes cast in his favour than the sum of all Weighted Votes cast for all those RS Nominees ranked below him on the same list, the RS Nominee ranked first on the relevant list shall be elected as the SG Committee Member or (as the case may be) IS Committee Member and the voting procedure in this Clause 15.6.4 shall terminate; and (k) if the condition in paragraph (j) above is not satisfied, the RS Nominee whose name appears last on the SG Preference List or (as the case may be) IS Preference List shall be removed from that list and shall take no further part in the election process for the relevant RS Committee Members and the Moderator shall transfer the Weighted Votes of all those RS Pool Members who voted for that RS Nominee to the RS Nominee(s) who is their respective second preference. The Moderator shall then prepare a revised SG Preference List or (as the case may be) IS Preference List in each case to which paragraph (j) above shall be applied and the procedure set out in this paragraph (k) shall be repeated as often as may be necessary until the condition in paragraph (j) above is satisfied in relation to the relevant list (on each occasion the RS Nominee whose name appears last on the SG Preference List or (as the case may be) IS Preference List being removed from it and the Moderator transferring the Weighted Votes of all those RS Pool Members attributable to that RS Nominee to the RS Nominee(s) who is their next respective preference); and 15.6.5 If a SG Pool Member is a member of a Pool Member's Group of which an IS Pool Member is also a member (or vice versa) and there are no MP Pool Members in that Pool Member's Group, the SG Pool Member and the IS Pool Member shall jointly notify the Secretary upon receipt of the RS Nominee List at the annual general meeting or, as the case may be, extraordinary general meeting whether the SG Pool Member will participate in the election of the SG Committee Member or the IS Pool Member will participate in the election of the IS Committee Member. In the former case, the IS Pool Member shall not have the right to participate in the election of either RS Nominee and, in the latter case, the SG Pool Member shall not have the right to participate in the election of either RS Nominee. If no such notification is received by the Secretary before the election procedure for the RS Nominees begins, the votes of both the SG Pool Member and the IS Pool Member shall be discounted and ignored. 15.7 Spoilt papers: If any Voting Paper is incorrectly completed or otherwise spoilt, the Moderator shall take no account of it or of the Weighted Votes purported to be cast by it in the conduct of the procedures set out in Clause 15.5 and/or 15.6. 15.8 Default appointment: If the procedures set out in Clause 15.5 or 15.6 (other than Clause 15.6.3) shall result in less than the prescribed or (as the case may be) agreed maximum number of Committee Members permitted under Clause 15.1 being appointed (including where there are insufficient nominees nominated to fill the seats), the Director shall have the right to appoint and remove individuals to the Executive Committee as Committee Members in such numbers as may be necessary to provide for such maximum number of Committee Members until such time as another election pursuant to Clause 15.5.3 or (as the case may be) 15.6.4 takes place. Any Committee Member appointed pursuant to this Clause 15.8 shall, for the purposes of Clause 23.6, represent the interests of all Pool Members for the time being and from time to time. 15.9 Notification of Committee Members: The Secretary shall promptly notify all Pool Members and the Director of the appointment and removal of any Committee Member. 15.10 Removal of Committee Members: 15.10.1 A Committee Member may be removed by vote of all those Pool Members whose Weighted Votes were cast in favour of that Committee Member in his election pursuant to Clause 15.5 or Clause 15.6, such vote to be passed requiring a majority of 65 per cent. of the total number of Weighted Votes of all such Pool Members (after deduction of any Weighted Votes of persons who were Pool Members at the time of his election and who voted in favour of him but who are no longer Pool Members). For the purposes of such vote, relevant Pool Members may cast only that number of Weighted Votes which they cast in favour of such Committee Member in his election pursuant to Clause 15.5 or 15.6. 15.10.2 A separate general meeting of those Pool Members entitled to vote may be convened for the purpose of removing a Committee Member and to every such separate general meeting the provisions of Part III relating to general meetings of Pool Members (other than Clause 10.9, save in respect of the attendance by the Pool Auditor or the Director or its or his duly appointed representative) shall apply mutatis mutandis but so that:- (a) the necessary quorum shall be one Pool Member entitled to vote thereat; and (b) notice of any such separate general meeting need be given only to those entitled to attend the same. 15.11 Vacation of office by Committee Members: The office of a Committee Member shall be vacated if:- 15.11.1 He resigns his office by notice delivered to the Secretary; or 15.11.2 He becomes bankrupt or compounds with his creditors generally; or 15.11.3 He becomes of unsound mind or a patient for any purpose of any statute relating to mental health; or 15.11.4 He and his alternate fail to attend more than three consecutive meetings of the Executive Committee; or 15.11.5 He dies; or 15.11.6 He is removed from office pursuant to Clause 15.10. 15.12 Election of replacement Committee Members: At the time of the vacation of office of a Committee Member (for the purposes of this Clause 15.12 an "Outgoing Committee Member") or as soon as is reasonably practicable thereafter , a replacement Committee Member shall be elected following the procedures set out in, in the case of an MP Committee Member, Clause 15.5 or, in the case of an RS Committee Member, Clause 15.6, provided that :- (a) only Pool Members whose Weighted Votes were cast in favour of the Outgoing Committee Member in an election pursuant to Clause 15.5 or 15.6 and who were, at the time of his vacation of office, represented by him pursuant to Clause 23.6.1 or 23.6.2; and (b) only those persons who have become Pool Members in the period of the Outgoing Committee Member's term of office and who were, at the time of his vacation of office, represented by him pursuant to Clause 23.6.4 may take part in the election of a replacement Committee Member pursuant to this Clause 15.12. 15.13 Alternates: 15.13.1 Each Committee Member shall have the power to appoint any person (who may be an existing Committee Member) to be his alternate and may at his discretion remove an alternate Committee Member so appointed. Any appointment or removal of an alternate Committee Member shall be effected by notice in writing executed by the appointor and delivered to the Secretary who shall forthwith notify all other Committee Members of such appointment. If his appointor so requests, an alternate Committee Member shall be entitled to receive notice of all meetings of the Executive Committee or of sub-committees or sub-groups of which his appointor is a member and to receive a voting paper on a poll instead of the appointor. He shall also be entitled to attend, speak and vote as a Committee Member at any such meeting at which the Committee Member appointing him is not personally present and at the meeting to exercise and discharge all the functions, powers and duties of his appointor as a Committee Member and for the purposes of the proceedings at the meeting the provisions of this Part IV shall apply as if he were a Committee Member. He shall also be entitled to demand a poll (whether at or after the meeting) pursuant to Clause 22.3, to carry out consultations with Pool Members contemplated by Clause 22.8 insofar as his appointor shall be unable to do so, to act on the instructions of Pool Members duly given to his appointor or to him on behalf of his appointor and to complete his appointor's voting paper on a poll on behalf of his appointor. 15.13.2 Except on a poll, every person acting as an alternate Committee Member shall have one vote for each Committee Member for whom he acts as alternate, in addition to his own vote if he is also a Committee Member. On a poll, an alternate Committee Member shall be entitled (if his appointor is unable to do so) to exercise (on behalf of his appointor and by completion of the appointor's separate voting paper) all of the votes which his appointor is entitled to cast, in addition to any votes which the alternate is entitled to cast in his own capacity if he is also a Committee Member. Execution by an alternate Committee Member of any resolution in writing of the Executive Committee shall, unless the notice of his appointment provides to the contrary, be as effective as execution by his appointor. 15.13.3 An alternate Committee Member shall ipso facto cease to be an alternate Committee Member if his appointor ceases for any reason to be a Committee Member. 15.13.4 References in this Agreement to a Committee Member shall, unless the context otherwise requires, include his duly appointed alternate. 16. POOL CHAIRMAN 16.1 Pool Chairman: There shall at all times be a Chairman of the pooling and settlement arrangements for the electricity industry in England and Wales established by this Agreement (the "Pool Chairman"). ------------- 16.2 Appointment and Term: 16.2.1 The election of a Pool Chairman shall take place either:- (i) at the annual general meeting or (as the case may be) an extraordinary general meeting of Pool Members convened for that purpose (where practicable) held not less than three months before the end of the term of the then current Pool Chairman; or (ii) should the Executive Committee so decide, by a postal vote in accordance with Clause 16.4, such postal vote to have a closing date which (where practicable) is not less than three months before the end of the term of the then current Pool Chairman. 16.2.2 Subject to Clause 16.2.4, the term of office of the Pool Chairman shall be from 1st April in the year of his election to the 31st March falling two years thereafter provided that:- (i) where the Pool Chairman is to be elected at an annual general meeting or (as the case may be) an extraordinary general meeting of Pool Members, if the meeting at which he is elected is held after 1st April, his term of office shall commence from such date as the Pool Members in general meeting shall resolve (being no earlier than the date of such meeting); (ii) where the Pool Chairman is to be elected by postal vote, if the closing date of such postal vote is after 1st April, his term of office shall commence from such date as shall be set out in the notice of postal vote which shall have been sent to all Pool Members by the Chief Executive in accordance with Clause 16.4; and (iii) his term of office shall expire before 31st March if he resigns or is unable for whatever reason to continue to act or if a successor Pool Chairman is elected with a term of office which Pool Members either in general meeting or (as the case may be) by the terms of a postal vote resolve is to commence before that date. 16.2.3 The appointment of the Pool Chairman shall be on such terms and conditions (including, but not limited to, terms and conditions in relation to reimbursement, hours of work and removal (subject to Clause 13.1.2)) as have been approved by Pool Members in general meeting. Any amendment to those terms and conditions shall require the prior approval of Pool Members in general meeting. 16.2.4 Not later than three months prior to the end of the two year term of the then current Pool Chairman, Pool Members may either (i) call and hold a general meeting or (ii) call and hold a postal vote and, if the Pool Chairman agrees, may resolve to extend the term of appointment of the Pool Chairman by one year. If the resolution is approved in accordance with the terms of this Agreement then the term of appointment shall be so extended provided that under no circumstances shall the term of appointment exceed three years. 16.2.5 If at any time the Pool Chairman shall resign or be unable for whatever reason to continue to act, an extraordinary general meeting shall be called in accordance with Clause 9.4 or a postal vote shall be called in accordance with Clause 16.4 for the purposes of electing a successor Pool Chairman. Unless that successor Pool Chairman himself is removed, resigns or is unable for whatever reason to continue to act, he shall hold office until the 31st March falling closest to the date two years after the date of his election and his appointment may be extended in accordance with Clause 16.2.4. 16.3 Transitional Provisions: The appointment of the Pool Chairman whose two year term of office starts on 1st April, 1996 is hereby ratified and confirmed by all Pool Members. 16.4 Election procedure (postal vote): The Executive Committee may (where practicable) resolve to call a postal vote to elect a Pool Chairman. Where the Executive Committee so resolves, such postal vote shall be held in accordance with the following principles:- 16.4.1 The Executive Committee shall instruct the Chief Executive, who shall send a notice to Pool Members, stating that a postal vote has been called and inviting nominations to be sent to the Chief Executive within a period of not less than 21 days from the date of such notice; 16.4.2 Once such period for nomination has closed, the Chief Executive shall send to all Pool Members a ballot paper containing a list of all eligible nominees and a closing date for the receipt by the Chief Executive of completed ballot papers, such date being no less than 21 days from the date of such ballot paper; and 16.4.3 Each Pool Member shall have one vote and the successor Pool Chairman shall be elected by single transferable vote in accordance with the procedures approved by the Executive Committee. 16.5 Election procedure (general meeting): 16.5.1 Where any successor Pool Chairman is to be elected at an annual general meeting or (as the case may be) extraordinary general meeting, nominations shall be delivered no later than 21 days prior to the relevant annual general meeting or (as the case may be) extraordinary general meeting. 16.5.2 At the relevant annual general meeting or (as the case may be) extraordinary general meeting, all eligible nominees shall be proposed by the Pool Chairman (failing whom, the Chief Executive). Each Pool Member shall have one vote and the successor Pool Chairman shall be elected by single transferable vote in accordance with the procedures approved by the Executive Committee. 16.6 Nominations: Any Pool Member can nominate any one person, whether or not an employee of a Pool Member, to be Pool Chairman. Nominations made pursuant to this Clause 16.6 shall be delivered in writing to the Chief Executive within any time period specified pursuant to Clause 16.4 or (as the case may be) Clause 16.5. Any such nomination shall only be valid where accompanied by a written statement from the nominee stating that he is aware of the proposal and would be prepared to serve as Pool Chairman in accordance with this Agreement and the relevant terms and conditions if elected. 16.7 Functions: The Pool Chairman shall have and carry out only such duties and responsibilities and exercise such powers as are expressly provided in this Agreement and in his terms of reference approved by the Executive Committee from time to time. The Pool Chairman shall exercise impartially all such duties, responsibilities and powers. 16.8 No voting rights: The Pool Chairman in his capacity as Pool Chairman shall have no voting rights under this Agreement. 16.9 Indemnity: The Pool Chairman shall be indemnified and kept indemnified jointly and severally by all Pool Members (and, as between the Pool Members, rateably in the proportion which their respective Contributory Shares bear one to the other at the time of receipt of the request for indemnification) from and against any and all costs (including legal costs), charges, expenses, damages or other liabilities properly incurred or suffered by him in relation to his office as Pool Chairman or the due exercise by him of his powers, duties and responsibilities as Pool Chairman and all claims, demands or proceedings arising out of or in connection with the same except any such costs, charges, expenses, damages or other liabilities which are suffered or incurred or occasioned by the wilful default or bad faith of, or breach of duty or trust by, the Pool Chairman. The Pool Members shall, upon request, provide the Pool Chairman with a written deed of indemnity to that effect. 17. CHIEF EXECUTIVE, SECRETARIAT AND SECRETARY 17.1 Chief Executive: 17.1.1 Subject to Clause 15.7.4, a chief executive of the Executive Committee (the "Chief Executive") shall be appointed and be subject to removal and replacement by resolution of the Executive Committee passed by 70 per cent or more of the votes of all Committee Members (after consultation with the Pool Chairman). The Chief Executive shall be appointed on such terms and conditions as they see fit. 17.1.2 The Chief Executive shall undertake such duties and responsibilities and exercise such powers in relation to the Executive Committee and its activities as the Executive Committee may from time to time assign to or vest in him. 17.1.3 The Chief Executive shall have the right and shall be obliged to attend all meetings of the Executive Committee and all meetings of the Pool Members in general meeting. The Chief Executive in his capacity as Chief Executive shall have no voting rights under this Agreement. If for any reason the Chief Executive is unable to attend any such meeting, he shall nominate a representative to attend in his place. 17.1.4 The Executive Committee shall make arrangements for the remuneration of the Chief Executive and the payment of his costs and expenses and the same shall be recovered in accordance with the PFA Accounting Procedure or as otherwise directed by the Executive Committee from time to time. 17.2 Secretariat: 17.2.1 The Executive Committee may from time to time appoint and remove, or make arrangements for the appointment and removal of, such personnel as the Executive Committee requires to assist the Executive Committee, any sub-committee of the Executive Committee, the chairman of the Executive Committee or any such sub-committee, the Pool Chairman, the Chief Executive or the Secretary in the proper performance of its or his duties and responsibilities, in each such case upon such terms and conditions as the Executive Committee sees fit. 17.2.2 Any personnel referred to in Clause 17.2.1 shall undertake such duties and responsibilities and exercise such powers as the Executive Committee may from time to time assign to or vest in him, it or them. 17.2.3 The Executive Committee shall make arrangements for the remuneration of such personnel as are referred to in Clause 17.2.1 and the payment of their costs and expenses and the same shall be recovered in accordance with the PFA Accounting Procedure or as otherwise directed by the Executive Committee from time to time. 17.3 Secretary: 17.3.1 The Executive Committee may from time to time appoint and remove, or make arrangements for the appointment and removal of, the Secretary on such terms and conditions as it sees fit. 17.3.2 The Secretary in his capacity as Secretary shall have no voting rights under this Agreement. 17.3.3 The Secretary shall have and carry out only such duties and responsibilities as are expressly provided in this Agreement and such other reasonable secretarial and administrative duties and responsibilities as may from time to time be delegated to it by the Executive Committee. If at any time there is no Secretary, the responsibilities and duties of the Secretary under this Agreement shall become those of the Chief Executive or, if there shall be no Chief Executive, the Executive Committee until such time as a Secretary is appointed pursuant to Clause 17.3.1 or a Chief Executive is appointed pursuant to Clause 17.1.1 (and notices to the Secretary under this Agreement shall be re-addressed accordingly). 17.3.4 The Secretary shall be entitled to receive such remuneration (if any) as the Executive Committee may from time to time approve, such remuneration to be paid to it at such times and in such manner as the Executive Committee shall from time to time direct and to be recovered in accordance with the PFA Accounting Procedure or as otherwise directed by the Executive Committee from time to time. Further, the Secretary shall be paid its reasonable travelling, hotel and incidental expenses of attending and returning from meetings of the Executive Committee or any sub-committee thereof and any general meetings and separate general meetings of Pool Members and all costs and expenses properly and reasonably incurred by it in the performance of its duties and responsibilities under this Agreement. All such costs and expenses shall be recovered in accordance with the PFA Accounting Procedure or as otherwise directed by the Executive Committee from time to time. 17.4 Indemnity: 17.4.1 All Pool Members shall jointly and severally indemnify and keep indemnified the Chief Executive, the Contract Manager, the personnel referred to in Clause 17.2.1, the Secretary and each member of any sub-committee of the Executive Committee or of any sub-group established by any such sub-committee (other than a Committee Member, but without prejudice to Clause 23.3.4) (and, as between the Pool Members, according to their respective Contributory Shares at the time of receipt of the request for indemnification) from and against any and all costs (including legal costs), charges, expenses, damages or other liabilities properly incurred or suffered by the Chief Executive in relation to his office as Chief Executive or (as the case may be) the Secretary in relation to its office as Secretary or the due exercise by the Chief Executive, the Contract Manager, the said personnel, the Secretary or (as the case may be) any such member of his, their or its powers, duties and responsibilities under this Agreement and all claims, demands or proceedings arising out of or in connection with the same except any such costs, charges, expenses, damages or other liabilities which are suffered or incurred or occasioned by the wilful default or bad faith of, or breach of obligation by, the Chief Executive, the Contract Manager, such personnel, the Secretary or (as the case may be) any such member. 17.4.2 The Pool Members undertake to enter into an indemnity in favour of any employer of the Chief Executive, any personnel referred to in Clause 17.2.1, the Secretary or (as the case may be) any such member of any sub-committee of the Executive Committee or of any sub-group established by any such sub-committee as is referred to in Clause 17.4.1 under which they shall jointly and severally indemnify and keep indemnified any such employer in respect of all acts and omissions of the Chief Executive, the Contract Manager, such personnel, the Secretary or (as the case may be) any such member in the performance of his, their or its rights, powers, duties and responsibilities under this Agreement (and, as between the Pool Members, according to their respective Contributory Shares at the time of receipt of the request for indemnification under the relevant indemnity). 18. PROCEEDINGS OF THE EXECUTIVE COMMITTEE 18.1 Meetings: 18.1.1 Meetings of the Executive Committee (other than special meetings referred to in Clause 18.1.3) shall be held at least quarterly (or at such shorter regular intervals as may be agreed from time to time by the Executive Committee) at such time and place in any jurisdiction in which any Pool Member is incorporated or has its principal place of business as may be agreed from time to time by the Executive Committee (or, in default of agreement, as stipulated by the Pool Chairman). 18.1.2 Meetings of the Executive Committee shall be convened by the Secretary upon giving to the Committee Members, the Pool Chairman, the Chief Executive (if any), the Settlement System Administrator, the Director and the Pool Auditor and (where matters the subject of the agenda referred to in Clause 18.1.4 concern directly the functions, duties or responsibilities of any Externally Interconnected Party (not being a Pool Member), the Pool Funds Administrator, the Grid Operator and/or the Ancillary Services Provider) the relevant one(s) of them at least five working days' notice of the place, the day and the hour of the relevant meeting. 18.1.3 Special meetings of the Executive Committee shall be convened upon the request of any Committee Member, the Pool Chairman or the Chief Executive Such request shall be made in writing to the Secretary and shall state the matters to be considered at that special meeting. Upon receipt of such request the Secretary shall convene in accordance with Clause 18.1.2 without delay such special meeting for a date occurring as soon as practicable thereafter but not less than five nor more than ten working days after receipt of such request. If the Secretary shall fail so to convene a special meeting the Committee Member which made such request, the Pool Chairman or (as the case may be) the Chief Executive may himself convene a special meeting, but any meeting so convened shall not be held after the expiration of two months from the date of such request. A special meeting convened under this Clause 18.1.3 by a Committee Member, the Pool Chairman or the Chief Executive shall be convened in the same manner, as nearly as possible, as that in which meetings of the Executive Committee are to be convened by the Secretary pursuant to Clause 18.1.2. 18.1.4 Any notice given under Clause 18.1.2 shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given and shall be accompanied by an agenda of the matters to be considered at the relevant meeting together with any supporting documents or papers then available to the Secretary. Any Committee Member may advise additional matters which he wishes to be considered at such meeting by notice to all other Committee Members, the Pool Chairman, the Chief Executive (if any), the Secretary, the Settlement System Administrator, the Director and the Pool Auditor and (where such additional matters concern directly the functions, duties or responsibilities of any Externally Interconnected Party (not being a Pool Member), the Pool Funds Administrator, the Grid Operator and/or the Ancillary Services Provider) the relevant one(s) of them given no later than three working days before the date of such meeting. Only matters identified in such agenda or so advised shall be discussed or resolved upon at such meeting. The accidental omission to give notice of a meeting or accompanying agenda or supporting documents or papers to, or the non-receipt of notice of a meeting or accompanying agenda or supporting documents or papers by, any person entitled to receive notice shall not invalidate the proceedings at that meeting. 18.1.5 For any meeting of the Executive Committee, the periods and methods of notice referred to in the foregoing provisions of this Clause 18 may be waived prospectively or retrospectively with the consent in writing of all such persons as are entitled to attend the relevant meeting. 18.1.6 The Secretary shall prepare minutes of all meetings of the Executive Committee and shall provide copies thereof to all such persons as were entitled to attend the relevant meeting as soon as practicable (and in any event within ten working days) after the relevant meeting has been held. Each person who attended such meeting shall notify his approval or disapproval of the minutes thereof to the Secretary no later than ten working days after receipt thereof and, if he fails to do so, he or it shall be deemed to have approved the same. The Secretary shall record any such disapproval in the minutes unless the same shall have been withdrawn or the minutes amended with the agreement of the Executive Committee. The Secretary shall provide copies of minutes of meetings of the Executive Committee to any other Party within a reasonable time after request therefor provided that the said time for approving or disapproving the same has expired. Further, the Secretary shall provide copies of such minutes to such persons as the Executive Committee may from time to time direct within a reasonable time after receipt of such direction. 19. CONDUCT OF EXECUTIVE COMMITTEE MEETINGS 19.1 General: Chairman: 19.1.1 Subject as provided in Clauses 13, 18 and 22 and this Clause 19, the Executive Committee may meet for the transaction of business, and adjourn and otherwise regulate its meetings, as it shall see fit. 19.1.2 The Pool Chairman shall preside as chairman at every meeting of the Executive Committee provided that:- (a) if the Pool Chairman is unable to attend any meeting, he shall nominate another individual to preside as chairman at that meeting in his place. Such individual shall be a director or senior executive of one of the Pool Members but shall not be a Committee Member or an alternate for any Committee Member; and (b) if there is no Pool Chairman or the Pool Chairman or his duly appointed nominee shall not be present within 15 minutes after the time appointed for the holding of the meeting or the Pool Chairman is unwilling to act, the Committee Members present may appoint one of their number to be chairman of the meeting. 19.1.3 The chairman of the meeting in his capacity as chairman shall not have any vote at meetings of the Executive Committee. 19.2 Quorum: No business shall be transacted at a meeting of the Executive Committee unless a quorum is present throughout that meeting. Six Committee Members present in person or by their respective alternates shall constitute a quorum. 19.3 Lack of Quorum: If, within half an hour from the time appointed for holding any meeting of the Executive Committee, a quorum is not present, the meeting shall be adjourned to the same day in the next week at the same time and place and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for holding the meeting, those present shall constitute a quorum. 19.4 Representation of non-Committee Members: Each of the Settlement System Administrator, the Pool Chairman, the Director and the Pool Auditor (or its or his duly appointed representative) shall have the right to attend and speak (but not to vote) at meetings of the Executive Committee. Each Externally Interconnected Party (not being a Pool Member) and each of the Pool Funds Administrator, the Grid Operator and the Ancillary Services Provider (or its duly appointed representative) shall be entitled to attend and speak (but not vote) at meetings of the Executive Committee only where matters directly concerning its functions, duties or responsibilities have been identified or advised as provided in Clause 18.1.4 or if so requested by the Executive Committee. The Chief Executive (or his duly appointed representative) shall have the right to attend and speak (but not vote) at meetings of the Executive Committee and shall be obliged so to attend. With the exception of attendances by the Pool Chairman, the Chief Executive and the Pool Auditor, no payment shall be made to any person who has the right by virtue of this Clause 19.4 to attend Executive Committee meetings in respect of any such attendance. 19.5 Written resolutions: A resolution in writing, executed by or on behalf of each Committee Member, shall be as valid and effectual as if it had been passed at a meeting of the Executive Committee duly convened and held and may consist of several instruments in like form and executed by or on behalf of one or more of such Committee Members. Any proposed resolution in writing shall be circulated to all those persons who would have been entitled to attend a meeting of the Executive Committee at which such resolution could properly have been passed. 19.6 Default in appointment: All acts done by any meeting of the Committee Members or of a sub-committee of the Executive Committee shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of such Committee Member, be as valid as if such person had been duly appointed. 20. DELEGATION 20.1 Sub-committees: The Executive Committee may establish sub-committees. Each sub-committee:- 20.1.1 Shall be composed of such persons (whether or not Committee Members) and shall discharge such rights, powers, duties and responsibilities as from time to time the Executive Committee considers desirable to delegate to it; and 20.1.2 In the exercise of its rights and powers and the performance of its duties and responsibilities delegated to it by the Executive Committee shall at all times conduct itself and its affairs in a manner which it considers best designed to give effect to the principal objects and purpose set out in Clause 4.1.2 and to promote, and not obstruct, the fair and efficient operation of the procedures referred to in Clause 4.1.3 so that the objectives set out in Clause 4.1.3 are thereby achieved; and 20.1.3 Shall be given written terms of reference and, unless otherwise varied by the Executive Committee, the provisions of Clauses 18 and 19 shall apply mutatis mutandis to meetings of such sub-committee and the provisions of Clauses 19.4, 23.3.1, 23.3.2 and 23.3.3 shall apply mutatis mutandis in relation to any such sub-committee and the members thereof; and 20.1.4 May establish sub-groups to assist in the discharge of the rights, powers, duties and responsibilities of such sub-committee, each of which sub-groups shall be given written terms of reference and, unless otherwise varied by the Executive Committee or any sub-committee acting on the authority of the Executive Committee, the provisions of Clauses 18 and 19 shall apply mutatis mutandis to meetings of such sub-groups and the provisions of Clauses 23.3.1, 23.3.2, and 23.3.3 shall apply mutatis mutandis in relation to each such sub-group and the members thereof. 20.2 Nominees: Upon written request of the Executive Committee or, in the case of the Settlement System Administrator, Order issued by the Contract Manager under Schedule 4, each Pool Member and the Settlement System Administrator shall:- 20.2.1 Nominate one or more persons knowledgeable in the matters referred to, or the subject of consideration by, the relevant sub-committee to attend at meetings of, and otherwise participate as a member of, any sub-committee established by the Executive Committee; and 20.2.2 Procure that such nominee(s) shall so attend and participate at such time or times as the Executive Committee or such sub-committee may require, provided that a Pool Member shall not be required in any period of 12 months to make available nominees for more than 60 days in aggregate. Save as provided by Clause 23.5 no payment shall be made to Pool Members in respect of any such attendance or participation. 20.3 Member's responsibilities: To the extent not inconsistent with the provisions of Clauses 20.1.1, 20.1.2 and 20.1.3 a member of any sub-committee established by the Executive Committee shall be free to represent the interests of the person or persons which nominated him to that sub-committee but each such person acknowledges and agrees the subordination of those interests to the responsibilities of such sub-committee under Clause 20.1.2. 20.4 Chief Executive: The Executive Committee may from time to time delegate all or any of its rights, powers, duties and responsibilities under this Agreement to the Chief Executive upon such terms and conditions as the Executive Committee thinks fit. 20.5 Effect of decisions: Resolutions of sub-committees shall not have binding effect (a) unless and then only to the extent that the Executive Committee shall have delegated the relevant decision-making powers to the sub-committee, or (b) unless approved by resolution of the Executive Committee (and then subject to Clause 13). Meetings of such sub-committees shall, so far as possible, be arranged so that minutes of such meetings can be circulated to each Committee Member in sufficient time for consideration before the next following regular meeting of the Executive Committee. Resolutions of sub-groups shall not have binding effect. The Executive Committee shall remain at all times responsible for the actions of all its sub-committees and sub-groups. 20.6 Other delegation: Subject to any direction to the contrary by Pool Members in general meeting but without prejudice to the Executive Committee's rights under Clauses 20.1 and 20.4, the Executive Committee may from time to time delegate in any particular case all or any of its rights, powers, duties and responsibilities under this Agreement, including any decision-making powers and the conduct of any review or consultation and the preparation and submission of any report required of it under this Agreement, to such person or persons as it thinks fit and on such terms and conditions as it thinks fit and shall require that, in the performance of the delegated duties, such person or persons shall conform to any regulations that may be imposed on it or them by the Executive Committee. 21. [Not used]. 22. VOTING 22.1 Voting: The chairman of the relevant meeting of the Executive Committee and any Committee Member may demand that any question or matter arising at a meeting of the Executive Committee be put to a vote of Committee Members. Any vote so demanded shall be taken forthwith or at such other time as such chairman directs not being later than the date of the next meeting of the Executive Committee. Any demand for a vote may, before the vote is taken, be withdrawn. 22.2 Simple majority: Subject as provided in the following provisions of this Clause 22, any question or matter arising at a meeting of the Executive Committee shall be decided by a simple majority of the votes cast at the meeting by Committee Members. On any such question or matter each Committee Member shall be entitled to one vote. In the event of an equality of votes on any resolution put to the Executive Committee, the matter the subject of the relevant resolution shall be remitted to the Committee Members for decision on a poll. 22.3 Demand for a poll: In respect of any matter or question which is put to a vote of Committee Members a poll may be demanded (before or after the simple majority vote) either:- 22.3.1 At the meeting at which the simple majority vote takes place, by the chairman of the meeting or by any Committee Member; or 22.3.2 By no later than five working days after such meeting, by notice in writing to the Chief Executive by any Committee Member (whether or not present at the relevant meeting). 22.4 Effect of decision: A decision duly made at a meeting of the Executive Committee shall (unless otherwise determined by the Executive Committee or otherwise provided by the terms of the decision) have immediate effect, unless a poll be duly demanded in accordance with Clause 22.3, in which case, pending the outcome of the vote on a poll, the decision shall cease to or shall not have effect. 22.5 Withdrawal of demand: Any demand for a poll may be withdrawn by the person who made it at any time provided that notice of withdrawal is received by the Chief Executive by no later than the seventh working day following the date of the Executive Committee meeting at which the vote took place. The Chief Executive shall as soon as reasonably practicable notify all Parties and all other persons entitled or required to attend general meetings of Pool Members of receipt of any such notice of withdrawal. 22.6 Conduct of a poll: The Secretary shall without delay following the demand for, or the remittance of a matter for decision on, a poll despatch to each Committee Member a voting paper in such form as shall be agreed by the chairman of the Executive Committee meeting at which the matter in question was considered or (failing him) the Chief Executive but which shall in any event set out the full text of the resolution in respect of which the poll is required (which shall be the same as the resolution which was put to a simple majority vote), shall provide for each Committee Member to cast votes for or against the resolution and shall specify the date by which votes must be lodged by Committee Members. The Secretary shall at the same time give notice to all Parties that a poll has been demanded and shall specify in such notice the resolution on which the poll has been called (if applicable), the identity of the person (or persons) who has demanded the poll and the date by which votes must be lodged by the Committee Members. The accidental omission to issue a voting paper or to give notice of a poll, or the non-receipt of a voting paper or such a notice by, any person entitled to receive the voting paper or (as the case may be) the notice shall not invalidate the conduct of the poll or the result thereof. 22.7 Votes on a poll: on a vote on a poll:- 22.7.1 The Committee Members shall in aggregate be entitled to a number of votes equal to the number of votes which the Pool Members would have been entitled to cast on a poll at a general meeting if such meeting had taken place on the day of the Executive Committee meeting at which the matter in question was considered; 22.7.2 Each Committee Member shall have the votes attributable to his Constituents and shall cast such votes in accordance with the individual written instructions of each such Constituent, but so that no Constituent shall be entitled to instruct that the votes attributable to it be cast more than once; 22.7.3 In the absence of any written instructions from any Constituent, a Committee Member shall not be entitled to cast any votes on behalf of that Constituent; 22.7.4 A Constituent may instruct the relevant Committee Member to abstain from casting any or a specified number of votes on its behalf; 22.7.5 The votes cast by a Committee Member shall not be valid unless:- (a) the relevant voting paper shall have been received by the Secretary on or before the date falling 10 working days after the date on which the voting papers were despatched to Committee Members and the votes cast in such voting paper accord with the written instructions referred to in paragraph (b) below; (b) accompanied by a copy of the written instructions given by or on behalf of the Constituent(s) whose votes the Committee Member is entitled to cast; (c) the Committee Member in other respects shall have complied with the procedures for votes on a poll (if any) from time to time established by the Executive Committee; 22.7.6 Any Constituent on whose instructions a Committee Member is required to act in accordance with the foregoing provisions shall be entitled to make arrangements with any other Constituent on whose instructions that same Committee Member is required to act for the requisite written instructions to be given on its behalf by that other Constituent. Details of any such arrangement shall promptly be given to the Secretary. 22.8 65 per cent. majority: A resolution on a poll shall be decided by a majority of not less than 65 per cent. of the votes duly cast. The Secretary shall as soon as reasonably practicable after the expiry of the 10 working day period for return of voting papers referred to in Clause 22.7.5(a) ascertain the results of the poll in consultation with the Pool Chairman or (failing him) the Chief Executive and the Chief Executive or (failing him) the Secretary shall as soon as practicable thereafter notify all Parties and all other persons entitled or required to attend general meetings of Pool Members of the outcome of the poll. The result of the poll shall be deemed to be the resolution of the meeting at which or after which the poll was demanded. 22.9 Responsibilities of Committee Members: The Committee Members shall consult the Pool Members whose votes they are entitled to cast as soon as reasonably practicable following the demand for a poll and shall be required to cast, or to refrain from casting, the votes of such Pool Members in accordance with their individual instructions. The provisions of Clause 23.1 shall not apply in respect of any vote conducted on a poll. 22.10 Referral to general meetings: The provisions of this Clause 22 are subject to the requirements of referral to the Pool Members in general meeting described in Clause 13.4. 22.11 Civil emergencies: The provisions of this Clause 22 are subject to the provisions of Clause 61.9. 23. COMMITTEE MEMBERS' RESPONSIBILITIES AND PROTECTIONS; POOL MEMBER REPRESENTATION 23.1 Executive Committee's responsibilities: In the exercise of its powers and the performance of its duties and responsibilities under this Agreement the Executive Committee shall at all times conduct itself and its affairs in a manner which it considers best designed to give effect to the principal objects and purpose set out in Clause 4.1.2 and to promote, and not obstruct, the fair and efficient operation of the procedures referred to in Clause 4.1.3 so that the objectives set out in Clause 4.1.3 are thereby achieved. To the extent not inconsistent with the responsibilities of the Executive Committee under this Clause 23.1 a Committee Member shall be free to give effect to his responsibilities under Clause 23.2 but each of the Pool Members whom such Committee Member represents acknowledges and agrees the subordination of such Committee Member's responsibilities under Clause 23.2 to the responsibilities of the Executive Committee under this Clause 23.1. 23.2 Committee Members' responsibilities: In the exercise of his powers and the performance of his duties and responsibilities as a Committee Member under this Agreement a Committee Member shall represent those Pool Members which he is required to represent from time to time in accordance with the provisions of Clause 23.6. 23.3 Protections: 23.3.1 The Executive Committee, each Committee Member, the Pool Chairman, the Chief Executive, the Contract Manager and the Secretary shall be entitled to rely upon any communication or document reasonably believed by it or him to be genuine and correct and to have been communicated or signed by the person by whom it purports to be communicated or signed and shall not be liable to any of the Parties for any of the consequences of such reliance. 23.3.2 The Executive Committee, each Committee Member, the Pool Chairman, the Chief Executive, the Contract Manager and the Secretary may in relation to any act, matter or thing contemplated by this Agreement act on the opinion or advice of, or any information from, any lawyer, banker, valuer, broker, accountant or any other specialist or professional adviser given within the field of expertise usually ascribed to persons of such description or the specialist field of expertise for which he has been retained and duly instructed so to act by the Executive Committee, and shall not be liable for the consequences of so acting. The appointment of any such adviser to the Executive Committee shall be approved by the Executive Committee before any such cost is charged to the PFA Accounting Procedure. 23.3.3 In the event of any conflict or inconsistency, any directions and instructions of the Director (which the Director is entitled under his statutory or regulatory powers to issue or give) shall prevail over the duties and responsibilities of the Executive Committee or the Secretary under this Agreement and no liability whatsoever shall attach to the Executive Committee or any Committee Member or the Pool Chairman or the Chief Executive or the Contract Manager or the Secretary (as the case may be) as a result of due compliance by it or him with any such directions and instructions. 23.3.4 Each Committee Member shall be indemnified and kept indemnified jointly and severally by all Pool Members and, as between all Pool Members, rateably in the proportion which their respective Contributory Share bear one to the other at the time of receipt of the request for indemnification from and against any and all costs (including legal costs), charges, expenses, damages or other liabilities properly incurred or suffered by him in relation to the Executive Committee or his office as Committee Member or the due exercise by him of his powers, duties and responsibilities as a Committee Member and all claims, demands or proceedings arising out of or in connection with the same except any such costs and expenses referred to in Clause 23.4 which have been recovered in accordance with the PFA Accounting Procedure and any such costs, charges, expenses, damages or other liabilities which are suffered or incurred or occasioned by the wilful default or bad faith of, or breach of duty or trust by, such Committee Member. 23.3.5 The Pool Funds Administrator acknowledges and agrees that it holds the benefit of Clause 23.3.4 as trustee and agent for each Committee Member. 23.3.6 Each Pool Member shall, upon request by any Committee Member, provide that Committee Member with a written deed of indemnity in the terms set out in Clause 23.3.4. 23.4 Committee Members' costs and expenses: Each Committee Member and each member of any sub-committee or sub-group of the Executive Committee may be paid his reasonable travelling, hotel and incidental expenses of attending and returning from meetings of the Executive Committee or any such sub-committee or sub-group and shall be paid all expenses properly and reasonably incurred by him in the conduct of the business of the Executive Committee or the relevant sub-committee or sub-group or in the discharge of his duties as a Committee Member or (as the case may be) a member of the relevant sub-committee or sub-group. All such expenses shall be recovered in accordance with the PFA Accounting Procedure. 23.5 Committee's costs and expenses: The Executive Committee and each of its sub-committees and sub-groups shall be entitled to recover all its costs and expenses properly incurred in accordance with the PFA Accounting Procedure. For this purpose, the costs and expenses of the Executive Committee shall include properly incurred costs, expenses and liabilities of or associated with any business accommodation and services required by the Executive Committee, the Chief Executive, the Secretary or the personnel referred to in Clause 17.2.1 and the properly incurred costs and expenses of any consultant or adviser retained by the Executive Committee or any such person in the proper performance of its or his duties and responsibilities. 23.6 Pool Member representation: Each Pool Member will be represented on the Executive Committee as follows:- 23.6.1 Subject as provided in Clause 23.6.3, if the first preferred MP Nominee or RS Nominee of a Pool Member is elected to the Executive Committee pursuant to Clause 15.5 or 15.6, that MP Nominee or RS Nominee in its capacity as a Committee Member will represent the interests of that Pool Member; 23.6.2 If the first preferred MP Nominee or RS Nominee of a Pool Member is not elected to the Executive Committee pursuant to Clause 15.5 or 15.6, or if a Pool Member did not vote in any such election, then that Pool Member shall within five working days after the relevant meeting of Pool Members at which the Committee Members are elected notify the Secretary of the identity of the Committee Member whom it wishes to represent its interests on the Executive Committee and, subject to Clause 23.6.3, such Committee Member will represent those interests; 23.6.3 Subject to the prior written agreement of the Committee Member concerned (such agreement not to be unreasonably withheld or delayed) and to the relevant Pool Member having first consulted the Pool Chairman, a Pool Member may by written notice to the Secretary elect, on no more than two occasions during the Committee Members' term of office, to have its interests on the Executive Committee represented by a Committee Member other than the Committee Member referred to in Clause 23.6.1 or 23.6.2 (as the case may be); 23.6.4 A person becoming a Pool Member during the Committee Members' term of office shall be represented by the Committee Member of their choice, such choice to be notified in writing to the Director and the Secretary within five working days of that person becoming a Pool Member. That person shall continue to be represented by his chosen Committee Member (or his successor) until the expiry of that Committee Member's term of office (or, if earlier, its ceasing to be a Pool Member) and will not during that period be entitled to the benefit of Clause 23.6.3; and 23.6.5 A Pool Member will be a Constituent of the Committee Member representing its interests on the Executive Committee for the time being and from time to time. 23.7 Notification: The Secretary shall notify all Pool Members and the Director promptly after the meeting of Pool Members at which Committee Members are elected of the Pool Members and their respective Committee Member representatives and of any subsequent nomination or change of representation during the term of office of the Committee Members. 24. POWERS OF THE EXECUTIVE COMMITTEE 24.1 General power: Subject as otherwise provided in this Agreement, the Executive Committee shall, as between itself and the Pool Members in general meeting, exercise overall supervision of the Settlement System and its operations. 24.2 Specific powers: Subject as otherwise provided in this Agreement, the powers, duties and responsibilities of the Executive Committee shall, as between itself and the Pool Members in general meeting, include:- 24.2.1 The specific powers, duties and responsibilities set out in the Pool Rules; 24.2.2 Monitoring on a regular basis the Settlement System Administrator in its operation of the Settlement System (including deciding whether to propose to the Pool Members in general meeting for their approval the removal of the Settlement System Administrator); 24.2.3 The power to appoint and remove the Pool Funds Administrator and to carry out the other functions ascribed to it in Schedules 11 and 15 and to enter into on behalf of Pool Members any agreement or arrangement with the Pool Funds Administrator (or successor Pool Funds Administrator) in substitution for that set out in Schedule 15; 24.2.4 Monitoring on a regular basis each of the Grid Operator and the Ancillary Services Provider in the performance of its obligations under this Agreement; 24.2.5 Considering applications by New Parties to be admitted as parties to this Agreement under Clause 3 and of Parties to be admitted as Pool Members under Clause 8; 24.2.6 Considering, amending, substituting, approving and disapproving all Agreed Procedures, Codes of Practice (including commissioning reviews thereof by the Pool Auditor in accordance with Clause 47.1.5 or by other technical experts) and Service Lines; 24.2.7 The specific powers, duties and responsibilities set out in Schedule 4; 24.2.8 The specific powers, duties and responsibilities set out in Schedule 15; 24.2.9 Appointing and removing the Pool Auditor, and instructing the Pool Auditor to conduct audits, reviews, tests and checks and the monitoring and review thereof, all in accordance with Part IX; 24.2.10 Opening, maintaining and closing bank accounts for its own purposes and crediting and debiting sums thereto; 24.2.11 Controlling the development of the Pool Rules and considering and approving or disapproving amendments to the Pool Rules in accordance with Clause 7.4.2; 24.2.12 Commissioning independent reviews of the Scheme and its operation in accordance with Part XIII; 24.2.13 Conducting reviews, preparing Works Programmes and implementing Transitional Arrangements, all in accordance with Clause 5; 24.2.14 Preparing the reports referred to in Clause 9.1.2 and the business plan referred to in Clause 9.1.1 and preparing and despatching regular quarterly reports to the Parties (with a copy to the Director) in relation to all matters which are the subject of this Agreement and in such reports reviewing performance over the immediately preceding Quarter against the business plan referred to in Clause 9.1.1; 24.2.15 Considering any representation from any Pool Member in relation to any regular quarterly report prepared pursuant to Clause 24.2.14 above or otherwise relating to any matter which is the subject of this Agreement; 24.2.16 Overseeing the standards of Metering Equipment and the Codes of Practice, agreeing in accordance with paragraph 14 of Schedule 21 dispensations therefrom and reviewing the need for new standards for Metering Equipment and, where it considers such new standards are required, adopting such standards in accordance with the requirements for adoption of Codes of Practice (as contained in the definition of Code of Practice) and in accordance with the provisions of Schedule 21; 24.2.17 Dealing promptly and efficiently with any dispute referred to it concerning Settlement or its operation (including with respect to data); 24.2.18 Convening in accordance with Clause 9.4 general meetings of Pool Members or classes of Pool Members; 24.2.19 Appointing, remunerating and removing the Chief Executive in accordance with Clause 17.1 and, where permitted by the terms of this Agreement, giving directions and instructions to the Chief Executive, the Contract Manager, the Settlement System Administrator, the Pool Funds Administrator, the Grid Operator, the Ancillary Services Provider, Externally Interconnected Parties (not being Pool Members) and other persons to carry into effect the decisions of the Executive Committee or Pool Members in general meeting or separate general meeting; 24.2.20 If requested by the Director, conveying any direction or request of the Director to the Settlement System Administrator, the Pool Funds Administrator, the Grid Operator, the Ancillary Services Provider or any other Party or the Pool Auditor; 24.2.21 Appointing, remunerating and removing in accordance with the Grid Code one or more persons to represent the Executive Committee on the Grid Code Review Panel; 24.2.22 Appointing, remunerating and removing lawyers, bankers, valuers, brokers, accountants and other professional and specialist advisers to assist the Executive Committee or any of its sub-committees in the performance of its duties and responsibilities under this Agreement; 24.2.23 Subject to any applicable confidentiality provisions, monitoring any litigation, arbitration or other proceedings affecting or which may affect the Settlement System; 24.2.24 Subject to any applicable confidentiality provisions, advising Pool Members, Externally Interconnected Parties (not being Pool Members), the Settlement System Administrator, the Pool Funds Administrator, the Grid Operator and the Ancillary Services Provider of decisions of the Executive Committee applicable to them or the relevant one(s) of them and liaising with all such persons on an ongoing and regular basis; 24.2.25 Advising each of the Pool Auditor and the Director of decisions of the Executive Committee and of Pool Members in general meeting or separate general meeting and liaising with each of the Pool Auditor and the Director on an ongoing and regular basis; 24.2.26 Investigating any complaints made by any Pool Member concerning the Settlement System, the Funds Transfer System (or any part or aspect of any thereof), the Settlement System Administrator, the Pool Funds Administrator, the Grid Operator, the Ancillary Services Provider, the Pool Auditor, the Pool Banker or the Custodian; 24.2.27 Approving the Pool Banker and giving instructions for, or consenting to, the removal of the same; 24.2.28 Reviewing and approving or disapproving the Procedures Manual in accordance with Clause 64; 24.2.29 Considering and dealing with any other matter relating to the Settlement System, the Funds Transfer System (or any part or aspect of any thereof) or its or their operation referred to the Executive Committee by the Pool Members in general meeting or separate general meeting, any Pool Member, the Pool Chairman, the Pool Auditor or the Director and any other matter which is otherwise designated under this Agreement for reference to it; and 24.2.30 Determining the amount of the Second Tier Suppliers' System Charge. 24.3 Exclusion of general meeting powers: Pool Members in general meeting shall have no powers in relation to the matters expressly reserved under this Agreement to the Executive Committee except to the extent that such matters are remitted to the Pool Members in general meeting under Clause 13.4.". PART V LIMITATION OF LIABILITY 25. LIMITATION OF LIABILITY 25.1 Limitation of liability: Subject to Clause 25.2 and save where any provision of this Agreement provides for an indemnity, each Party agrees and acknowledges that no Party (excluding for this purpose the Settlement System Administrator) (the "Party Liable") or any of its officers, employees or agents shall be liable to any of the other Parties for loss arising from any breach of this Agreement other than for loss directly resulting from such breach and which at the date of this Agreement was reasonably foreseeable as not unlikely to occur in the ordinary course of events from such breach in respect of:- 25.1.1 physical damage to the property of any of the other Parties or its or their respective officers, employees or agents; and/or 25.1.2 the liability of any such other Party to any other person for loss in respect of physical damage to the property of any other person. 25.2 Death and personal injury: Nothing in this Agreement shall exclude or limit the liability of the Party Liable for death or personal injury resulting from the negligence of the Party Liable or any of its officers, employees or agents and the Party Liable shall indemnify and keep indemnified each of the other Parties, its officers, employees or agents from and against all such and any loss or liability which any such other Party may suffer or incur by reason of any claim on account of death or personal injury resulting from the negligence of the Party Liable or any of its officers, employees or agents. 25.3 Exclusion of certain types of loss: Subject to Clause 25.2 and save where any provision of this Agreement provides for an indemnity, neither the Party Liable nor any of its officers, employees or agents shall in any circumstances whatsoever be liable to any of the other Parties for:- 25.3.1 any loss of profit, loss of revenue, loss of use, loss of contract or loss of goodwill; or 25.3.2 any indirect or consequential loss; or 25.3.3 loss resulting from the liability of any other Party to any other person howsoever and whensoever arising save as provided in Clauses 25.1.2 and 25.2. 25.4 Trust: Each Party acknowledges and agrees that each of the other Parties holds the benefit of Clauses 25.1, 25.2 and 25.3 for itself and as trustee and agent for its officers, employees and agents. 25.5 Survival: Each of Clauses 25.1, 25.2, 25.3 and 25.4 shall:- 25.5.1 be construed as a separate and severable contract term, and if one or more of such Clauses is held to be invalid, unlawful or otherwise unenforceable the other or others of such Clauses shall remain in full force and effect and shall continue to bind the Parties; and 25.5.2 survive termination of this Agreement. 25.6 Saving: For the avoidance of doubt, nothing in this Part V shall prevent or restrict any Party enforcing any obligation (including suing for a debt) owed to it under or pursuant to this Agreement. 25.7 Full negotiation: Each Party acknowledges and agrees that the foregoing provisions of this Part V have been the subject of discussion and negotiation and are fair and reasonable having regard to the circumstances as at the date of this Agreement. PART VII THE SETTLEMENT SYSTEM ADMINISTRATOR'S RESPONSIBILITIES 29. RESPONSIBILITIES Responsibilities: Without prejudice to the generality of the duties, responsibilities and obligations of the Settlement System Administrator provided elsewhere in the SSA Arrangements:- 29.1 Provision of information: The Settlement System Administrator shall upon request provide each Pool Member, the Ancillary Services Provider and the Grid Operator with a certified copy of such records, data and other information concerning amounts payable by or to such Pool Member, the Ancillary Services Provider and the Grid Operator as such Pool Member, the Ancillary Services Provider or the Grid Operator may reasonably request for the purpose of establishing the amounts which are owed to or by such Pool Member, the Ancillary Services Provider or the Grid Operator in accordance with this Agreement, and in any event with such information as any Pool Member, the Ancillary Services Provider or the Grid Operator may request from the Settlement System Administrator in order to establish or prove a claim to any amounts due or claimed to be due. The Settlement System Administrator shall provide such information forthwith upon request or (if so required by the Settlement System Administrator) upon delivery of a certificate from the Pool Member's, the Ancillary Service Provider's or the Grid Operator's counsel certifying that such information is required for such purpose. Each of the Parties agrees to the release of all such records, data and other information in the circumstances described in this Clause 29.1. 29.2 Arrangements with the Grid Operator and Ancillary Services Provider: Each of the Settlement System Administrator, the Grid Operator and the Ancillary Services Provider shall make and maintain arrangements with each other whereby such data and other information as may be collected or received by any of them or necessary for the purposes of the Settlement System, the Ancillary Services Business or (as the case may be and subject to Clause 69) the operation of the NGC Transmission System or the performance by the Grid Operator of its obligations under the NGC Transmission Licence shall be provided to such other(s) to the extent necessary to enable such other(s) to perform its or their respective obligations under this Agreement, the Grid Code, any Ancillary Services Agreement and/or the NGC Transmission Licence. Each of the Parties agrees to the release of all such data and other information in the circumstances described in this Clause 29.2. 29.3 Arrangements with the Pool Funds Administrator: The Settlement System Administrator and the Pool Funds Administrator shall make and maintain arrangements with each other whereby:- (a) sufficient data and other information is provided by the Settlement System Administrator to the Pool Funds Administrator as to enable the Pool Funds Administrator to perform its obligations under this Agreement and the Funds Transfer Agreement; and (b) sufficient data and other information is provided by the Pool Funds Administrator to the Settlement System Administrator as to enable the Settlement System Administrator to perform its obligations under this Agreement. Each of the Parties agrees to the release of all such data and other information in the circumstances described in this Clause 29.3. 30. [Not used]. 31. [Not used]. 32. [Not used]. 33. [Not used]. 34. COSTS, FEES AND EXPENSES 34.1 Schedule 4: The provisions of Schedule 4 shall have effect. 34.2 Fees: 34.2.1 Each Party which is not a Pool Member (other than the Settlement System Administrator, the Pool Funds Administrator, the Grid Operator and the Ancillary Services Provider) shall pay the Settlement System Administrator a fee as provided in Section 8 of Part G of the Appendix to Schedule 4 in respect of the provision to such Party of all data and other information which is required by the terms and conditions of Service Line 10 (Service to CEO and Pool Members) to be made available to it by the Settlement System Administrator. 34.2.2 A Party may at any time by notice in writing to the Settlement System Administrator elect not to be provided with all or some of the data and other information to which it is entitled from the Settlement System Administrator under this Agreement and may change such election at any time upon further written notice to the Settlement System Administrator. 34.3 Charges: The Executive Committee shall be entitled to require that a fee or other charge (not exceeding(pound)500 per dispute or such other sum as the Pool Members in general meeting may from time to time approve) be levied on and paid by a Party in respect of any dispute concerning Settlement or its operation (including with respect to data) referred by such Party for determination to the Executive Committee or any sub-committee thereof. Such fee or other charge shall be levied, paid and collected in such manner and at such time as the Executive Committee shall direct and the relevant Party hereby undertakes to pay any such fee or other charge so levied. Any such fee or other charge shall at the option of the Executive Committee (i) be refunded in whole or in part to the Party which paid the same, or (ii) be applied against the administration costs of whatsoever nature of the Executive Committee or the relevant sub-committee. 34.4 Externally Interconnected Parties' costs: 34.4.1 An Externally Interconnected Party shall be entitled to recover in accordance with this Clause 34.4 its costs and expenses reasonably incurred in acting in accordance with this Agreement as the Externally Interconnected Party for its Corresponding External Pool Members (as defined in the Pool Rules). 34.4.2 Not later than 30 days after the beginning of each Accounting Period (commencing with the Accounting Period beginning in 1992) each Externally Interconnected Party shall submit in writing to the Executive Committee for approval (such approval not to be unreasonably withheld) reasonable details of the costs and expenses anticipated as likely to be incurred by it in its capacity as an Externally Interconnected Party in that Accounting Period and (commencing with the Accounting Period beginning in 1993) of the actual costs and expenses so incurred by it in the immediately preceding Accounting Period. If approved by the Executive Committee, all such costs and expenses shall be recovered by an Externally Interconnected Party from its Corresponding External Pool Members in accordance with Clause 34.4.3. If not so approved, the Externally Interconnected Party shall revise and resubmit to the Executive Committee the said details as often as may be required in order to obtain such approval. 34.4.3 Each Corresponding External Pool Member shall reimburse its Externally Interconnected Party its due proportion of all its Externally Interconnected Party's approved costs and expenses within 28 days after receipt of an invoice from its Externally Interconnected Party. The Externally Interconnected Party shall issue invoices in respect of each Quarter on or after the Quarter Day relating thereto. Invoices shall be based on approved anticipated costs and expenses for the relevant Accounting Period and the first invoice for each Accounting Period (commencing with the Accounting Period beginning in 1993) shall include any correction that may be necessary on account of the approved actual costs and expenses being different from the approved anticipated costs and expenses for the immediately preceding Accounting Period. 34.4.4 For the purposes of this Clause 34.4 a Corresponding External Pool Member's due proportion of its Externally Interconnected Party's approved costs and expenses for each Quarter shall be calculated as follows:- (a) the aggregate of the Externally Interconnected Party's approved costs and expenses shall be divided by two; (b) as to one half of such approved costs and expenses, the Corresponding External Pool Member's due proportion shall be the proportion which the sum of (i) the number of its Generation Trading Blocks and (ii) one (representing the notional Consumer referred to in paragraph 26.5.2(d) of the Pool Rules) bears to the sum of (a) the total number of the Generation Trading Blocks of all Corresponding External Pool Members the Externally Interconnected Party of which is the same as that for the Corresponding External Pool Member in question and (b) the number of all such Corresponding External Pool Members, and each such Corresponding External Pool Member shall for this purpose be allocated at least one Generation Trading Block; and (c) as to the other half of such approved costs and expenses, the Corresponding External Pool Member's due proportion shall be the proportion which its Gross Traded Energy for the Quarter in question bears to the aggregate of the Gross Traded Energy for that Quarter of all Corresponding External Pool Members the Externally Interconnected Party of which is the same as that for the Corresponding External Pool Member in question, and for this purpose "Gross Traded Energy" in respect of any Quarter and any Corresponding External Pool Member shall be the aggregate amount of Active Energy (measured in kWh) bought and sold pursuant to this Agreement by such Corresponding External Pool Member in its capacity as such in that Quarter. 34.4.5 The foregoing provisions of this Clause may be amended or varied in respect of an Externally Interconnected Party and its Corresponding External Pool Members (or any of them) by prior written agreement of that Externally Interconnected Party, all its Corresponding External Pool Members and the Executive Committee. 34A. SECOND TIER SYSTEM CHARGES 34A.1 The following provisions of this Section 34A shall apply in respect of each of the Accounting Periods beginning on 1st April, 1994, 1st April, 1995, 1st April, 1996 and 1st April, 1997 (each a "Specified Accounting Period"). 34A.2 Subject to Section 34A.6, the Second Tier Suppliers' System Charge for a Specified Accounting Period shall be determined by the Executive Committee as the amount per annum to be charged to each Second Tier Supplier in respect of each Second Tier System supplied by such Supplier. 34A.3 Subject to Section 34A.6, the Second Tier Suppliers' Non-Pooled Generation System Charge for a Specified Accounting Period shall be determined by the Executive Committee as the amount per annum to be charged to each Supplier in respect of each Non-Pooled Generator for whose Metering System such Supplier is the Registrant. 34A.4 Subject to Section 34A.6, the Suppliers' System Charge for a Specified Accounting Period shall be determined by the Executive Committee as the amount per annum to be charged to each Supplier (other than a Second Tier Supplier) in respect of each Non-Second Tier System in that Supplier's authorised area. 34A.5The second tier system charge payable by a Supplier in respect of each calendar month in a Specified Accounting Period shall be calculated as follows:- (a) in respect of each Second Tier Supplier, in accordance with the following formula:- Second Tier Suppliers' System Charge x NOSP where NOSP is the total number of Second Tier Systems supplied by such Supplier at the beginning of the relevant calendar month; (b) in respect of each Supplier and in addition to the charge in Section 34A.5(a), in accordance with the following formula:- [OBJECT OMITTED] where NNPG is the total number of Metering Systems of Non-Pooled Generators for which such Supplier is the Registrant at the beginning of the relevant calendar month; (c) in respect of each Supplier (other than a Second Tier Supplier), in accordance with the following formula:- Suppliers' System Charge x NMS 12 where NMS is the total number of Non-Second Tier Systems in that Supplier's authorised area as at the beginning of that month; (d) for these purposes, the numbers of Second Tier Systems and of Non-Second Tier Systems as at the beginning of each calendar month shall be as notified to the Settlement System Administrator (who shall then notify the Director) by the relevant Suppliers (and the Settlement System Administrator being entitled, in the absence of any notification to the contrary, to rely on the last such notification and other information in its possession) and, in the event of any dispute between the Parties, shall be as determined by the Director (whose determination shall be final and binding); and (e) only those Second Tier Systems in respect of which data collection costs are incurred by Second Tier Agents or the Settlement System Administrator shall be used in determining the number of Second Tier Systems. 34A.6 If in respect of any Specified Accounting Period (other than the one beginning on 1st April, 1997) the aggregate of all second tier system charges payable pursuant to Sections 34A.5(a), 34A.5(b) and 34A.5(c) and received by the Settlement System Administrator is less than or (as the case may be) more than the Total Second Tier System Charges for such Specified Accounting Period the deficit or (as the case may be) the surplus shall be carried forward to the immediately succeeding Specified Accounting Period and shall be included in the calculation of the Total Second Tier System Charges therefor. 34A.7 The Executive Committee will use its reasonable endeavours to ensure that the aggregate of all second tier system charges payable pursuant to Sections 34A.5(a), 34A.5(b) and 34A.5(c) and received by the Settlement System Administrator in respect of the Accounting Period beginning on 1st April, 1997 meets the Total Second Tier System Charges specified for that Accounting Period. There shall be no carry forward of any such deficit or surplus arising in respect of the Specified Accounting Period beginning on 1st April, 1997. PART VIII THE SETTLEMENT SYSTEM AND COMPUTER OPERATIONS 35. DEVELOPMENT OF THE SETTLEMENT SYSTEM 35.1 Development: The Settlement System shall be developed under the overall control of the Executive Committee. All developments of and changes to the Computer Systems shall be made in accordance with the terms of the Development Policies. 35.2 Delegation: Save as provided by the Development Policies, the Executive Committee shall be entitled to delegate all or any of its rights, powers and duties under Clause 35.1 and the Development Policies to such person(s) and on such terms and conditions as from time to time it may see fit. 35.3 Development Policies: 35.3.1 (a) The matters addressed by the Development Policies are set out in the list of contents in the Development Policies. These general headings define the scope of the Development Policies. (b) The scope of the Development Policies may be amended at any time and from time to time by written agreement of the Executive Committee and the Settlement System Administrator. (c) Any amendment to any of the matters addressed by the Development Policies or any addition or substitution to the Development Policies which does not extend or restrict (other than in a way or to an extent which can reasonably be regarded as de minimis) the scope of the Development Policies may be made at any time and from time to time, and shall be effective if so made, by the Executive Committee after consultation with the Settlement System Administrator unless such matter is one covered by the headings in Schedule 16 in which event such amendment, addition or substitution may be made and shall be effective only by written agreement of the Executive Committee and the Settlement System Administrator. 35.3.2 Without prejudice to Clause 35.3.1(c), Schedule 16 may be changed at any time and from time to time by written agreement of the Executive Committee and the Settlement System Administrator. 35.3.3 Each of the Parties undertakes to comply with (and the Pool Members undertake to ensure that the Executive Committee complies with) the Development Policies. 35.4. SSA's comments: The Executive Committee or the particular sub-committee or sub-group in respect of any development of the Settlement System shall take into account all reasonable comments of the Settlement System Administrator in relation to the specification, design, testing and implementation requirements of any development of the Settlement System where such comments relate to the operational compatibility or consistency with the Settlement System or the ability of the Settlement System Administrator to comply with this Agreement, the Act or NGC's Transmission Licence. 35.5 Provision of data and information: Each Party shall ensure that all data and information necessary to enable any testing of the Settlement System or any development thereof or change thereto required under the Development Policies and which is permitted to be released by the Settlement System Administrator under the Pool Rules or as otherwise expressly provided herein is supplied to the Executive Committee or as it may direct and to the Settlement System Administrator, and each Party shall use all reasonable endeavours to co-operate with and support any such testing. 35.6 Provision of data and information to authorised persons: The Parties shall provide or ensure that the Settlement System Administrator provides all data and information required under Clause 35.5 to such persons as may from time to time be authorised by the Executive Committee to receive the same provided that such persons shall have executed a confidentiality undertaking in such form as the Executive Committee may from time to time determine. If the Settlement System Administrator is not permitted or required to release any data and information by reason only of the confidential nature of such data and information it shall and may provide representative data to the extent required for such testing. 35.7 Inconsistencies and conflicts: In the event of any inconsistency or conflict between the provisions of this Agreement and the provisions of the Development Policies, the provisions of this Agreement shall prevail. 36. CHANGE MANAGEMENT 36.1 Change Management Policies: In order to ensure that developments of and changes to the Settlement System are brought into effect in an ordered and controlled manner, each of the Parties undertakes to comply with the Change Management Policies. 36.2 Amendments: The Change Management Policies may be amended at any time and from time to time by the Executive Committee after consultation with the Settlement System Administrator. 37. SOFTWARE 37.1 [Not used]. 37.2 Warranties: Without prejudice to Service Line 19 (System Integration) and Section 9 of Schedule 4, nothing in this Agreement shall imply or impose any requirement on the Settlement System Administrator to give any warranty with respect to any Software. 37.3 No liability: Each Party acknowledges that neither NGC nor Energy Settlements and Information Services Limited shall have any liability in respect of any software developed before the Effective Date. 38. [Not used]. 39. [Not used]. 40. [Not used]. 41. NOTIFICATION OF DEFECTS BY POOL MEMBERS Each Pool Member undertakes to the Settlement System Administrator and each other Pool Member promptly to notify the Settlement System Administrator and the Executive Committee in writing of any defects of which it is or becomes aware in the Software or its operation and to provide such further information as may reasonably be required by the Settlement System Administrator to identify, isolate and correct such defect. 42. [Not used]. 43. [Not used]. 44. [Not used]. 45. ESCROW ARRANGEMENTS 45.1 Escrow Agreement: On 17th March, 1992 the Settlement System Administrator (for itself and on behalf of the Pool Members acting through the Executive Committee) entered into an escrow agreement (the "Escrow Agreement") in the form set out in schedule 7 with The National Computing Centre Limited (the "Custodian"). The Settlement System Administrator has deposited or will deposit as soon as it comes into existence:- 45.1.1 a copy of the source code and load (machine executable) modules relating to all Developed Application Software (as defined in Schedule 4) together with all job control language and licensed software system tables, each in a machine readable form and the source code and job control language in a hard copy form; and 45.1.2 a copy of all related manuals and other associated documentation, including:- (a) any user requirement documents, together with all associated authorised change requests; (b) any functional specification documents associated with those documents described in paragraph (a) above, together with all authorised change requests associated with the relevant functional specification; (c) to the extent available to the Settlement System Administrator, any design specification documents associated with those documents described in paragraphs (a) and (b) above, together with all authorised change requests associated with the relevant design specification; (d) any program and/or user guides prepared to assist in he day-to-day operation and future development of the computer programs (including records of test cases together with the associated test input and output data used for validation purposes); (e) any relevant test strategy schedules and acceptance test schedules as specified for functional and operational end to end testing; (f) any relevant test acceptance certificates and reports for all tests recording comments and observations made on the appropriate tests where such tests are commissioned by the Settlement System Administrator; (g) any relevant client acceptance certificates and Pool Auditor's reports, together with any reports recording such clients' and the Pool Auditor's observations and comments on the tests; (h) any relevant compilation or detailed operating procedures required in connection with any of the relevant paragraphs in this Clause 45.1.2; (i) all Software licences for Licensed Application Software (as defined in Schedule 4); and (j) a list detailing all versions of Licensed Application Software (including operating systems and compilers) used in creating each version of the object code detailing the version numbers used and any program temporary fixes or equivalent mode, (together the "Material"). If, after consultation with the Settlement System Administrator, the Executive Committee shall so request:- (A) the Settlement System Administrator shall use its reasonable endeavours (which may include the payment of a fee or further fee recoverable through the Charging Procedure) to procure that any licence for any Licensed Application Software is on terms or amended terms that permit the deposit of such Licensed Application Software with a reputable software escrow agent approved by the Executive Committee on the terms of an escrow agreement approved by the Executive Committee and the Settlement System Administrator (in the case of the Settlement System Administrator such approval not to be unreasonably withheld); and (B) NGC shall use its reasonable endeavours to procure that any licence for any Licensed Application Software licensed by it to the Settlement System Administrator is on terms or amended terms that permit the deposit of such Licensed Application Software with a reputable software escrow agent approved by the Executive Committee on the terms of an escrow agreement approved by the Executive Committee and NGC (in the case of NGC such approval not to be unreasonably withheld). 45.2 Updating: The Settlement System Administrator shall ensure that the Material deposited with the Custodian is kept fully up-to-date and reflects all Modifications (as defined in the Escrow Agreement) and shall deposit a copy of all Modifications with the Custodian as soon as the same are available, all in accordance with the terms and subject to the conditions of the Escrow Agreement. 45.3 Notification to Executive Committee: The Settlement System Administrator shall notify the Executive Committee promptly of the delivery of each Modification to the Custodian. 45.4 Amendments: Any amendment to or variation of the Escrow Agreemen shall be made in accordance with its terms provided that the Settlement System Administrator shall not make or agree to any such amendment or variation without the prior written consent of the Executive Committee. 46. [Not used]. PART IX THE POOL AUDITOR AND SCHEDULING AND DESPATCH REVIEWS 47. THE POOL AUDITOR AND SCHEDULING AND DESPATCH REVIEWS 47.1 Appointment and removal: The Executive Committee shall (after consultation with the Settlement System Administrator) from time to time appoint a firm of accountants of internationally recognised standing to carry out:- 47.1.1 audits of the calculations and allocations performed by the Settlement System, such audits to be carried out annually; 47.1.2 audits of the Funds Transfer System, such audits to be carried out annually; 47.1.3 tests and/or checks on new items or versions of Software; 47.1.4 reviews of Agreed Procedures and Codes of Practice, as required from time to time by the Executive Committee; and 47.1.5 audits, reviews, tests and/or checks of such other matters as are otherwise designated under this Agreement for reference to it and, where not so designated, such other audits, reviews, tests and/or checks as the Executive Committee may from time to time reasonably require (having regard, in particular, to the disruptive effect of the same on the business and operations of the Parties), and to assist, upon request of the Executive Committee, in the preparation of Works Programmes pursuant to Clause 5.9. The Executive Committee shall have the right at any time and from time to time (after consultation with the Settlement System Administrator) to remove from office as Pool Auditor any firm of accountants so appointed by it, but the Executive Committee shall ensure that there shall at all times be a Pool Auditor. 47.2 Scheduling and Despatch Review: 47.2.1 The Grid Operator shall (after consultation with the Executive Committee) decide upon the appointment from time to time of such firm of accountants of internationally recognised standing as the Executive Committee shall approve (such approval not to be unreasonably withheld or delayed) to carry out reviews ("Scheduling and Despatch Reviews") of the Scheduling and Despatch processes under the Grid Code, such reviews to be carried out, until the first anniversary of the Effective Date, at such time or times as shall be agreed between the Grid Operator and the Executive Committee and, thereafter, annually. The objective and scope of each such review is set out in Schedule 19. 47.2.2 The Grid Operator shall have the right at any time and from time to time (after consultation with the Executive Committee) to decide upon the removal from office of the firm of accountants so appointed by it with the consent of the Executive Committee (such consent not to be unreasonably withheld or delayed). 47.2.3 The auditor carrying out the Scheduling and Despatch Review shall report to the Grid Operator. 47.3 Scope of work: 47.3.1 The terms of engagement and scope of the work to be carried out by the Pool Auditor shall be in accordance with the terms of this Agreement and as determined from time to time by the Executive Committee (after consultation with the Pool Auditor and, where appropriate, the Settlement System Administrator or the Pool Funds Administrator) and the Pool Auditor shall report to the Executive Committee. The Executive Committee shall, upon request, provide each Pool Member, the Director, any Party which has applied pursuant to Clause 8.2 to become a Pool Member and (as appropriate) the Settlement System Administrator or the Pool Funds Administrator with a copy of such terms of engagement. 47.3.2 Any opinion or report of the auditor carrying out the Scheduling and Despatch Review shall be addressed to the Grid Operator (for its own benefit) and a copy thereof shall be sent to the Executive Committee and to each Pool Member, the Director, the Settlement System Administrator and the Pool Funds Administrator (each of whom shall be entitled to rely on it). 47.4 Notification of disputes: Upon written request of the Pool Auditor or, where the dispute relates to Scheduling and Despatch, the auditor carrying out the Scheduling and Despatch Review, a Party shall promptly provide the Pool Auditor or (as the case may be) the auditor carrying out the Scheduling and Despatch Review with a written statement of all disputes under or in connection with this Agreement or any Ancillary Services Agreement which are then outstanding and which involve such Party or which the relevant Party believes may arise and are likely to involve such Party, and (subject to any supervening obligations of confidentiality binding on such Party) such statement shall include reasonable details of each such dispute. 48. AUDIT INSTRUCTIONS 48.1 Frequency: 48.1.1 Audits, tests, reviews and checks pursuant to Clause 47.1 shall be carried out at such time or times as the Executive Committee shall determine (after consultation with the Pool Auditor and, where appropriate, the Settlement System Administrator or the Pool Funds Administrator) and any such audit, test, review or check shall relate to such period(s) as the Executive Committee and the Pool Auditor shall agree. 48.1.2 The review pursuant to Clause 47.2 shall be carried out at such time or times as the Grid Operator shall determine and the Executive Committee shall approve (such approval not to be unreasonably withheld or delayed). 48.1.3 In good time before each annual general meeting of Pool Members:- (a) the Executive Committee shall instruct the Pool Auditor to prepare the report referred to in Clause 9.1.2; and (b) the Grid Operator shall instruct the auditor carrying out the Scheduling and Despatch Review to prepare the report referred to in Clause 47.2.3. 48.2 Opinions and reports: Any opinion or report of the Pool Auditor required by the Executive Committee shall be addressed to the Executive Committee for the benefit of all Pool Members and to such other person(s) as the Executive Committee may direct and a copy thereof shall be sent by the Executive Committee to each Pool Member and the Director and, if requested and the Executive Committee approves, the Settlement System Administrator and the Pool Funds Administrator (and the Settlement System Administrator and the Pool Funds Administrator shall be entitled to rely upon the same in any legal proceedings (including arbitration)). 48.3 Concerns and recommendations: 48.3.1 In instructing the Pool Auditor in respect of any of the matters referred to in Clause 47.1 the Executive Committee shall require the Pool Auditor:- (a) forthwith to report any material concerns with respect to matters the subject of the relevant audit, test, review and/or check; and (b) to make such recommendations as to changes in the procedures, controls and/or audit coverage as the Pool Auditor considers appropriate. Upon receipt of any such report or recommendation the Executive Committee shall, after consultation with the Settlement System Administrator or (in the case of the review referred to in Clause 47.1.2) the Pool Funds Administrator, prepare and send or cause to be prepared and sent a report to Pool Members, the Pool Auditor and the Director and the Settlement System Administrator or (as the case may be) the Pool Funds Administrator enclosing a copy of the Pool Auditor's report or recommendation. The Executive Committee shall instruct the Settlement System Administrator or (as the case may be) the Pool Funds Administrator to carry out such corrective action as the Pool Members in general meeting may approve or (where such approval is not required by the terms of this Agreement) as the Executive Committee may resolve consequent upon receipt of the Executive Committee's report (which the Settlement System Administrator and the Pool Funds Administrator undertake promptly to do). 48.3.2 In instructing the auditor in respect of the Scheduling and Despatch Review the Grid Operator shall require the auditor to make the reports and recommendations referred to in Clauses 48.3.1(a) and (b). Upon receipt of a copy of any such report or recommendation the Executive Committee shall, after consultation with the Settlement System Administrator and the Grid Operator, prepare or send or cause to be prepared and sent a report to Pool Members, the auditor carrying out the Scheduling and Despatch Review and the Settlement System Administrator enclosing a copy of the report or recommendation. The Executive Committee may instruct the Grid Operator to carry out such corrective action as may be reasonable and practicable in all the circumstances and which is consistent with the Grid Code which the Pool Members in general meeting shall approve. 48.4 Access: 48.4.1 To the extent that the Pool Auditor reasonably requires in order to be satisfied that the Pool Funds Administrator is complying with its obligations under this Agreement and the Agreed Procedures, the Pool Funds Administrator shall permit the Pool Auditor unrestricted access to its operation of the Funds Transfer System, the Funds Transfer Hardware and the Funds Transfer Software and all data used, information held and records kept by the Pool Funds Administrator or its agents in the conduct of that operation and shall make available members of its staff to explain such operation and such other issues as the Pool Auditor considers relevant. 48.4.2 The Grid Operator shall permit the auditor carrying out the Scheduling and Despatch Review unrestricted access to that part of its business as relates to Scheduling and Despatch and the operation of BPS GOAL and all data used, information held and records kept by the Grid Operator in the conduct of such business and shall make available members of its staff to explain such operations and such other issues as the auditor considers relevant. 48.5 Costs: 48.5.1 The costs of any corrective action on the part of the Settlement System Administrator pursuant to Clause 48.3.1 shall be as agreed between the Pool Auditor and the Executive Committee (after consultation with the Settlement System Administrator) and shall be borne in accordance with the PFA Accounting Procedure. 48.5.2 The costs of any audit, test, review or check pursuant to Clause 47.1.1 to 47.1.5 (inclusive) and any corrective action on the part of the Pool Funds Administrator pursuant to Clause 48.3.1 shall be as agreed between the Pool Auditor and the Executive Committee (after consultation with the Pool Funds Administrator in the case of any such corrective action) and shall be borne by the Pool Funds Administrator and recovered by it in accordance with the PFA Accounting Procedure. 48.5.3 The costs of any review pursuant to Clause 47.2 and any corrective action on the part of the Grid Operator pursuant to Clause 48.3.2 shall be borne by the Grid Operator. 48.6 Conflict: The Executive Committee shall require the Pool Auditor and the auditor carrying out the Scheduling and Despatch Review to disclose to the Executive Committee the existence and nature of all audit assignments with any Party. 48.7 Own auditors' review: Each Pool Member may request of the Executive Committee that its own external auditors be permitted to liaise with the Pool Auditor and the auditor carrying out the Scheduling and Despatch Review in accordance with normal professional standards, including provision of access to working papers. The Executive Committee shall take such steps as may reasonably be required of it to ensure that each of the Pool Auditor and the auditor carrying out the Scheduling and Despatch Review co-operates accordingly (subject to Clause 48.9). 48.8 Pool Auditor's rights: The Pool Auditor shall be entitled to attend and speak at meetings of the Executive Committee and at general meetings and separate general meetings of Pool Members. The Pool Auditor shall be entitled to resign upon giving prior notice to the Executive Committee (the period of such notice (if any) to be as set out in the terms of its appointment). Should the Pool Auditor resign, be removed from office or not be reappointed the Pool Auditor shall have the right to communicate directly with Pool Members if it believes there are matters which should be brought to their attention. 48.9 Confidentiality: 48.9.1 The Pool Auditor shall as a condition precedent to its appointment execute a confidentiality undertaking in favour of each of the Settlement System Administrator, the Pool Funds Administrator, the Grid Operator and the Ancillary Services Provider and the Executive Committee on behalf of all Pool Members in such form as may be reasonably required from time to time by the Executive Committee. 48.9.2 The auditor carrying out the Scheduling and Despatch Review shall as a condition precedent to its appointment execute a confidentiality undertaking in such form as may be reasonably required from time to time by the Grid Operator and which shall be approved by the Executive Committee (such approval not to be unreasonably withheld or delayed). 48.9.3 If requested by the Settlement System Administrator, the Pool Funds Administrator, the Grid Operator or the Ancillary Services Provider, the auditor carrying out the Scheduling and Despatch Review shall execute a confidentiality undertaking in favour of the relevant one of them in such form as the Executive Committee may from time to time approve (such approval not to be unreasonably withheld or delayed). 48.10 Scheduling and Despatch Auditor: The auditor appointed to carry out the Scheduling and Despatch Review shall be entitled to attend and speak at meetings of the Executive Committee and at general meetings and separate general meetings of Pool Members where matters relating to Scheduling and Despatch are to be discussed or considered. The auditor shall be entitled to resign upon giving prior notice to the Grid Operator (who shall send a copy forthwith to the Executive Committee) (the period of such notice, if any, to be as set out in the terms of its appointment). Should the auditor resign, be removed from office or not be reappointed it shall have the right to communicate directly with Pool Members if it believes that there are matters which should be brought to their attention. PART X THE GRID OPERATOR'S RESPONSIBILITIES 49. RESPONSIBILITIES The Grid Operator shall have the following duties, responsibilities and obligations under this Agreement:- 49.1 PORTHOLE: Ensuring that, insofar as relevant to the operation of the Settlement System and the Pool Rules, PORTHOLE will in its operation comply with its user and functional specifications. 49.2 Services: Making available to any successor Settlement System Administrator those services necessary for the proper functioning of the Settlement System which the Grid Operator made available to the incumbent Settlement System Administrator at any time in the twelve month period prior to the resignation or removal of such incumbent Settlement System Administrator, in any such case upon such terms as may be agreed between the Grid Operator, such successor Settlement System Administrator and the Executive Committee. 49.3 Generally: Such other duties, responsibilities and obligations as are set out in this Agreement. 50. STANDARD OF CARE 50.1 Standard of care: In the exercise of its duties and responsibilities under this Agreement the Grid Operator shall exercise that degree of care, diligence, skill and judgment which would ordinarily be expected of a reasonably prudent operator of the NGC Transmission System taking into account the circumstances actually known to the Grid Operator, its officers and employees at the relevant time or which ought to have been known to it or them had it or they made such enquiries as were reasonable in the circumstances. 50.2 Miscellaneous: 50.2.1 (a) The Grid Operator shall be entitled to rely upon any direction or instruction of the Executive Committee or the Chief Executive (if any) if the same is signed by way of authority in accordance with Clause 50.2.4 on behalf of two or more Committee Members or on behalf of the Chief Executive and shall not be obliged to comply with any direction or instruction of any sub-committee of the Executive Committee or any delegate of the Executive Committee other than the Chief Executive (unless such direction or instruction is shown as having been ratified by the Executive Committee). (b) The Grid Operator shall be entitled to rely upon any communication or document reasonably believed by it to be genuine and correct and to have been communicated or signed by the person by whom it purports to be communicated or signed and shall not be liable to any of the Parties for any of the consequences of such reliance. 50.2.2 Compliance with the Director's directions: No liability whatsoever shall attach to the Grid Operator as a result of due compliance by it with any directions and instructions of the Director, provided that in complying with such directions and instructions the Grid Operator is at all times acting in good faith. 50.2.3 Prior approval: Where by the terms of this Agreement the Grid Operator is required to obtain the prior directions, instructions, approval or consent of the Executive Committee or the Chief Executive, the Grid Operator shall have no authority to, and shall not, act unless the requisite directions, instructions, approval or consent have first been obtained. Notwithstanding the foregoing sentence, nothing in this Agreement shall prevent the Executive Committee from ratifying any act of the Grid Operator. 50.2.4 Express authority: All directions and instructions of the Executive Committee or the Chief Executive to the Grid Operator shall, as between the Grid Operator and the Pool Members, be deemed to have the express authority of, and shall be binding without reservation upon, all Pool Members. 50.2.5 Authority of Pool Members: The Grid Operator shall not be bound to act in accordance with the directions or instructions of the Pool Members unless the Pool Members act through the Executive Committee. 50.2.6 General Meetings: The Grid Operator shall not be obliged to take any steps to ascertain whether any resolution of Pool Members in general meeting or of any class of Pool Members in separate general meeting which it is advised by the Executive Committee or the Chief Executive as having been passed was in fact passed or passed by the requisite majority and until the Grid Operator shall have express written notice to the contrary from the Executive Committee or the Chief Executive it shall be entitled to assume that the relevant resolution was passed or (as the case may be) the relevant requisite majority was obtained. 50.2.7 Exceptions: Notwithstanding the foregoing provisions of this sub-clause 50.2, in the performance of its duties and responsibilities under this Agreement the Grid Operator shall not be bound to act in accordance with the directions or instructions of the Executive Committee or the Chief Executive if:- (a) to do so would cause the Grid Operator to breach any of its obligations under the Act or its Transmission Licence; or (b) the Grid Operator has reasonable grounds for believing that it would so breach any of such obligations and has consulted the Director and:- (i) the Director has not indicated that in his view it would not involve any such breach; or (ii) the Director has indicated that, notwithstanding any such actual or potential breach, the Director would not be minded to enforce compliance with those obligations and the Grid Operator has received an indemnity reasonably satisfactory to it in respect of its acting in accordance with such directions and instructions. In any such event the Grid Operator shall promptly notify the Executive Committee. 50.2.8 Reference to the Director: If at any time the Grid Operator has a concern which is properly and reasonably founded that, in acting in accordance with any direction or instruction of the Executive Committee or the Chief Executive, it will breach one or more of its obligations under the Act or its Transmission Licence, then, if having discussed the matter with the Executive Committee the matter remains unresolved, the Grid Operator shall either comply with such direction or instruction or by notice in writing refer the same to the Director, such notice to set out in full the directions or instructions given to the Grid Operator and the grounds for such concern and to be copied to the Executive Committee. Pending any guidance from the Director in response to any such reference and, provided that the Director shall not express any view that such reference is misconceived, vexatious or in respect of an improperly or unreasonably founded concern, the Grid Operator shall not be liable to any of the other Parties for refusing to act in accordance with the relevant direction or instruction. If the Director shall express such a view, the Grid Operator shall be so liable. PART XI ANCILLARY SERVICES AND THE ANCILLARY SERVICES PROVIDER 51. ANCILLARY SERVICES 51.1 Obligations: The obligations of the Ancillary Services Provider and the Grid Operator pursuant to this Clause 51 shall be owed to each and every Supplier. 51.2 Obligations of Ancillary Services Provider: The Ancillary Services Provider shall:- 51.2.1 implement, maintain and operate all such systems as are necessary to enable it properly to carry on the Ancillary Services Business in accordance with the Transmission Licence; 51.2.2 operate the Ancillary Services Business in an efficient and economic manner; 51.2.3 maintain such records, data and other information as the Pool Auditor may from time to time by notice in reasonable detail to the Ancillary Services Provider reasonably require for the purposes of this Part XI or as may otherwise be reasonably necessary to enable the Ancillary Services Provider to comply promptly and fully with its obligations under this Agreement; 51.2.4 retain in electronic or machine readable form for a period of not less than eight years (or such longer period as the Pool Auditor may from time to time reasonably require), copies of all records, data and information referred to in Clause 51.2.3 in respect of the Ancillary Services; 51.2.5 provide to the Settlement System Administrator who shall promptly provide the same to each Supplier monthly and annual statements giving aggregate payment details separately in respect of each of the following items:- (a) Reactive Energy; (b) frequency control; (c) Black Start Capability (as defined in the Grid Code); (d) lost opportunity costs; (e) supplies of Ancillary Services to Externally Interconnected Parties; (f) adjustments for disputes which have been settled or otherwise determined; and (g) the Ancillary Services Provider's business charges, together with a statement of the sum of all such items, and each of the Parties agrees to such information being so provided; 51.2.6 not transfer or seek to transfer any of its duties or responsibilities as Ancillary Services Provider save to NGC's successor as Grid Operator where NGC is removed as Grid Operator (but not further or otherwise); 51.2.7 upon a successor Grid Operator being appointed (so far as it is able), transfer to such successor all data, records, other information, assets, equipment, facilities, rights and know-how which it has (excluding freehold and leasehold real property) and which are necessary to carry out the duties and responsibilities of the Ancillary Services Provider and which are not otherwise readily obtainable by such successor including all original and copy material relating to the same and, in consideration for such transfer, the Suppliers shall jointly and severally pay to the Ancillary Services Provider a reasonable sum to reflect the costs of, and the costs of transferring, such material, such sum to be determined pursuant to Clause 83 in default of agreement between the Suppliers and Ancillary Services Provider; and 51.2.8 ensure that all agreements or arrangements for the provision of Ancillary Services to Externally Interconnected Parties are on the best commercial terms reasonably available. 51.3 Obligations of Suppliers: Each Supplier shall pay the Ancillary Services Provider the amount allocated to such Supplier for Ancillary Services in any Settlement Period for Ancillary Services in accordance with this Agreement. 51.4 Obligation of Grid Operator: The Grid Operator shall enforce the Master Connection and Use of System Agreement and each Supplemental Agreement (insofar as it concerns the provision of Ancillary Services) in accordance with their respective terms in all circumstances in which it is reasonable to do so having regard to its obligations under the Act, the Transmission Licence and the Grid Code. 51.5 Audit of Ancillary Services: 51.5.1 The Suppliers may require the Pool Auditor to carry out audits, tests, checks or reviews in relation to the operation by the Ancillary Services Provider of the Ancillary Services Business as Suppliers may from time to time reasonably require (having regard, in particular, to the disruptive effect of the same on the business and operations of the Ancillary Services Provider). The terms of engagement for any such audit, test, check or review shall be made available to the Ancillary Services Provider. 51.5.2 The Suppliers shall not require more than two audits, tests, checks and reviews pursuant to Clause 51.5.1 in any Accounting Period. 51.5.3 On instructing the Pool Auditor pursuant to Clause 51.5.1, the Supplier(s) concerned may require the Pool Auditor:- (a) forthwith to report any material concerns with respect to matters the subject of the relevant audit, test, check or review; and (b) to make such recommendations as to changes in the procedures, controls and/or audit coverage of the Ancillary Services Business as the Pool Auditor considers appropriate. 51.5.4 The Ancillary Services Provider shall permit the Pool Auditor such access to its Ancillary Services' operations and all records, documents, data and other information (other than Excluded Information) held by the Ancillary Services Provider in the conduct of such operations in each case as the Pool Auditor may reasonably require and shall make available members of its staff to explain such operations and such other issues as the Pool Auditor considers relevant. The Pool Auditor shall not disclose and shall not be obliged to disclose to any Supplier details of prices paid to each Generator by the Ancillary Services Provider. In this Clause 51.5 "Excluded Information" means all records, documents, data and other information provided in the course of the discussions or negotiations with any person with whom the Ancillary Services Provider contracts or considers contracting for the provision of Ancillary Services other than as stated in any Ancillary Services Agreement whether such discussions or negotiations take place before contracting or as part of any price review during the term of any Ancillary Services Agreement. 51.5.5 The Pool Auditor shall report to the Suppliers and a copy of any report by the Pool Auditor relating to an audit, test, check or review pursuant to Clause 51.5.1 shall be provided to the Ancillary Services Provider. The Pool Auditor shall owe a duty of confidentiality to the Ancillary Services Provider save to the extent necessary to carry out the particular audit, test, check or review provided that any matter or thing set out in any report to the Suppliers shall not be subject to any such obligation and provided always that nothing in this Clause 51.5.5 shall prevent the disclosure of any information pursuant to Clause 69. The Ancillary Services Provider shall be entitled to rely on any such report in any legal proceedings (including arbitration). 51.5.6 If the Suppliers so resolve, the Ancillary Services Provider shall promptly implement any recommendations made by the Pool Auditor in a report relating to an audit, test, check or review pursuant to Clause 51.5.1 and, in the event of any dispute, such dispute shall be referred to arbitration in accordance with Clause 83. 51.5.7 The cost of any audit, test, check or review pursuant to Clause 51.5.1 shall be borne by the requisitioning Supplier(s). The costs of implementing any recommendations pursuant to Clause 51.5.6 may be recovered by the Ancillary Services Provider in accordance with the ASP Accounting Procedure. 51.6 Basis of Payment: The Ancillary Services Provider shall calculate the total amount payable under Ancillary Services Agreements in respect of each Settlement Day together with any amendments to calculations made for previous Settlement Days based upon information derived from the Grid Operator and the Settlement System Administrator. The charges to Suppliers for Ancillary Services shall comprise the costs so calculated together with the charges of the Ancillary Services Provider calculated in accordance with Schedule 18. The Ancillary Services Provider shall notify a provisional sum to the Settlement System Administrator within three working days after receipt of such information from the Grid Operator and the Settlement System Administrator so as to be despatched by the Settlement System Administrator to Suppliers in accordance with the relevant Agreed Procedure to enable the Settlement System Administrator to apportion this sum to the sale of Active Energy according to the Pool Rules. The Ancillary Services Provider shall notify a final sum to the Settlement System Administrator by such time as will enable the Settlement System Administrator to take into account the final Settlement Run for each Settlement Day. Any unresolved amount shall be included in the final Settlement Run on an interim basis pending resolution. Thereafter it may be included (together with any errors or omissions subsequently arising) in any appropriate Settlement Run. 51.7 Lost opportunity costs: 51.7.1 Subject to Clause 51.6, where the Ancillary Services Provider pays any Generator an amount in respect of lost opportunity costs the Ancillary Services Provider shall use reasonable endeavours to include any such amounts in its Ancillary Service charge to Suppliers in the Settlement Day on which it arises or as soon as possible thereafter. 51.7.2 As soon as the Ancillary Services Provider is notified by any Generator that any obligation to pay any lost opportunity costs may arise it shall consult the Suppliers and, without prejudice to the Ancillary Services Provider's right to recover such lost opportunity costs from Suppliers, if requested by the Suppliers shall recover such lost opportunity costs over such a period as may be agreed between the Ancillary Services Provider and the Suppliers and, in default of agreement, over such period as the Ancillary Services Provider considers to be reasonable. 51.8 Independent Contractor: The Ancillary Services Provider shall act as an independent contractor in carrying out its duties pursuant to this Agreement and (unless expressly authorised to the contrary) shall neither act nor hold itself out nor be held out as acting as agent for any of the Other Parties. 51.9 Standard of care: In the exercise of its duties and responsibilities under this Agreement the Ancillary Services Provider shall exercise that degree of care, diligence, skill and judgment which would ordinarily be expected of a reasonably prudent operator of the Ancillary Services Business taking into account the circumstances actually known to the Ancillary Services Provider, its officers and employees at the relevant time or which ought to have been known to it or them had it or they made such enquiries as were reasonable in the circumstances. 51.10 Miscellaneous: 51.10.1 (a) The Ancillary Services Provider shall be entitled to rely upon any direction or instruction of the Executive Committee or the Chief Executive (if any) if the same is signed by way of authority in accordance with Clause 51.10.4 on behalf of two or more Committee Members or on behalf of the Chief Executive and shall not be obliged to comply with any direction or instruction of any sub-committee of the Executive Committee or any delegate of the Executive Committee other than the Chief Executive (unless such direction or instruction is shown as having been ratified by the Executive Committee); (b) The Ancillary Services Provider shall be entitled to rely upon any communication or document reasonably believed by it to be genuine and correct and to have been communicated or signed by the person by whom it purports to be communicated or signed and shall not be liable to any of the Parties for any of the consequences of such reliance. 51.10.2 Compliance with the Director's directions: No liability whatsoever shall attach to the Ancillary Services Provider as a result of due compliance by it with any directions and instructions of the Director, provided that in complying with such directions and instructions the Ancillary Services Provider is at all times acting in good faith. 51.10.3 Prior approval: Where by the terms of this Agreement the Ancillary Services Provider is required to obtain the prior directions, instructions, approval or consent of the Executive Committee or the Chief Executive, the Ancillary Services Provider shall have no authority to, and shall not, act unless the requisite directions, instructions, approval or consent have first been obtained. Notwithstanding the foregoing sentence, nothing in this Agreement shall prevent the Executive Committee from ratifying any act of the Ancillary Services Provider. 51.10.4 Express authority: All directions and instructions of the Executive Committee or the Chief Executive to the Ancillary Services Provider shall, as between the Ancillary Services Provider and the Pool Members, be deemed to have the express authority of, and shall be binding without reservation upon, all Pool Members. 51.10.5 Authority of Pool Members: The Ancillary Services Provider shall not be bound to act in accordance with the directions or instructions of the Pool Members unless the Pool Members act through the Executive Committee. 51.10.6 General Meetings: The Ancillary Services Provider shall not be obliged to take any steps to ascertain whether any resolution of Pool Members in general meeting or of any class of Pool Members in separate general meeting which it is advised by the Executive Committee or the Chief Executive as having been passed was in fact passed or passed by the requisite majority and until the Ancillary Services Provider shall have express written notice to the contrary from the Executive Committee or the Chief Executive it shall be entitled to assume that the relevant resolution was passed or (as the case may be) the relevant requisite majority was obtained. 51.10.7 Exceptions: Notwithstanding the foregoing provisions of this sub-clause 51.10, in the performance of its duties and responsibilities under this Agreement the Ancillary Services Provider shall not be bound to act in accordance with the directions or instructions of the Executive Committee or the Chief Executive if:- (a) to do so would cause the Ancillary Services Provider to breach any of its obligations under the Act or its Transmission Licence; or (b) the Ancillary Services Provider has reasonable grounds for believing that it would so breach any of such obligations and has consulted the Director and:- (i) the Director has not indicated that in his view it would not involve any such breach; or (ii) the Director has indicated that, notwithstanding any such actual or potential breach, the Director would not be minded to enforce compliance with those obligations and the Ancillary Services Provider has received an indemnity reasonably satisfactory to it in respect of its acting in accordance with such directions and instructions. In any such event the Ancillary Services Provider shall promptly notify the Executive Committee. 51.10.8 Reference to the Director: If at any time the Ancillary Services Provider has a concern which is properly and reasonably founded that, in acting in accordance with any direction or instruction of the Executive Committee or the Chief Executive, it will breach one or more of its obligations under the Act or its Transmission Licence, then, if having discussed the matter with the Executive Committee the matter remains unresolved, the Ancillary Services Provider shall either comply with such direction or instruction or by notice in writing refer the same to the Director, such notice to set out in full the directions or instructions given to the Ancillary Services Provider and the grounds for such concern and to be copied to the Executive Committee. Pending any guidance from the Director in response to any such reference and, provided that the Director shall not express any view that such reference is misconceived, vexatious or in respect of an improperly or unreasonably founded concern, the Ancillary Services Provider shall not be liable to any of the other Parties for refusing to act in accordance with the relevant direction or instruction. If the Director shall express such a view, the Ancillary Services Provider shall be so liable. 51.11Suppliers' Resolutions: Where any matter is reserved under this Part XI or Schedule 18 for the Suppliers to resolve, that matter shall be decided upon by the majority vote of the Suppliers' representatives on the Executive Committee. 51A. TRANSMISSION SERVICES It is expressly acknowledged by the Parties that neither (i) the termination or expiry of the provisions of Clause 51A, 51B or 51C of this Agreement as in force immediately prior to the coming into effect of this Clause 51A, including the Transmission Services Scheme ("TSS") (as therein defined) and/or any addition to or amendment of any other provision of this Agreement effected pursuant to those Clauses whilst in force nor (ii) the termination or expiry of previous clauses in this Agreement which related to UMIS2 (as was therein defined) shall prejudice any Consumer's (as defined in the Pool Rules) or the Grid Operator's (acting through its agent the Ancillary Services Provider) accrued rights and liabilities under each of UMIS2 and/or TSS at the date of such termination or expiry which accrued rights shall include, for the avoidance of doubt, the ability to adjust sums calculated under UMIS2 and/or TSS in respect of disputes arising after such termination or expiry in respect of periods falling before such termination or expiry. 51B. TRANSMISSION SERVICES SCHEME 2 General: 51B.1 Notwithstanding any other provision of this Agreement, the provisions of this Clause shall govern the rights and obligations of the Parties in relation to the Transmission Services Scheme 2. 51B.2 In Recital (G), this Clause 51B, Schedule 9 and Schedule 11, for so long as amended by the provisions of Clause 51B.4, the term "Transmission Services Scheme 2" means the scheme to provide an incentive for the Grid Operator to minimise (taking into account other associated costs) a proportion of the costs arising under this Agreement and/or resulting from the operation of the NGC Transmission System including those arising from the acquisition of Ancillary Services, and more particularly:- (a) which provides for payments between the Grid Operator (acting through its agent the Ancillary Services Provider) and Consumers in relation to:- (i) the Transmission Services Uplift Payment, which comprises a Reactive Power Daily Payment, a Transport Uplift Daily Payment and an Energy Uplift Daily Payment; and (ii) the Transmission Losses Daily Payment; and (b) which provides for an adjustment in relation to out of merit costs, in the form agreed pursuant to Clause 51B.6 as the same may be amended from time to time in accordance with the terms of that Clause. 51B.3 The Transmission Services Scheme 2: (a) The Parties agree (and agree that they will procure that the Executive Committee will so agree) that in the period from 00.00 hours on 1st April, 1996 to 24.00 hours on 31st March, 1997 the Transmission Services Scheme 2, the amendments and/or additions to the Pool Rules to implement the Transmission Services Scheme 2 and the provisions of this Clause, shall apply. This Clause 51B.3(a) may not be amended without the prior written consent of all Parties. (b) As indicated in Clause 51B.3(a), the provisions of Clause 51B, the Transmission Services Scheme 2 and any addition to or amendment of any other provisions of this Agreement or the Pool Rules effected pursuant to this Clause 51B shall terminate at 24.00 hours on 31st March, 1997, except for any provision, addition or amendment which is required to continue beyond that date to give effect to the operation of the Transmission Services Scheme 2 in respect of any period before that date. 51B.4 The Parties agree:- (a) to be bound by the terms, conditions and other provisions of the Transmission Services Scheme 2; (b) that the Grid Operator (acting through its agent the Ancillary Services Provider) and each Consumer shall make such payments as are required and determined by the provisions of the amendments and/or additions to the Pool Rules to implement the Transmission Services Scheme 2; (c) that for the period during which this Clause 51.B applies, the following changes shall be made to the provisions of this Agreement:- (i) in paragraphs 1, 5.4, 5.14, 17.5 and 17.6 of Schedule 11 references to the Ancillary Services Provider shall be deemed to be references to itself and as agent for the Grid Operator in relation to the Transmission Services Scheme 2; (ii) in paragraph 2.1 of Schedule 11 the words "and the Transmission Services Scheme 2" shall be inserted after the words "Ancillary Services"; (iii)in paragraph 5.14 of Schedule 11 the words "or in respect of the Transmission Services Scheme 2" shall be inserted after the first reference to "Ancillary Services" and the words "or in respect of the Transmission Services Scheme 2 for the relevant payment day" shall be inserted after the words "that same day" and in paragraph 5.15 of Schedule 11 the words "or the Ancillary Services Provider" shall be inserted after the words "Pool Member" wherever they occur in that paragraph; and (iv) in Part 4 of Schedule 11, references to information in respect of Ancillary Services shall be deemed to include information in respect of the Transmission Services Scheme 2, in paragraph 17.5 the information required shall include the total amount payable by the Ancillary Services Provider (exclusive of United Kingdom Value Added Tax) pursuant to the Transmission Services Scheme 2 in respect of each Settlement Day, in paragraph 17.6 the Pool Funds Administrator shall include in its verification the amount shown to be payable by the Ancillary Services Provider pursuant to the Transmission Services Scheme 2 in respect of each Settlement Day and in paragraph 22.4 the Confirmation Notices shall include the total amount payable by the Ancillary Services Provider pursuant to the Transmission Services Scheme 2 in respect of each Settlement Day. 51B.5 The Suppliers and the Grid Operator may request the Parties and the Executive Committee promptly (and in any event before the date the Transmission Services Scheme 2 is to take effect) to execute and do all such acts, matters and things (including effecting amendments to the Pool Rules) as may be necessary to give effect to the Transmission Services Scheme 2. The Parties shall not refuse (and agree that they will procure that the Executive Committee shall not refuse) any such request on the grounds of any objections to any provisions of any of the Annexes of Appendix 3 to the Pool Rules as agreed from time to time between the Suppliers and the Grid Operator. 51B.6 Effectiveness: Neither this Clause 51B (other than Clauses 51B.2, 51B.5 and this Clause 51B.6), nor the Transmission Services Scheme 2, nor any amendment, variation or replacement of either of them, nor any amendment, variation or replacement to the Pool Rules relating to the Transmission Services Scheme 2, may become effective except with the prior agreement of the Suppliers (which agreement shall be given by the passing of a resolution in a separate class meeting) and the prior written agreement of the Grid Operator. 51B.7 Survival: (a) Termination or expiry of the provisions of this Clause 51B, the Transmission Services Scheme 2 and/or any addition to or amendment of any other provision of this Agreement effected pursuant to this Clause shall not prejudice any Consumer's or the Grid Operator's accrued rights and liabilities under the Transmission Services Scheme 2 at the date of such termination or expiry, which accrued rights shall, for the avoidance of doubt, include the ability to adjust sums calculated under the Transmission Services Scheme 2 in respect of disputes arising after such termination or expiry in respect of periods falling before such termination or expiry; and (b) the provisions of this sub-Clause 51B.7 and Clause 51B.3(b) shall survive the termination of the Transmission Services Scheme 2. 51B.8 Definitions: In, and in relation to, this Clause 51B "Consumer" shall bear the meaning given to that term in the Pool Rules. PART XII SETTLEMENT RE-RUNS 52. SETTLEMENT RE-RUNS 52.1 Re-runs: The Parties acknowledge and agree that there may be occasions following any final run of Settlement (as referred to in paragraph D(3) of the Preamble to Schedule 9) when it is necessary in respect of a Settlement Day (or part thereof) to re-determine the trades of electricity pursuant to this Agreement and the provision of Ancillary Services (whether to take account of oversight or error, malfunction of the Settlement System operation in accordance with Grid Operator Despatch instructions issued under emergency circumstances, award of an arbitrator(s) pursuant to Clause 83, court order or otherwise howsoever). The Executive Committee, in consultation with the Settlement System Administrator, the Pool Funds Administrator and the Pool Auditor and, where appropriate, the Ancillary Services Provider and the Grid Operator, shall decide how such re-determination is to be effected, the re-allocation of moneys and the period of time over which any such re-allocation is to take place, any such decision to take account and give effect, as nearly as practicable, to the principles and procedures set out in this Agreement (and, where relevant, the award of the said arbitrator(s) or court order). In particular, but without prejudice to the generality of the foregoing, the Executive Committee may require following any relevant final run of Settlement (and shall take due notice of any request from the Ancillary Services Provider or the Grid Operator to this effect) the Settlement System Administrator to re-run, and the Settlement System Administrator shall re-run, Settlement in respect of any Settlement Day (or relevant part thereof) using the software and data originally used in respect of such Settlement Day (or relevant part thereof) but subject to such changes, amendments or additional inputs as may be required by the Executive Committee (in consultation with the Ancillary Services Provider, the Grid Operator or any other relevant party) or by (as the case may be) such arbitrator(s) or court. Any such re-run shall hereafter in this Clause 52 be referred to as a "Re-run". 52.2 Timing: The Settlement System Administrator shall arrange for any Re-run to be carried out as soon as is reasonably practicable following request by the Executive Committee subject to the availability of computer time, compatible software, appropriate data and other resources. 52.3 Ancillary Services Provider: The Ancillary Services Provider shall have the right to incorporate any delayed or disputed amount in respect of the provision of Ancillary Services into Settlement without requiring a Re-run. 52.4 Notification: The Executive Committee shall promptly notify each Party, the Pool Auditor and the Director of each occasion on which it requires the Settlement System Administrator to carry out any Re-run, the reasons for such requirement, the timing thereof and the period to be covered thereby and shall provide each Party with such information about any Re-run as is relevant to such Party and shall provide the Pool Auditor and the Director with full details of any Re-run. 52.5 Proviso: The foregoing provisions of this Clause 52 are subject to the proviso that no Re-run shall be carried out, and neither the Executive Committee nor any Party shall be entitled to require that a Re-run be carried out, in respect of a Settlement Day or any part thereof after the first anniversary of such Settlement Day, but so that this proviso shall not restrict the right of any Party to claim or recover any moneys properly due and owing to it under this Agreement. PART XIII RISK MANAGEMENT SCHEME 53. APPLICATION 53.1 Request: The Executive Committee shall send any Pool Member a Scheme Admission Application within 28 days after receipt of a request for the same from that Pool Member. 53.2 Scheme Admission Application: Any Pool Member may apply to the Executive Committee to have any Centrally Despatched Generating Unit admitted to the Scheme by completing and submitting to the Executive Committee a duly completed Scheme Admission Application not less than 40 days before the proposed date of admission to the Scheme of that Centrally Despatched Generating Unit. 53.3 Admission: The Executive Committee shall admit any Centrally Despatched Generating Unit to the Scheme in respect of which all Scheme Admission Conditions are met. 53.4 Notification (1): If the Executive Committee determines that, in respect of any Centrally Despatched Generating Unit, the Scheme Admission Conditions have been met it shall forthwith and in any event within 40 days after receipt of the Scheme Admission Application notify the relevant Pool Member and the Settlement System Administrator accordingly. 53.5 Notification (2): If the Executive Committee determines that, in respect of any Centrally Despatched Generating Unit, the Scheme Admission Conditions have not been met it shall forthwith and in any event within 40 days after receipt of the Scheme Admission Application notify the relevant Pool Member of the reasons why the Scheme Admission Conditions have not been met. 53.6 Reference to the Director: In the event of any dispute between the Executive Committee and the relevant Pool Member over whether such Pool Member has fulfilled the Scheme Admission Conditions the same may be referred by the Executive Committee or the relevant Pool Member to the Director for determination, whose determination shall be final and binding for all purposes. 54. SCHEME ADMISSION CONDITIONS The Scheme Admission Conditions are that:- 54.1 No person has an Accountable Interest in the Centrally Despatched Generating Unit which is the subject of the Scheme Admission Application which, when added to the Accountable Interests of that person in other Generating Units (whether situate within England and Wales or elsewhere), exceeds in aggregate 1500MW; 54.2 The Pool Member does not have an Accountable Interest (excluding any Accountable Interest of less than 10MW) in more than four Generating Units (whether situate within England and Wales or elsewhere). For the avoidance of doubt a combined cycle module shall be deemed for these purposes a single Generating Unit; 54.3 The Centrally Despatched Generating Unit which is the subject of the Scheme Admission Application has not at the date of the Scheme Admission Application been Commissioned; 54.4 The Centrally Despatched Generating Unit shall be admitted for seven calendar years from the date of its admission to the Scheme specified in the Scheme Admission Application; and 54.5 The Pool Member shall specify in the Scheme Admission Application the proposed Scheme Planned Availability for each Settlement Period in the proposed first Scheme Year for the Centrally Despatched Generating Unit. 55. RIGHTS AND OBLIGATIONS OF POOL MEMBERS 55.1 Notification of unavailability: In respect of each Scheme Year for each Scheme Genset (other than the first) the Pool Member shall not later than 28 days before the start of that Scheme Year for each Scheme Genset notify the Executive Committee of all Settlement Periods in that Scheme Year during which the Scheme Genset is intended to be unavailable. 55.2 Scheme Planned Availability: All Settlement Periods in that Scheme Year other than those notified under Clause 55.1 shall together constitute the Scheme Planned Availability in respect of that Scheme Genset for that Scheme Year. 55.3 Failure to notify: If the Pool Member fails to notify the Executive Committee in accordance with Clause 55.1 of the Scheme Planned Availability in respect of that Scheme Genset for the following Scheme Year, the Scheme Planned Availability shall be deemed to be the same as the Scheme Planned Availability for the current Scheme Year. 55.4 No amendment: The Scheme Planned Availability for any Scheme Year notified in accordance with Clause 55.1 or deemed in accordance with Clause 55.3 may not be amended. 55.5 Payment rights: The Pool Member shall make or be entitled to receive payments in respect of each Scheme Genset as determined in accordance with Section 27 of Schedule 9 notwithstanding the expiry of the period referred to in Clause 50.4. 55.6 No withdrawal: The Pool Member may not withdraw any Scheme Genset from the Scheme during any period referred to in Clause 50.4 applicable to that Scheme Genset. 55.7 Actual planned availability: In respect of each Scheme Genset, the Pool Member shall use all reasonable endeavours to ensure that the Scheme Planned Availability for each Scheme Year is the actual planned availability of such Scheme Genset. 56. REVIEW 56.1 Review: Within two months after the end of the third Scheme Year in respect of which the first Scheme Genset has been admitted to the Scheme and each subsequent anniversary of that date the Executive Committee shall (with the consent of the Director) appoint an independent firm of accountants of internationally recognised standing to review the Scheme to establish whether or not any element of the Scheme (or the Scheme taken as a whole) gives rise to a systematic imbalance which is likely to prevent the payments to the Scheme balancing payments from the Scheme and to submit to the Executive Committee and the Director a report setting out details of any such imbalance and his findings and recommendations for amending the Scheme designed to correct any such imbalance. 56.2 Amendments: The Executive Committee may make such amendments to the provisions of Section 27 of Schedule 9 as are required to implement the recommendations referred to in Clause 56.1. Any such amendments shall apply in respect of any Scheme Admission Application received after the date such amendments become effective and shall constitute a new Scheme. 56.3 Existing rights and obligations continue: Any Pool Member shall remain entitled to the benefits and subject to the obligations of the Scheme with respect to any Scheme Genset in effect at the time of admission of that Scheme Genset to the Scheme. PART XIV FUEL SECURITY 57. DEFINITIONS Definitions: In this Part XIV:- "Fuel Security Interest" in relation to a particular Payment Instruction, means the interest (if any) accruing on the Fuel Security Payment or Fuel Security Reimbursement specified in that Payment Instruction pursuant to sub-clause 2.08 of Part 5 of the Fuel Security Code; "Fuel Security Ledger" means any ledger required to be maintained by the Pool Funds Administrator in accordance with Clause 59; "Fuel Security Payment" means the amount specified in a Payment Instruction which a Generator is entitled to recover from those persons specified in that Payment Instruction (excluding Fuel Security Interest, if any, in relation thereto); "Fuel Security Reimbursement" means the amount specified in a Payment Instruction which a Generator is liable to reimburse to those persons specified in that Payment Instruction (excluding Fuel Security Interest, if any, in relation thereto); and "Payment Instruction" means an instruction which has been duly authorised and delivered by a Generator to whom the Fuel Security Code applies to the Pool Funds Administrator in the form, and in the manner, specified in the Fuel Security Code. 58. PAYMENT INSTRUCTIONS 58.1 Effect of a Payment Instruction: Following delivery of a Payment Instruction to the Pool Funds Administrator:- 58.1.1 any Fuel Security Payment specified in that Payment Instruction (together with any Fuel Security Interest in relation thereto) shall be treated as an amount which is due to that Generator from those persons specified in that Payment Instruction and which is payable on the basis provided in that Payment Instruction; and 58.1.2 any Fuel Security Reimbursement specified in that Payment Instruction (together with any Fuel Security Interest in relation thereto) shall be treated as an amount which is due from that Generator to those persons specified in that Payment Instruction and which is payable on the basis provided in that Payment Instruction; and 58.1.3 subject to Clauses 58.2 and 58.3, the Pool Funds Administrator shall arrange for such Fuel Security Payment or such Fuel Security Reimbursement (together with any Fuel Security Interest in relation thereto) to be paid to or, as the case may be, paid by that Generator by or, as the case may be, to those persons specified in that Payment Instruction in accordance with the provisions of such Payment Instruction; and 58.1.4 such Payment Instruction (including any calculation, determination or other matter stated or specified therein) shall, save in the case of fraud, be conclusive and binding upon all Parties. 58.2 Clarification: If the Pool Funds Administrator considers either that the basis of payment of a Fuel Security Payment or a Fuel Security Reimbursement provided for in a Payment Instruction is unclear, contradictory or incomplete or that it is impossible to implement in full the basis of payment provided for in a Payment Instruction, then the Pool Funds Administrator must, promptly on becoming aware of the same, notify the Director in reasonable detail of the same and, until that matter is clarified, the Pool Funds Administrator shall only be obliged to implement the payment specified in that Payment Instruction to the extent that without clarification such implementation is possible. 58.3 Failure to specify or clarify: If a Payment Instruction fails to specify the basis upon which the Fuel Security Payment or a Fuel Security Reimbursement specified in that Payment Instruction must be paid or if the Director fails to clarify any matter notified to it in accordance with Clause 58.2 within ten Business Days of such notification then the Pool Funds Administrator shall arrange for the relevant payment to be made on such basis as the Executive Committee shall, with the written approval of the Director, determine to be appropriate. 59. RECORD KEEPING AND PAYMENTS 59.1 Fuel Security Ledgers: 59.1.1 Following delivery of a Payment Instruction to the Pool Funds Administrator, the Pools Funds Administrator shall, if he has not already done so, open and thereafter maintain a Fuel Security Ledger in the name of that Generator and shall record therein all amounts (together with any Fuel Security Interest in relation thereto) due to and from that Generator that are specified in Payment Instructions and shall also record therein all transactions arranged by the Pool Funds Administrator for payments to be made to and from that Generator in accordance with the provisions of Payment Instructions. 59.1.2 The Pool Funds Administrator shall from the time that a Fuel Security Ledger is opened until it records a nil balance provide to each Generator and to each Supplier on the last Business Day of each calendar month a statement reflecting all entries recorded in the Fuel Security Ledger of that Generator over the course of the previous month. 59.1.3 The Fuel Security Ledger of a Generator shall, except as required by Clause 59.2.2 or Part IX, be kept confidential in accordance with Part XX. 59.1.4 Each monthly statement provided under Clause 59.2.2 shall, save in the case of manifest error, be deemed prima facie evidence of the contents of that part of the Fuel Security Ledger to which it relates. 59.1.5 Each Party shall promptly review each monthly statement provided to it under Clause 59.2.2 and shall (without prejudice to any of its rights under this Agreement) where practicable within ten Business Days after receiving each such statement notify the Pool Funds Administrator of any inaccuracies in such statement of which it is aware. 59.1.6 If the Pool Funds Administrator at any time receives from a Generator or any Supplier a notice disputing the accuracy of the Fuel Security Ledger of that Generator, the Pool Funds Administrator shall consult with the Party giving the notice and use all reasonable endeavours to rectify any inaccuracy. In the event that any inaccuracy in a Fuel Security Ledger of a Generator is rectified, the Pool Funds Administrator shall advise that Generator and the Suppliers of the inaccuracy that was rectified. 59.2 Fuel Security Payments: Following delivery to the Pool Funds Administrator of a Payment Instruction specifying a Fuel Security Payment, the Pool Funds Administrator shall enter in the Fuel Security Ledger of that Generator as a credit (a) the amount of the Fuel Security Payment, and (b) thereafter, any Fuel Security Interest in relation thereto. 59.3 Fuel Security Reimbursements: Following delivery to the Pool Funds Administrator of a Payment Instruction specifying a Fuel Security Reimbursement, the Pool Funds Administrator shall enter in the Fuel Security Ledger of that Generator as a debit (a) the amount of the Fuel Security Reimbursement, and (b) thereafter, any Fuel Security Interest in relation thereto. 59.4 Other Entries: Any amount paid to or, as the case may be, paid by a Generator in accordance with the provisions of a Payment Instruction shall be entered as a debit or, as the case may be, a credit in the Fuel Security Ledger of that Generator. 59.5 Set off: The Pool Funds Administrator shall, unless it reasonably believes that it would be unlawful to do so, from time to time where possible set off any amounts shown as credits in the Fuel Security Ledger of a Generator against any amounts shown as debits in the Fuel Security Ledger of that Generator in the order in which they were entered. Any balance shown in the Fuel Security Ledger of a Generator shall, if it is a credit, be paid to or, if it is a debit, be paid by that Generator to the extent that it relates to a Payment Instruction on the basis provided for in that Payment Instruction. The entitlements and liabilities of a Generator (and the corresponding liabilities and entitlements of the respective debtors and creditors of that Generator) shall, to the extent that they have been set off as aforesaid, be deemed satisfied and extinguished. 59.6 Schedule 11: All payments made to or by any Generator in accordance with the provisions of a Payment Instruction shall, subject to any contrary instruction contained in the provisions of a Payment Instruction, be effected by the Pool Funds Administrator through the Banking System and the Billing System established in accordance with Schedule 11. PART XV METERING 60. METERING 60.1 Introduction: The rights and obligations of each Party to this Agreement which enable the accurate measurement of Energy traded for the purposes of this Agreement by appropriate metering installations are as set out in this Part XV and also in Schedule 21, and the provisions of Schedule 21 shall have effect and apply in the same manner as the remaining provisions of this Agreement apply with respect to each such Party. 60.2 General: 60.2.1 For the purposes of this Agreement the quantities of Active Energy and Reactive Energy Exported or Imported by Parties shall be measured and recorded through Metering Equipment installed, operated and maintained and otherwise provided for as set out in this Part XV and in Schedule 21. Each Generating Unit (excluding for this purpose Generation Trading Blocks) which is subject to Central Despatch shall have separate Metering Equipment. 60.2.2 Each Party is required to register or procure that there is registered with the Settlement System Administrator the Metering System at each Site where such Party Exports or Imports electricity except where such electricity is not sold or purchased in accordance with the Pool Rules. 60.3 Registrants: 60.3.1 A Metering System shall have a Registrant and Operator (and shall be commissioned in accordance with the relevant Code of Practice) before the Settlement System Administrator is required to take such Metering System and the data derived therefrom into account for the purposes of Settlement. 60.3.2 Each Metering System (and the identities of its respective Registrant and Operator) which the Settlement System Administrator shall take into account for the purposes of Settlement shall be as set out, for the time being and from time to time, in the Register. 60.3.3 A Registrant's role in relation to a Metering System under this Agreement shall continue until:- (i) such Registrant ceases to be a Party or another Party complying with the definition of Registrant accepts such role as Registrant in accordance with the provisions of this Agreement by service of a duly completed notice in the form prescribed by the relevant Agreed Procedure (but without prejudice to any accrued liabilities of the previous Registrant); or (ii) the Plant or Apparatus of the Registrant, in respect of such Metering System, ceases to be connected at the relevant Site (as indicated in the notification to the Settlement System Administrator in the form prescribed by the relevant Agreed Procedure); or (iii) in the case of a Registrant of a Metering System which is at the point of connection between a Public Electricity Supplier's Distribution System and a Second Tier Customer, the Registrant ceases to act as Second Tier Supplier in relation to the same at such point of connection; or (iv) in the case of a Registrant of a Metering System which is at the point of connection between a Public Electricity Supplier's Distribution System and an ERS First Tier Customer, the Registrant ceases to act as Supplier in relation to the same at such point of connection; or (v) in the case of a Registrant of a Metering System which is at the point of connection between a Public Electricity Supplier's Distribution System and a Non-Pooled Generator, the Registrant ceases to act as Supplier purchasing generation from such Non-Pooled Generator in relation to the same at such point of connection. 60.3.4 The Settlement System Administrator shall inform the relevant Host PES of:- (i) the identity of any new Registrant; and (ii) any change in the identity of any existing Registrant, of a Metering System in respect of which that Public Electricity Supplier is Host PES, after such change is notified to the Settlement System Administrator in accordance with the terms of this Agreement. 60.3.5 There must always be one and, at any point in time, no more than one Registrant for each Metering System which is registered with the Settlement System Administrator. 60.3.6 Any notice of a new, or of a change in an existing, Registrant, Equipment Owner Operator, Second Tier Customer, ERS First Tier Customer, Non-Pooled Generator or Host PES or any Form of Acknowledgement required under this Part XV or Schedule 21 shall be in such form and given to such person at such time(s) and accompanied by payment of such fees (if any) as is prescribed by the relevant Agreed Procedures. 60.3.7 If a Metering System ceases to have a Registrant who is not replaced as Registrant in relation to the relevant Metering Equipment, the Settlement System Administrator shall not be obliged to take the relevant Metering System into account for the purposes of Settlement. 60.3.8 A Registrant may not resign or retire as Registrant except in accordance with Clause 60.3.3. 60.3.9 The Registrant in respect of any Metering System shall provide to the Settlement System Administrator such information as may be required by the relevant Agreed Procedures. 60.3.10 The Settlement System Administrator shall not enter on the Register a Registrant in respect of which evidence of consent of the Equipment Owner has not been provided in accordance with the relevant Agreed Procedure. 60.3.11 Where a Metering System at the point of connection of two or more Distribution Systems is to be registered with the Settlement System Administrator, all interested Parties shall agree upon and nominate the Registrant by means of a duly completed nomination to the Settlement System Administrator in the form prescribed by the relevant Agreed Procedure. 60.3.12 A Metering System for recording the output of a Non-Pooled Generator must be capable of being identified separately for the purposes of Settlement from any Metering System recording demand. For the avoidance of doubt, it is acknowledged that one set of Metering Equipment may comprise more than one separately-identified Metering System. 60.4 Operators: 60.4.1 There must always be one and, at any point in time, no more than one Operator for each Metering System which is registered with the Settlement System Administrator. A replacement Operator of such Metering System may be appointed from time to time in accordance with the provisions of this Part XV, Schedule 21 and the relevant Agreed Procedure. 60.4.2 All Metering Systems at the site of a Non-Pooled Generator, which contain all or any part of the same Metering Equipment must have the same Operator. 60.4.3 Any notice of a new Operator or of a change in Operator (including upon resignation, removal or cessation in accordance with the provisions of Schedule 21) or any Form of Acknowledgement required under this Part XV or Schedule 21 shall be in such form and given to such person at such time(s) and accompanied by payment of such fees (if any) as is prescribed by the relevant Agreed Procedures. Where any Meter Operator Party has not acknowledged its appointment as Operator the Settlement System Administrator shall notify the Registrant in accordance with the relevant Agreed Procedure. 60.4.4 The Registrant in respect of a Metering System shall ensure that there is appointed from time to time an Operator, which is a Meter Operator Party, in accordance with, and for the purposes of, Schedule 21 as Operator in respect of that Metering System. 60.4.5 If a person which is an Operator in respect of any Metering System ceases to be an Operator in respect thereof for whatever reason (including upon removal or resignation) or ceases to be a Meter Operator Party (including upon removal or resignation) and there has not been appointed, at that time, a replacement Operator in respect of the relevant Metering System(s) in accordance with the provisions of this Part XV and Schedule 21, such person's responsibilities as Operator of such Metering Equipment shall upon such cessation be assumed by the Registrant in respect of such Metering Equipment who shall be deemed to be the Operator therefor (notwithstanding that it shall not be registered as such by the Settlement System Administrator) in accordance with the provisions of this Clause (the "deemed Operator"). 60.4.6 If a person which is an Operator in respect of any Metering System at the site of a Non-Pooled Generator ceases to be an Operator in respect thereof for whatever reason (including upon removal or resignation) or ceases to be a Meter Operator Party (including upon removal or resignation) and there has not been appointed, at that time, a replacement Operator in respect of the relevant Metering System(s) in accordance with the provisions of this Part XV and Schedule 21, such person's responsibilities as Operator of the relevant Metering Equipment shall upon such cessation be assumed by the Registrant of the Metering System registered for supply with respect to such Metering Equipment. Such Registrant shall be deemed to be the Operator therefor (notwithstanding that it shall not be registered as such by the Settlement System Administrator) in accordance with the provisions of this Clause (the "Deemed Operator"). 60.4.7 As soon as any Registrant has reasonable grounds to believe that an Operator of any Metering System in respect of which it is the Registrant has ceased to act as Operator therefor in accordance with substantially all of its responsibilities as set out in Schedule 21 it shall remove such Operator in respect of such Metering System in accordance with paragraph 6.1 of Schedule 21. 60.4.8 If the Settlement System Administrator has reasonable grounds to believe that an Operator of any Metering System has ceased to act as Operator therefor in accordance with substantially all of its responsibilities as set out in Schedule 21 the Settlement System Administrator shall notify the Registrant in accordance with the relevant Agreed Procedure. 60.4.9 Any Registrant which is deemed to be the Operator of a Metering System pursuant to the provisions of Clause 60.4.5 shall, subject to Clauses 60.4.10 and 60.4.11, continue to act as the Operator in respect of any Metering System to which that Clause applies, or shall appoint an agent or contractor which shall continue to act as the Operator in respect of such Metering System, for a period of 10 Business Days (which shall commence at the time of the cessation referred to in Clause 60.4.4) or, if a new Operator is registered in respect of that Metering System prior to the expiry of that period, for a period ending on the date of such registration. 60.4.10 If a Registrant to which Clause 60.4.9 applies does not act as Operator in accordance with the provisions thereof or does not appoint an agent or contractor who shall act as Operator, or if the 10 Business Day period referred to in Clause 60.4.9 shall expire without a replacement Operator being registered with the Settlement System Administrator in respect of that Metering System in accordance with paragraph 4 of Schedule 21, that Registrant shall:- (i) undertake to cease forthwith to supply or to generate or to take a supply of electricity for the purposes of the sale or acquisition of electricity pursuant to this Agreement at the site where such supply or generation is measured, recorded and communicated to the Settlement System Administrator by that Metering System; and (ii) notify the Settlement System Administrator in accordance with the relevant Agreed Procedure of that fact. 60.4.11 During the period in which a Registrant is the deemed Operator in accordance with this Clause it shall be required (save only as expressly provided to the contrary in this Agreement) to comply with the requirements of this Part XV and Schedule 21 as Operator provided that, but without prejudice to any liability to pay for Active or Reactive Energy traded by it, such Registrant as deemed Operator:- (i) shall not be required to be registered as Operator with the Settlement System Administrator nor to comply with the prescribed conditions for registration as Operator from time to time in accordance with the provisions of Schedule 21; and (ii) shall not at any time when it is the deemed Operator be required to incur significant capital expenditure in the fulfilment of obligations contained in this Part XV or Schedule 21 where:- (a) the Metering Equipment shall have become defective, inaccurate or in want of repair (the "defective Metering Equipment") as a direct consequence of the act or omission of any previous Operator; (b) the Registrant shall upon becoming aware of the same have taken all steps to cease forthwith to supply or to generate electricity for the purposes of the sale or acquisition of electricity pursuant to this Agreement at or in relation to the site where such supply or generation is measured, recorded and communicated to the Settlement System Administrator by the defective Metering Equipment; and (c) the Registrant shall have notified the Settlement System Administrator in accordance with the relevant Agreed Procedure of the fact that the supply or generation has ceased. Where (x) the Settlement System Administrator proposes to exercise its right under paragraph 18 of Schedule 21 to replace, renew or repair the defective Metering Equipment (the "remedial work"); (y) the exercise of such right would result in the incurring of significant capital expenditure; and (z) the Register indicates that such Registrant is acting as deemed Operator, the Settlement System Administrator shall notify the Registrant before undertaking such remedial work and shall give such Registrant the opportunity to comply with (ii) (b) and (c) above before commencing such remedial work. 60.5 Maintenance of Register and documents: 60.5.1 The Settlement System Administrator shall keep a register recording:- (i) each Metering System which is accepted for the purposes of the Settlement System; (ii) the respective identities in respect of each such Metering System of:- (a) the Registrant; (b) the Operator; (c) the Equipment Owner; (d) the Host PES (where applicable); (e) any Second Tier Customer, ERS First Tier Customer or Non-Pooled Generator in respect of a supply to which that Metering System is being used; and (f) any agent which may be appointed from time to time by the Settlement System Administrator for the purpose of data collection or, where appropriate, of any Second Tier Agent in respect of such Metering System or, where the Settlement System Administrator does not appoint or have currently appointed such agent or Second Tier Agent in respect of a Metering System, a note to this effect; (iii) loss adjustment details whether by meter biasing or by software; (iv) whether the Metering Equipment comprising a Metering System is the subject of a dispensation agreed in accordance with paragraph 14 of Schedule 21; and (v) the relevant Code(s) of Practice in respect of such Metering System. 60.5.2 For the purposes of this Agreement, the Settlement System Administrator shall refer only to the Register to identify the Registrant, Operator, Equipment Owner, Host PES, Second Tier Customer, ERS First Tier Customer, Non-Pooled Generator, agent or Second Tier Agent referred to in Clause 60.5.1 relating to each Metering System and shall not be obliged to acknowledge or be bound by any other agreement or arrangement entered into by any Registrant, Operator, Equipment Owner, Host PES, Second Tier Customer, ERS First Tier Customer or Non-Pooled Generator. 60.5.3 The Settlement System Administrator shall keep the Register up to date, noting changes to Registrants, Operators, Equipment Owners, Host PESs, Second Tier Customers, ERS First Tier Customers, Non-Pooled Generators, Metering Equipment, dispensations and any Site disconnections as notified to it pursuant to this Agreement and any changes to any agent or Second Tier Agent. The Settlement System Administrator shall also record in the Register any other information regarding each Metering System as may be reasonably required by the Executive Committee. 60.6 Communication links and central collector stations: 60.6.1 The Settlement System Administrator shall collect (or procure the collection of) and estimate data relating to quantities of Active and Reactive Power Imported or Exported by any Party as may be required for the proper functioning of Settlement in accordance with the provisions of this Clause 60.6. 60.6.2 The Settlement System Administrator shall collect or procure the collection of all such data referred to in Clause 60.6.1 as is available from Outstations either by means of remote interrogation or by means of manual on-site interrogation. 60.6.3 (a) For the purposes of remote interrogation the Settlement System Administrator shall enter into, manage and monitor contracts or other arrangements to provide for the maintenance of all communication links by which information is passed from Outstations to the Settlement System Administrator or its agent other than exchange links which form part of Communications Equipment. (b) In the event of any fault or failure of any communication link or any error or omission in such data or all necessary data not being available from Outstations the Settlement System Administrator shall collect or procure the collection of such data by manual on-site interrogation in accordance with the relevant Agreed Procedures. 60.6.4 The Settlement System Administrator shall be responsible for the installation and maintenance of central collector stations. 60.6.5 The Settlement System Administrator shall collect or procure the collection of data for the purposes of the Settlement System from Embedded Generators, Second Tier Suppliers, Second Tier Customers, ERS First Tier Customers, Non-Pooled Generators and inter-Distribution System connections in accordance with the relevant Agreed Procedures. 60.6.6 The obligation to maintain communications links in respect of Metering Equipment shall not apply where and with effect from the date on which a person receiving a supply of or generating electricity recorded by such Metering Equipment ceases to be a Second Tier Customer or an ERS First Tier Customer, a Non-Pooled Generator, a Generator or a PES. 60.7 Class rights: 60.7.1 The levels of accuracy for Metering Equipment at points of connection of Second Tier Customers taking up to (and including) 100kW of demand and at new points of connection between two or more Distribution Systems were not set as at 1st April, 1993 and shall be as specified by the Executive Committee subject to the consent of any relevant class of Pool Members. 60.7.2 The levels of accuracy for Metering Equipment at points of connection of Non-Pooled Generators shall be as specified by the Executive Committee subject to the consent of any relevant class of Pool Members. 60.7.3 Any change to the standards of accuracy of Metering Equipment required for Second Tier Customers up to (and including) 100kW before 31st March, 1998 shall be a change to the class rights of Suppliers. 60.7.4 Any change to the standards of accuracy of Metering Equipment required for Non-Pooled Generators shall be a change to the class rights of Suppliers. 60.8 Sealing: Metering Equipment shall be as secure as is practicable in all the circumstances and for this purpose:- (a) all Metering Equipment shall comply with the relevant Agreed Procedure; and (b) the Executive Committee and the Settlement System Administrator shall regularly review Agreed Procedures for security arrangements in relation to Metering Equipment. 60.9 Discrepancies between meter advance and half hourly value totals: The Parties acknowledge that, in transmitting metered data, impulses representing quantities of electricity may be lost between the relevant Meter and the Outstations giving rise to inaccuracies in half hourly values notwithstanding that the Metering Equipment is complying with the standards required by this Agreement. In such circumstances any differences between electricity flows recorded on Meters and the total of the half hourly values recorded in the Settlement System will be noted at the time that the Meter is inspected and read by the Settlement System Administrator pursuant to paragraph 10 of Schedule 21 and will be dealt with as provided in the relevant Agreed Procedure. In any other circumstances where the Metering Equipment is not complying with the standards required by this Agreement such difference will be dealt with in accordance with paragraph 11 of Schedule 21. 60.10 Meter Failure: 60.10.1 If at any time any Metering Equipment ceases to function or is found to be outside the prescribed limits of accuracy referred to in paragraph 7.3.1 of Schedule 21 for whatever reason then, except in the circumstances referred to in Clause 60.10.2:- (a) in the case of Metering Equipment ceasing to function, during the period from the date of such cessation; or (b) in any other case, during the period from the time when such inaccuracy first occurred or, if such time is unknown, from the midnight preceding the day during which the disputed reading occurred, until, in either such case, the date of adjustment, replacement, repair or renewal of such Metering Equipment under paragraph 8.4 of Schedule 21, the meter readings shall be deemed to be those calculated pursuant to the relevant Agreed Procedure. 60.10.2 If at any time a voltage transformer fuse on a circuit supplying a Meter fails with the result that the Metering Equipment is outside the prescribed limits of accuracy referred to in paragraph 7.3.1 of Schedule 21, the meter readings from the time the failure is deemed to have occurred until the voltage transformer circuit is again restored to the Meter shall be deemed to be those calculated pursuant to the relevant Agreed Procedure. A failure shall be deemed to have occurred at the point in time provided for in the relevant Agreed Procedure. 60.11 Disputes: 60.11.1 Any dispute regarding the accuracy of data recorded or transmitted by Metering Equipment in respect of any Settlement Day which is to be used for the purposes of Settlement and where the purpose of the resolution of such dispute is solely to affect payments arising from a Settlement Run shall, if there is a relevant Agreed Procedure, be dealt with in accordance with such Agreed Procedure. If, having exhausted such Agreed Procedure any Party is not satisfied with the outcome, such Party may refer the matter to the Executive Committee. If there shall be no relevant Agreed Procedure, such dispute shall be referred to the Executive Committee. If, in either case, any Party is not satisfied with the decision of the Executive Committee, the matter may be referred by such Party to arbitration in accordance with Clause 83. 60.11.2 Any dispute regarding Metering Equipment (other than a dispute referred to in Clause 60.11.1) shall be referred to the Executive Committee. If any Party is not satisfied with the decision of the Executive Committee, the matter may be referred by such Party to arbitration in accordance with Clause 83. 60.11.3 It is hereby expressly acknowledged and agreed by the Parties that the resolution of any dispute referred to in Clause 60.11.1 or 60.11.2 shall in all cases be without prejudice to the bringing or pursuing of any claim, by or against, or the resolving of any issue between any one or more of such Parties or any other Party arising out of the same facts or circumstances, or facts or circumstances incidental to the facts and circumstances giving rise to such dispute, or upon the basis of which such dispute has been resolved, in favour of, or against, a Meter Operator Party or Meter Operator Parties. 60.11.4 Upon the request of any Party which is a party to a dispute referred to in Clause 60.11.1 or 60.11.2 any relevant data derived from Metering Equipment may be submitted by the Settlement System Administrator to the body then having jurisdiction in respect of the relevant dispute for the purposes of resolving such dispute. 60.12 Information: 60.12.1 If a Pool Member or Party intends to make or provide or make a significant alteration to a connection to the NGC Transmission System or to a Distribution System which connection is of 100MW or more in capacity and which may require a new Metering System to be registered into the Settlement System or a significant change to a Metering System to be registered into the Settlement System, the Pool Member or Party shall inform the Settlement System Administrator as soon as possible and, in any event, not later than three months prior to the date on which the Pool Member or Party expects to make or provide the connection or change. Such information will be regarded as confidential to the Pool Member or Party providing it, and will be used by the Settlement System Administrator only for the purpose of preparing the Settlement System to take account of the Metering System when it is registered. 60.12.2 Any information regarding or data acquired by the Settlement System Administrator or its agent from Metering Equipment at any Site which is a point of connection to a Distribution System shall, and may, be passed by the Settlement System Administrator or its agent to the operator of the relevant Distribution System. The said operator of the relevant Distribution System may only use the same for the purposes of the operation of the Distribution System and the calculation of charges for use of and connection to the Distribution System. 60.13 Ownership of Metering Data, access, use and use of Communications Equipment: 60.13.1 The Registrant of any Metering System shall own the data acquired therefrom provided that (and each Registrant hereby expressly agrees and acknowledges that) a Second Tier Customer, ERS First Tier Customer or Non-Pooled Generator of that Registrant in respect of which such data is generated shall be entitled at all times without charge by the Registrant to access, obtain and use such data and provided further that:- (i) such access, obtaining or use, or the method of such access, obtaining or use, does not interfere with the operation of Settlement; (ii) nothing in this Clause 60.13.1 shall require the Registrant actively to provide such data to such Second Tier Customer, such ERS First Tier Customer or such Non-Pooled Generator or so to provide such data free of charge; and (iii) such access shall not be by using any communications link used by the Settlement System Administrator for the purposes of Clause 60.6 without the prior written consent of the Settlement System Administrator. 60.13.2 The Settlement System Administrator and, for the purposes of the performance by the Pool Auditor of its functions under Part IX, the Pool Auditor are hereby authorised to use all data which is owned by the Registrant pursuant to Clause 60.13.1 as may be permitted pursuant to this Agreement, and the Settlement System Administrator or, as the case may be, the Pool Auditor may only release such data to others to the extent set out in this Agreement. It is hereby expressly agreed that the Settlement System Administrator is permitted to and shall against request and payment of a reasonable charge therefor release to a Second Tier Customer, ERS First Tier Customer or Non-Pooled Generator such data relating to it as is referred to in Clause 60.13.1. 60.13.3 Communications Equipment need not be dedicated exclusively to the provision of data to the Settlement System Administrator for the purposes of Settlement provided that any other use shall not interfere at any time with the operation of Settlement and subject also to the relevant provisions (if any) in the Tariff. 60.14 Ancillary Services: Until the RP Date, the Ancillary Services Provider shall be entitled at its own cost and expense (which shall not be charged or recharged to Pool Members) to prepare and submit to the Suppliers in separate class meeting a works programme relating to the method of recovery from Pool Members for the supply of Reactive Energy by reference to the actual amount of Reactive Energy consumed by Pool Members as measured by MVAr Metering Equipment at each relevant Site, and, if approved by the Suppliers in separate class meeting, such works programme shall be deemed to be an approved Works Programme for all purposes of this Agreement and the provisions of Clauses 5.13 and 5.14 shall apply mutatis mutandis. 60.15 Appointment of Agents by Settlement System Administrator: Notwithstanding the provisions of paragraph 7.2.2 of Schedule 4 the Settlement System Administrator may appoint one or more agents to perform any or all of its obligations under this Part XV and Schedule 21. 60.16 Appointment of Second Tier Agents by Settlement System Administrator with effect from 31st March, 1994: 60.16.1 If, for the purposes of Clause 60.15, the Settlement System Administrator appoints one or more agents for the purpose of carrying out the obligations of the Settlement System Administrator under or in connection with this Part XV or Schedule 21 in relation to Metering Systems at or referable to points of connection relating to Second Tier Customers, ERS First Tier Customers or Non-Pooled Generators as the Settlement System Administrator may direct, then the provisions of Clauses 60.16.1 to 60.16.5 and Clause 60.17 shall, inter alia, apply to such arrangements. 60.16.2 The Settlement System Administrator shall, prior to appointing any Second Tier Agent pursuant to Clause 60.16.1, consult with the Executive Committee as to the appropriateness of the appointment of such Second Tier Agent and the terms upon which, if appropriate, such agent is to be appointed and shall have due regard to the wishes expressed pursuant to this Clause 60.16.2 by the Executive Committee. 60.16.3 The Settlement System Administrator shall use reasonable endeavours to procure that each Second Tier Agent shall promptly and properly input data and other information as it may receive pursuant to the terms of its appointment into its Second Tier Computer Systems and shall review and validate data and other information in accordance with the relevant Agreed Procedures to establish the completeness thereof and to identify any inconsistencies therein. 60.16.4 The Settlement System Administrator shall use reasonable endeavours to procure that each Second Tier Agent shall keep secure and confidential and not disclose, during the period of its appointment or following its resignation or removal, information, data and documentation obtained by the Second Tier Agent in such capacity so as to cause a breach by the Settlement System Administrator of its obligations pursuant to Clause 68 or 69 of this Agreement. 60.16.5 The Settlement System Administrator shall use reasonable endeavours to procure that upon the reasonable request of the Settlement System Administrator and in any event upon the removal or resignation of any Second Tier Agent, such Second Tier Agent shall make over to the Settlement System Administrator or its nominee all such records, manuals and data and other information in the ownership or under the control of the Second Tier Agent and relating to the operation, and necessary for the proper functioning, of the Second Tier Data Collection System. 60.17 Review: (a) As soon as practicable after the third anniversary of the date of this Agreement the Executive Committee, in consultation with the Settlement System Administrator and the Director, shall carry out a full review of the Second Tier Data Collection System and, in consultation with the Director, shall seek to agree with the Settlement System Administrator (the agreement of the Settlement System Administrator not to be unreasonably withheld or delayed) the manner by which the costs of the Second Tier Data Collection System should be recovered, in the Accounting Periods commencing on or after 1st April, 1994. (b) If, and to the extent, deemed necessary by the Executive Committee in consultation with the Settlement System Administrator and the Director, the Executive Committee shall conduct a further review of the Second Tier Data Collection System and, in consultation with the Director, shall seek to agree with the Settlement System Administrator (the agreement of the Settlement System Administrator not to be unreasonably withheld or delayed), the manner by which the Second Tier Data Collection System should operate, and by which the costs of the same should be recovered, in the Accounting Periods commencing on or after 1st April, 1996 such review to commence in due time to enable implementation of any changes to the Second Tier Data Collection System on that date. (c) The Executive Committee, in consultation with the Settlement System Administrator and the Director, shall carry out a further full review of the Second Tier Data Collection System and, in consultation with the Director, shall seek to agree with the Settlement System Administrator (the agreement of the Settlement System Administrator not to be unreasonably withheld or delayed), the manner by which the Second Tier Data Collection System should operate, and by which the costs of the same should be recovered, in the Accounting Periods commencing on or after 1st April, 1998 such review to commence in due time to enable implementation of any changes to the Second Tier Data Collection System on that date. (d) In the event of an agreement within (a), (b) or, as the case may be, (c) above, the provisions of this Agreement relating to the Second Tier Data Collection System shall be amended accordingly and, in the event of any failure to agree, the matter shall be referred to arbitration pursuant to the provisions of Clause 83. If such agreement has not been reached or a determination has not been made or a settlement not been reached under any such arbitration prior to: (i) in the case of (a) above, the fourth anniversary of the date of this Agreement; (ii) in the case of (b) above (where applicable) by 1st April, 1996; and (iii) in the case of (c) above by 1st April, 1998, the Settlement System Administrator shall, between such date and the date on which agreement is reached or (if applicable) a determination or settlement under such arbitration is made or reached, recover the costs, expenses and charges of the Second Tier Data Collection System in accordance with Clause 34A and paragraph 3 of Part G of the Appendix to Schedule 4. 60.18Software for FMS: The Settlement System Administrator shall develop and implement appropriate computer software for the purposes of collecting and aggregating data following the FMS Date. 60.19 Qualifying Unmetered Supplies: 60.19.1 Notwithstanding any of the other provisions of this Agreement, including Clause 60 (other than the provisions of this Clause 60.19) and Schedule 21, the provisions of this Clause 60.19 and any Second Tier Unmetered Supplies Procedures shall, to the extent they are supplemental to or conflict with any other provisions of this Agreement, govern the rights and obligations of the Parties (including each Operator and each Meter Operator Party) in relation to Qualifying Unmetered Supplies. 60.19.2 Neither this Clause 60.19 (save for the requirements set out in this Clause 60.19.2 for the bringing into effect of this Clause 60.19) nor the Second Tier Unmetered Supplies Procedures nor any amendment, variation or replacement of either of them may become effective: (i) unless and until the Chief Executive shall have given each Public Electricity Supplier, each Second Tier Supplier, the Director (who may consult with such persons as he considers appropriate) and the Settlement System Administrator not less than 14 days' notice that this Clause 60.19 (or any amendment, variation or replacement thereof) and/or the Second Tier Unmetered Supplies Procedures are to become effective, stating the date on which the same are proposed to become effective and having attached thereto a copy of any proposed Second Tier Unmetered Supplies Procedures; and (ii) so long as none of the recipients of the notice referred to in Clause 60.19.2(i) shall have given a counternotice to the Chief Executive before the date on which this Clause 60.19 and/or the Second Tier Unmetered Supplies Procedures are to become effective stating, on reasonable grounds, an objection to this Clause 60.19 or the Second Tier Unmetered Supplies Procedures becoming effective on the proposed date or at all, in the event that a counternotice shall have been given in accordance with Clause 60.19.2(ii) the Chief Executive shall, as soon as is reasonably practicable, notify the persons referred to in Clause 60.19(i) of that fact. 60.19.3 Nothing in this Clause 60.19 shall permit the adoption, in the Second Tier Unmetered Supplies Procedures or otherwise, of standards of accuracy of data for Qualifying Unmetered Supplies different from those which apply generally under this Agreement other than during the transitional period expiring on 31st March, 1995. 60.19.4 Except where the context otherwise requires, in this Clause 60.19:- "Qualifying Unmetered Supplies" means unmetered street lighting and related supplies of a type which as at the date this Clause 60.19 becomes effective are permitted to be made by a Second Tier Supplier; "Second Tier Unmetered Supplies Procedures" means the procedures in respect of Qualifying Unmetered Supplies in the form agreed between all Public Electricity Suppliers and the Director (who may consult with such persons as he considers appropriate) as the same may be amended, varied or replaced from time to time with the agreement of such persons. 60.19.5 The Executive Committee may determine that Agreed Procedures are necessary to implement this Clause 60.19 or the Second Tier Unmetered Supplies Procedures and in such case nothing in this Clause 60.19 or the Second Tier Unmetered Supplies Procedures shall prejudice such determination or the adoption or implementation of such Agreed Procedures, provided that any such Agreed Procedure shall not include matters which would occur on the Second Tier Customer's or ERS First Tier Customer's side of the outstation. 60.19.6 The Parties accept that modifications to the Settlement System Administrator's rights and obligations under this Agreement may be required under the Second Tier Unmetered Supplies Procedures or otherwise before this Clause 60.19 can become effective. 60.20 Obligation on Suppliers to install half-hourly metering and register above 100 kW customers: Each Supplier shall use all reasonable endeavours to ensure that half-hourly metering and the necessary communications links are installed in respect of all Embedded Non-Franchise Sites in respect of which it is Supplier by no later than 1st October, 1997 and that all Metering Systems associated with such Embedded Non-Franchise Sites are registered in ERS by no later than 31st December, 1997, in accordance with the approach specified by the Executive Committee Provided that there shall be no obligation to install metering and communications links in respect of sites relating to Qualifying Unmetered Supplies. PART XVI POOL CIVIL EMERGENCIES 61.1 DEFINITIONS Definitions: In this Part XVI:- "Civil Emergency Pool Credit Facility" shall mean a credit facility to be arranged by and for the use of Suppliers upon terms and conditions to be set out in Schedule 11 to this Agreement; "PoolCivil Emergency" shall have the meaning ascribed to it in Clause 61.2.1; "Pool Civil Emergency Event" shall mean an event or series of events which satisfies the conditions set out in Clause 61.3.2; "Pool Civil Emergency Period" shall mean a period initiated by the Executive Committee after the occurrence of a Pool Civil Emergency Event which shall commence, and terminate, in accordance with this Part; "PoolRules Civil Emergency Condition" shall mean, in respect of any Schedule Day, that both:- (i) UMT _ 0.1 (as determined in accordance with paragraph 32.1(a) of Schedule 9); and (ii) RAPT _ 3 * CAPT (as determined in accordance with paragraph 32.1(b) of Schedule 9); "Pool Rules Civil Emergency Period" shall mean a period which commences, and terminates, and in which section 32.3 of Schedule 9 is in force, in accordance with this Part; and "Relevant Time" in relation to any event, means the time which falls two hours prior to the first time at which an Availability Declaration must be submitted pursuant to section 6.1 of Schedule 9 on the first Settlement Day which commences at least 24 hours after the occurrence of such event. 61.2 APPLICATION AND STATEMENT OF INTENT 61.2.1 General Statement of Intended Application: It is intended that this Part shall apply where there is in existence an event, or series of events which does or do not generally occur as part of normal market operating conditions and which affect(s) the operation of the market for the generation, transmission and/or supply of electricity in England and Wales and which, as a result, cause(s) or is or are likely to cause materially changed pool prices to arise and continue (a "Pool Civil Emergency"). The following conditions set out in this Part are intended to reflect the circumstances in which it is envisaged that it would likely be the case that such event or events shall have so occurred. 61.2.2 Interrelationship with Act: The Act and the Energy Act 1976 contain legislation conferring wide powers upon the Secretary of State to regulate the generation, transmission and/or supply of electricity in an emergency. It is intended that the provisions of this Part shall coexist in application with such legislation. 61.3 CONDITIONS FOR EXISTENCE OF A POOL CIVIL EMERGENCY 61.3.1 Determination of a Pool Civil Emergency: A Pool Civil Emergency shall exist upon any resolution to that effect passed by the Executive Committee in accordance with the provisions of this Part whereafter, subject to the following provisions of this Part, a Pool Civil Emergency Period shall commence. 61.3.2 Conditions: The Executive Committee shall resolve that a Pool Civil Emergency exists only if it has formed the opinion that a Pool Civil Emergency Event has occurred. A Pool Civil Emergency Event shall occur whenever:- (a) materially changed pool prices exist or are likely to exist and, in either case, are likely to continue; and (b) such materially changed pool prices are the direct result of any one or more of the following:- (i) a major failure affecting the operation of the NGC Transmission System; (ii) a major operational failure of one or more Distribution Systems; or (iii)an inability of any Generator to generate or the loss of generating plant availability of any Generator; and (c) the event within (i), (ii), or as the case may be, (iii) of (b) above has itself resulted from any one or more of the following:- (i) any action taken by or on behalf of Her Majesty's Government pursuant to and in accordance with the emergency provisions set out in sections 1 to 4 of the Energy Act 1976 or section 96 of the Act; (ii) any act, order, regulation, direction or directive, legislation or restraint of Parliament or any governmental authority, or agent or instrument of the foregoing; (iii) any act of public enemy or terrorist, act of war or hostilities (whether declared or undeclared), threat of war or hostilities, blockade, revolution, riot, insurrection, civil commotion or unrest or demonstration; (iv) any strike, lock-out or other industrial action; (v) any act of sabotage or vandalism; (vi) lightning, earthquake, hurricane, storm, fire, flood, drought, accumulation of snow or ice, or any other extreme weather or environmental condition; or (vii) any other event provided that in such a case any resolution of the Executive Committee determining that a Pool Civil Emergency exists must be carried by a majority of not less than 75 per cent. of the Total Weighted Votes of all Committee Members entitled to vote at a meeting of the Executive Committee whether or not present. 61.4 CONDITIONS FOR EXISTENCE OF A POOL RULES CIVIL EMERGENCY PERIOD Pool Rules Civil Emergency Period: A Pool Rules Civil Emergency Period shall, subject to the following provisions of this Part, commence as part of a Pool Civil Emergency Period whenever (i) a Pool Civil Emergency Period is current and (ii) the Pool Rules Civil Emergency Condition is satisfied and (iii) Section 28 of Schedule 9 hereof is not in effect. 61.5 PROCEDURE FOR INITIATION OF A POOL CIVIL EMERGENCY PERIOD AND COMMENCEMENT OF A POOL RULES CIVIL EMERGENCY PERIOD 61.5.1 Right to requisition: (a) Each Pool Member, the Settlement System Administrator, the Grid Operator, the Director and the Secretary of State shall have the several right to have convened a special meeting of the Executive Committee for it to consider whether a Pool Civil Emergency exists (and accordingly whether a Pool Civil Emergency Period is to commence). (b) To requisition a meeting of the Executive Committee the relevant Party, the Director or, as the case may be, the Secretary of State shall notify in writing:- (i) in the case of a Pool Member, its appointed Committee Member, the Pool Chairman or the Chief Executive; and (ii) in the case of the Settlement System Administrator, the Grid Operator, the Director or the Secretary of State, the Pool Chairman or the Chief Executive, that it wishes such a meeting to be convened giving as full an explanation as it is able of the event or events which it believes constitute(s) the relevant Pool Civil Emergency Event. (c) Upon receipt of a written requisition in accordance with (b), the relevant Committee Member, the Pool Chairman or, as the case may be, the Chief Executive shall convene a special meeting of the Executive Committee in accordance with Clause 18 to take place within 48 hours after receipt of such requisition, and the provisions relating to notice periods in Clause 18 shall be varied for the purposes of this Part accordingly. 61.5.2 Initiation by the Executive Committee: Pool Civil Emergency Period: If the Executive Committee shall resolve that a Pool Civil Emergency exists then, subject to the right of veto in Clause 61.5.7 being exercised, a Pool Civil Emergency Period shall commence upon the expiry of the time limit for the exercise of such veto and shall continue until terminated in accordance with Clause 61.7. 61.5.3 Pool Rules Civil Emergency Period: (a) Commencement: A Pool Rules Civil Emergency Period shall, subject to the right of veto in (b) below and in Clause 61.5.7 being exercised, commence in accordance with Clause 61.4 at the expiry of the period for the exercise of the Executive Committee's veto in (b) below and shall continue until terminated in accordance with the provisions of Clause 61.7. (b) Executive Committee's Right of Veto: The Executive Committee shall have the right to veto the commencement of a Pool Rules Civil Emergency Period by the passing of a resolution to that effect carried by a majority of not less than 65 per cent. of the Total Weighted Votes of all Committee Members entitled to vote at such meeting whether or not present, provided that the Executive Committee shall only be able to exercise such right of veto prior to the Relevant Time relative to the time at which the Secretary receives a notification given by the Settlement System Administrator pursuant to Clause 61.5.4. (c) Effect of Veto: Where the Executive Committee exercises its right of veto in accordance with (b) above, the relevant Pool Rules Civil Emergency Period shall not commence. 61.5.4 Settlement System Administrator's Notification: The Settlement System Administrator shall notify forthwith by telephone (and confirm in writing as soon as is practicable thereafter to) the Chief Executive, Pool Chairman, Secretary, Director and Secretary of State whenever it becomes aware that the Pool Rules Civil Emergency Condition is satisfied. 61.5.5 Reasons: The Executive Committee shall give reasons for the passing of any resolution pursuant to this Clause or the exercising of any right of veto conferred on it by this Clause, to be notified to the relevant parties by the Secretary in accordance with Clause 61.5.6. 61.5.6 Notification (1): The Secretary shall notify in accordance with Clause 75 all Parties, the Director and the Secretary of State:- (a) of the result of any vote taken on a resolution of the Executive Committee pursuant to this Part, giving reasons in outline explaining such result, immediately following the conclusion of the meeting at which the vote was taken; such notification may be given by telephone or by facsimile transmission. An outline statement of reasons shall be circulated by the Secretary to the same persons as soon as is reasonably practicable thereafter; and (b) where there has been no exercise within the time limit provided therefor of a right of veto pursuant to either Clause 61.5.3 by the Executive Committee or Clause 61.5.7 by the Director or the Secretary of State, notify all Parties, the Director and the Secretary of State immediately of the commencement of a Pool Rules Civil Emergency Period. 61.5.7 Right of Veto: (a) Right of Veto: The Director and the Secretary of State shall each have a several right to veto the commencement of any Pool Civil Emergency Period or, as the case may be, Pool Rules Civil Emergency Period by giving written notice of an exercise of such right of veto addressed to the Executive Committee, the Pool Chairman and the Chief Executive within the time periods specified below. To be validly given, such notice shall specify in sufficient detail (in the case of a Pool Civil Emergency Period) the relevant resolution of the Executive Committee or (in the case of a Pool Rules Civil Emergency Period) the relevant notification of the Settlement System Administrator, in respect of which the right of veto is being exercised. (b) Effect of Veto: Where the Director or the Secretary of State exercises his veto in accordance with this Clause 61.5.7, the relevant Pool Civil Emergency Period or, as the case may be, Pool Rules Civil Emergency Period shall not commence. (c) Time Limits: Any veto given by, or on behalf of, either of the Director or Secretary of State must be received by or on behalf of the Executive Committee:- (i) in respect of a resolution initiating a Pool Civil Emergency Period, before the expiry of a period of 48 hours commencing upon the receipt by the Director or, as appropriate, the Secretary of State, of the notification of the result of the vote upon the relevant resolution; or (ii) in the case of a veto in respect of the commencement of a Pool Rules Civil Emergency Period, before the expiry of the time for the exercise of the Executive Committee's right of veto pursuant to Clause 61.5.3. For the avoidance of doubt, such veto may be given at any time before the commencement of such period. (d) Reasons: The Director shall upon exercising a right of veto conferred by this Clause give reasons to the Executive Committee supporting the exercise of that right and the Parties would expect the Secretary of State also to give reasons upon any exercise of his right of veto conferred by this Clause. (e) Notification (2): Upon receipt by or on behalf of the Executive Committee of a notice of exercise of veto pursuant to this Clause, the Secretary, on behalf of the Executive Committee, shall as soon as is possible thereafter give notice in accordance with Clause 75 of the exercise of such veto. 61.6 EFFECT OF POOL AND POOL RULES CIVIL EMERGENCY PERIODS 61.6.1 Effect of a Pool Civil Emergency Period: (a) Upon a determination that a Pool Civil Emergency exists in accordance with Clause 61.2.1 above:- (i) Suppliers shall be entitled during the Pool Civil Emergency Period, for the purposes of payments to be made by them pursuant to this Agreement during such period, to utilise the Civil Emergency Pool Credit Facility; and (ii) Sections 32.1 and 32.2 of the Pool Rules shall enter into force and effect. (b) The Pool Members expressly acknowledge the fact that during the currency of any Pool Civil Emergency Period Suppliers shall be entitled to operate credit facilities in accordance with and subject to any conditions of their respective Licences (where relevant). 61.6.2 Effect of a Pool Rules Civil Emergency Period: Upon the commencement of a Pool Rules Civil Emergency Period in accordance with Clause 61.5.3(a), the provisions of Section 32.3 of Schedule 9 shall enter into full force and effect and shall continue in full force and effect until such time as that Pool Rules Civil Emergency Period is terminated in accordance with Clause 61.7. 61.7 TERMINATION OF A POOL CIVIL EMERGENCY PERIOD 61.7.1 Director's determination of end of Pool Civil Emergency Period: A Pool Civil Emergency Period and, where applicable, any concurrent Pool Rules Civil Emergency Period, shall terminate upon any determination of the Director to that effect. 61.7.2 Consultation: The Director shall only determine that a Pool Civil Emergency Period and, where applicable, any concurrent Pool Rules Civil Emergency Period shall terminate after having fully consulted and taken into consideration the views of all relevant Parties and after having obtained the approval of the Secretary of State. 61.7.3 Notification (3): The Director shall notify in writing the Secretary, the Pool Chairman and the Chief Executive as soon as is possible of any determination made pursuant to this Clause 61.7 giving reasons for any determination so made and the Secretary shall immediately notify all Parties of such determination upon receipt. 61.7.4 Confirmation: The Director shall confirm to the Executive Committee upon any determination pursuant to this Clause 61.7 that a Pool Civil Emergency Period shall terminate, that he has taken full account of all relevant matters, the views of such relevant Parties and has obtained the approval of the Secretary of State. 61.7.5 Termination of a Pool Rules Civil Emergency Period within a continuing Pool Civil Emergency Period: (a) The Executive Committee may, by resolution carried by a majority of not less than 65 per cent. of the Total Weighted Votes of all Committee Members whether or not present, terminate any current Pool Rules Civil Emergency Period whenever it considers, in its absolute discretion, that the continued application of the modified Pool Rules as set out in Section 32.3 of Schedule 9 to be, in the circumstances, no longer appropriate. (b) The relevant Pool Rules Civil Emergency Period shall terminate following the passing of that resolution at the Relevant Time relative to the time at which that resolution is passed. (c) The Secretary, on behalf of the Executive Committee, shall as soon as is possible after the passing of such resolution give notice to all Parties, the Director and the Secretary of State in accordance with Clause 75 that the relevant Pool Rules Civil Emergency Period is to so terminate. (d) Whenever Section 28 of Schedule 9 enters into force and effect, in accordance with this Agreement, any Pool Rules Civil Emergency Period then current shall terminate at the time that such section so enters into force and effect. 61.7.6 Effect of Termination: (a) Pool Civil Emergency Period: Upon the termination of any Pool Civil Emergency Period the Civil Emergency Pool Credit Facility shall forthwith cease to be utilised and, where there is a concurrent Pool Rules Civil Emergency Period, the provisions of Section 32 of Schedule 9, shall forthwith cease to be effective. (b) Pool Rules Civil Emergency Period within a current and continuing Pool Civil Emergency Period: Upon the termination of any Pool Rules Civil Emergency Period within a current and continuing Pool Civil Emergency Period the provisions of Section 32.3 of Schedule 9 shall forthwith cease to be effective. 61.8 REFERENCE TO DIRECTOR 61.8.1 Reference to the Director: If any dispute shall arise between the Executive Committee and any Pool Member:- (a) as to whether the Executive Committee ought to have concluded that the conditions for the initiation of a Pool Civil Emergency Period in accordance with Clause 61.3.2 were satisfied either as a matter of fact or such that there was a Pool Civil Emergency within the spirit of the statement of intent set out at Clause 61.2.1; or (b) as to whether the Executive Committee ought or ought not to have exercised its right of veto pursuant to Clause 61.5.3(b) in respect of the commencement of a Pool Rules Civil Emergency Period; or (c) as to whether a Pool Rules Civil Emergency Period within a current and continuing Pool Civil Emergency Period ought or ought not to have been terminated by the Executive Committee in accordance with Clause 61.7.5 above, the dispute may be referred by notice of the dispute given in writing by the relevant Pool Member to the Director and as if such Pool Member were exercising a Dissentient Pool Member's right of appeal pursuant to Clause 13.5. The Director shall determine the matter within 60 days of receipt of such referral. Notice of any such referral shall be given to the Executive Committee at the same time that the dispute is so referred. 61.8.2 Content and Effect of Determination: (a) If the Director shall determine in accordance with Clause 61.8.1 that a Pool Civil Emergency Period or Pool Rules Civil Emergency Period should commence, or as the case may be, resume, then:- (i) in the case of a Pool Civil Emergency Period, upon such determination having been notified to the Secretary in accordance with Clause 61.8.3, a Pool Civil Emergency Period shall commence or, as the case may be, resume; and (ii) in the case of a Pool Rules Civil Emergency Period, such period shall commence at the Relevant Time relative to the time at which such determination has been notified to the Secretary in accordance with Clause 61.8.3; or (b) If the Director shall determine in accordance with Clause 61.8.1 that a continuing Pool Civil Emergency Period or Pool Rules Civil Emergency Period should terminate, then:- (i) in the case of a Pool Civil Emergency Period, upon such determination having been notified to the Secretary in accordance with Clause 61.8.3, the then current Pool Civil Emergency Period shall terminate; and (ii) in the case of a Pool Rules Civil Emergency Period, the then current such period shall terminate at the Relevant Time relative to the time at which such determination has been notified to the Secretary in accordance with Clause 61.8.3. 61.8.3 Notification (4): The Director shall notify in writing the Secretary, the Pool Chairman and the Chief Executive as soon as is possible of any determination made pursuant to this Clause 61.8 giving reasons for any determination so made and the Secretary shall immediately notify all Parties of such determination upon receipt. 61.9 MODIFICATION OF PROCEDURES Modification of Procedures: Neither the procedures for a poll set out in Clause 22 nor the provisions of Clause 13.4 shall apply to any resolution of the Executive Committee referred to in this Part XVI, and there shall be no right of referral of the matter the subject of such resolution to the Pool Members in general meeting. PART XVII TRADING SITE 62. TRADING SITE Trading Site: The provisions of Schedule 17 shall have effect. PART XVIII THE POOL FUNDS ADMINISTRATOR, BILLING AND SETTLEMENT 63. THE POOL FUNDS ADMINISTRATOR 63.1 Responsibilities: The Pool Funds Administrator shall have the following duties, responsibilities and obligations, namely:- 63.1.1 to comply with all the obligations set out in this Agreement and the Agreed Procedures in respect of the establishment, maintenance and operation of the Funds Transfer System and to carry out its obligations under the Funds Transfer Agreement; 63.1.2 to keep under review and to make recommendations to the Executive Committee on its own initiative or whenever requested by the Executive Committee concerning:- (a) any change to the Funds Transfer System (or any part or aspect thereof); (b) the appointment of a new Pool Banker; (c) any change to Schedule 11 or 15; and (d) any change to the Funds Transfer Agreement, which the Pool Funds Administrator may consider desirable. In making such recommendations, the Pool Funds Administrator shall have regard to, and shall provide details of, the cost of implementing such changes (which cost would be charged or recharged to Pool Members) and shall recommend whether, in light of those costs, certain parties or categories of party to the Agreement should be exempted from such changes or whether special provisions for such parties or categories of party should be adopted; 63.1.3 (a) to maintain such records, data and other information as the Pool Auditor may, after consultation with the Executive Committee, from time to time by notice in writing and in reasonable detail to the Pool Funds Administrator, require for the purposes of Part IX, or as may otherwise be reasonably necessary to enable the Pool Funds Administrator to comply promptly and fully with all its obligations under this Agreement, the Agreed Procedures or the Funds Transfer Agreement, in either such case in such form as the Pool Auditor may from time to time by notice to the Pool Funds Administrator require or (in the absence of such notification) in such form as a reasonably prudent operator of the Funds Transfer System would adopt; and (b) to maintain such records, data and other information as H.M. Customs and Excise may from time to time require of the Pool Funds Administrator; 63.1.4 to retain in machine readable form or hard copy form for a period of not less than eight years (or such longer period as any applicable law may require) and in any event in hard copy form (which for these purposes shall include microfiche) for a period of not less than one year copies of the records, data and other information received and processed by the Pool Funds Administrator in connection with its performance of the Services including:- (a) (to the extent relevant for the performance of the Services) Settlement Runs and Settlement Re-runs; (b) Advice Notes and Confirmation Notices; (c) bank statements in respect of the Pool Accounts; (d) Pool Ledger Accounts; (e) Payments Calendars; (f) a record of all Default Interest Rates and Reserve Interest Rates calculated from time to time (including the period to which each interest rate relates); (g) details of Security Cover supplied and to be supplied by each Providing Member (as defined in Schedule 11) or the Grid Operator, as the case may be; and (h) correspondence between the Pool Funds Administrator, on the one hand, and the Executive Committee, the Pool Chairman, the Chief Executive, any Pool Member, the Pool Banker, any Collection Bank, the Settlement System Administrator, the Ancillary Services Provider, the Director, the Pool Auditor, the Grid Operator and any other relevant bank or institution, on the other hand; 63.1.5 to provide to the Executive Committee and the Chief Executive upon request records, data and other information concerning the Funds Transfer System (and any part thereof) (unless disclosure would breach any duty of confidentiality imposed on the Pool Funds Administrator) and which the Pool Funds Administrator is required to retain under paragraph 63.1.3 or 63.1.4 (and each of the Parties agrees to the release of all such records, data and other information in the circumstances and manner described in this paragraph 63.1.5); 63.1.6 to provide to the Pool Auditor upon request records, data and other information concerning the Funds Transfer System (and any part thereof) and which the Pool Funds Administrator is required to maintain and retain under paragraph 63.1.3 or 63.1.4 (and each of the Parties agrees to the release of all such records, data and other information in the circumstances and manner described in this paragraph 63.1.6); 63.1.7 subject to the provisions of Part XX, to provide a certified copy of such records, data and other information concerning the Funds Transfer System (and any part thereof) and amounts payable by or to any Pool Member, the Ancillary Services Provider or the Grid Operator as the relevant Pool Member, the Ancillary Services Provider or (as the case may be) the Grid Operator may reasonably request for the purpose of establishing the amounts which are owed to or by such Pool Member, the Ancillary Services Provider or the Grid Operator in accordance with this Agreement, and in any event such information as any Pool Member, the Ancillary Services Provider or the Grid Operator may request from the Pool Funds Administrator in order to establish or prove a claim to any amounts due or claimed to be due. The Pool Funds Administrator shall forthwith upon such request provide such information upon delivery (if so required by the Pool Funds Administrator) of a certificate from the counsel of such Pool Member, the Ancillary Services Provider or the Grid Operator certifying that, in such counsel's opinion, such information is required for such purpose; 63.1.8 to issue Advice Notes and Confirmation Notices within the times and containing the details required by Schedule 11; 63.1.9 upon request, promptly to supply on its own behalf and on behalf of Pool Members, the Ancillary Services Provider and the Grid Operator (with a copy to the Pool Member concerned, the Ancillary Services Provider and the Grid Operator) any information (including copies of documents) to H.M. Customs and Excise, and to co-operate in any investigation by H.M. Customs and Excise or H.M. Inspector of Taxes relating to the Funds Transfer System (or any part or aspect thereof); 63.1.10 in respect of each calendar quarter, to issue to all Pool Members, the Executive Committee, the Chief Executive, the Settlement System Administrator, the Ancillary Services Provider and the Grid Operator no later than the fifth Business Day after each calendar quarter a statement enabling the identification of who may constitute Majority Default Calling Creditors during that calendar quarter (and the Parties hereby agree to such disclosure being made); 63.1.11 except in respect of moneys received on account of the PFA Operating Costs, the PFA Handling Charge, the Annual Fee or Bank Charges in accordance with the accounting procedure set out in Schedule 15 or the consideration received pursuant to sub-section 5.1 or 5.2 of that Schedule, to pay all moneys received by it from a Pool Member, the Ancillary Services Provider or the Grid Operator in accordance with Schedule 11 into a Pool Account to be held in trust in accordance with the provisions of Schedule 11; and 63.1.12 to comply with all its other obligations under this Agreement (including Schedules 11 and 15) and the Agreed Procedures, and expressions defined in Schedules 11 and 15 shall have the same respective meanings when used in this Clause 63.1. 63.2 Standard of care: In the exercise of its duties and responsibilities under this Agreement and the Agreed Procedures the Pool Funds Administrator shall exercise that degree of care, diligence, skill and judgment which would ordinarily be expected of a reasonably prudent operator of the Funds Transfer System taking into account the circumstances actually known to the Pool Funds Administrator, its officers and employees at the relevant time or which ought to have been known to it or them had it or they made such enquiries as were reasonable in the circumstances. In particular, but without prejudice to the generality of the foregoing, in the absence of directions and instructions given to it by the Executive Committee under this Agreement and having due regard to the resources available to it, the Pool Funds Administrator shall at all times conduct itself in a manner calculated to achieve the principal objects and purpose of this Agreement set out in Clauses 4.1.2 and 4.1.3. 63.3 UK value added tax indemnity: 63.3.1 Indemnity (1): Without prejudice to paragraph 63.3.2 all Pool Members and the Grid Operator shall jointly and severally indemnify and keep indemnified the Pool Funds Administrator, its officers, employees and agents (but so that, as between Pool Members and the Grid Operator, their liability shall be apportioned so that the Grid Operator is liable for 5 per cent. of the indemnified amount and the Pool Members are liable for the balance of such indemnified amount in proportion to their respective Contributory Shares at the time of receipt of the request for indemnification calculated on the basis that the points allocated to the Pool Member in default are disregarded) against any liability which the Pool Funds Administrator may incur as a result of the failure of any Pool Member, the Grid Operator or the Ancillary Services Provider (as the case may be) properly to account to H.M. Customs & Excise for all amounts of United Kingdom Value Added Tax payable or receivable by it in respect of any supplies of electricity, Ancillary Services or Transport Uplift. 63.3.2 Indemnity (2): If any Pool Member, the Ancillary Services Provider or the Grid Operator shall fail properly to account for any amount of United Kingdom Value Added Tax payable or receivable by it, that person shall indemnify and keep indemnified each non-defaulting Pool Member and (if it is not in default) the Grid Operator (on an after tax basis, but taking account of any tax relief available to the relevant Pool Member or the Grid Operator, as the case may be) against any liability which such non-defaulting Pool Member and (if it is not in default) the Grid Operator shall incur pursuant to paragraph 63.3.1. 63.4 Schedule 15: 63.4.1 Subject to the rights of each of the Parties under this Agreement, all Parties hereby agree promptly to execute and deliver all agreements and other documentation necessary to give effect to any act, matter or thing done by the Executive Committee in accordance with Schedule 15 (including the removal of the incumbent Pool Funds Administrator and the appointment of a successor in accordance with the terms thereof). 63.4.2 Schedule 15 provides that certain matters may be referred by the Executive Committee to arbitration pursuant to Clause 83. In making any such reference or in alleging that any such reference is being made pursuant to Clause 83 the Executive Committee shall act (and is hereby irrevocably authorised by each of the Pool Members to act) as the sole and exclusive representative of all the Pool Members and the Pool Funds Administrator hereby agrees that the Executive Committee shall have the authority so to act. 64. PROCEDURES MANUAL 64.1 Preparation: Within 28 days after the Effective Date (or such longer period as the Executive Committee may approve) the Pool Funds Administrator shall prepare, or cause to be prepared, a Procedures Manual which it shall submit to the Executive Committee for its review. The Executive Committee shall give its comments on the Procedures Manual to the Pool Funds Administrator within 28 days after receipt thereof and the Pool Funds Administrator shall revise, or cause to be revised, the Procedures Manual to the satisfaction of the Executive Committee within 21 days after receipt of such comments (or such longer period as the Executive Committee may approve). Promptly thereafter the Pool Funds Administrator shall provide the Executive Committee with sufficient copies of the revised Procedures Manual for distribution by the Executive Committee to all Parties, the Pool Auditor, the Pool Banker and the Director. 64.2 Amendments: Where from time to time any amendments to the Procedures Manual are necessary to reflect changes in the systems and/or procedures associated with the Funds Transfer System, the procedure set out in Clause 64.1 shall apply mutatis mutandis. 64.3 Costs: The costs of producing, revising and amending the Procedures Manual shall be borne by the Pool Funds Administrator and recovered by it in accordance with the provisions of Schedule 11 as part of its charges. 65. BILLING AND SETTLEMENT The provisions of Schedule 11 shall have effect. PART XIX DEFAULT, TERM AND TERMINATION 66. DEFAULT 66.1 Default (1): At any time after the occurrence of any of the events referred to in Clause 66.3.1, 66.3.2 or 66.3.3 and so long as such event continues unremedied or unwaived by Majority Default Calling Creditors:- 66.1.1 Majority Default Calling Creditors may, upon reaching a bona fide conclusion that the reason for the failure by the Defaulting Pool Member under Clause 66.3.1, 66.3.2 or 66.3.3 is other than administrative or banking error (having taken into account the representations, if any, of the Defaulting Pool Member made within 24 hours after request therefor is made to the Defaulting Pool Member on behalf of the Majority Default Calling Creditors, which request Majority Default Calling Creditors shall be obliged to make), by notice to the Defaulting Pool Member (copied to the Executive Committee and the Director) declare such event an Event of Default; 66.1.2 at the same time as Majority Default Calling Creditors declare such an Event of Default or at any time thereafter, Majority Default Calling Creditors may by notice to the Executive Committee (copied to the Defaulting Pool Member and the Director) require the Executive Committee to suspend (which the Executive Committee shall forthwith do) all voting rights of the Defaulting Pool Member under this Agreement for a specified period (being not more than 90 days) and, upon the Executive Committee giving notice to such effect to the Defaulting Pool Member (copied to the Director), such voting rights (but not any other rights or any liabilities or obligations of the Defaulting Pool Member) shall be suspended for such period; and 66.1.3 where:- (a) the Defaulting Pool Member is a Public Electricity Supplier, no earlier than 28 days after the date of the notice referred to in Clause 66.1.1; and (b) in any other case, at the same time as Majority Default Calling Creditors declare such an Event of Default or at any time thereafter, Majority Default Calling Creditors may by notice to the Defaulting Pool Member (copied to the Executive Committee, the Settlement System Administrator, the Grid Operator, the Pool Funds Administrator, the Ancillary Services Provider and the Director) require the Defaulting Pool Member to cease to be a Party with effect from the date of its De-energisation and until such date all voting rights of the Defaulting Pool Member under this Agreement (but not any other rights or any liabilities or obligations of the Defaulting Pool Member) shall be automatically suspended. For the avoidance of doubt, Majority Default Calling Creditors shall be at liberty to give notice under Clause 66.1.2 and, upon expiry of the specified period referred to therein and subject as provided in the foregoing provisions of this Clause 66.1, to give notice under Clause 66.1.3. 66.2 Default (2): At any time after the occurrence of any of the events referred to in Clause 66.3 (other than (a) any of the events referred to in Clause 66.3.1, 66.3.2 and 66.3.3 and (b) in the case where the Defaulting Pool Member is unable to pay its debts as referred to in Clause 66.3.6(a), unless any of the other events referred to in Clause 66.3 has occurred and is continuing) and so long as such event continues unremedied or unwaived by the Pool Members in general meeting the Executive Committee may (and shall if so directed by the Pool Members in general meeting):- 66.2.1 by notice to the Defaulting Pool Member (copied to the Director) declare such event an Event of Default and suspend all voting rights of the Defaulting Pool Member under this Agreement for a specified period (being not more than 90 days) whereupon such voting rights (but not any other rights or any liabilities or obligations of the Defaulting Pool Member) shall be suspended for such period; and 66.2.2 upon the expiry of such period by notice to the Defaulting Pool Member (copied to the Settlement System Administrator, the Grid Operator, the Pool Funds Administrator, the Ancillary Services Provider and the Director) require the Defaulting Pool Member to cease to be a party to this Agreement with effect from the date of its De-energisation and until such date all voting rights of the Defaulting Pool Member under this Agreement (but not any other rights or any liabilities or obligations of the Defaulting Pool Member) shall be automatically suspended. 66.3 Events of Default: The events referred to in the foregoing provisions of this Clause 66 are:- 66.3.1 the Pool Member in question (the "Defaulting Pool Member") shall fail to provide or maintain or renew in accordance with Schedule 11 the requisite amount of Security Cover determined pursuant to that Schedule; or 66.3.2 the Defaulting Pool Member shall fail to pay in the manner provided in this Agreement any sum payable by it to any Pool Creditor within three Business Days after its due date; or 66.3.3 the Defaulting Pool Member shall fail to pay in the manner provided in this Agreement any sum payable by it hereunder to the Settlement System Administrator or the Pool Funds Administrator within 28 days after the Settlement System Administrator or (as the case may be) the Pool Funds Administrator has given notice to it (copied to the Executive Committee and the Director) that payment has not been received and requiring such default to be remedied; or 66.3.4 the Defaulting Pool Member shall fail to pay in the manner provided in this Agreement any sum payable by it hereunder to the Executive Committee within 28 days after the Executive Committee has given notice to it (copied to the Director) that payment has not been received and requiring such default to be remedied; or 66.3.5 the Defaulting Pool Member shall fail in any material respect to perform or comply with any of its other obligations under this Agreement and such default (if it is capable of remedy) is not remedied within a reasonable period of time (not exceeding 90 days) after the Executive Committee has given notice to the Defaulting Pool Member (copied to the Director) of the occurrence thereof and requiring the same to be remedied; or 66.3.6 the Defaulting Pool Member:- (a) is unable to pay its debts (within the meaning of section 123(1) or (2) of the Insolvency Act 1986, but subject as hereinafter provided in this Clause 66.3.6) or if any voluntary agreement is proposed in relation to it under section 1 of that Act or enters into any scheme of arrangement (other than for the purpose of reconstruction or amalgamation upon terms and within such period as may previously have been approved in writing by the Executive Committee); (b) has a receiver (which expression shall include an administrative receiver within the meaning of section 29 of the Insolvency Act 1986) of the whole or any material part of its assets or undertaking appointed; (c) has an administration order under section 8 of the Insolvency Act 1986 made in relation to it; (d) passes any resolution for winding-up other than a resolution previously approved in writing by the Executive Committee; or (e) becomes subject to an order by the High Court for winding-up. For the purposes of paragraph (a) above section 123(1)(a) of the Insolvency Act 1986 shall have effect as if for "(pound)750" there was substituted (pound)10,000 and, further, the Defaulting Pool Member shall not be deemed to be unable to pay its debts for the purposes of paragraph (a) above if any such demand as is mentioned in the said section is being contested in good faith by the Defaulting Pool Member with recourse to all appropriate measures and procedures; or 66.3.7 the Licence (if any) granted to the Defaulting Pool Member is determined or revoked or otherwise ceases to be in force for any reason whatsoever, in any such case for whatever reason and whether or not within the control of the Defaulting Pool Member. 66.4 De-energisation: 66.4.1 If the Majority Default Calling Creditors shall give notice to a Defaulting Pool Member under Clause 66.1.3 or the Executive Committee shall give notice to a Defaulting Pool Member under Clause 66.2.2 the Defaulting Pool Member shall forthwith, and in compliance with the instructions of the Grid Operator or (in the case of any connection to a User System) the User whose System it is (the "Relevant User"), take all such action as may be necessary to give effect to the relevant De-energisation. 66.4.2 If the Defaulting Pool Member shall fail to take such action as is referred to in Clause 66.4.1 within 48 hours after the date of any such notice referred to therein, the Grid Operator and/or, as the case may be, the Relevant User undertakes to each of the other Parties and the Executive Committee to use reasonable endeavours to effect or (as the case may be) give instructions to effect such De-energisation as quickly as practicable having regard to all the circumstances affecting such De-energisation (including any operational difficulties and relevant Licence duties). 66.4.3 Each Pool Member hereby irrevocably and unconditionally consents to its De-energisation by the Grid Operator and/or, as the case may be, the Relevant User in the circumstances set out in Clause 66.4.2. 66.5 Sharing of risk: Where an Event of Default is declared under Clause 66.1.1 or 66.2.1 in respect of a Defaulting Pool Member which is a Public Electricity Supplier, then for the period beginning on the date of the notice declaring such Event of Default until the earlier of:- 66.5.1 the date falling 28 days thereafter; and 66.5.2 the date on which the Event of Default has been remedied or waived by Majority Default Calling Creditors or (as the case may be) the Pool Members in general meeting, (but not further or otherwise) each Pool Member (other than the Defaulting Pool Member) shall be severally liable for its Contributory Share (calculated on the basis that the Points allocated to the Defaulting Pool Member are disregarded) of all sums (including United Kingdom Value Added Tax) which such Defaulting Pool Member is required under this Agreement to pay in respect of electricity taken by the Defaulting Pool Member and Ancillary Services during each complete Settlement Day falling within such period and which are not paid on the due date therefor by the Defaulting Pool Member. The Defaulting Pool Member shall indemnify and keep indemnified each Pool Member on demand against all sums properly paid by such Pool Member pursuant to this Clause 66.5 together with interest thereon from the date of payment by such Pool Member to the date of its reimbursement (as well after as before judgment) at the Default Interest Rate. 66.6 Indemnity on De-energisation: Where under Clause 66.4 the Grid Operator and/or the Relevant User is required to effect or (as the case may be) give instructions to effect a De-energisation the Defaulting Pool Member, failing which, each Pool Member (but, in the case of each Pool Member, only in respect of its Contributory Share at the time of receipt of the request for indemnification, calculated on the basis that the Points allocated to the Defaulting Pool Member are disregarded) shall indemnify and keep indemnified the Grid Operator and/or the Relevant User (as the case may be) on demand against any and all liability, loss or damage which it may suffer or incur by reason of effecting or giving instructions to effect such De-energisation. 66.7 Accrued rights and liabilities: 66.7.1 The suspension of a person as a Pool Member and the cessation of a person as a Pool Member and/or a Party for whatever reason shall not prejudice its accrued rights and liabilities under this Agreement as at the date of its suspension or (as the case may be) cessation or its rights and liabilities under this Agreement which may accrue in relation to the period during which it was not so suspended or (as the case may be) it was a Party or any of its obligations under this Agreement which are expressed to continue notwithstanding such suspension or cessation. 66.7.2 Without prejudice to the generality of Clause 66.7.1, a Defaulting Pool Member shall be liable for all sums (including United Kingdom Value Added Tax) which it is required under this Agreement to pay in respect of electricity taken by it and Ancillary Services pending its De-energisation pursuant to Clause 66.4. 67. TERM AND TERMINATION 67.1 Term: This Agreement shall have no fixed duration. 67.2 Suspension of Pool Member's voting rights: A Pool Member's voting rights shall be suspended only in the circumstances and to the extent specified in Clauses 66.1.2 and 66.2.1. 67.3 Termination as a Party: A Pool Member shall cease to be a Party only:- 67.3.1 in the circumstances and to the extent specified in Clauses 8.7 to 8.10 (inclusive); 67.3.2 in the circumstances and to the extent specified in Clauses 66.1.3 and 66.2.2; or 67.3.3 if, by unanimous resolution of all Committee Members, the Executive Committee shall so reasonably determine and the prior written consent of the Director shall have been obtained. 67.4 Termination of the Agreement: 67.4.1 This Agreement may be terminated if a resolution of Pool Members in general meeting is unanimously carried by those Pool Members present in person or by proxy at the relevant general meeting and the prior written consent of the Director has been obtained. 67.4.2 The termination shall take effect from whichever is the later in time of the date of the resolution referred to in Clause 67.4.1 and the consent in writing of the Director referred to in that Clause. 67.5 Clause exhaustive: The Pool Members agree that the foregoing provisions of this Clause 67, when read with the Clauses referred to herein and Clause 8.11, are exhaustive of the rights of suspension of a Pool Member's voting rights, of termination of Pool Membership, of cessation as a Party and of termination of this Agreement. PART XX CONFIDENTIALITY 68. DEFINITIONS AND INTERPRETATION 68.1 Definitions: In this Part XX, except where the context otherwise requires:- "Authorised Recipient" means, in relation to any Protected Information, any Business Person who, before the Protected Information had been divulged to him by NGC or any subsidiary of NGC, had been informed of the nature and effect of Clause 69 and who requires access to such Protected Information for the proper performance of his duties as a Business Person in the course of Permitted Activities; "Business Person" means any person who is a Main Business Person or a Corporate Functions Person, and "Business Personnel" shall be construed accordingly; "Confidential Information" means all data and other information supplied to the Obligor or any nominee of the Obligor appointed pursuant to paragraph 10 of Appendix 4 of Schedule 9 by another Party under the provisions of this Agreement, and shall include copies of the load modules referred to in Service Line 11 (Listings and Load Modules); "Corporate Functions Person" means any person who:- (a) is a director of NGC; or (b) is an employee of NGC or any of its subsidiaries carrying out any administrative, finance or other corporate services of any kind which in part relate to the Main Business; or (c) is engaged as an agent of or an adviser to or performs work in relation to or services for the Main Business; "Generation Business" has the same meaning as in the NGC Transmission Licence; "Main Business" means any business of NGC or any of its subsidiaries as at the Effective Date or which it is required to carry on under the NGC Transmission Licence, other than the Generation Business; "Main Business Person" means any employee of NGC or any director or employee of its subsidiaries who is engaged solely in the Main Business, and "Main Business Personnel" shall be construed accordingly; "Obligor" has the meaning given to that term in Clause 70.1; "Permitted Activities" means activities carried on for the purposes of the Main Business; and "Protected Information" means any information relating to the affairs of a Party which is furnished to Business Personnel pursuant to this Agreement unless, prior to such information being furnished, such Party has informed the recipient thereof by notice in writing or by endorsement on such information that the said information is not to be regarded as Protected Information. 68.2 Interpretation: For the avoidance of doubt, data and other information which any Party is permitted or obliged to divulge or publish to any other Party pursuant to this Agreement shall not necessarily be regarded as being in the public domain by reason of being so divulged or published. 69. CONFIDENTIALITY FOR NGC AND ITS SUBSIDIARIES 69.1 Protection of Protected Information: NGC and its subsidiaries in each of their capacities in this Agreement shall secure that Protected Information is not:- 69.1.1 divulged by Business Personnel to any person unless that person is an Authorised Recipient; 69.1.2 used by Business Personnel for the purposes of obtaining for NGC or any of its subsidiaries or for any other person:- (a) any electricity licence; or (b) any right to purchase or otherwise acquire, or to distribute, electricity (including rights under any electricity purchase contract, as defined in the NGC Transmission Licence); or (c) any contract or arrangement for the supply of electricity to Customers or Suppliers; or (d) any contract for the use of any electrical lines or electrical plant belonging to or under the control of a Supplier; or (e) control of any body corporate which, whether directly or indirectly, has the benefit of any such licence, contract or arrangement; and 69.1.3 used by Business Personnel for the purpose of carrying on any activities other than Permitted Activities, except with the prior consent in writing of the Party to whose affairs such Protected Information relates. 69.2 Exceptions: Nothing in this Clause 69 shall apply:- 69.2.1 to any Protected Information which, before it is furnished to Business Personnel, is in the public domain; or 69.2.2 to any Protected Information which, after it is furnished to Business Personnel:- (a) is acquired by NGC or any subsidiary of NGC in circumstances in which this Clause 69 does not apply; or (b) is acquired by NGC or any subsidiary of NGC in circumstances in which this Clause 69 does apply and thereafter ceases to be subject to the restrictions imposed by this Clause 69; or (c) enters the public domain, and in any such case otherwise than as a result of (i) a breach by NGC or any subsidiary of NGC of its obligations in this Clause 69 or (ii) a breach by the person who disclosed that Protected Information of that person's confidentiality obligation and NGC or any of its subsidiaries is aware of such breach; or 69.2.3 to the disclosure of any Protected Information to any person if NGC or any subsidiary of NGC is required or expressly permitted to make such disclosure to such person:- (a) in compliance with the duties of NGC or any subsidiary of NGC under the Act or any other requirement of a Competent Authority; or (b) in compliance with the conditions of the NGC Transmission Licence or any document referred to in the NGC Transmission Licence with which NGC or any subsidiary of NGC is required by virtue of the Act or the NGC Transmission Licence to comply; or (c) in compliance with any other requirement of law; or (d) in response to a requirement of any stock exchange or regulatory authority or the Panel on Take-overs and Mergers; or (e) pursuant to the arbitration rules for the Electricity Arbitration Association or pursuant to any judicial or other arbitral process or tribunal having jurisdiction in relation to NGC or its subsidiaries; or 69.2.4 to any Protected Information to the extent that NGC or any of its subsidiaries is expressly permitted or required to disclose that information under the terms of any agreement or arrangement (including this Agreement, the Grid Code, the Distribution Codes and the Fuel Security Code) with the Party to whose affairs such Protected Information relates; or 69.2.5 to any Protected Information but only to the extent that it has been properly provided to NGC or any subsidiary of NGC by the Settlement System Administrator pursuant to any provision of the Pool Rules. 69.3 Use of information by NGC: NGC and each of its subsidiaries may use all and any information or data supplied to or acquired by it from or in relation to the other Parties in performing Permitted Activities including, for the following purposes:- 69.3.1 the operation and planning of the NGC Transmission System; 69.3.2 the calculation of charges and preparation of offers of terms for connection to or use of the NGC Transmission System; 69.3.3 the operation and planning of the Ancillary Services Business and the calculation of charges therefor; 69.3.4 the operation of the Settlements Business; 69.3.5 the provision of information under the British Grid Systems Agreement and the EdF Documents, and may pass the same to subsidiaries of NGC which carry out such activities and the Parties agree to provide all information to NGC and its subsidiaries for such purposes. 69.4 Restrictions on Business Personnel: NGC undertakes to each of the other Parties that, having regard to the activities in which any Business Person is engaged and the nature and effective life of the Protected Information divulged to him by virtue of such activities, neither NGC nor any of its subsidiaries shall unreasonably continue (taking into account any industrial relations concerns reasonably held by it) to divulge Protected Information or permit Protected Information to be divulged by any subsidiary of NGC to any Business Person:- 69.4.1 who has notified NGC or the relevant subsidiary of his intention to become engaged as an employee or agent of any other person (other than of NGC or any subsidiary thereof) who is:- (a) authorised by licence or exemption to generate, transmit or supply electricity; or (b) an electricity broker or who is known to be engaged in the writing of electricity purchase contracts (as hereinbefore defined); or (c) known to be retained as a consultant to any such person who is referred to in paragraph (a) or (b) above; or 69.4.2 who is to be transferred to the Generation Business, save where NGC or such subsidiary could not, in all the circumstances, reasonably be expected to refrain from divulging to such Business Person Protected Information which is required for the proper performance of his duties. 69.5 Identification of Protected Information: Without prejudice to the other provisions of this Clause 69, NGC shall procure that any additional copies made of the Protected Information, whether in hard copy or computerised form, will clearly identify the Protected Information as protected. 69.6 Corporate Functions Person: NGC undertakes to use all reasonable endeavours to procure that no employee is a Corporate Functions Person unless the same is necessary for the proper performance of his duties. 69.7 Charge restriction condition variable: Without prejudice to Clause 69.3, NGC and each of its subsidiaries may use and pass to each other all and any Period Metered Demand data supplied to or acquired by it and all and any information and data supplied to it pursuant to Section OC6 of the Grid Code for the purposes of Demand Control (as defined in the Grid Code), but in each case only for the purposes of its estimation and calculation from time to time of the variable "system maximum ACS demand" (as defined in Condition 4 of the NGC Transmission Licence). 69.8 Ancillary Services: NGC shall secure that Protected Information which is subject to the provisions of Clause 69.1 and which relates to the cost of Reactive Power provided by each individual Generator is not divulged to any Business Person engaged in the provision of static compensation for use by the Grid Operator. 69.9 Metering data - Distribution System: Any information regarding, or data acquired by the Settlement System Administrator or its agent from, Metering Equipment at Sites which are a point of connection to a Distribution System shall and may be passed by the Settlement System Administrator or his agent to the operator of the relevant Distribution System. The said operator of the relevant Distribution System may use the same only for the purposes of the operation of such Distribution System and the calculation of charges for use of and connection to such Distribution System. 69.10 Metering data - Qualifying Arrangements: The Settlement System Administrator and the Grid Operator shall and may pass any relevant information and data relating to the Genset Metered Generation (including, for the avoidance of doubt, all relevant Metered Data, as defined in paragraph 3.1.2 of Schedule 9) of any of the Generating Units which are the subject of qualifying arrangements (as defined in section 33 of the Act) to such person as may be specified from time to time pursuant to such qualifying arrangements. 70. CONFIDENTIALITY OTHER THAN FOR NGC AND ITS SUBSIDIARIES 70.1 General obligation: Each Party (other than NGC and its subsidiaries) (the "Obligor") hereby undertakes with each other Party (including NGC and its subsidiaries) that it shall preserve the confidentiality of, and not directly or indirectly reveal, report, publish, disclose or transfer or use for its own purposes Confidential Information except:- 70.1.1 in the circumstances set out in Clause 70.2; or 70.1.2 to the extent otherwise expressly permitted by this Agreement; or 70.1.3 with the prior consent in writing of the Party to whose affairs such Confidential Information relates; or 70.1.4 to the extent that it has been properly provided to the Obligor by the Settlement System Administrator pursuant to any provision of the Pool Rules. 70.2 Exceptions: The circumstances referred to in Clause 70.1.1 are:- 70.2.1 where the Confidential Information, before it is furnished to the Obligor, is in the public domain; or 70.2.2 where the Confidential Information, after it is furnished to the Obligor:- (a) is acquired by the Obligor in circumstances in which this Clause 70 does not apply; or (b) is acquired by the Obligor in circumstances in which this Clause 70 does apply and thereafter ceases to be subject to the restrictions imposed by this Clause 70; or (c) enters the public domain, and in any such case otherwise than as a result of (i) a breach by the Obligor of its obligations in this Clause 70 or (ii) a breach by the person who disclosed that Confidential Information of that person's confidentiality obligation and the Obligor is aware of such breach; or 70.2.3 if the Obligor is required or permitted to make disclosure of the Confidential Information to any person:- (a) in compliance with the duties of the Obligor under the Act or any other requirement of a Competent Authority; or (b) in compliance with the conditions of any Licence or any document referred to in any Licence with which the Obligor is required to comply; or (c) in compliance with any other requirement of law; or (d) in response to a requirement of any stock exchange or regulatory authority or the Panel on Take-overs and Mergers; or (e) pursuant to the arbitration rules for the Electricity Arbitration Association or pursuant to any judicial or other arbitral process or tribunal having jurisdiction in relation to the Obligor; or 70.2.4 to the employees, directors, agents, consultants and professional advisers of the Obligor, in each case on the basis set out in Clause 70.3. 70.3 Internal procedures: With effect from the date of this Agreement the Obligor shall adopt procedures within its organisation for ensuring the confidentiality of all Confidential Information which it is obliged to preserve as confidential under Clause 70.1. These procedures are:- 70.3.1 the Confidential Information will be disseminated within the Obligor only on a "need to know" basis; 70.3.2 employees, directors, agents, consultants and professional advisers of the Obligor in receipt of Confidential Information will be made fully aware of the Obligor's obligations of confidence in relation thereto; and 70.3.3 any copies of the Confidential Information, whether in hard copy or computerised form, will clearly identify the Confidential Information as confidential. 71. RELEASE OF INFORMATION 71.1 Notwithstanding any foregoing provisions of this Part XX, the Parties agree that each of them shall be at liberty to provide copies of this Agreement and any supplemental agreement to both or either thereof to any third party, and each of the Parties consents to disclosure by any other Party of the fact that it is a party to this Agreement and, where such is the case, a Pool Member. 71.1.1 The following provisions of this Clause are designed to facilitate the release of certain data and other information to persons who are not Parties. Such provisions are without prejudice to any Party's rights to disclose or use data or information pursuant to the other provisions of this Agreement or otherwise. 71.1.2 At the request of the Executive Committee or any person who is not a Party and against payment by or on behalf of the person to whom the data or other information is to be released of a fee or charge therefor calculated mutatis mutandis on the basis set out in Clause 34.2, the Settlement System Administrator shall provide to such person(s) as the Executive Committee may nominate or (as the case may be) to the person requesting the same, data and other information received by the Settlement System Administrator in or derived from the operation of the Settlement System provided that:- (a) the Pool Rules specify that such data or other information may be so released; or (b) the Party to whose affairs such data or other information relates has given its prior consent in writing to such disclosure. 71.1.3 Upon request by the Executive Committee, the Settlement System Administrator shall notify the Executive Committee in writing of any request received by it from any person under Clause 71.1.2 and of the name of such person and shall give details of the data and other information provided. 71.1.4 Each of the Parties agrees to the release of data and other information in the circumstances described in Clause 71.1.2. 71.2 The Parties acknowledge that, for the Executive Committee and each of its sub-committees properly to carry out its duties and responsibilities under this Agreement, the Executive Committee may decide or be obliged to keep confidential to it (and may instruct its sub-committees to keep confidential) matters, reports, data and other information produced by or for, made available to or held by, the Executive Committee or the relevant sub-committee and, in any such case, Committee Members shall neither disclose the same to the Pool Member(s) which they represent nor be required by such Pool Member(s) so to disclose. Each of the Parties agrees to respect the position of the Executive Committee, its sub-committees and the Committee Members accordingly. 71.3 Each of the Parties other than the Settlement System Administrator, the Grid Operator, the Ancillary Services Provider and the Pool Funds Administrator agrees, subject to any relevant confidentiality restriction binding on it, to provide the Executive Committee, the Chief Executive and the personnel referred to in Clause 17.2.1 with all data and other information reasonably requested by the Executive Committee and necessary for the Executive Committee, the Chief Executive or (as the case may be) such personnel properly to carry out its or his duties and responsibilities under this Agreement. The Grid Operator and the Ancillary Services Provider each agree, subject to any relevant confidentiality restriction binding on it, to provide the Executive Committee, the Chief Executive and the personnel referred to in Clause 17.2.1 with such data and other information relating to its duties, responsibilities or obligations under this Agreement which the Executive Committee shall reasonably request and which is necessary for the Executive Committee, the Chief Executive or (as the case may be) such personnel to carry out its or his duties and responsibilities under this Agreement. 71.4 Each Party acknowledges and agrees that no Party shall be in breach of any obligation of confidentiality owed by it pursuant to this Agreement in reporting under Clause 6.10 any breach of the Pool Rules or its belief that any such breach has occurred. 71.5 Notwithstanding any other provision of this Agreement, the provisions of this Part XX shall continue to bind a person after its cessation as a Party for whatever reason. PART XXI THE PARTICIPATION OF NGC 72. THE PARTICIPATION OF NGC 72.1 As Grid Operator: For so long as NGC is the Grid Operator, references in this Agreement to the Grid Operator shall be read and construed as references to NGC acting in its capacity as Grid Operator, and all rights, benefits, duties, responsibilities, liabilities and obligations under this Agreement with regard to the Grid Operator shall be those of NGC acting in that capacity. 72.2 As Ancillary Services Provider: For so long as NGC is the Ancillary Services Provider, references in this Agreement to the Ancillary Services Provider shall be read and construed as references to NGC acting in its capacity as Ancillary Services Provider, and all rights, benefits, duties, responsibilities, liabilities and obligations under this Agreement with regard to the Ancillary Services Provider shall be those of NGC acting in that capacity. The Ancillary Services Provider shall have the benefit of the obligations and undertakings entered into by the Settlement System Administrator and Pool Funds Administrator in this Agreement. 72.3 As Pool Member: The Parties acknowledge that NGC is not in any of its capacities under this Agreement a Pool Member. 72.4 Wholly-owned subsidiary: NGC shall procure that so long as Energy Settlements and Information Services Limited is appointed Settlement System Administrator it shall at all times remain a wholly-owned subsidiary of, and wholly controlled by, NGC. 73. [Not used.] PART XXII MISCELLANEOUS 74. FORCE MAJEURE 74.1 Force Majeure: Where the Settlement System Administrator, the Grid Operator, the Pool Funds Administrator or the Ancillary Services Provider (the "Non-Performing Party") is unable to carry out all or any of its obligations under the SSA Arrangements by reason of Force Majeure (but subject, in the case of the Settlement System Administrator, to Section 33 of Schedule 4):- 74.1.1 the SSA Arrangements shall remain in effect; but 74.1.2 (a) the Non-Performing Party's relevant obligations; (b) the obligations of each of the other Parties owed to the Non-Performing Party under the SSA Arrangements; and (c) any other obligations (not being payment obligations) of such other Parties under the SSA Arrangements owed inter se which the relevant Party is unable to carry out directly as a result of the suspension of the Non-Performing Party's obligations shall be suspended for a period equal to the Force Majeure provided that:- (i) the suspension of performance is of no greater scope and of no longer duration than is required by the Force Majeure; (ii) no obligations of any Party are excused as a result of the Force Majeure; and (iii) in respect of the suspension of the Non-Performing Party's obligations:- (A) the Non-Performing Party gives the Executive Committee (which shall promptly inform the other Parties, the Pool Auditor and the Director) prompt notice describing the circumstance of Force Majeure, including the nature of the occurrence and its expected duration, and continues to furnish daily reports with respect thereto during the period of Force Majeure; and (B) the Non-Performing Party uses all reasonable efforts to remedy its inability to perform. 74.2 Discussions: As soon as practicable after the occurrence of the Force Majeure the Non-Performing Party shall discuss with the Executive Committee how best to continue its operations and give effect to its obligations so far as possible in accordance with this Agreement. 75. NOTICES 75.1 Addresses: Save as otherwise expressly provided in the SSA Arrangements, any notice or other communication to be given by one Party to another under, or in connection with the matters contemplated by, the SSA Arrangements shall be addressed to the recipient and sent to the address, telex number or facsimile number of such other Party given in the SSA Arrangements for the purpose and marked for the attention of the person so given or to such other address, telex number and/or facsimile number and/or marked for such other attention as such other Party may from time to time specify by notice given in accordance with this Clause 75 to the Party giving the relevant notice or other communication to it. 75.2 Executive Committee: Any notice or other communication to be given to the Executive Committee under, or in connection with the matters contemplated by, the SSA Arrangements shall be sent to the Secretary at the address, telex number or facsimile number given in the SSA Arrangements for the purpose or to such other address, telex number or facsimile number as the Secretary may from time to time specify by notice given in accordance with this Clause 75 to the Parties. 75.3 Deemed receipt: Save as otherwise expressly provided in the SSA Arrangements, any notice or other communication to be given by any Party to any other Party under, or in connection with the matters contemplated by, the SSA Arrangements shall be in writing and shall be given by letter delivered by hand or sent by first class prepaid post (airmail if overseas) or telex or facsimile, and shall be deemed to have been received:- 75.3.1 in the case of delivery by hand, when delivered; or 75.3.2 in the case of first class prepaid post, on the second day following the day of posting or (if sent airmail overseas or from overseas) on the fifth day following the day of posting; or 75.3.3 in the case of telex, on the transmission of the automatic answer-back of the addressee (where such transmission occurs before 1700 hours on the day of transmission) and in any other case on the day following the day of transmission; or 75.3.4 in the case of facsimile, on acknowledgement by the addressee's facsimile receiving equipment (where such acknowledgement occurs before 1700 hours on the day of acknowledgement) and in any other case on the day following the day of acknowledgement. 76. ASSIGNMENT A Party shall not assign and/or transfer and shall not purport to assign and/or transfer any of its rights and/or obligations under the SSA Arrangements provided that any Party may assign by way of security only all or any of its rights over receivables arising under the SSA Arrangements. 77. COUNTERPARTS This Agreement may be executed in any number of counterparts and by the different Parties on separate counterparts, each of which when executed and delivered shall constitute an original, but all the counterparts shall together constitute but one and the same instrument. 78. WAIVERS; REMEDIES NOT CUMULATIVE 78.1 Waivers: No delay by or omission of any Party in exercising any right, power, privilege or remedy under the SSA Arrangements shall operate to impair such right, power, privilege or remedy or be construed as a waiver thereof. Any single or partial exercise of any such right, power, privilege or remedy shall not preclude any other or further exercise thereof or the exercise of any other right, power, privilege or remedy. 78.2 Remedies not cumulative: The rights and remedies provided by the SSA Arrangements to the Parties are exclusive and not cumulative and exclude and are in place of all substantive (but not procedural) rights or remedies express or implied and provided by common law or statute in respect of the subject matter of the SSA Arrangements (other than any such rights or remedies provided under section 58 of the Act or any directions (if any) issued thereunder), including without limitation any rights any Party may possess in tort which shall include actions brought in negligence and/or nuisance. Accordingly, each of the Parties hereby waives to the fullest extent possible all such rights and remedies provided by common law or statute, and releases a Party which is liable to another (or others), its officers, employees and agents to the same extent from all duties, liabilities, responsibilities or obligations provided by common law or statute in respect of the matters dealt with in this Agreement and undertakes not to enforce any of the same except as expressly provided herein. 78.3 Director's and Secretary of State's rights: For the avoidance of doubt, the Parties acknowledge and agree that nothing in the SSA Arrangements shall exclude or restrict or otherwise prejudice or affect any of the rights, powers, privileges, remedies, duties and obligations of the Secretary of State or the Director under the Act or any Licence or otherwise howsoever. 79. SEVERANCE OF TERMS If for any reason whatever any provision of the SSA Arrangements is or becomes invalid, illegal or unenforceable, or is declared by any court of competent jurisdiction or any other Competent Authority to be invalid, illegal or unenforceable or if such Competent Authority:- (a) refuses, or formally indicates an intention to refuse, authorisation of, or exemption to, any of the provisions of or arrangements contained in the SSA Arrangements (in the case of a refusal either by way of outright refusal or by way of requiring the amendment or deletion of any provision of the SSA Arrangements and/or the inclusion of any provision in the SSA Arrangements and/or the giving of undertakings or the acceptance of conditions as to future conduct before such authorisation or exemption can be granted); or (b) formally indicates that to continue to operate any provision of the SSA Arrangements may expose the Parties to sanctions under any law, order, enactment or regulation, or requests any Party to give undertakings or to accept conditions as to future conduct in order that such Party may not be subject to such sanctions and, in all cases, whether initially or at the end of any earlier period or periods of exemption then, in any such case, the Parties will negotiate in good faith with a view to agreeing one or more provisions which may be substituted for such invalid, unenforceable or illegal provision which substitute provision(s) is(are) satisfactory to the Competent Authority(ies) and produce(s) as nearly as is practicable in all the circumstances the appropriate balance of the commercial interests of the Parties. 80. ENTIRE AGREEMENT The SSA Arrangements contain or expressly refer to the entire agreement between the Parties with respect to the subject matter hereof and expressly exclude any warranty, condition or other undertaking implied at law or by custom and supersedes all previous agreements and understandings between the Parties with respect thereto and each of the Parties acknowledges and confirms that it does not enter into this Agreement in reliance on any representation, warranty or other undertaking not fully reflected in the terms of the SSA Arrangements. 81. LANGUAGE Each notice, instrument, certificate or other document to be given by one Party to another hereunder shall be in the English language. 82. RESTRICTIVE TRADE PRACTICES ACT 1976 If after the commencement of section 100 of the Act (the "RTP Section") this Agreement is subject to registration under the Restrictive Trade Practices Act 1976 then NGC undertakes, no earlier than five months but no later than six months after the commencement of the RTP Section, to furnish to the Director General of Fair Trading particulars of this Agreement and of any agreement of which it forms part. Before furnishing such particulars NGC will consult with the Founder Generators and the Founder Suppliers as to the nature of the particulars to be so furnished and will consult with the Founder Generators and Founder Suppliers regularly regarding the progress of discussions with the Director General of Fair Trading in regard to the agreement(s) so furnished. 83. ARBITRATION 83.1 Referral to arbitration: Save where expressly stated in this Agreement to the contrary and subject to any contrary provision of the Act or any Licence or the rights, powers, duties and obligations of the Director or the Secretary of State under the Act, any Licence or otherwise howsoever, any dispute or difference of whatever nature howsoever arising under, out of or in connection with the SSA Arrangements between any one or more Parties shall be and is hereby referred to arbitration pursuant to the arbitration rules of the Electricity Arbitration Association in force from time to time. 83.2 Proper law: Whatever the nationality, residence or domicile of any Party and wherever the dispute or difference or any part thereof arose the law of England shall be the proper law of any reference to arbitration hereunder and in particular (but not so as to derogate from the generality of the foregoing) the provisions of the Arbitration Acts 1950 (notwithstanding anything in section 34 thereof) to 1979 shall apply to any such arbitration wherever the same or any part of it shall be conducted. 83.3 Third Party Claims (1): Subject always to Clause 83.6, if any tariff customer (as defined in section 22(4) of the Act) brings any legal proceedings in any court (as defined in the Rules of the Supreme Court 1965 and in the County Courts Act 1984) against one or more persons, any of which is a Party (the "Defendant Contracting Party"), and the Defendant Contracting Party wishes to make a Third Party Claim (as defined in Clause 83.5) against any other Party (a "Contracting Party") which would but for this Clause 83.3 have been a dispute or difference referred to arbitration by virtue of Clause 83.1 then, notwithstanding the provisions of Clause 83.1 which shall not apply and in lieu of arbitration, the court in which the legal proceedings have been commenced shall hear and completely determine and adjudicate upon the legal proceedings and the Third Party Claim not only between the tariff customer and the Defendant Contracting Party but also between either or both of them and any other Contracting Party whether by way of third party proceedings (pursuant to the Rules of the Supreme Court 1965 or the County Court Rules 1981) or otherwise as may be ordered by the court. 83.4 Third Party Claims (2): Where a Defendant Contracting Party makes a Third Party Claim against any Contracting Party and such Contracting Party wishes to make a Third Party Claim against a further Contracting Party the provisions of Clause 83.3 shall apply mutatis mutandis as if such Contracting Party had been the Defendant Contracting Party and similarly in relation to any such further Contracting Party. 83.5 Third Party Claims (3): For the purposes of this Clause 83 "Third Party Claim" shall mean:- 83.5.1 any claim by a Defendant Contracting Party against a Contracting Party (whether or not already a party to the legal proceedings) for any contribution or indemnity; or 83.5.2 any claim by a Defendant Contracting Party against such a Contracting Party for any relief or remedy relating to or connected with the subject matter of the legal proceedings and substantially the same as some relief or remedy claimed by the tariff customer; or 83.5.3 any requirement by a Defendant Contracting Party that any question or issue relating to or connected with the subject matter of the legal proceedings should be determined not only as between the tariff customer and the Defendant Contracting Party but also as between either or both of them and a Contracting Party (whether or not already a party to the legal proceedings). 83.6 Limitation: Clause 83.3 shall apply only if at the time the legal proceedings are commenced no arbitration has been commenced between the Defendant Contracting Party and another Contracting Party raising or involving the same or substantially the same issues as would be raised by or involved in the Third Party Claim. The tribunal in any arbitration which has been commenced prior to the commencement of legal proceedings shall determine the question, in the event of dispute, whether the issues raised or involved are the same or substantially the same. 84. JURISDICTION 84.1 Submission to jurisdiction: Subject and without prejudice to Clauses 83 and 84.4, all the Parties irrevocably agree that the courts of England are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with the SSA Arrangements and that accordingly any suit, action or proceeding (together in this Clause 84 referred to as "Proceedings") arising out of or in connection with the SSA Arrangements may be brought in such courts. 84.2 Waiver: Each Party irrevocably waives any objection which it may have now or hereafter to the laying of the venue of any Proceedings in any such court as is referred to in this Clause and any claim that any such Proceedings have been brought in an inconvenient forum and further irrevocably agrees that a judgment in any Proceedings brought in the English courts shall be conclusive and binding upon such Party and may be enforced in the courts of any other jurisdiction. 84.3 Agent for service of process: Each Party which is not incorporated in any part of England or Wales agrees that if it does not have, or shall cease to have, a place of business in England or Wales it will promptly and hereby does appoint the Settlement System Administrator (or such other person as shall be acceptable to the Executive Committee) irrevocably to accept service of process on its behalf in any Proceedings in England. 84.4 Arbitration: For the avoidance of doubt nothing contained in the foregoing provisions of this Clause 84 shall be taken as permitting a Party to commence Proceedings in the courts where this Agreement otherwise provides for Proceedings to be referred to arbitration. 85. GOVERNING LAW The SSA Arrangements shall be governed by, and construed in all respects in accordance with, English law. IN WITNESS whereof this Agreement has been duly executed the day and year first above written CA971150.152 SCHEDULE 1 This Schedule reflects the parties as at 30th March, 1990 The Founder Generators
Registered Registered or Name Number Principal Office National Power PLC 2366963 Sudbury House 15 Newgate Street London EC1A 7AU PowerGen plc 2366970 53 New Broad Street London EC2M 1JJ Nuclear Electric plc 2264251 Barnett Way Barnwood Gloucester GL4 7RS The National Grid Company plc (Pumped 2366977 National Grid House Storage Business Division) Sumner Street London SE1 9JU Electricite de France, Service National - 3 Rue de Messine 75008 Paris France Scottish Power plc 117120 Cathcart House Spean Street Glasgow G44 4BE Scotland Scottish Hydro-Electric PLC 117119 16 Rothesay Terrace Edinburgh EH3 7SE Scotland British Nuclear Fuels plc 1002607 Risley Warrington Cheshire WA3 6AS The United Kingdom Atomic Energy Authority - 11 Charles II Street London SW1 4QT Central Power Limited 2251099 Mucklow Hill Halesowen West Midlands B62 8BP
SCHEDULE 2 This Schedule reflects the parties as at 30th March, 1990 The Founder Suppliers Part A Public Electricity Suppliers Registered Registered or Name Number Principal Office Eastern Electricity plc 2366906 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ East Midlands Electricity plc 2366923 398 Coppice Road Arnold Nottingham NG5 7HX London Electricity plc 2366852 Templar House 81-87 High Holborn London WC1V 6NU Manweb plc 2366937 Sealand Road Chester CH1 4LR Midlands Electricity plc 2366928 Mucklow Hill Halesowen West Midlands B62 8BP Northern Electric plc 2366942 Carliol House Market Street Newcastle upon Tyne NE1 6NE NORWEB plc 2366949 Talbot Road Manchester M16 6NE SEEBOARD plc 2366867 Grand Avenue Hove East Sussex BN3 2LS Southern Electric plc 2366879 Littlewick Green Maidenhead Berkshire SL6 3QB South Wales Electricity plc 2366985 Newport Road St Mellons Cardiff CF3 9XW South Western Electricity plc 2366894 800 Park Avenue Aztec West Almondsbury Bristol BS12 4SE Yorkshire Electricity Group plc 2366995 Wetherby Road Scarcroft Leeds LS14 3HS Part B Second Tier Suppliers Registered Registered or Name Number Principal Office National Power PLC 2366963 Sudbury House 15 Newgate Street London EC1A 7AU PowerGen plc 2366970 53 New Broad Street London EC2M 1JJ Nuclear Electric plc 2264251 Barnett Way Barnwood Gloucester GL4 7RS SEEBOARD plc 2366867 Grand Avenue Hove East Sussex BN3 2LS British Nuclear Fuels plc 1002607 Risley Warrington Cheshire WA3 6AS Part C Others Registered Registered or Name Number Principal Office Electricite de France, Service National - 3 Rue de Messine 75008 Paris France Scottish Power plc 117120 Cathcart House Spean Street Glasgow G44 4BE Scotland Scottish Hydro-Electric PLC 117119 16 Rothesay Terrace Edinburgh EH3 7SE Scotland SCHEDULE 3 Form of Accession Agreement THIS SUPPLEMENTAL AGREEMENT is made on [ ] BETWEEN:- (1) [ ], a company incorporated [with limited liability] under the laws of [ ] [(registered number [ ])] and having its [registered] [principal] office at [ ] (the "New Party"); and (2) [ ] (the "Nominee") on behalf of all the parties to the Pooling and Settlement Agreement referred to below. WHEREAS:- (A) by an agreement dated 30th March, 1990 made between the Founder Generators named therein (1), the Founder Suppliers named therein (2), NGC Settlements Limited now known as Energy Settlements and Information Services Limited as Settlement System Administrator (3), Energy Pool Funds Administration Limited as Pool Funds Administrator (4), The National Grid Company plc as Grid Operator and Ancillary Services Provider (5), and Scottish Power plc and Electricite de France, Service National as Externally Interconnected Parties (6) (as amended, varied, supplemented, modified or suspended, the "Pooling and Settlement Agreement") the parties thereto agreed to give effect to and be bound by certain rules and procedures for the operation of an electricity trading pool and the operation of a settlement system; and (B) the New Party has requested that it be admitted as a Party pursuant to Clause 3 of the Pooling and Settlement Agreement and each of the Parties hereby agrees to such admission. NOW IT IS HEREBY AGREED as follows:- 1. Unless the context otherwise requires, words and expressions defined in the Pooling and Settlement Agreement shall bear the same meanings respectively when used herein. 2. The Nominee (acting on behalf of each of the Parties) hereby admits the New Party as an additional Party under the Pooling and Settlement Agreement on the terms and conditions hereof and with effect from [insert effective date of admission]. 3. The New Party hereby accepts its admission as a Party and undertakes with the Nominee (acting on behalf of each of the Parties) to perform and to be bound by the terms and conditions of the Pooling and Settlement Agreement as a Party as from the [insert effective date of admission]. 4. For all purposes in connection with the Pooling and Settlement Agreement the New Party shall as from the [insert effective date of admission] be treated as if it had been a signatory of the Pooling and Settlement Agreement as a [[Generator]/[Supplier]/[Externally Interconnected Party]]*, and as if this Agreement were part of the Pooling and Settlement Agreement, and the rights and obligations of the Parties shall be construed accordingly. 5. This Agreement and the Pooling and Settlement Agreement shall be read and construed as one document and references in the Pooling and Settlement Agreement to the Pooling and Settlement Agreement (howsoever expressed) shall be read and construed as references to the Pooling and Settlement Agreement and this Agreement. 6. This Agreement shall be governed by and construed in all respects in accordance with English law and the provisions of Clauses 83 and 84 of the Pooling and Settlement Agreement shall apply hereto mutatis mutandis. AS WITNESS the hands of the duly authorised representatives of the parties hereto the day and year first above written [New Party] By: Notice details (Clause 75 of the Pooling and Settlement Agreement) Address: Telex number: Facsimile number: Attention: [Nominee] (for and on behalf of each of the parties to the Pooling and Settlement Agreement) By: - ---------------------------------------------------------------------------- * Delete/complete as appropriate. Note:this form will require adaptation in the circumstances described in Clauses 3.11 to 3.14 inclusive. SCHEDULE 4 Terms of Engagement of the Settlement System Administrator Contents 1. DEFINITIONS 1.1 Definitions 1.2 Executive Committee's and Contract Manager's obligations 2. ORDERING AND PROVISION OF SERVICES 3. THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES 4. STANDARD OF CARE, LIMITATION OF LIABILITY AND INDEMNITY 4.1 Standard of care 4.2 Service Line 4.3 Limitation of liability 4.4 Death and personal injury 4.5 Exclusion of certain types of loss 4.6 Trust 4.7 Survival 4.8 Saving 4.9 Full negotiation 4.10 Indemnity 5. PERSONNEL 5.1 Standard of Personnel 5.2 Account Manager 5.3 Contract Manager 5.4 Restriction on recruiting Personnel 6. DUTIES AND RESPONSIBILITIES OF THE SETTLEMENT SYSTEM ADMINISTRATOR 6.1 The Settlement System 6.2 Back-up arrangements 6.3 Metering 6.4 Works Programmes 6.5 Recommendations 6.6 Records 6.7 Provision of information (1) 6.8 Provision of information (2) 6.9 Provision of information (3) 6.10 Pool Rules 6.11 Arrangements with the Grid Operator and Ancillary Services Provider 6.12 Arrangements with the Pool Funds Administrator 6.13 Notification of arrangements 6.14 Estimates 6.15 Advisory obligations 6.16 Quality management system and procedures 6.17 Documentation 6.18 Long term forecasting procedures 6.19 Provision of Hardware 6.20 Performance Improvement Programme 6.21 Data input and validation 7. PERFORMANCE OF DUTIES 7.1 Independent contractor 7.2 Delegation 8. RESPONSIBILITY FOR THE SSA SYSTEM 8.1 The SSA System 8.2 Developed software 8.3 Licensed software 8.4 Third party maintenance 8.5 SSA System changes 8.6 Maintenance of the SSA System Software 8.7 Notification of commercial use 9. SOFTWARE 9.1 Definitions 9.2 Representations and Warranties 10. MAINTENANCE ARRANGEMENTS 11. AUDIT ACCESS 12. INSURANCE RESPONSIBILITIES 12.1 Insurance requirements 12.2 Application of proceeds 12.3 Information requirements 12.4 Default 12.5 Change in insurance requirements 13. TERMINATION OF THE APPOINTMENT OF ESIS 13.1 Termination 13.2 Termination pursuant to Clause 67.4 14. RESIGNATION BY ESIS 15. REMOVAL OF ESIS AFTER 31ST MARCH, 1999 16. REMOVAL OF ESIS ON OR BEFORE 31ST MARCH, 1999 17. REMOVAL OF ESIS 17.1 Breach of obligations capable of remedy 17.2 Breach of obligations incapable of remedy 17.3 Insolvency 17.4 Change of Status 17.5 Removal Procedure 18. POWERS OF EXECUTIVE COMMITTEE ON RESIGNATION AND REMOVAL 19. APPOINTMENT OF SUCCESSOR SETTLEMENT SYSTEM ADMINISTRATOR 19.1 Approval of the Director 19.2 Discharge 20. CONTINUATION OF SERVICES 20.1 Continuation of Services 20.2 Post-Termination Services 20.3 Extension Period Charges 20.4 Post-Termination Period Charges 20.5 Two year limit 20.6 Full force and effect 21. TRANSFER OF SERVICES, RESPONSIBILITIES AND ASSETS 21.1 Transfer of services, responsibilities and assets 21.2 Asset Transfer Costs 21.3 Transition services 21.4 Disputes 22. ALLOCATION OF COSTS ON RESIGNATION 23. ALLOCATION OF COSTS ON REMOVAL AFTER 31ST MARCH, 1999 24. ALLOCATION OF COSTS ON REMOVAL ON OR BEFORE 31ST MARCH, 1999 25. ALLOCATION OF COSTS ON REMOVAL 26. REIMBURSEMENT BY POOL MEMBERS 27. DIRECTOR'S INVOLVEMENT 28. POOL MEMBER AND EXECUTIVE COMMITTEE BREACHES 29. VARIATION OF SERVICE LINES 30. EXTENSION OF TIME 31. CONTRACT MANAGEMENT RULES 31.1 Contract Management Rules 31.2 Amendments to the Contract Management Rules 32. GROSS MARGIN 32.1 Auditor's Report 32.2 Negotiations 33. FORCE MAJEURE 34. CONFIDENTIALITY 35. NOTICES APPENDIX 1. DEFINITIONS 1.1. Definitions: In this Schedule and the Appendix hereto, except where the context otherwise requires:- "Account Manager" means the person or his alternate who has been nominated as such by the Settlement System Administrator in accordance with sub-section 5.2; "Anticipated Fixed Standing Charges" has the meaning given to that term in the Appendix hereto; "Committed Additional Services Charges" has the meaning given to that term in the Appendix hereto; "Compensation" means the aggregate of:- (a) 75 per cent. of the Profit Element attributable to the Anticipated Fixed Standing Charges; and (b) the Profit Element attributable to the Committed Additional Services Charge; "Contract Management Rules" means the procedures of that name in the agreed form as amended, modified or varied in accordance with sub-section 31.2; "Contract Manager" means the person or his alternate who has been nominated as such by the Executive Committee in accordance with sub-section 5.3; "Deferred Settlement Project Expenditure" has the meaning given to that term in the Appendix hereto; "Extension Notice" has the meaning given to that term in sub-section 20.1; "Extension Period" has the meaning given to that term in sub-section 20.1; "Gross Margin" means, in respect of each SSA Accounting Period, the aggregate of all Total Sums Due invoiced in respect of such SSA Accounting Period less those costs which can be directly related to the provision of Services hereunder (but disregarding for the purposes of such costs, tax, interest charges and Infrastructure Costs); "Infrastructure" means those assets and resources which are not dedicated to or directly attributable to the provision of part or parts of the Services. For the avoidance of doubt, Infrastructure includes the general manager, finance staff, personnel staff and procurement staff and the buildings (or parts thereof) attributable to such staff; "Infrastructure Costs" means those costs incurred by the Settlement System Administrator in the provision of Infrastructure. For the avoidance of doubt, Infrastructure Costs include the following costs to the extent that they are not directly attributable to a part or parts of the Services:- (a) legal except where (i) such costs are agreed to be treated as Third Party Costs, or (ii) such costs relate to the third (or more) Supplemental Agreement in an SSA Accounting Period, in which case they shall not be treated as Infrastructure Costs; (b) training; (c) audit; (d) insurance; (e) travelling; (f) public relations; (g) general depreciation; and (h) group charges, but do not include professional indemnity insurance costs or costs related to Deferred Settlement Project Expenditure; "in the agreed form" means in a form which is agreed on the one hand by either the Account Manager or the Settlement System Administrator and on the other hand by either the Contract Manager or the Executive Committee; "Irremediable Removal Notice" means a notice given by the Executive Committee to the Settlement System Administrator pursuant to sub-section 17.2, 17.3 or (as the context may require) 17.4; "Menus of Prices" has the meaning given to that term in the Appendix hereto; "Order" has the meaning given to that term in the Appendix hereto; "Outstanding Liabilities" means all liabilities incurred by the Settlement System Administrator in providing the Services or to enable it to provide the Services and which as at the Termination Date remain to be discharged in whole or in part, other than the Pool Agreed Liabilities; "Performance Improvement Programme" means a programme agreed between the Executive Committee and the Settlement System Administrator in accordance with Section 10 of Part B of the Appendix hereto to improve the cost-effectiveness of Services; "Pool Agreed Liabilities" means all liabilities (including Deferred Settlement Project Expenditure) incurred by the Settlement System Administrator under any contract or arrangement entered into or renewed by the Settlement System Administrator at the express written request or with the express written approval of the Executive Committee or the Contract Manager and which as at the Termination Date remain to be discharged in whole or in part; "Pool Apportioned Outstanding Liabilities" means all Outstanding Liabilities which as at the Termination Date and according to their terms at such date fall to be discharged on or before 31st March, 1999 provided that no such Outstanding Liability may be treated as a Pool Apportioned Outstanding Liability:- (a) where the Settlement System Administrator accounts for such Outstanding Liability during the period following the giving of a Removal Notice on a different basis from that used to account for such Outstanding Liability on the date which is 12 months prior to such Removal Notice, unless the Executive Committee or the Contract Manager has consented to such different basis (such consent not to be unreasonably withheld) or such different basis of accounting is required by law or applicable accounting standard; or (b) to the extent that the amount of the Outstanding Liability increases in a non-immaterial respect after the giving of a Removal Notice except where such increase is necessary for the Settlement System Administrator to provide Services under an Order; "Post-Termination Period" means a period of up to twelve months after the Termination Date; "Profit Element" means the Gross Margin for the twelve month period ending on the date of the Removal Notice as reported by the Settlement System Administrator's auditor pursuant to sub-section 32.1, reduced by 9.4 per cent. on account of overhead costs; "Remediable Removal Notice" means a notice given by the Executive Committee to the Settlement System Administrator pursuant to sub-section 17.1; "Removal Notice" means a notice given by the Executive Committee to the Settlement System Administrator pursuant to Section 15 or 16 or (as the case may be) sub-section 17.5; "Resignation Notice" means a notice given by ESIS to the Executive Committee and the Director pursuant to Section 14; "Service Line" means a legally binding operating document which is agreed for the time being and from time to time by the Settlement System Administrator and the Executive Committee to be a Service Line in respect of a particular Service; "Services" has the meaning given to that term in the Appendix hereto; "Sole Supplier Index" has the meaning given to that term in the Appendix hereto; "SSA Accounting Period" means each successive period of 12 months beginning on 1st April in each year or of such other length and/or beginning on such other date as may be agreed between the Settlement System Administrator and the Executive Committee. The first SSA Accounting Period shall begin on 1st April, 1994; "SSA Apportioned Outstanding Liabilities" means all Outstanding Liabilities other than the Pool Apportioned Outstanding Liabilities; "Termination Date" means the date upon which the appointment of ESIS as Settlement System Administrator is terminated pursuant to Section 13.2, 14, 15, 16 or (as the context may require) 17, as the same may be postponed pursuant to Section 20; "Third Party Costs" has the meaning given to that term in the Appendix hereto; "Total Sums Due" has the meaning given to that term in the Appendix hereto; and "Transition Costs" means:- (a) the costs incurred by the Settlement System Administrator during the period from the date of the Removal Notice or the Resignation Notice to the Termination Date in providing reasonable training for the person who becomes the successor Settlement System Administrator, such training to be a single programme delivered once and to be to the same standards and to use the same practices and procedures as are then set out in the Service Lines at the date on which the consultation procedure prior to serving a Removal Notice or a Resignation Notice commences; (b) reasonable costs incurred by the Settlement System Administrator in supporting the commissioning and proving of the successor Settlement System such that the successor Settlement System Administrator is capable of operating on the same basis and to the same frequencies as are set out in the Service Lines at the date on which the consultation procedure prior to serving a Removal Notice or a Resignation Notice commences; (c) the costs incurred by the Settlement System Administrator in physically moving, relocating or handing over to the successor Settlement System Administrator the property required to be made available by ESIS (but not, for the avoidance of doubt, the consideration payable therefor); (d) the costs incurred by the Settlement System Administrator in preparing and supplying to the successor Settlement System Administrator procedural or practice documentation not already recorded in writing; and (e) the travelling and accommodation costs of the Settlement System Administrator's employees in attending upon the successor Settlement System Administrator for all or any of the purposes in paragraph (a), (b) or (c) above. 1.2 Executive Committee's and Contract Manager's obligations: Where in this Schedule and the Appendix hereto an obligation is expressed to be undertaken by the Executive Committee or the Contract Manager, the Pool Members shall procure that the Executive Committee or, as the case may be, the Contract Manager performs that obligation and any breach, failure or action on the part of the Executive Committee or the Contract Manager shall be deemed to be a breach, failure or action on the part of all Pool Members. 2. ORDERING AND PROVISION OF SERVICES Ordering and provision of Services: Services shall be Ordered and provided in accordance with and pursuant to the Appendix hereto and the provisions of that Appendix shall have effect. 3. THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES Payment for Services: The Settlement System Administrator shall be entitled to recover from the Pool Members and Parties charges in accordance with and pursuant to the Appendix hereto. 4. STANDARD OF CARE, LIMITATION OF LIABILITY AND INDEMNITY 4.1 Standard of care: Subject to sub-section 4.2, in the exercise of its duties and responsibilities under the SSA Arrangements the Settlement System Administrator shall exercise that degree of care, diligence, skill and judgment which would ordinarily be expected of a reasonably prudent operator of the Settlement System taking into account the circumstances actually known to the Settlement System Administrator, its officers and employees at the relevant time or which ought to have been known to it or them had it or they made such enquiries as were reasonable in the circumstances. In particular, but without prejudice to the generality of the foregoing, in the absence of directions and instructions given to it by the Executive Committee or the Contract Manager under the SSA Arrangements and having due regard to the constraints imposed on the Settlement System Administrator by the Charging Procedure and the resources available to it, the Settlement System Administrator shall at all times conduct itself in a manner calculated to achieve the principal objects and purpose of the Agreement set out in Clauses 4.1.2 and 4.1.3. 4.2 Service Line: If the standard required of the Settlement System Administrator for the performance of a Service is included in the Service Line for that Service, such standard shall be deemed to be the standard to which the Settlement System Administrator will be required to perform to discharge its duty of care under sub-section 4.1 in respect of that Service. 4.3 Limitation of liability: Subject to sub-section 4.4 and save where any provision of this Agreement provides for an indemnity, each Party agrees and acknowledges that neither the Settlement System Administrator nor any of its officers, employees or agents shall be liable to any of the other Parties for loss arising from any breach of the SSA Arrangements other than for loss directly resulting from such breach and which at the date of this Agreement was reasonably foreseeable as not unlikely to occur in the ordinary course of events from such breach in respect of:- (i) physical damage to the property of any of the other Parties or its or their respective officers, employees or agents; and/or (ii) the liability of any such other Party to any other person for loss in respect of physical damage to the property of any other person. 4.4 Death and personal injury: Nothing in the SSA Arrangements shall exclude or limit the liability of the Settlement System Administrator for death or personal injury resulting from the negligence of the Settlement System Administrator or any of its officers, employees or agents and the Settlement System Administrator shall indemnify and keep indemnified each of the other Parties, its officers, employees and agents from and against all such and any loss or liability which any such other Party may suffer or incur by reason of any claim on account of death or personal injury resulting from the negligence of the Settlement System Administrator or any of its officers, employees or agents. 4.5 Exclusion of certain types of loss: Subject to sub-section 4.4 and save where any provision of this Agreement provides for an indemnity, neither the Settlement System Administrator nor any of its officers, employees or agents shall in any circumstances whatsoever be liable to any of the other Parties for:- (i) any loss of profit, loss of revenue, loss of use, loss of contract or loss of goodwill; or (ii) any indirect or consequential loss; or (iii)loss resulting from the liability of any other Party to any other person howsoever and whensoever arising save as provided in paragraph 4.3(ii) and sub-section 4.4. 4.6 Trust: Each Party acknowledges and agrees that each of the other Parties holds the benefit of sub-sections 4.3, 4.4 and 4.5 for itself and as trustee and agent for its officers, employees and agents. 4.7 Survival: Each of sub-sections 4.3, 4.4, 4.5 and 4.6 shall:- (i) be construed as a separate and severable contract term, and if one or more of such sub-sections is held to be invalid, unlawful or otherwise unenforceable the other or others of such sub-sections shall remain in full force and effect and shall continue to bind the Parties; and (ii) survive termination of the appointment of ESIS as Settlement System Administrator. 4.8 Saving: For the avoidance of doubt, nothing in this Section 4 shall prevent or restrict any Party enforcing any obligation (including suing for a debt) owed to it under or pursuant to this Agreement. 4.9 Full negotiation: Each Party acknowledges and agrees that the foregoing provisions of this Section 4 have been the subject of discussion and negotiation and are fair and reasonable having regard to the circumstances as at the date of this Agreement. 4.10 Indemnity: (a) In this sub-section 4.10 "Losses" means all losses, costs, damages, expenses, liabilities and claims suffered or reasonably incurred by the Settlement System Administrator, its officers, employees or agents. (b) Each Pool Member (or, in the case of any agreement entered into for or on behalf of any class of Pool Members, each Pool Member of that class) shall (but only in respect of its Contributory Share at the time of receipt of the request for indemnification) severally indemnify and keep indemnified the Settlement System Administrator, its officers, employees and agents against all Losses arising directly or indirectly out of a third party claim made against the Settlement System Administrator, its officers, employees or agents under or pursuant to any agreement which the Settlement System Administrator, against an Order or a request of the Executive Committee issued or made as permitted by Part E of the Appendix hereto, has entered into as agent for, or otherwise on behalf of, the Pool Members and/or any class of Pool Members and/or the Executive Committee (other than any Losses recoverable under the Charging Procedure or arising from the wilful default, bad faith or negligence of, or breach of its obligations under the SSA Arrangements by, the Settlement System Administrator, its officers, employees or agents). For the purposes of this sub-section 4.10 the Pool Members in general meeting shall be deemed to have approved the Escrow Agreement and each Accession Agreement executed prior to 1st October, 1991 and the relevant class of Pool Members which are parties thereto shall be deemed to have approved each deed of indemnity entered into in favour of a Pool Chairman where his period of appointment began on or before 1st April, 1993. 5. PERSONNEL 5.1 Standard of Personnel: In and for the performance of the Services the Settlement System Administrator shall engage only persons who are to the Settlement System Administrator's knowledge suitably qualified, skilled and honest and shall (where appropriate) provide such persons with the requisite training for the work which they are to perform. 5.2 Account Manager: The Settlement System Administrator:- (a) shall from time to time, after consultation with the Chief Executive, nominate a person with responsibility for liaison with the Contract Manager regarding the provision of the Services; (b) may also from time to time nominate up to two alternates for that person; and (c) shall have the right to remove the Account Manager at any time provided that the Settlement System Administrator shall ensure that there shall at all times be an Account Manager. The Settlement System Administrator shall notify the Executive Committee forthwith in writing of each nomination and removal of an Account Manager and shall procure that the Account Manager shall be available to be contacted by the Contract Manager at all reasonable times during the provision of the Services. 5.3 Contract Manager: The Executive Committee:- (a) shall from time to time, after consultation with the Settlement System Administrator, nominate a person with responsibility for liaison with the Account Manager regarding the provision of the Services; (b) may also from time to time nominate up to two alternates for that person; and (c) shall have the right to remove the Contract Manager at any time provided that the Executive Committee shall ensure that there shall at all times be a Contract Manager. The Executive Committee shall notify the Settlement System Administrator forthwith in writing of each nomination and removal of a Contract Manager and shall procure that the Contract Manager shall be available to be contacted by the Account Manager at all reasonable times. 5.4 Restriction on recruiting Personnel: 5.4.1 From 1st April, 1994 until the date falling twelve months (or such other period as the Settlement System Administrator and the Executive Committee may agree) after the Termination Date or, if there is a Post-Termination Period, the last day of the Post-Termination Period:- (a) ESIS shall not without the prior written consent of the Chief Executive employ, solicit or entice or endeavour to solicit or entice away from the Chief Executive's Office any person who at that time is, or was within the previous six months, an employee or member of staff of the Chief Executive's Office or of another person seconded to the Chief Executive's Office; and (b) Pool Members shall procure that neither the Chief Executive nor any member of the Chief Executive's Office nor any Committee Member shall without the prior written consent of ESIS employ, solicit or entice or endeavour to solicit or entice away from ESIS any person who at that time is, or was within the previous six months, an employee or member of staff of ESIS. Each undertaking contained in this paragraph 5.4.1 shall be construed as a separate undertaking and if one or more of the undertakings is held to be against the public interest or unlawful or in any way an unlawful restraint of trade, the remaining undertakings shall continue to bind the relevant Party. 5.4.2 Breach by ESIS of its obligations under paragraph 5.4.1(a) above shall not entitle the Executive Committee to terminate the appointment of ESIS as Settlement System Administrator under this Agreement and breach by a Pool Member of its obligations under paragraph 5.4.1(b) above shall not constitute a breach by a Pool Member of its obligations for the purposes of Section 28, but in each case shall only entitle such other party to claim damages or to bring proceedings for an injunction. 6. DUTIES AND RESPONSIBILITIES OF THE SETTLEMENT SYSTEM ADMINISTRATOR Responsibilities: Without prejudice to the generality of the duties, responsibilities and obligations of the Settlement System Administrator provided elsewhere in the SSA Arrangements, the Settlement System Administrator shall:- 6.1 The Settlement System: Comply with its obligations under the SSA Arrangements in respect of the day-to-day operation of the Settlement System; 6.2 Back-up arrangements: In accordance with Service Line 7 (Disaster Recovery), maintain back-up arrangements for the day-to-day operation of the Settlement System; 6.3 Metering: Comply with its obligations under Part XV of and Schedule 21 to this Agreement; 6.4 Works Programmes: Subject to the availability of resources, co-operate in the preparation, finalisation and implementation of all Works Programmes in respect of which the Settlement System Administrator is not appointed Works Programme Manager; 6.5 Recommendations: At the invitation of the Executive Committee or of its own initiative, recommend to the Executive Committee changes to the Settlement System and the SSA Arrangements; 6.6 Records: In accordance with Service Line 6 (Off-site Security), on the instruction of the Executive Committee maintain such records, data and other information as the Pool Auditor may from time to time by notice in reasonable detail to the Executive Committee require for the purposes of Part IX of this Agreement provided that this obligation shall cease to apply to the Settlement System Administrator following its resignation or removal; 6.7 Provision of information (1): Subject to any statutory or Licence obligations, provide the Executive Committee upon request with reports, data and other information concerning the Settlement System (other than information which is exclusively confidential to and the property of the Settlement System Administrator) required by the Executive Committee and which the Settlement System Administrator is required to retain under sub-section 6.6. Each of the Parties agrees to the release of all such reports, data and other information in the circumstances described in this sub-section 6.7; 6.8 Provision of information (2): Provide the Pool Auditor upon request with reports, data and other information concerning the Settlement System required by the Pool Auditor and which the Settlement System Administrator is required to retain under sub-section 6.6. Each of the Parties agrees to the release of all such reports, data and other information in the circumstances described in this sub-section 6.8; 6.9 Provision of information (3): Provide each Pool Member, the Ancillary Services Provider and the Grid Operator upon request with a certified copy of such records, data and other information concerning amounts payable by or to such Pool Member, the Ancillary Services Provider and the Grid Operator in accordance with Service Line 10 (Service to CEO and Pool Members). Each of the Parties agrees to the release of all such records, data and other information in the circumstances described in this sub-section 6.9; 6.10 Pool Rules: Perform those specific duties and responsibilities ascribed to it in the Pool Rules; 6.11 Arrangements with the Grid Operator and Ancillary Services Provider: Make and maintain arrangements with the Grid Operator and the Ancillary Services Provider in accordance with Clause 29.2; 6.12 Arrangements with the Pool Funds Administrator: Make and maintain arrangements with the Pool Funds Administrator in accordance with Clause 29.3; 6.13 Notification of arrangements: Provide, upon request, the Executive Committee with details of its arrangements for the time being in effect with each of the Grid Operator, the Ancillary Services Provider and the Pool Funds Administrator referred to in sub-section 6.11 or (as the case may be) 6.12; 6.14 Estimates: Without prejudice to its obligations under Section 17.8 of Schedule 11, where the Settlement System Administrator is unable for whatever reason to provide the Pool Funds Administrator with the actual information required in respect of each Settlement Day for each Pool Member, the Ancillary Services Provider and the Grid Operator, provide the Pool Funds Administrator in accordance with Service Line 2 (Settlement Process) with its best estimates of that information by the same time as it is required to provide the actual information; 6.15 Advisory obligations: 6.15.1 Report to the Executive Committee and/or the Contract Manager on those matters set out or referred to in the Service Lines in the manner and within the timescales prescribed thereby; 6.15.2 Report promptly in writing to the Executive Committee:- (a) any problem with the Settlement System or its then current operation that is putting pressure on the due and punctual performance by the Settlement System Administrator of any Service; and (b) any problem of which the Settlement System Administrator is or becomes aware about the likely future operation of the Settlement System arising out of the way in which the Settlement System is then currently being operated; 6.16 Quality management system and procedures: 6.16.1 Establish and keep under review a quality management system that is designed to enable the Settlement System Administrator to meet the standards set out or referred to in sub-sections 4.1 and 4.2 and under that system prepare and keep under review procedures to meet such standards; 6.16.2 Provide the Executive Committee on request with copies of such procedures and notify the Executive Committee of any changes made thereto or, where such changes require contribution or input from all or any of the Parties, any proposed changes thereto; and 6.16.3 Consider any comments or any proposed changes on or to such procedures made by or on behalf of the Executive Committee from time to time; 6.17 Documentation: Maintain up-to-date manuals, specifications and similar documentation for the provision of the Services and provide the Executive Committee on request with copies of such manuals, specifications and similar documentation; 6.18 Long-term forecasting procedures: Having regard to its knowledge of the requirements of the Executive Committee and the Pool Members:- (a) consult the Contract Manager in respect of the Settlement System Administrator's long term planning for the use and allocation of resource cover; (b) following consultation with the Contract Manager pursuant to paragraph (a) above, plan for anticipated future requirements of the Executive Committee and Pool Members; (c) maintain internal financial controls to ensure that the objectives of this Schedule and the Appendix hereto are met; and (d) provide the Executive Committee as appropriate or on request with a report of the results and/or impact of the matters arising from the consultation referred to in paragraph (a) above; 6.19 Provision of Hardware: 6.19.1 Provide Hardware subject to compliance by the Settlement System Administrator with its obligations under the remainder of this sub-section; 6.19.2 Be entitled to change the Hardware provided that:- (a) the Settlement System Administrator has given to the Executive Committee reasonable prior notice of the intention to change the Hardware; (b) the Settlement System Administrator has given to the Executive Committee reasonable details of the proposed change, together with a timetable for implementation, at the time notice is given under paragraph (a) above; (c) the impact (if any) on the Settlement Software is detailed in the notice given under paragraph (a) above and, if there shall be any such impact, the proposed change to the Settlement Software shall proceed in accordance with the Change Management Policies; (d) any such change will not materially affect the operation or function of the Settlement System; and (e) all costs associated with any such change shall be met by the Settlement System Administrator (and shall not be recharged to Pool Members); 6.19.3 Make changes to the Hardware required by Pool Members, acting through the Executive Committee, provided that the Settlement System Administrator shall notify Pool Members in accordance with the Change Management Policies and appropriate changes to the Service Lines and/or the Menus of Prices shall be agreed in accordance with the Appendix hereto; 6.20 Performance Improvement Programme: Seek to identify and give support to initiatives which may form the basis of Performance Improvement Programmes; 6.21 Data input and validation: 6.21.1 Promptly and properly input such data and other information as it may receive pursuant to the terms of this Agreement; 6.21.2 Review and validate data and other information in accordance with the Agreed Procedures to establish the completeness thereof and to identify any inconsistencies therein. 7. PERFORMANCE OF DUTIES 7.1 Independent contractor: In carrying out its duties and responsibilities under the SSA Arrangements, the Settlement System Administrator shall act as an independent contractor and (unless expressly authorised to the contrary) shall neither act nor hold itself out nor be held out as acting as agent for any of the other Parties. 7.2 Delegation: 7.2.1 Subject as provided in paragraphs 7.2.2 and 7.2.3, the Settlement System Administrator may delegate the performance of all or any of its duties and responsibilities under the SSA Arrangements to agents or contractors. 7.2.2 The Settlement System Administrator shall be entitled to delegate the performance of all or any of its duties and responsibilities under the SSA Arrangements provided that they are not duties or responsibilities which are in respect of any significant matter (unless the prior written approval of the Executive Committee under paragraph 7.2.3 has been given). 7.2.3 In giving any such approval as is referred to in paragraph 7.2.2 the Executive Committee shall specify the particular duties and responsibilities which may be delegated and to whom and for what period. On receipt of such approval the Settlement System Administrator may delegate its duties and responsibilities only to the extent of the terms of such approval. 7.2.4 As between the Settlement System Administrator and the other Parties, no delegation pursuant to this sub-section 7.2 or pursuant to Clause 60.15 nor the terms or conditions of any contract pursuant to which any such delegation is effected shall relieve the Settlement System Administrator of any of its duties or responsibilities under the SSA Arrangements. The Settlement System Administrator shall at all times properly supervise the performance of all such delegates. 7.2.5For the avoidance of doubt, the term "delegation" as used in this sub-section 7.2 includes sub-contracting. 8. RESPONSIBILITY FOR THE SSA SYSTEM 8.1 The SSA System: The Settlement System Administrator shall have control of the running and development of the SSA System, subject to the restrictions set out in this Section 8. 8.2 Developed software: (a) In relation to any Software developed by the Settlement System Administrator, the Settlement System Administrator shall procure that all intellectual property rights shall vest in the Settlement System Administrator absolutely. In the case of Software commissioned from third parties or where rights in Software are purchased, the Settlement System Administrator shall procure that all intellectual property rights are transferred to the Settlement System Administrator. Where the Settlement System Administrator customises, or commissions the customisation of, any Software licensed from any third parties, the Settlement System Administrator shall procure that all intellectual property rights shall vest in the Settlement System Administrator. (b) Pool Members confirm and agree (i) that they have no objection to the intellectual property rights referred to in paragraph (a) above being held in this way and (ii) that the Settlement System Administrator shall have the right of use of such intellectual property rights as an absolute owner. 8.3 Licensed software: In respect of any Software not developed internally, purchased or commissioned, the Settlement System Administrator shall ensure that it has a fully transferable licence to use the Software, together with (unless the Executive Committee otherwise notifies the Settlement System Administrator) suitable escrow arrangements for any Software for which the source code and full documentation has not been provided or which is not freely available. No further fees shall be payable in respect of any transfer of the licence to any nominated representative of the Executive Committee under Section 21, except to the extent that the licensor may continue to charge the same licence fees to the transferee. 8.4 Third party maintenance: Except in circumstances beyond the Settlement System Administrator's control, the SSA System shall be fully maintained, by third party maintenance organisations to the extent that the Software is not developed internally, and the SSA System shall be fully documented so that it can be operated by any successor to the Settlement System Administrator. The Settlement System Administrator shall promptly notify the Executive Committee upon the Settlement System Administrator becoming aware that the SSA System will cease to be maintained by such a third party maintenance organisation. 8.5 SSA System changes: The Settlement System Administrator shall be free to make any changes to the SSA System, except to the extent that (a) the modification necessitates any change to the Developed Application Software or Licensed Application Software, or (b) it detrimentally affects the operation of the Settlement System. 8.6 Maintenance of the SSA System Software: Without prejudice to Section 10, in respect of any Software related to the SSA System which is written, commissioned or customised by the Settlement System Administrator, the Settlement System Administrator shall maintain support for, and where necessary fix any bugs in, such Software from the Termination Date until the expiry of the Post-Termination Period, if any, and the costs of maintaining that support and fixing the bugs shall be as agreed between the Settlement System Administrator and the Contract Manager and shall be recovered in accordance with the Charging Procedure. 8.7 Notification of commercial use: The Settlement System Administrator shall promptly notify the Executive Committee if it uses the Software for a purpose other than that envisaged under the SSA Arrangements, including its sale, licence, development or otherwise being made available howsoever to any other person with such details as the Executive Committee may reasonably request. 9. SOFTWARE 9.1 Definitions: In this Section 9:- "Developed Application Software" means those computer programs and codes described in the Contract Management Rules from time to time and all copyright and other intellectual property rights therein and all documents and materials forming part thereof or relating thereto; and "Licensed Application Software" means those computer programs and codes described in the Contract Management Rules from time to time. 9.2 Representations and Warranties: 9.2.1 The Settlement System Administrator represents, warrants and undertakes to the other Parties as a continuing obligation and the other Parties acknowledge that:- (a) the Settlement System Administrator has, and for so long as it remains the Settlement System Administrator will have, unencumbered and freely transferable title to Developed Application Software; (b) the Licensed Application Software is, and for so long as the Settlement System Administrator remains as such will remain, the subject of a non-exclusive licence in favour of the Settlement System Administrator transferable to its successor Settlement System Administrator; and (c) the Settlement System Administrator undertakes to use all reasonable endeavours to:- (i) assign or novate, or procure the assignment or novation, of any licence for Licensed Application Software to the successor Settlement System Administrator as soon as is reasonably practicable and to obtain any consent necessary for that purpose; or (ii) procure the grant by the relevant licensor to the successor Settlement System Administrator of a licence in respect of Licensed Application Software as soon as is reasonably practicable, so that the licence held by the successor Settlement System Administrator is on terms no less favourable to it than the terms of the licence held by the Settlement System Administrator and without payment of a fee by Pool Members or the successor Settlement System Administrator (except to the extent that the licensor may continue to charge the same licence fee to the transferee). 9.2.2 Pool Members confirm and agree (i) that they have no objection to the intellectual property rights referred to in paragraph 8.2(a) above being held in this way and (ii) that, as between the Settlement System Administrator and Pool Members, the Settlement System Administrator shall have the right of use of such intellectual property rights as an absolute owner. 10. MAINTENANCE ARRANGEMENTS Maintenance arrangements: The Settlement System Administrator shall:- (a) ensure that at all times it has in full force and effect proper arrangements for the maintenance of (and the prompt rectification of defects in) the Hardware and Software provided that in relation to Developed Application Software such maintenance shall not be required to extend beyond the implementation of a corrective procedure or a remedy to such Software to allow for the continued running of such Software in accordance with its specification; (b) upon reasonable request of the Executive Committee, confirm to the Executive Committee in writing the existence of such maintenance arrangements in respect of the Hardware and the SSA System; and (c) upon reasonable request of the Executive Committee, supply evidence reasonably satisfactory to the Executive Committee of the existence and nature of such maintenance arrangements in respect of the Developed Application Software and the Licensed Application Software. 11. AUDIT ACCESS Access: 11.1 The Settlement System Administrator shall:- (a) permit the Pool Auditor unrestricted access to the Settlement System, the Hardware and the Software and all data used, information held and records kept by the Settlement System Administrator or its agent or sub-contractors in operating the Settlement System; (b) use reasonable endeavours to procure that each Second Tier Agent, each Second Tier Agent's agent (if any) and each Second Tier Agent's sub-contractor (if any) permits the Pool Auditor unrestricted access to the Second Tier Hardware and Second Tier Software, to its agency or sub-contracting operations and to all data used, information held and records kept by each such Second Tier Agent, Second Tier Agent's agent and/or Second Tier Agent's sub-contractor; (c) make available members of its staff to explain the operation of the Settlement System and such other issues as the Pool Auditor considers relevant; and (d) use reasonable endeavours to procure that each Second Tier Agent, each Second Tier Agent's agent (if any) and each Second Tier Agent's sub-contractor (if any) makes available members of its staff to explain its operation of its agency or sub-contracting operations, the Second Tier Hardware and the Second Tier Software and such other issues as the Pool Auditor considers relevant. 11.2 ESIS in its capacity as Settlement System Administrator shall procure that, in addition to ESIS's auditor auditing the annual accounts of ESIS for a particular financial year, that auditor shall report in writing to the Executive Committee the Gross Margin for that financial year and shall deliver that report to the Executive Committee no later than the date upon which such annual accounts are laid before ESIS in general meeting or otherwise published or issued (if earlier). 11.3 The Settlement System Administrator shall permit an auditor appointed by the Executive Committee access to the operations and business of the Settlement System Administrator to confirm that the quality management procedures and billing practices applied by the Settlement System Administrator under the terms of the SSA Arrangements are being complied with. The terms of reference for each such audit will be agreed by the auditor with ESIS, such agreement not to be unreasonably withheld. 12. INSURANCE RESPONSIBILITIES 12.1 Insurance requirements: Subject to the availability in the insurance market of such insurances, the Settlement System Administrator shall effect and maintain in full force and effect with first class insurers the following insurances:- 12.1.1 insurance with respect to (a) physical loss or damage to each of the Hardware (including Second Tier Hardware) and Software (including Second Tier Software) and (b) corruption of the Software (including Second Tier Software) and related computer data, in each case in an amount equivalent to its replacement cost, except, with effect from 1st April, 1994, insofar as concerns any Second Tier Hardware and Second Tier Software owned and/or operated by any particular Second Tier Agent where such Second Tier Agent has agreed with the Settlement System Administrator substantially to the effect, inter alia, that:- (a) the Second Tier Agent will effect and maintain in full force and effect with first class insurers insurance with respect to (i) physical loss or damage to each of such Second Tier Hardware and Second Tier Software and (ii) corruption of such Second Tier Software and related computer data, in each case in an amount equivalent to its correction cost; (b) the Second Tier Agent shall promptly on request provide to the Settlement System Administrator an insurance broker's certificate having a form and content as specified in sub-section 12.3 and evidence that the Second Tier Agent has paid the relevant premiums; and (c) if the Second Tier Agent has not so insured and paid the relevant premiums the Settlement System Administrator shall, on behalf of the Second Tier Agent, take out such insurance and pay such premiums and recover the cost of the same from the Second Tier Agent; and provided that, in the case of (c) above, where:- (i) the Settlement System Administrator is aware that the Second Tier Agent has not so insured in accordance with (a) above; and (ii) a period of fourteen days since the Settlement System Administrator first became aware that the Second Tier Agent had not insured in accordance with (a) above has elapsed, during which period the Second Tier Agent has not so insured in accordance with (a) above, the Settlement System Administrator shall so take out such insurance in the name of such Second Tier Agent unless, after having sought, to the extent that it is able, such information from the Second Tier Agent as is necessary for the purposes of obtaining such insurance, it has failed to obtain such information; and 12.1.2 professional indemnity insurance as Settlement System Administrator in an amount of not less than (pound)20,000,000 any one claim and (pound)20,000,000 all claims in any one year (or such greater amount as may from time to time be reasonably required by the Executive Committee after consultation with the Settlement System Administrator or such lesser amount as may from time to time be agreed between the Executive Committee and the Settlement System Administrator). 12.2 Application of proceeds: The Settlement System Administrator shall use all reasonable endeavours:- (a) in the case of insurance referred to above where it is the insured to make and collect claims promptly; and (b) in the case of insurance where its Second Tier Agent is the insured, to procure that such Second Tier Agent makes and collects claims promptly, and shall apply and, as appropriate, shall procure that its Second Tier Agent applies, all moneys so received by it in respect of the insurance referred to in this Section 12 in or towards making good the loss and fully repairing the damage or (as the case may be) satisfying the relevant liability in respect of which such moneys were receivable or reimbursing the cost of the same. 12.3 Information requirements: The Settlement System Administrator shall promptly supply the Executive Committee upon request from time to time with an insurance broker's certificate in form and content reasonably satisfactory to the Executive Committee confirming that cover has been effected, whether by it or its Second Tier Agent, in respect of the insurance referred to in sub-section 12.1 and giving reasonable details of the terms and conditions of such insurance. 12.4 Default: If the Settlement System Administrator shall default in the performance of its obligations under this Section 12, the Executive Committee shall have the right (but shall not be obliged) to make the appropriate insurance arrangements and shall have the right to recover from the Settlement System Administrator any costs incurred (including any handling fee). 12.5 Change in insurance requirements: 12.5.1 If at the request of the Executive Committee the sums insured under the Settlement System Administrator's professional indemnity insurance are increased, the amount of any resultant increase in the insurance premium shall be recovered by the Settlement System Administrator (assuming that it has borne the same) in accordance with the Charging Procedure. 12.5.2 If at the request of the Executive Committee the amount of the excess or deductible under the Settlement System Administrator's professional indemnity insurance is increased and there is a resultant decrease in the insurance premium payable, the amount of such decrease shall be reimbursed by the Settlement System Administrator to Pool Members under the Charging Procedure (assuming that Pool Members have already paid the Settlement System Administrator on the basis of a higher premium) provided that in the event of a claim against the Settlement System Administrator in respect of which a payment is or (but for such increase in the excess or deductible) would have been made to the Settlement System Administrator under its professional indemnity insurance Pool Members shall be required themselves to bear in aggregate the first part of any such claim up to the amount of such increased excess or deductible and in satisfaction of that obligation shall reimburse the same to the Settlement System Administrator in accordance with the Charging Procedure. 12.5.3 If in any other case the sums insured under the Settlement System Administrator's professional indemnity insurance are changed from the amounts referred to in paragraph 12.5.1 or the amount of the excess or deductible thereunder is changed from the amount referred to in paragraph 12.5.2, any resultant increase in the insurance premium payable shall be for the Settlement System Administrator's own account and shall not be recoverable by it from the other Parties. 13. TERMINATION OF THE APPOINTMENT OF ESIS 13.1 Termination: The appointment of ESIS as Settlement System Administrator may be terminated either by the resignation of ESIS in accordance with Section 14 or by the removal of ESIS in accordance with Section 15, 16 or 17. 13.2 Termination pursuant to Clause 67.4: If this Agreement is terminated pursuant to Clause 67.4 then:- (a) if the effective date of termination of this Agreement is after 31st March, 1999, the Termination Date shall be deemed for the purposes of allocating costs between ESIS and Pool Members to be 31st March, 1999 and the provisions of Section 23 shall apply; and (b) if the effective date of termination of this Agreement is on or before 31st March, 1999, the Termination Date shall be deemed for the purposes of allocating costs between ESIS and Pool Members to be 31st March, 1999 and the provisions of Section 24 shall apply. 14. RESIGNATION BY ESIS Resignation procedure: After consultation between the Settlement System Administrator and the Executive Committee and the Director having given his prior written consent ESIS may give 12 months' notice in writing (the "Resignation Notice") to the Executive Committee (which shall forthwith notify all Pool Members) and the Director of its intention to resign as Settlement System Administrator on a date (in this Section 14, the "Termination Date") not earlier than 1st April, 1999 and, subject to Section 20, the appointment of ESIS as Settlement System Administrator shall terminate on the Termination Date. 15. REMOVAL OF ESIS AFTER 31ST MARCH, 1999 Removal procedure: After consultation between the Settlement System Administrator and the Executive Committee ESIS may be removed as Settlement System Administrator at any time after 31st March, 1999 where:- (a) a resolution of the Pool Members in general meeting resolving to remove ESIS as Settlement System Administrator has been passed by either:- (i) Pool Members holding not less than 80 per cent. of the Total Votes of Pool Members who are entitled to vote in person or by proxy at a general meeting of Pool Members or deemed effective pursuant to Clause 13.5; or (ii) Pool Members holding less than 80 per cent. of the Total Votes of Pool Members who are entitled to vote in person or by proxy at a general meeting of Pool Members, but only where there is no more than one dissentient Pool Member; (b) the Director has given his prior written consent in the light of the resolution passed in accordance with paragraph (a) above; and (c) the Executive Committee has given the Settlement System Administrator after such resolution has been passed or deemed effective (which the Executive Committee shall promptly do) 12 months' notice in writing (in this Section 15, the "Removal Notice") of such removal (or such longer period of notice as the Director may determine in response to the application made to him for the purposes of paragraph (b) above) to take effect on the date being no earlier than 1st April, 1999 specified in the Removal Notice (in this Section 15, the "Termination Date") and, subject to Section 20, the appointment of ESIS as Settlement System Administrator shall terminate on the Termination Date. 16. REMOVAL OF ESIS ON OR BEFORE 31ST MARCH, 1999 Removal procedure: After consultation between the Settlement System Administrator and the Executive Committee ESIS may be removed as Settlement System Administrator at any time on or before 31st March, 1999 where:- (a) a resolution of the Pool Members in general meeting resolving to remove ESIS as Settlement System Administrator has been passed by either:- (i) Pool Members holding not less than 80 per cent. of the Total Votes of Pool Members who are entitled to vote in person or by proxy at a general meeting of Pool Members or deemed effective pursuant to Clause 13.5; or (ii) Pool Members holding less than 80 per cent. of the Total Votes of Pool Members who are entitled to vote in person or by proxy at a general meeting of Pool Members, but only where there is no more than one dissentient Pool Member; (b) the Director has given his prior written consent in the light of the resolution passed in accordance with sub-paragraph (a) above; and (c) the Executive Committee has given the Settlement System Administrator after such resolution has been passed or deemed effective (which the Executive Committee shall promptly do) 12 months' notice in writing (in this Section 16, the "Removal Notice") of such removal (or such longer period of notice as the Director may determine in response to the application made to him for the purposes of paragraph (b) above) to take effect on the date falling before 1st April, 1999 specified in the Removal Notice (in this Section 16, the "Termination Date") and, subject to Section 20, the appointment of ESIS as Settlement System Administrator shall terminate on the Termination Date. 17. REMOVAL OF ESIS 17.1 Breach of obligations capable of remedy: If the Settlement System Administrator fails in any persistent, material respect or in any single, major respect to perform or comply with any of the obligations expressed to be assumed by it under the SSA Arrangements and such failure, in the reasonable opinion of the Executive Committee, is capable of remedy, the Executive Committee shall have the right to give notice in writing (the "Remediable Removal Notice") to the Settlement System Administrator giving details of the relevant failure and requiring that such failure be remedied within 30 days (or such longer period as may be necessary but in any event within 90 days or any longer period as may be reasonable and agreed between the Settlement System Administrator and the Executive Committee) from the date of receipt by the Settlement System Administrator of the Remediable Removal Notice and, if a longer period is reasonable, that within 30 days from the said date of receipt the Settlement System Administrator agree a timetable with the Executive Committee for the remedy of such failure (such agreement not to be unreasonably withheld). 17.2 Breach of obligations incapable of remedy: If the Settlement System Administrator fails in any persistent, material respect or in any single, major respect to perform or comply with any of the obligations expressed to be assumed by it under the SSA Arrangements and such failure, in the reasonable opinion of the Executive Committee, is incapable of remedy, the Executive Committee shall have the right to give notice in writing (in this sub-section 17.2, the "Irremediable Removal Notice") to the Settlement System Administrator giving details of the relevant failure and stating that, in the reasonable opinion of the Executive Committee, the Settlement System Administrator is in breach of the terms of the SSA Arrangements and such breach is incapable of remedy. 17.3 Insolvency: If the Settlement System Administrator:- (a) is unable to pay its debts (within the meaning of section 123(1) or (2) of the Insolvency Act 1986, but subject as hereinafter provided in this sub-section 17.3) or if any voluntary agreement is proposed in relation to it under section 1 of that Act or if the Settlement System Administrator enters into any scheme of arrangement (other than for the purpose of reconstruction or amalgamation upon terms and within such period as may previously have been approved in writing by the Executive Committee); or (b) has a receiver (which expression shall include an administrative receiver within the meaning of section 29 of the Insolvency Act 1986) of the whole or any material part of its assets or undertaking appointed; or (c) has an administration order under section 8 of the Insolvency Act 1986 made in relation to it; or (d) passes any resolution for winding-up other than a resolution previously approved in writing by the Executive Committee; or (e) becomes subject to an order by the High Court for winding-up, the Executive Committee shall have the right to give notice in writing (in this sub-section 17.3, the "Irremediable Removal Notice") to the Settlement System Administrator referring to such event. For the purposes of paragraph (a) above section 123(1)(a) of the Insolvency Act 1986 shall have effect as if for "(pound)750" there were substituted "(pound)250,000" and, further, the Settlement System Administrator shall not be deemed to be unable to pay its debts for the purposes of paragraph (a) above if any such demand as is mentioned in the said section is being contested in good faith by the Settlement System Administrator with recourse to all appropriate measures and procedures. 17.4 Change of Status: If ESIS ceases to be a wholly-owned subsidiary of NGC then, subject to the prior written consent of the Director having been obtained, the Executive Committee shall have the right to give notice in writing (in this sub-section 17.4, the "Irremediable Removal Notice") to the Settlement System Administrator referring to such event. 17.5 Removal Procedure: Subject to:- (a) the Executive Committee having given the Settlement System Administrator a Remediable Removal Notice, and either the Settlement System Administrator having been unwilling or unable to remedy the failure within 30 days from the date of receipt of the Remediable Removal Notice (or such longer period as may be permitted under sub-section 17.1) or, as the case may be, within the period provided in the timetable agreed with the Executive Committee for the remedy of such failure; or (b) the Executive Committee having given the Settlement System Administrator an Irremediable Removal Notice, ESIS may be removed as Settlement System Administrator where:- (i) a resolution of the Pool Members in general meeting resolving to remove ESIS as Settlement System Administrator has been passed by either:- (a) Pool Members holding not less than 80 per cent. of the Total Votes of Pool Members who are entitled to vote in person or by proxy at a general meeting of Pool Members or deemed effective pursuant to Clause 13.5; or (b) Pool Members holding less than 80 per cent. of the Total Votes of Pool Members who are entitled to vote in person or by proxy at a general meeting of Pool Members, but only where there is no more than one dissentient Pool Member; (ii) the Director has given his prior written consent in the light of the resolution passed in accordance with sub-paragraph (i) above; and (iii) the Executive Committee has given the Settlement System Administrator after such resolution has been passed or deemed effective (which the Executive Committee shall promptly do) 12 months' notice in writing (in this Section 17, the "Removal Notice") of such removal to take effect on the date specified in the Removal Notice (in this Section 17, the "Termination Date") and, subject to Section 20, the appointment of ESIS as Settlement System Administrator shall terminate on the Termination Date. 18. POWERS OF EXECUTIVE COMMITTEE ON RESIGNATION AND REMOVAL Executive Committee Powers: At any time and from time to time on or after a Resignation Notice or a Removal Notice has been given by or on behalf of the Executive Committee to the Settlement System Administrator, the Executive Committee shall have the right:- (a) subject to all security, safety and operational constraints of the Settlement System Administrator current at the time the Resignation Notice or (as the case may be) the Removal Notice is given, to enter (and any third party reasonably nominated by the Executive Committee shall have the right to enter) upon reasonable notice any premises where the Settlement System Administrator performs any of its functions relating to the Settlement System to inspect any aspect of the Settlement System, to ensure maintenance of service levels and to facilitate the transfer of service, responsibilities and assets pursuant to Section 21; and (b) on such reasonable basis as may be agreed with the Settlement System Administrator (such agreement not to be unreasonably withheld), to communicate with and consult such of the Settlement System Administrator's staff as are available as the Executive Committee reasonably considers to be essential to the Settlement System for a period up to 12 months following the Termination Date. 19. APPOINTMENT OF SUCCESSOR SETTLEMENT SYSTEM ADMINISTRATOR 19.1 Approval of the Director: The Parties undertake with each other that no successor Settlement System Administrator shall be appointed without the written approval of the Director first having been obtained. 19.2 Discharge: With effect from the Termination Date ESIS in its capacity as Settlement System Administrator shall (save as provided in sub-sections 5.4, 8.6, 12.2, 20.2 and Section 21 and save as regards any rights and liabilities accrued as at the date of its retirement or removal) be discharged from any further obligation and shall have no further rights under the SSA Arrangements but shall remain entitled to the benefit of the provisions of sub-sections 4.3 to 4.9 (inclusive) and any other provision of this Agreement providing for an indemnity or the payment of other costs or charges in favour of the Settlement System Administrator, and its successor and (save as provided in this sub-section 19.2) each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been a party to this Agreement in place of ESIS as Settlement System Administrator. 20. CONTINUATION OF SERVICES 20.1 Continuation of Services: Subject to sub-section 20.5, the Executive Committee shall have the right to postpone the Termination Date beyond its original date on a maximum of four occasions and, on each occasion, for a period of three months (each an "Extension Period") and ESIS agrees to continue to act as Settlement System Administrator for the duration of each Extension Period. The Executive Committee shall exercise such right by written notice to the Settlement System Administrator specifying the duration of each Extension Period (each an "Extension Notice"), and the Termination Date shall thereupon be postponed to the last day of the then proposed Extension Period. 20.2 Post-Termination Services: The Contract Manager may, by placing an Order, request the Settlement System Administrator to provide such training and support services as are set out in the Menu of Consultancy Services Prices and the Menu of Development Services Prices (each as defined in the Appendix hereto) as the Executive Committee may reasonably require for the Post-Termination Period. Any such Order shall specify the length of time for which such services are required. Subject to sub-section 20.4, the Settlement System Administrator shall be entitled to charge for such services in accordance with the Menu of Prices current immediately prior to the Termination Date (subject to indexation in accordance with the terms of the Appendix hereto) but shall only be required to provide such services to the extent that the resources are at the time employed by ESIS or were formerly employed by ESIS and are at the time employed within the NGC group of companies. 20.3 Extension Period Charges: The Settlement System Administrator shall have the right to charge for Services rendered during the Extension Period in accordance with Section 1 of Part H of the Appendix hereto. 20.4 Post-Termination Period Charges: The Settlement System Administrator shall charge only a nominal sum (being not more than (pound)100 in the aggregate) for such training and support services rendered in accordance with sub-section 20.2 where the Termination Date is referable to a Resignation Notice given by ESIS pursuant to Section 14 or a Removal Notice given by the Executive Committee pursuant to Section 17. 20.5 Two year limit: Notwithstanding any other provision of this Agreement, the Executive Committee shall not be entitled to require ESIS to remain appointed as Settlement System Administrator after the date falling 24 months after the date on which:- (a) the Settlement System Administrator gives the Executive Committee a Resignation Notice; or (as the case may be) (b) the Executive Committee gives the Settlement System Administrator a Removal Notice. 20.6 Full force and effect: All the provisions of this Schedule and the Appendix hereto shall remain in full force and effect for the duration of the Extension Period (if any) and the Post-Termination Period (if any) to the extent necessary to give effect to the terms of this Section 20. 21. TRANSFER OF SERVICES, RESPONSIBILITIES AND ASSETS 21.1 Transfer of services, responsibilities and assets: Upon a successor Settlement System Administrator being appointed under Section 19 and accepting such appointment ESIS in its capacity as outgoing Settlement System Administrator shall:- (a) grant to a nominee of the Pool Members (who may be the successor Settlement System Administrator) an unrestricted, non-exclusive, perpetual and transferable licence of all Software, all related documentation and other similar intellectual property belonging to the outgoing Settlement System Administrator free of charge, to use, copy, adapt and translate such Software and other property for any purpose related to the operation of the Settlement System; (b) use all reasonable endeavours to novate, or procure the novation of, any licence or other agreement to use and/or maintain the Software to such successor; (c) transfer to such successor all Hardware belonging to the outgoing Settlement System Administrator and essential to such successor to carry out such successor's duties and responsibilities under the SSA Arrangements and which is not otherwise readily obtainable by such successor; (d) make over to such successor copies of all such records, manuals and data and other information not referred to in paragraph 21.1(a) and in the ownership or under the control of the outgoing Settlement System Administrator and relating to the operation, and necessary for the proper functioning of the Settlement System; and (e) without prejudice to the foregoing provisions of this Section 21, transfer or otherwise make available to such successor all assets (excluding freehold and leasehold property), equipment, facilities, rights, know-how and transitional assistance which it possesses and which is necessary for such successor to have to operate the Settlement System in accordance with the SSA Arrangements and which is not otherwise readily obtainable by such successor, in each case on such reasonable terms (other than as to consideration) as may be agreed between ESIS, such successor and the Executive Committee (and, in default of agreement, the dispute shall be referred to arbitration in accordance with Clause 83) and in consideration of the payment of such sums as are referred to in sub-section 21.2. ESIS further agrees, in consideration of the payment of such sums as are referred to in sub-section 21.2, to co-operate with any such successor and the Executive Committee so that the transfer of duties, services, responsibilities, assets and know-how to such successor is carried out causing as little disruption to the operation of the Settlement System and inconvenience to the Parties as is practical in all the circumstances. 21.2 Asset Transfer Costs: 21.2.1 The consideration referred to in sub-section 21.1 is:- (a) in respect of:- (i) the right to use all Software, related documentation and other similar intellectual property referred to in paragraph 21.1(a), a peppercorn rental; (ii) all Hardware referred to in paragraph 21.1(c), the fair market value of the same as at the date of transfer; and (iii) the copies referred to in paragraph 21.1(d), the cost to the outgoing Settlement System Administrator of making such copies; (b) in respect of:- (i) charges to Pool Members which the Executive Committee has expressly requested ESIS in its capacity as Settlement System Administrator to defer and the Deferred Settlement Project Expenditure, the principal amount deferred and any interest due and outstanding on that principal amount and all other amounts payable in discharging any financing arrangements undertaken in relation to such deferred expenditure provided that in the case of Deferred Settlement Project Expenditure the consideration shall be the net book value of the Software at that date; and (ii) the co-operation referred to in the last sentence of sub-section 21.1 and such other matters as are within sub-section 21.1 (other than those in paragraph 21.1(b) for which there shall be no charge made) but not paragraphs (a) or (b)(i) or (ii) above, a nominal amount only in respect of the co-operation (with no additional charge for matters such as management time expended) and otherwise at fair market value. 21.2.2 Any payment made by all or any of the Pool Members to ESIS in its capacity as outgoing Settlement System Administrator under this Section 21 shall be without prejudice to any rights and remedies which the Pool Members (or any of them) may have against ESIS as Settlement System Administrator arising under the SSA Arrangements. 21.3 Transition services: During the period from the date of the Removal Notice or, as the case may be, the Resignation Notice to the Termination Date or, as the case may be, the last day of the Post-Termination Period, the Contract Manager may give the outgoing Settlement System Administrator an Order requesting the outgoing Settlement System Administrator to:- (a) provide training and systems support for the successor Settlement System Administrator; (b) provide parallel running with the successor Settlement System Administrator; (c) move, relocate or hand over to the successor Settlement System Administrator the property it is required to transfer pursuant to paragraphs 21.1(a) to 21.1(e) (inclusive); (d) supply to the successor Settlement System Administrator procedural or practice documentation not already recorded in writing; and (e) provide employees to attend upon the successor Settlement System Administrator for all or any of the purposes referred to in paragraphs (a), (b) or (c) above. 21.4 Disputes: Any dispute arising under or in connection with this Section 21 shall be referred to arbitration in accordance with Clause 83. 22. ALLOCATION OF COSTS ON RESIGNATION Allocation of costs on resignation: Subject to Section 28(b), if the appointment of ESIS as Settlement System Administrator shall be terminated by the resignation of ESIS in accordance with Section 14:- (a) the Pool Members shall reimburse ESIS the Pool Agreed Liabilities; and (b) ESIS shall be responsible for, and shall not have recourse to any Pool Member for all or any part of:- (i) the Transition Costs (and shall refund to Pool Members in accordance with sub-section 2.7 of Part J of the Appendix hereto any sums already received by ESIS on that account); and (ii) the Outstanding Liabilities; and (c) the liability of Pool Members for the payment of charges for the provision of Services up to the Termination Date and during the Post-Termination Period shall be as set out elsewhere in this Schedule and the Appendix hereto. 23. ALLOCATION OF COSTS ON REMOVAL AFTER 31ST MARCH, 1999 Allocation of costs on removal: Subject to Section 28(b), if the appointment of ESIS as Settlement System Administrator shall be terminated by the removal of ESIS in accordance with Section 15:- (a) the Pool Members shall reimburse ESIS the Pool Agreed Liabilities; (b) ESIS shall be responsible for, and shall not have recourse to any Pool Member for all or any part of, the Outstanding Liabilities; and (c) the liability of Pool Members for the payment of charges for the provision of Services up to the Termination Date and during the Post-Termination Period shall be as set out elsewhere in this Schedule and the Appendix hereto. 24. ALLOCATION OF COSTS ON REMOVAL ON OR BEFORE 31ST MARCH, 1999 Allocation of costs on removal: If the appointment of ESIS as Settlement System Administrator shall be terminated by the removal of ESIS in accordance with Section 16:- (a) the Pool Members shall reimburse ESIS:- (i) the Pool Agreed Liabilities; (ii) the Pool Apportioned Outstanding Liabilities; and (iii) the Compensation; (b) ESIS shall be responsible for, and shall not have recourse to any Pool Member for all or any part of, the SSA Apportioned Outstanding Liabilities; and (c) the liability of Pool Members for the payment of charges for the provision of Services up to the Termination Date and during the Post-Termination Period shall be as set out elsewhere in this Schedule and the Appendix hereto. ESIS shall take all reasonable steps and shall otherwise use all reasonable endeavours to mitigate the Pool Apportioned Outstanding Liabilities. 25. ALLOCATION OF COSTS ON REMOVAL Allocation of costs on removal: Subject to Section 28(b), if the appointment of ESIS as Settlement System Administrator shall be terminated by the removal of ESIS in accordance with Section 17:- (a) the Pool Members shall reimburse ESIS the Pool Agreed Liabilities; and (b) ESIS shall be responsible for, and shall not have recourse to any Pool Member for all or any part of:- (i) the Transition Costs (and shall refund to Pool Members in accordance with sub-section 2.7 of Part J of the Appendix hereto any sums already received by ESIS on that account); (ii) the Outstanding Liabilities; (c) the liability of Pool Members for the payment of charges for the provision of Services up to the Termination Date and during the Post-Termination Period shall be as set out elsewhere in this Schedule and the Appendix hereto. 26. REIMBURSEMENT BY POOL MEMBERS Reimbursement by Pool Members: In respect of any sum to be reimbursed by Pool Members to the Settlement System Administrator pursuant to Section 22, 23, 24 or 25:- (a) ESIS may recover such sum in accordance with sub-paragraph 2.3 of Part J of the Appendix hereto; (b) Pool Members shall be liable on a several basis according to their respective Contributory Shares as at the Termination Date provided that, if a Pool Member shall fail to pay its Contributory Share of such sum within 45 days after the due date for payment therefor, the other Pool Members shall be jointly and severally liable to pay such unpaid sum (and liable as between themselves according to their respective Contributory Shares, calculated on the basis that the Points allocated to the defaulting Pool Member are disregarded); and (c) any Pool Member (a "non-paying Pool Member") which fails to pay its Contributory Share in the circumstances of Section 26(b) shall indemnify and keep indemnified each Pool Member on demand against all sums properly paid by such Pool Member in relation to that non-paying Pool Member's Contributory Share pursuant to Section 26(b). 27. DIRECTOR'S INVOLVEMENT Director's involvement: If, in giving written consent pursuant to Section 14, 15(b), 16(b) or 17.5(ii) the Director shall impose conditions or qualifications which render it impracticable to give effect to the terms of any of Sections 19 to 26 (inclusive) as written, ESIS and the Executive Committee shall promptly negotiate in good faith to agree amendments to the SSA Arrangements (including, if appropriate, to the charging principles) to give effect to the Director's conditions or qualifications and, in default of agreement as to such amendments within six months after the commencement of such negotiations, the Settlement System Administrator or the Executive Committee or any Pool Member shall be entitled to refer the dispute to arbitration in accordance with Clause 83. In the conduct of such negotiations, ESIS and the Executive Committee shall have regard both to the Menus of Prices and to the costs which will be incurred by ESIS in continuing to provide Services to satisfy the Director's conditions or qualifications, it being understood that, where such costs are properly incurred, it is the parties' intention that ESIS should be entitled to recover the same from Pool Members. 28. POOL MEMBER AND EXECUTIVE COMMITTEE BREACHES Breach by Pool Members and/or Executive Committee: Without prejudice to Clause 66 if the Pool Members acting collectively, the Executive Committee, the Contract Manager or the Chief Executive's Office fail, or any of the same is deemed pursuant to Section 1.2 or Section 29 to have failed, in any persistent, material respect or in any single, major respect to perform or comply with any of its or their obligations under the SSA Arrangements and, if such failure is not capable of remedy or is capable of remedy, but is not remedied within 30 days from the date of receipt by the Executive Committee of notice from the Settlement System Administrator giving details of the relevant failure and requiring its remedy (or such longer period as may be necessary but in any event within 90 days or any longer period as may be reasonable and agreed between the Settlement System Administrator and the Executive Committee) and, where such reasonable period is longer than 30 days, a timetable for the remedy of such failure is not agreed by the Executive Committee with the Settlement System Administrator (such agreement not to be unreasonably withheld) within 30 days from the said date of receipt, then ESIS may(the prior written consent of the Director having been obtained):- (a) give not less than 12 months' notice in writing to the Executive Committee (which shall forthwith notify all Pool Members) and the Director of its resignation specifying the date thereof, and the appointment of ESIS as Settlement System Administrator shall terminate on that date and the provisions of Section 24 shall apply as if the appointment of ESIS as Settlement System Administrator shall have been terminated by its removal in accordance with Section 16 (but disregarding for this purpose any requirement to pay Compensation if the appointment of ESIS as Settlement System Administrator in fact terminates after 31st March, 1999); or (b) give notice to all Pool Members, the Executive Committee and the Chief Executive's Office identifying such irremediable breach or failure to remedy or agree a timetable for remedy of a remediable breach and, if at any time after the service of such notice and while such breach is continuing, the Settlement System Administrator resigns or is removed pursuant to Section 14, 15, 16 or 17 then, notwithstanding Sections 22, 23 and 25, the provisions of Section 24 shall apply as if the appointment of ESIS as Settlement System Administrator shall have been terminated by its removal in accordance with Section 16 (but disregarding for this purpose any requirement to pay Compensation if the appointment of ESIS as Settlement System Administrator in fact terminates after 31st March, 1999). 29. VARIATION OF SERVICE LINES If the Executive Committee engages a person other than the Settlement System Administrator to perform a Service contained in a Service Line or part thereof which is listed in the Sole Supplier Index there shall be deemed to be a failure by the Executive Committee in a single, major respect to comply with its obligations under the SSA Arrangements or the Settlement System Administrator shall be entitled to insist upon due and proper performance of the SSA Arrangements provided that the mere variation of any Service Line to a state where no Service is to be provided or can be Ordered thereunder shall not be deemed to be such a failure. 30. EXTENSION OF TIME If performance of the terms of the SSA Arrangements by the Settlement System Administrator is delayed by reason of the act or default of a Party or a Meter Operator Party, the Settlement System Administrator shall be entitled to a reasonable extension of time for performance and to any reasonable additional costs which it can demonstrate to the Executive Committee were directly incurred as a result of such delay provided always and on condition that the Settlement System Administrator shall notify the Executive Committee in writing within a reasonable time of the circumstances giving rise to the delay in performance. 31. CONTRACT MANAGEMENT RULES 31.1 Contract Management Rules: The Parties agree that, whilst the Contract Management Rules do not constitute or evidence legally binding obligations, they are indicative of best practice with respect to certain aspects of the day-to-day operation of the SSA Arrangements and include practices and procedures which either have been proven or are expected to facilitate that day-to-day operation. The Parties agree that a failure by a Party to comply with the Contract Management Rules shall not of itself constitute a breach of the SSA Arrangements nor give rise to any sanction against that Party. 31.2 Amendments to the Contract Management Rules: The Contract Management Rules may be amended, modified or varied by agreement between the Account Manager and the Contract Manager in accordance with procedures to be agreed between themselves from time to time. 32. GROSS MARGIN 32.1 Auditor's Report: The Settlement System Administrator shall procure that its auditor reports to the Executive Committee within one month after (a) the signature of the Settlement System Administrator's annual accounts and (b) a Removal Notice being given pursuant to Section 16 the figure that represents the Gross Margin for the financial year in respect of which such annual accounts have been prepared or (as the case may be) the twelve month period ending on the date of the Removal Notice. 32.2 Negotiations: 32.2.1 If, in respect of the SSA Accounting Period to which the annual accounts referred to in sub-section 32.1 relate, the Gross Margin expressed as a percentage of the aggregate of the Total Sums Due for that period is more than 25 per cent. or less than 15 per cent., Pool Members (acting through the Executive Committee) or the Settlement System Administrator may by notice to the other request that the Menus of Prices be reviewed. 32.2.2 If notice is given as provided in paragraph 32.2.1 above, the Executive Committee and the Settlement System Administrator may (but shall not be obliged to) agree to conduct such a review of the Menus of Prices but if they do so agree and reach agreement as to the changes in prices, any such price change shall be effective from the beginning of the SSA Accounting Period immediately following the SSA Accounting Period referred to in paragraph 32.2.1 above. 32.2.3 The provisions of this sub-section 32.2 are without prejudice to any other review or revision of the Menus of Prices required or permitted pursuant to other provisions of this Schedule or the Appendix hereto. 33. FORCE MAJEURE If by reason of Force Majeure the Settlement System Administrator shall be unable to carry out all or any of its obligations under this Agreement, the provisions of Clause 74 shall have effect provided that the Settlement System Administrator shall have the right to recover in respect of any period of Force Majeure (to the extent that it would not otherwise have been able to recover by reason of the Force Majeure):- (a) the standing charge for Consultancy Services referred to in sub-section 4.1 of Part G of the Appendix hereto time-apportioned for that period; (b) the standing charge for Development Services referred to in sub-section 5.1 of Part G of the Appendix hereto time-apportioned for that period; (c) the Monthly Minimum Manpower Charge Commitment referred to in sub-section 10.1 of Part G of the Appendix hereto (less the sum of (a) and (b) above) time-apportioned for that period; (d) to the extent that the sum of (a), (b) and (c) above falls short of the Minimum Contract Price time-apportioned to that period, the amount of that shortfall; (e) Deferred Settlement Project Expenditure; (f) Third Party Costs invoiced to the Settlement System Administrator in that period; and (g) the Suppliers Second Tier Charge time-apportioned for that period together with any under-recovery and less any over-recovery on the STSSC Account. 34. CONFIDENTIALITY Pool Members shall jointly and severally procure that the Executive Committee, the Chief Executive's Office and the Contract Manager shall use all reasonable endeavours to preserve the confidentiality of, and not directly or indirectly reveal, report, publish, disclose or transfer the Menus of Prices or the Gross Margin, or any part of or any information contained in or relating to the Menus of Prices or the Gross Margin (the "Relevant Information") except:- (a) where the Relevant Information is in the public domain otherwise than by breach by a Pool Member, the Executive Committee, the Chief Executive's Office or the Contract Manager of this Agreement; (b) to the extent that the Settlement System Administrator gives its prior consent in writing, it being acknowledged that such consent has been given for disclosure of the Relevant Information relating to the Accounting Period beginning on 1st April, 1994; (c) to the extent required by law, any Act of Parliament or any Competent Authority; (d) to comply with the conditions of any Licence or any document referred to in the Licence with which the party is required to comply; (e) to the Executive Committee's consultants or professional advisers or to the Pool Auditor; or (f) to the extent required by any judicial or arbitral process having jurisdiction over the Pool Members, the Executive Committee, the Chief Executive's Office or the Contract Manager, as the case may be, provided that the Executive Committee and its staff shall be entitled to keep on display and make available for inspection to (but not copying by) Pool Members (and to notify Pool Members that there is on display and available for inspection) at the office of the staff of the Executive Committee all Relevant Information. 35. NOTICES Notices: For the purposes of this Schedule 4 and the Appendix hereto, Clause 75 shall apply as if each of the Account Manager and the Contract Manager is a Party with the following address and facsimile number:-
(a) Account Manager: Energy Settlements and Information Services Limited, Fairham House, Green Lane, Clifton, Nottingham NG11 9LN Facsimile number: 0115-945 6807; (b) Contract Manager: The Electricity Pool of England and Wales, 2nd Floor, 15 Bloomsbury Square, London WC1A 2LP Facsimile number: 0171-831 4813
APPENDIX TO SCHEDULE 4 THE SERVICES CONTENTS PART A - PRELIMINARY 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions 1.2 Interpretation PART B - THE SERVICES 1. CATEGORIES OF SERVICES 2. PRODUCTION SERVICES 2.1 Production Services 2.2 Types of Production Services 2.3 Continuous Production Services 2.4 Ad Hoc Production Services 2.5 Limits on Production Services 3. CONSULTANCY SERVICES 4. DEVELOPMENT SERVICES 5. NON-MENU SERVICES 6. PRICE ON REQUEST ITEMS 7. SOLE SUPPLIER SERVICES 7.1 Sole Supplier Services 7.2 Status of Sole Supplier Services 7.3 Variations of Sole Supplier Services 7.4 Review of Sole Supplier Index 8. MANAGEMENT OF RESOURCES 9. MARKET TESTS 9.1 Market Tests 9.2 Timing 9.3 Settlement System Administrator's involvement 10. PERFORMANCE IMPROVEMENT PROGRAMMES 10.1 Performance Improvement Programmes 10.2 Close Co-operation 10.3 Cost-benefit Sharing 10.4 Procedure 10.5 Costs of PIPs 10.6 Division of Cost Savings 10.7 Cost Savings by Pool Members 10.8 Non-PIP Modifications 11. CONTRACT REPORTING PART C - NEW REQUIREMENTS 1. CHANGES TO SERVICES 1.1 Changes to Services 1.2 Negotiation 1.3 Agreed Changes to Services 1.4 Formal documentation 1.5 Addition to Sole Supplier Index 2. PRICE ON REQUEST 2.1 Request for a price 2.2 Basis of the price 2.3 Price on Request 2.4 Amendment Procedure PART D - VARIATION MECHANICS 1. INDEXATION 1.1 Indexation 1.2 Mechanics 2. VARIATION MENUS 2.1 Variation Menus 2.2 Mechanics 3. RENT COSTS 3.1 Changes in rent 3.2 Mechanics 4. VOLUME CHANGES 4.1 Units of Variation 4.2 Limits 5. STANDING CHARGES 6. MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT 6.1 Monthly Minimum Manpower Charge Commitment 6.2 Reconciliation 7. MARKET TESTS AND PERFORMANCE IMPROVEMENT PROGRAMMES 8. INCONSISTENCIES IN THE SSA ARRANGEMENTS PART E - ORDERING SERVICES: GENERAL PROVISIONS 1. GENERAL REQUIREMENT FOR ORDERS 2. EXCEPTIONS TO THE REQUIREMENT FOR ORDERS 3. ISSUING, AND COMPLYING WITH, ORDERS AND REQUESTS 3.1 Entitlement to issue Orders and requests 3.2 Compliance with Orders and requests 3.3 Signature of requests 3.4 Signature of Orders 3.5 Limited delegation 3.6 Criteria for Orders 3.7 Authority of Pool Members, the Executive Committee and the Chief Executive 4. SETTLEMENT SYSTEM ADMINISTRATOR'S PROTECTIONS 4.1 Recovery of charges 4.2 Compliance with the Director's directions 4.3 Ratification 4.4 Express authority 4.5 Reliance on documents believed genuine 4.6 General meetings 4.7 Exceptions 4.8 Reference to the Director 5. JOB NUMBERS 5.1 Job Numbers 5.2 Extensions to Orders 6. SUPPLEMENTAL PROVISIONS 6.1 Changing resources 6.2 Ordering ethos 6.3 Resource records 6.4 Dedication of resource 6.5 Failure to supply resource PART F - ORDERING SERVICES: SPECIFIC PROVISIONS 1. ORDERING PRODUCTION SERVICES 1.1 Continuous Production Services 1.2 Volume changes 1.3 Ad Hoc Production Services 2. ORDERING CONSULTANCY SERVICES 2.1 Minimum manpower periods 2.2 Extensions of manpower 2.3 Short Notice Ordering 3. ORDERING DEVELOPMENT SERVICES 3.1 Project Template 3.2 Minimum manpower periods 3.3 Extensions of manpower 3.4 Short Notice Ordering 3.5 Fixed Price 4. ORDERING NON-MENU SERVICES 5. REQUESTS BY DIRECTOR 6. INDIVIDUAL POOL MEMBER REQUESTS 7. THIRD PARTY PROCUREMENT 7.1 Third Party Contract 7.2 Exceptional circumstances PART G - CHARGES FOR SERVICES: GENERAL PRINCIPLES 1. GENERAL 2. CHARGES FOR PRODUCTION SERVICES 2.1 Continuous Production Services 2.2 Ad Hoc Production Services 3. CHARGES FOR SECOND TIER METERING 3.1 Charges 3.2 Separate Account 3.3 Debits against Account 3.4 Interest 3.5 Over-recovery 4. CHARGES FOR CONSULTANCY SERVICES 4.1 Standing Charge 4.2 Manpower Charges 4.3 Revisions to charges 5. CHARGES FOR DEVELOPMENT SERVICES 5.1 Standing Charge 5.2 Template Charging 5.3 Manpower Charges 5.4 Revisions to Charges 5.5 Fixed Charges 6. CHARGES FOR NON-MENU SERVICES 7. THIRD PARTY PROCUREMENT COSTS 8. POOL DATA CATALOGUE FEES 8.1 Amount of Pool Data Catalogue Fees 8.2 Payment of Pool Data Catalogue Fees 8.3 Disputes 8.4 Interest on non-payment 8.5 Absence of Order 9. SUMMARY OF CHARGES RECOVERABLE 10. MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT 10.1 Monthly recovery 10.2 Reconciliation procedure 11. MINIMUM CONTRACT PRICE 11.1 Annual recovery 11.2 Monthly recovery 11.3 Minimum Contract Price PART H - CHARGES FOR SERVICES: EXCEPTIONAL ITEMS 1. EXTENSION PERIOD CHARGES 2. BAD DEBTS 3. NEW TAXES OR NEW LEGISLATION 3.1 New Taxes 3.2 New Legislation 4. EXCEPTIONAL ITEMS 5. MARKET TEST COSTS 6. PIP REBATES PART I - DEFERRED SETTLEMENT PROJECT EXPENDITURE 1. SOFTWARE EXPENDITURE ALREADY CAPITALISED 2. EXISTING WORK IN PROGRESS AS AT APRIL, 1994 3. NEW PROJECTS SINCE APRIL, 1994 PART J - COST RECOVERY 1. CHARGES RECOVERABLE BY THE SETTLEMENT SYSTEM ADMINISTRATOR 2. INVOICING 2.1 Invoice Statement for Prior Charges 2.2 Content of Invoice Statement 2.3 Invoice Statement for Post Charges 2.4 Content of Invoice Statement 2.5 Disputes 2.6 Invoices to Pool Members 2.7 Resignation or removal of the Settlement System Administrator 3. PAYMENTS 3.1 Payments by Pool Members 3.2 Disputes 3.3 Interest on non-payment 3.4 Payment of charges 4. ALLOCATION OF CHARGES 4.1 Allocation 4.2 New and former Pool Members PART K - ALLOCATION OF CHARGES 1. THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES 1.1 Payment of Total Sum Due 1.2 Allocation of Total Sum Due 1.3 Prima facie evidence 1.4 Contributory Shares PART A PRELIMINARY 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions: In this Appendix, except where the context otherwise requires:- "Ad Hoc Production Services" means those Production Services described in sub-section 2.4 of Part B; "AEI" means, in respect of any SSA Accounting Period, the underlying percentage increase in earnings over the previous 12 months ending in the October immediately prior to the start of such SSA Accounting Period determined by reference to the "Service industries - Divisions 6-9" indicator in the "Average earnings index: all employees: main industrial sectors" published by HMSO in the Employment Gazette or, if such index is no longer published in such form or by HMSO, any replacement or alternative index therefor which is agreed between the Settlement System Administrator and the Executive Committee to be appropriate in the circumstances or, if the Settlement System Administrator and the Executive Committee cannot reach agreement within a reasonable period of time, the replacement or alternative index determined by arbitration pursuant to Clause 83 to be appropriate; "Anticipated Fixed Standing Charges" means (without double counting) the aggregate of:- (a) the sum of all charges for (i) all Production Services Ordered and (ii) all Consultancy Services and Development Services Ordered at FSC Rates, as at the date of the Removal Notice; and (b) the sum of all charges for (i) all Production Services and (ii) all Consultancy Services and Development Services at FSC Rates which, taking into account the business plan referred to in Clause 9.1.6 current at the date of the Removal Notice, would have been Ordered for delivery in the period from the Termination Date to 31st March, 1999; "ASC Rate" means the price for manpower provided in connection with Consultancy Services and Development Services as set out in the Menu of Manpower Prices under the title ASC (Additional Standing Charge); "Average RPI" means, in respect of any SSA Accounting Period, the percentage increase in retail prices over the previous 12 months ending in the October immediately prior to the start of such SSA Accounting Period determined by reference to the "All items" index (excluding, except in relation to the indexation of the Menu of Second Tier Metering Prices, mortgage interest) in the Retail Prices Index published by the Central Statistical Office or, if such index is no longer published in such form or by the Central Statistical Office, any replacement or alternative index therefor which is agreed between the Settlement System Administrator and the Executive Committee to be appropriate in the circumstances or, if the Settlement System Administrator and the Executive Committee cannot reach agreement within a reasonable period of time, the replacement or alternative index determined by arbitration pursuant to Clause 83 to be appropriate; "Committed Additional Services Charges" means the sum of all charges for all Consultancy Services and Development Services Ordered at ASC Rates as at the date of the Removal Notice; "Consultancy Services" means the Services described as Consultancy Services in Section 3 of Part B; "Continuous Production Services" means those Production Services described in sub-section 2.3 of Part B; "Deferred Settlement Project Expenditure" means an amount of that name which is to be recovered by the Settlement System Administrator as charges on a deferred basis pursuant to Part I; "Development Services" means the Services described as Development Services in Section 4 of Part B; "FSC Rate" means the price for manpower provided in connection with Consultancy Services and Development Services as set out in the Menu of Manpower Prices under the title FSC (Fixed Standing Charge); "Handling Charge" means, in respect of any item, such amount as when added to the cost of such item is equal to ten per cent. of the sum of such amount and such cost; "Job Number" means a series of alpha-numeric digits relating to an Order; "Menu of Consultancy Services Prices" means the most recent document with that title setting out prices for certain consultancy services which is in the agreed form or which has been revised pursuant to Part D; "Menu of Development Services Prices" means the most recent document with that title setting out prices for certain development services which is in the agreed form or which has been revised pursuant to Part D; "Menu of Manpower Prices" means the most recent document with that title setting out prices for manpower which is in the agreed form or which has been revised pursuant to Part D; "Menu of Production Services Prices" means the most recent document with that title setting out prices for certain production services which is in the agreed form or which has been revised pursuant to Part D; "Menus of Prices" means all of:- (a) the Menu of Consultancy Services Prices; (b) the Menu of Development Services Prices; (c) the Menu of Manpower Prices; (d) the Menu of Production Services Prices (including as an annex thereto the Menu of Second Tier Metering Prices); and (e) any other menu of prices in the agreed form; "Minimum Contract Price" has the meaning given to that expression in sub-section 11.3 of Part G; "Monthly Minimum Manpower Charge Commitment" has the meaning given to that expression in sub-section 6.1 of Part D; "Non-Menu Services" means the Services referred to in Section 5 of Part B; "Order" means a request in the agreed form for Services given by the Contract Manager to the Account Manager, and "Ordered" and "Ordering" shall be construed accordingly; "Post Charges" means those charges in respect of which an invoice statement is issued pursuant to sub-section 2.3 of Part J; "Price on Request Items" means the items described as Price on Request Items in Section 6 of Part B; "Prior Charges" means those charges in respect of which an invoice statement is issued pursuant to sub-section 2.1 of Part J; "Production Services" means the Services described as Production Services in sub-section 2.1 of Part B; "Project Template" means a modelling tool in the agreed form which is used to Order Development Services and which assists in the estimating and profiling of manpower commitment; "Rate of Inflation" in respect of any SSA Accounting Period, means:- (a) in relation to the Menu of Manpower Prices, the AEI; and (b) in relation to all other Menus of Prices (other than charges for general depreciation, rent and Deferred Settlement Project Expenditure to which the Rate of Inflation shall not apply), the Average RPI (it being acknowledged that, in relation to Service Line 14 (Second Tier Metering), mortgage interest will be included in the calculation of Average RPI); "SCR Rate" means the price for manpower provided in connection with Consultancy Services and Development Services and set out in the Menu of Manpower Prices under the title SCR (Standard Contract Rate); "Services" means the services to be provided by the Settlement System Administrator pursuant to the SSA Arrangements, the categories of which are set out in Section 1 of Part B; "Sole Supplier Index" means the index with that title in the form agreed by the Settlement System Administrator and the Executive Committee setting out those Services or parts thereof which are designated as having sole supplier status, as such index may be amended or substituted from time to time by written agreement of the Settlement System Administrator and the Executive Committee; "Sole Supplier Services" means the Services referred to in sub-section 7.1 of Part B; "Third Party Contract" has the meaning given to that expression in Section 7 of Part F; "Third Party Costs" means costs under a Third Party Contract which are invoiced to the Settlement System Administrator by the third party and passed directly through to Pool Members, and shall include those costs which are expressly stated in this Schedule to be treated as Third Party Costs; "Total Sum Due" has the meaning given to that expression in Section 1 of Part J; and "Variation Menus" means the most recent set of documents of that title setting out changes in prices for Services which is in the agreed form, that set comprising as at the date this Schedule takes effect:- (a) a Continuous Production Services Variation Menu; and (b) a Manpower Variation Menu. 1.2 Interpretation: In this Appendix:- (a) except where the context otherwise requires, references to a particular Part, Section, sub-section or paragraph shall be a reference to that Part of this Appendix or, as the case may be, that Section, sub-section or paragraph of the relevant Part; and (b) where a notice period in relation to the provision of a Service begins upon receipt of an Order therefor, such notice period shall exclude the day upon which the Service is required to be provided and (if received after 12:00 hours on any day) the day upon which notice is deemed to be served. PART B THE SERVICES 1. CATEGORIES OF SERVICES Categories of Services: There are four categories of Services, being:- (a) Production Services; (b) Consultancy Services; (c) Development Services; and (d) Non-Menu Services. 2. PRODUCTION SERVICES 2.1 Production Services: Production Services are those Services described as Production Services in the Service Lines set out in the Menu of Production Services Prices. 2.2 Types of Production Services: Production Services are either Continuous Production Services or Ad Hoc Production Services. 2.3 Continuous Production Services: Continuous Production Services are those Production Services which the Settlement System Administrator is to provide on a regular basis as described in the relevant Service Line. 2.4 Ad Hoc Production Services: Ad Hoc Production Services are those Production Services which the Settlement System Administrator is to provide on an ad hoc basis as described in the relevant Service Line. 2.5 Limits on Production Services: There are physical constraints on the Settlement System which are recognised through the maxima set out in the Menu of Production Services Prices. This Appendix provides in sub-section 4.2 of Part D how Services are to be Ordered and priced outside certain maxima and minima limits. 3. CONSULTANCY SERVICES Consultancy Services are those Services described as Consultancy Services in the Service Lines set out in the Menu of Consultancy Services Prices. 4. DEVELOPMENT SERVICES Development Services are those Services described as Development Services in the Service Lines set out in the Menu of Development Services Prices. 5. NON-MENU SERVICES Non-Menu Services are those Services which (a) are requested by the Executive Committee or the Contract Manager, or are Ordered, to be provided by the Settlement System Administrator in its capacity as Settlement System Administrator, (b) are not included in a Service Line, and (c) if agreed to be provided, will not be included in a Service Line or a Menu of Prices but will be provided on stand-alone terms and conditions and, for the avoidance of doubt, any service or obligation of the Settlement System Administrator pursuant to the SSA Arrangements which is not described in a Service Line is a Non-Menu Service. 6. PRICE ON REQUEST ITEMS Price on Request Items are those Services designated as Price on Request in the Service Lines, being services for which there is a general description in one or more of the Service Lines but for which there is no corresponding price stated or referred to in any Menu of Prices and for which the Settlement System Administrator will quote a price in accordance with Section 2 of Part C and which may or may not be added to the relevant Menu of Prices. 7. SOLE SUPPLIER SERVICES 7.1 Sole Supplier Services: Those Services or parts thereof which for the time being and from time to time are listed in the Sole Supplier Index are known as Sole Supplier Services. 7.2 Status of Sole Supplier Services: Subject to sub-section 7.2 of Schedule 4, Sole Supplier Services may only be provided by the Settlement System Administrator. If the Executive Committee shall engage a person other than the Settlement System Administrator to perform a Sole Supplier Service, there shall be deemed to be a failure by the Executive Committee in a single, major respect to comply with its obligations under the SSA Arrangements for the purposes of Section 28 of Schedule 4 or the Settlement System Administrator shall be entitled to insist upon due and proper performance by the Executive Committee of its obligations under the SSA Arrangements. 7.3 Variations of Sole Supplier Services: The Executive Committee shall have the right to vary the volume of Service under any Sole Supplier Service to a level where no Service under the relevant Service Line is capable of being provided or can be Ordered. Exercise of this right will not constitute a failure or deemed failure by the Executive Committee to comply with its obligations under the SSA Arrangements. 7.4 Review of Sole Supplier Index: Within a period of six months after 31st March, 1999 the Settlement System Administrator shall review the Sole Supplier Index in consultation with the Executive Committee to assess whether it is appropriate to amend the list of Services which are designated as Sole Supplier Services. If as a result of that review or at any other time the Settlement System Administrator and the Executive Committee shall agree to amend or substitute the list of Services in whole or in part, the Sole Supplier Index shall be revised accordingly. 8. MANAGEMENT OF RESOURCES The Settlement System Administrator shall manage and schedule its resources and the resources available to it as it sees fit. Neither the Contract Manager nor Pool Members shall be entitled to specify that particular individuals be provided in relation to Services other than named project managers pursuant to Service Line 16 (Management Services), but the Contract Manager and Pool Members shall have the right to specify skill categories. 9. MARKET TESTS 9.1 Market Tests: The Executive Committee shall have the right to carry out market tests of the price of Services in accordance with the following provisions of this Section. 9.2 Timing: Market tests shall be carried out at the request of the Executive Committee from time to time and shall be conducted by or on behalf of the Executive Committee. 9.3 Settlement System Administrator's involvement: (a) If the Executive Committee wishes the Settlement System Administrator to take account of a market test, then the Executive Committee shall use its reasonable endeavours to commission a market test on a "like for like" basis for the provision of the Service in question (including as to quality, timeliness and flexibility) from a supplier of equal standing to the Settlement System Administrator agreed between the Executive Committee and the Settlement System Administrator (such agreement not to be unreasonably withheld) and shall permit the Settlement System Administrator to appraise the method and results of the market test and to request clarification of the method and clarification and correction of the results. (b) If the market test shall result in an indication that the Service in question may be obtained at a lower comparable price from another supplier, the Settlement System Administrator shall either demonstrate within a reasonable time why it is unable to adopt the lower comparable price or accept the results of the market test and forthwith adopt the lower comparable price. (c) If the Settlement System Administrator shall seek to demonstrate why it is unable to adopt the lower comparable price rather than accept the results of the market test but the Executive Committee disputes that the Settlement System Administrator either has done so within a reasonable time as required by paragraph (b) above or has adequately demonstrated why it is unable to adopt the lower comparable price, and in either case should therefore accept the results of the market test and adopt the lower comparable price, the Executive Committee may refer the dispute to arbitration in accordance with Clause 83. 10. PERFORMANCE IMPROVEMENT PROGRAMMES 10.1 Performance Improvement Programmes: The Executive Committee and the Settlement System Administrator may from time to time agree to conduct programmes designed to improve the cost-effectiveness of the Services. All such programmes shall be conducted in accordance with the principles set out in the following provisions of this Section and the Settlement System Administrator shall be obliged to participate in all such programmes. 10.2 Close Co-operation: Performance Improvement Programmes shall require close co-operation and an exchange of information between the Executive Committee and the Settlement System Administrator to a greater degree than is contemplated elsewhere by the terms of this Agreement. 10.3 Cost-benefit Sharing: The purpose of a Performance Improvement Programme is to yield cost-benefit sharing and any such programme will involve an analysis of actual costs rather than the prices that are contained in the Menus of Prices. 10.4 Procedure: The procedure for conducting a Performance Improvement Programme is set out in the Contract Management Rules. 10.5 Costs of PIPs: The costs of all Performance Improvement Programmes shall be borne by Pool Members according to their respective Contributory Shares and shall be recovered in accordance with the Charging Procedure. 10.6 Division of Cost Savings: If a Performance Improvement Programme shall demonstrate a saving in all or any of the costs that are incurred by the Settlement System Administrator in providing the Services, then that saving shall be shared equally between the Settlement System Administrator on the one hand and Pool Members on the other hand at that time and in the manner agreed between the Account Manager and the Contract Manager from time to time provided that the Pool Members shall have the right to receive the entire benefit of that saving until such time as they have received in full through that saving an amount equal to the costs incurred by them referred to in sub-section 10.5 above. 10.7 Cost Savings by Pool Members: If a Performance Improvement Programme shall demonstrate a saving in all or any of the costs that are incurred by Pool Members (other than costs payable to the Settlement System Administrator under the SSA Arrangements), the relevant Pool Members shall have the right to the entire benefit of that saving and shall not be required to share all or any part of that benefit. 10.8 Non-PIP Modifications: The following actions with regard to any Service provided by the Settlement System Administrator shall not be the subject of a Performance Improvement Programme and any cost savings caused by such action shall not be dealt with in accordance with the principles of the Performance Improvement Programmes:- (a) a change in the volume and/or frequencies of any Service under a Service Line within the maximum and minimum limits stated for that Service in the relevant Menu of Prices; (b) a change in the level of quality, fault tolerance or security for a particular Service where the commercial objectives (as stated in the relevant Service Lines) are not amended in respect of that change; (c) replacement of any Hardware or Software in the normal course of business; (d) where a Performance Improvement Programme is undertaken in respect of one or more particular Service Lines, any concomitant modification to a Service Line which is not the subject of that particular Performance Improvement Programme; and (e) where the Settlement System Administrator discovers that, through its own efforts, it has performed Services in a more efficient manner than it originally planned. 11. CONTRACT REPORTING Reports: The Settlement System Administrator shall provide the Contract Manager with reports in accordance with Service Line 10 (Service to CEO and Pool Members). PART C NEW REQUIREMENTS 1. CHANGES TO SERVICES 1.1 Changes to Services: Without prejudice to Parties' rights generally to amend this Agreement, the Contract Manager may from time to time request the Settlement System Administrator:- (a) to provide a new Service; or (b) to amend a Service currently included in a Service Line or to amend a Non-Menu Service; or (c) to delete a Service currently included in a Service Line. 1.2 Negotiation: Upon receipt of any such request the Account Manager will negotiate in good faith with the Contract Manager to amend in accordance with the Change Management Procedure referred to in Service Line 12 (Management of Settlement Change) the applicable Service Line, Menu of Prices and Variation Menu (or, if the Service is a Non-Menu Service, to agree or amend documentation recording the terms and conditions on which the Non-Menu Service is to be provided) and, if necessary, to amend other elements of the SSA Arrangements to give effect to such request provided that:- (a) neither the Settlement System Administrator nor the Executive Committee nor Pool Members shall be obliged to agree any such amendment or documentation; and (b) there shall be no obligation on the Account Manager or the Contract Manager to continue such negotiations if it is or becomes evident that there is no agreement to provide the Service or make the change referred to in sub-section 1.1 above or as to the amendments required to give effect to such new Service or change. As part of the negotiations for the provision of a new or amended Service, the Account Manager shall provide the Contract Manager with (in the case of a new Service) a price for the Service together with a statement of the incremental (but not necessarily pro rata) resource requirement and an accompanying written explanation, and (in the case of an amended Service) a revised price for that Service justified by reference to the prices in the relevant Menu of Prices and accompanied by a written explanation. 1.3 Agreed Changes to Services: The SSA Arrangements, applicable Service Lines, Menus of Prices and Variation Menus (or, if a Non-Menu Service is affected, the documentation recording the terms and conditions on which the Non-Menu Service is to be provided) shall be amended as required to reflect any agreement between the Pool Members and the Settlement System Administrator to:- (a) vary the SSA Arrangements, the Settlement System or the Development Policies; or (b) include an Ad Hoc Production Service as a Continuous Production Service, in accordance, where appropriate, with the Contract Management Rules. 1.4 Formal documentation: Any new Service or change to Service referred to in sub-section 1.1 above shall take effect as from the date specified in the formal documentation giving effect to such new Service or change and in accordance with the terms of such documentation. 1.5 Addition to Sole Supplier Index: Where a new Service Line is created as part of the formal documentation giving effect to a new Service or change to a Service the Settlement System Administrator and the Executive Committee shall consider whether such new Service Line should be added to the Sole Supplier Index and, if they so agree, it shall be so added. 2. PRICE ON REQUEST 2.1 Request for a price: The Contract Manager may from time to time request the Account Manager on behalf of the Settlement System Administrator to quote a price for any Price on Request Item and the Settlement System Administrator will within a reasonable time quote such a price. 2.2 Basis of the price: The price quoted by the Settlement System Administrator shall be calculated by taking account of the Menu of Prices for the category of Services which most closely corresponds to the relevant Price on Request Item and, if applicable, to the price payable for any third party resources for which the Settlement System Administrator will need to contract to provide such Price on Request Item. 2.3 Price on Request: The request and quotation procedure in sub-sections 2.1 and 2.2 above is known as the Price on Request procedure. 2.4 Amendment Procedure: Upon receipt of the Settlement System Administrator's price the Contract Manager may (but shall not be obliged to) agree the price quoted. If the Contract Manager shall notify the Account Manager that he agrees the price, the Account Manager and the Contract Manager shall ordinarily amend the applicable Menu of Prices to include the quoted price and the applicable Variation Menu and, if necessary, the applicable Service Line to include more detail as to the Service to be provided, unless the Contract Manager and the Account Manager agree that the price of a Price on Request Item shall not be added to the applicable Menu of Prices in which case such Price on Request Item shall remain a Price on Request Item. Upon such amendment(s) being made the relevant Price on Request Item shall cease to be a Price on Request Item and shall become a Production Service, a Development Service or a Consultancy Service (as appropriate) which may then be Ordered. PART D VARIATION MECHANICS 1. INDEXATION 1.1 Indexation: With effect from the first day of each SSA Accounting Period, beginning with the SSA Accounting Period starting in 1995:- (a) the Variation Menus shall be automatically adjusted by the applicable Rate of Inflation; and (b) the Menus of Prices shall be automatically adjusted by the applicable Rate of Inflation, but in each case only where and to the extent expressly provided in the relevant Menu. 1.2 Mechanics: No later than two months before the first day of each SSA Accounting Period, beginning with the SSA Accounting Period starting in 1995, the Settlement System Administrator shall prepare and deliver to the Contract Manager revised Menus of Prices and Variation Menus adjusted in accordance with sub-section 1.1 above and in the case of Menus of Prices sub-section 2.1 below together with a report from the Settlement System Administrator's auditor confirming that it has reviewed the revised Menus of Prices and Variation Menus and that they have been correctly adjusted in accordance with such sub-sections. 2. VARIATION MENUS 2.1 Variation Menus: With effect from the first day of each SSA Accounting Period, beginning with the SSA Accounting Period starting in 1995, and/or at such other times as may be prescribed in the relevant Variation Menu, the Menus of Prices shall be automatically adjusted as provided in the Variation Menus, as such Variation Menus have themselves first been adjusted as appropriate by the applicable Rate of Inflation pursuant to sub-section 2.1 above. 2.2 Mechanics: (a) In the preparation of revised Menus of Prices in accordance with sub-section 1.2 above, the Settlement System Administrator shall ensure that the adjustments to the Menus of Prices prescribed by the Variation Menus as referred to in sub-section 2.1 above are taken fully into account. (b) If an adjustment to a Menu of Prices is prescribed pursuant to sub-section 2.1 above otherwise than with effect from the first day of an SSA Accounting Period, the Settlement System Administrator shall prepare and deliver to the Contract Manager no later than two months before the adjustment is to take effect a revised Menu of Prices. 3. RENT COSTS 3.1 Changes in rent: If there shall be a change (whether an increase or a decrease) in the aggregate amount of rent payable by the Settlement System Administrator for such premises occupied by the Settlement System Administrator as may be agreed from time to time between the Settlement System Administrator and the Executive Committee (being in any event premises occupied by the Settlement System Administrator for the performance of the Services), the Menu of Production Services Prices shall be automatically adjusted with effect from the date on which such change takes effect by the fair allocation of the amount of such change across the prices for all Continuous Production Services provided that in the calculation of the change in the aggregate amount of rent payable by the Settlement System Administrator any increase in the amount of rent payable in respect of any premises occupied by the Settlement System Administrator shall be taken into account only to the extent that the Settlement System Administrator is able to demonstrate to the reasonable satisfaction of the Executive Committee that the rent for the relevant premises as so increased is no more than the open market rack rent for those premises as at the date of such increase. 3.2 Mechanics: If there shall be a change in rent as described in sub-section 3.1 above, the Settlement System Administrator shall prepare and deliver to the Contract Manager a revised Menu of Production Services Prices adjusted in accordance with sub-section 3.1 above together with a report from the Settlement System Administrator's auditor confirming that it has reviewed the revised Menu of Production Services Prices and that it has been fairly adjusted in accordance with sub-section 3.1 above. 4. VOLUME CHANGES 4.1 Units of Variation: Menus of Prices may provide for units of variation and prices per unit of variation to Services in which case the units of variation can be Ordered at the price per unit stated upon the requisite period of notice of variation (if any) being given. 4.2 Limits: Menus of Prices may provide maximum and minimum limits of a particular Service. Services required in excess of any such maximum shall be treated as new Services and Services required below any such minimum shall, at the request of the Contract Manager, be provided at a revised lower price where determined in accordance with a Performance Improvement Programme. 5. STANDING CHARGES The standing charges referred to in sub-sections 4.1 and 5.1 of Part G shall be varied automatically at the times and in the manner provided in the relevant Service Line. 6. MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT 6.1 Monthly Minimum Manpower Charge Commitment: For each Service Line, the Monthly Minimum Manpower Charge Commitment for any month shall be determined in accordance with the following formula:- MMMCC = C 12 where:- MMMCCis the Monthly Minimum Manpower Charge Commitment for the month in question (expressed in pounds sterling); A is the minimum number of man-days per annum for each skill category as shown in the minimum manpower column in the current Menu of Consultancy Services Prices and the current Menu of Development Services Prices; B is the price at current FSC Rates for the same skill category as shown in the Menu of Manpower Prices; and C is the aggregate of the sum of (A x B) for all skill categories as so shown. 6.2 Reconciliation: Within 15 working days after (x) the first six month period in an SSA Accounting Period and (y) the end of an SSA Accounting Period (each an "MMMCC Calculation Period") the Settlement System Administrator shall for each Service Line calculate and notify the Contract Manager of:- (a) the aggregate Monthly Minimum Manpower Charge Commitment for the six months falling in the MMMCC Calculation Period ("Sum A"); (b) the aggregate charges for manpower Ordered for the six months falling in the MMMCC Calculation Period in connection with Consultancy Services and Development Services ("Sum B"); and (c) the aggregate amount invoiced to Pool Members in the MMMCC Calculation Period being for each month the greater of the Monthly Minimum Manpower Charge Commitment or the charge for manpower Ordered ("Sum C"). The relevant adjustment for the purposes of sub-section 10.2 of Part G shall always be zero or a credit to Pool Members, shall arise either:- (i) where Sum A is greater than or equal to Sum B in which event the credit shall be such amount as is equal to the amount by which Sum C exceeds Sum A; or (ii) where Sum A is less than Sum B in which event the credit shall be such amount as is equal to the amount by which Sum C exceeds Sum B. 7. MARKET TESTS AND PERFORMANCE IMPROVEMENT PROGRAMMES The Menus of Prices shall be further adjusted following a market test or the implementation of a Performance Improvement Programme in accordance with the agreement (if any) reached between the Settlement System Administrator and the Executive Committee. 8. INCONSISTENCIES IN THE SSA ARRANGEMENTS If there is a change or variation to any part of the SSA Arrangements which creates an inconsistency in the obligations to be discharged by the Settlement System Administrator under the SSA Arrangements, the Settlement System Administrator may request the Contract Manager (in the case of a Service Line) or Pool Members, through the Executive Committee (in the case of any other part of the SSA Arrangements) to make such amendments to the SSA Arrangements as it considers necessary to remove such inconsistency and the Contract Manager or, as the case may be, the Executive Committee shall act accordingly to make such amendments as soon as reasonably possible. PART E ORDERING SERVICES: GENERAL PROVISIONS 1. GENERAL REQUIREMENT FOR ORDERS Save as provided in Section 2 below, an Order shall be required to be given to the Settlement System Administrator for each and every Service. Save as so provided, the Settlement System Administrator shall not, and shall not be required to, provide any Service, carry out or comply with any request or enter into any contract or other arrangement or do any other thing under or pursuant to the SSA Arrangements unless an Order is given to and received by the Settlement System Administrator in accordance with this Part and (if applicable) Part F. 2. EXCEPTIONS TO THE REQUIREMENT FOR ORDERS No Order is required to be received by the Settlement System Administrator in respect of:- (a) Services provided under Service Line 14 (Second Tier Metering) unless and until an ordering procedure is agreed between the Settlement System Administrator and the Executive Committee; (b) Services provided to an individual Pool Member under Service Line 10 (Service to CEO and Pool Members) or Service Line 11 (Listing and Load Modules) for which a request is received by the Settlement System Administrator directly from that Pool Member and where the Pool Member is charged directly for those Services; (c) Services provided to the Director or his staff in response to a request therefrom under Service Line 9 (Service to the Director General of Electricity Supply); (d) requests of the description in sub-section 3.1(a) below; (e) Services provided or acts carried out where, in the reasonable opinion of the Settlement System Administrator, there will be a breach of NGC's obligations under the Act or NGC's Transmission Licence unless such Services are provided or such acts are carried out by the Settlement System Administrator; (f) Services provided or acts carried out by the Settlement System Administrator in good faith where the Contract Manager or his alternate was unavailable to give an Order and, in the reasonable opinion of the Settlement System Administrator, it was necessary to act without an Order having been received from the Contract Manager in order to ensure the continued provision of the Services under the SSA Arrangements provided that, for the Settlement System Administrator to have the right to charge for such Services or acts, an Order shall be required to be issued after the event and, unless the Settlement System Administrator has not acted in good faith, the Contract Manager shall issue such an Order; and (g) requests from Pool Members, the Executive Committee, the Chief Executive's Office or the Contract Manager for access to persons involved in the provision of Production Services and no charge shall be made where such requests do not exceed the limits set out in the Contract Management Rules. 3. ISSUING, AND COMPLYING WITH, ORDERS AND REQUESTS 3.1 Entitlement to issue Orders and requests: The only persons entitled to issue Orders to or to make requests of the Settlement System Administrator under the SSA Arrangements are:- (a) if the request has no material cost consequence for the Settlement System Administrator, the Executive Committee (either acting by itself or through the Chief Executive) or the Contract Manager; (b) if the request has such a material cost consequence, the Contract Manager by means of an Order; (c) individual Pool Members by request under Service Line 10 (Service to CEO and Pool Members) or Service Line 11 (Listing and Load Modules); and (d) the Director or his staff by request under Service Line 9 (Service to the Director General of Electricity Supply). 3.2 Compliance with Orders and requests: Subject to the other provisions of this Section 3, the Settlement System Administrator shall at all times observe and comply with all requests made by (a) the Executive Committee or the Contract Manager, or (b) individual Pool Members under Service Line 10 (Service to CEO and Pool Members) or Service Line 11 (Listing and Load Modules), or (c) the Director or his staff under Service Line 9 (Service to the Director General of Electricity Supply), and all Orders which fulfil the criteria set out in sub-section 3.6 given by the Contract Manager. 3.3 Signature of requests: The Settlement System Administrator shall be entitled to rely upon any request of the Executive Committee if the same is signed by or on behalf of two or more Committee Members or by or on behalf of the Chief Executive. 3.4 Signature of Orders: The Settlement System Administrator shall be entitled to rely upon an Order if the same is signed by the Contract Manager. 3.5 Limited delegation: The Settlement System Administrator shall not act on the directions or instructions of any sub-committee of the Executive Committee or any delegate of the Executive Committee other than the Chief Executive or (in the case of Orders) the Contract Manager. 3.6 Criteria for Orders: An Order shall:- (a) be in writing and be clear and unequivocal (and an Order shall be deemed such until such time as the Settlement System Administrator requests any necessary clarification); (b) have due regard to the resources of the Settlement System Administrator available to give effect to such Order; (c) not increase the liabilities of the Settlement System Administrator beyond those contemplated under the SSA Arrangements without proper compensation. For this purpose, without limitation, compensation for increased liabilities shall be proper if an indemnity is given to the Settlement System Administrator which is reasonably satisfactory to it or other compensation reasonably satisfactory to the Settlement System Administrator is provided to it; (d) not conflict with the terms of the SSA Arrangements; and (e) not cause the Settlement System Administrator to breach any of NGC's obligations under the NGC Transmission Licence. 3.7 Authority of Pool Members, the Executive Committee and the Chief Executive: Save as provided in sub-section 3.1(a) and in respect of Services under Service Line 10 (Service to CEO and Pool Members) or Service Line 11 (Listing and Load Modules):- (a) none of the Pool Members, the Executive Committee and the Chief Executive may issue requests or Orders to the Settlement System Administrator; and (b) the Settlement System Administrator shall not act in accordance with any request of the Pool Members, Chief Executive or Executive Committee unless the Pool Members, the Executive Committee or the Chief Executive act through the Contract Manager. 4. SETTLEMENT SYSTEM ADMINISTRATOR'S PROTECTIONS 4.1 Recovery of charges: Nothing in this Part E and no omission on the part of the Contract Manager to issue an Order or to issue an Order for sufficient Services to cover the Monthly Minimum Manpower Charge Commitment and Minimum Contract Price shall prevent the Settlement System Administrator from invoicing and recovering from Pool Members in accordance with Parts G and J the Monthly Minimum Manpower Charge Commitment, the Minimum Contract Price and the standing charges referred to in sub-sections 4.1 and 5.1 of Part G. 4.2 Compliance with the Director's directions: No liability whatsoever shall attach to the Settlement System Administrator as a result of due compliance by it with any directions and instructions of the Director, provided that in complying with such directions and instructions the Settlement System Administrator is at all times acting in good faith. 4.3 Ratification: Nothing in the SSA Arrangements shall prevent the Executive Committee or the Contract Manager from ratifying any act of the Settlement System Administrator such ratification to be, where applicable, by way of an Order. 4.4 Express authority: All requests of the Executive Committee and Orders or requests of the Contract Manager to the Settlement System Administrator shall, as between the Settlement System Administrator and the Pool Members, be deemed to have the express authority of and shall be binding without reservation upon all Pool Members. 4.5 Reliance on documents believed genuine: The Settlement System Administrator shall be entitled to rely upon any communication or document reasonably believed by it to be genuine and correct and to have been communicated or signed by the person by whom it purports to be communicated or signed and shall not be liable to any of the Parties for any of the consequences of such reliance. 4.6 General meetings: The Settlement System Administrator shall not be obliged to take any steps to ascertain whether any resolution of Pool Members in general meeting or of any class of Pool Members in separate general meeting which it is advised by the Executive Committee or the Chief Executive as having been passed was in fact passed or passed by the requisite majority and until the Settlement System Administrator shall have express written notice to the contrary from the Executive Committee or the Chief Executive it shall be entitled to assume that the relevant resolution was passed or (as the case may be) the relevant requisite majority was obtained. 4.7 Exceptions: Notwithstanding the foregoing provisions of Section 3, in the performance of its duties and responsibilities under the SSA Arrangements the Settlement System Administrator shall not be bound to act in accordance with any request of the Executive Committee or the Contract Manager or any individual Pool Member under Service Line 10 (Service to CEO and Pool Members) or Service Line 11 (Listing and Load Modules), or an Order if:- (a) to do so would cause the Settlement System Administrator to breach any of NGC's obligations under the Act or NGC's Transmission Licence; or (b) the Settlement System Administrator has reasonable grounds for believing that it would so breach any of such obligations and has consulted the Director and:- (i) the Director has not indicated that in his view it would not involve any such breach; or (ii) the Director has indicated that, notwithstanding any such actual or potential breach, the Director would not be minded to enforce compliance with those obligations and the Settlement System Administrator has received an indemnity reasonably satisfactory to it in respect of its acting in accordance with such requests or Orders. In any such event the Settlement System Administrator shall promptly notify the Executive Committee. 4.8 Reference to the Director: If at any time the Settlement System Administrator has a concern which is properly and reasonably founded that, in acting in accordance with any requests of the Executive Committee or the Contract Manager or an individual Pool Member or any Order, it will breach one or more of NGC's obligations under the Act or NGC's Transmission Licence, then, if having discussed the matter with the Executive Committee the matter remains unresolved, the Settlement System Administrator shall either comply with such request or Order or by notice in writing refer the same to the Director, such notice to set out in full the request or be accompanied by a copy of the Order (as the case may be) given to the Settlement System Administrator and the grounds for such concern and to be copied to the Executive Committee and (if applicable) the individual Pool Member. Pending any guidance from the Director in response to any such reference and, provided that the Director shall not express any view that such reference is misconceived, vexatious or in respect of an improperly or unreasonably founded concern, the Settlement System Administrator shall not be liable to any of the other Parties for refusing to act in accordance with the relevant request or Order. If the Director shall express such a view, the Settlement System Administrator shall be so liable. 5. JOB NUMBERS 5.1 Job Numbers: The Contract Manager shall ensure that each Order that he issues shall have a Job Number and a stated objective. Where Orders issued by the Contract Manager have a common stated objective they will bear a related Job Number. 5.2 Extensions to Orders: Extensions to Orders may be made only if the Order in respect of such extension bears the same stated objective as the earlier Order. 6. SUPPLEMENTAL PROVISIONS 6.1 Changing resources: Once the Contract Manager has become aware of the identity of a particular person to be allocated to a particular Order whose responsibilities include direct communication with the Executive Committee or the Contract Manager (as the case may be) in connection with that Order, that person shall not be changed without prior consultation with and the agreement of the Executive Committee or the Contract Manager. 6.2 Ordering ethos: The Executive Committee shall endeavour to place Orders that month on month maintain a steady level of resource requirement but shall have the right to place Orders at any level that varies reasonably from one month to the next provided that nothing in this sub-section shall prevent a Service Line being varied to a state where no Service is to be provided or can be Ordered thereunder. 6.3 Resource records: The Settlement System Administrator shall maintain a record showing by Job Number where a Service has been Ordered but no work delivered or (as the case may be) no added value provided in the provision of that Service. 6.4 Dedication of resource: The resource represented by an Order shall be dedicated wholly and exclusively to the provision of the Service Ordered and shall not be made available to any third party or for any other purpose without the prior written consent of the Contract Manager. 6.5 Failure to supply resource: Where a resource has been Ordered but is not delivered in accordance with the terms of that Order, that resource shall be delivered at no further cost to Pool Members at such time or times as may be reasonably required by the Contract Manager and subject to such limits as may be agreed from time to time by the Account Manager and the Contract Manager. PART F ORDERING SERVICES: SPECIFIC PROVISIONS 1. ORDERING PRODUCTION SERVICES 1.1 Continuous Production Services: The minimum period for which a Continuous Production Service can be Ordered is one month. 1.2 Volume changes: If there shall be a change in the volume of Continuous Production Services for which no Order has been given, the Settlement System Administrator shall promptly notify the Contract Manager who shall promptly issue an Order with retrospective effect for such change. 1.3 Ad Hoc Production Services: The Contract Manager shall have the right to Order Ad Hoc Production Services in accordance with the Menu of Production Services Prices. 2. ORDERING CONSULTANCY SERVICES 2.1 Minimum manpower periods: The minimum periods for which manpower can be Ordered for Consultancy Services are:- (a) if charged at the FSC Rate, one month; (b) if charged at the ASC Rate, four months; and (c) if charged at the SCR Rate, one day. 2.2 Extensions of manpower: If manpower of a particular skill category has been Ordered for Consultancy Services and the Contract Manager requires further manpower of that skill category for Consultancy Services with the same stated objective as the earlier Order, the Contract Manager may Order the extension of such manpower requirement:- (a) where the earlier Order is charged at the ASC Rate, for one or more whole months at the same rate upon giving at least one month's prior notice to the Settlement System Administrator; and (b) where the earlier Order is charged at the SCR Rate, for one or more periods of five days at the same rate upon giving at least five working days' prior notice to the Settlement System Administrator. Once the stated objective of a Consultancy Service has been achieved or otherwise satisfied, there shall be no extension of manpower under this sub-section 2.2 in relation to that stated objective. 2.3 Short Notice Ordering: If the Order for Consultancy Services is received by the Settlement System Administrator less than three working days before the date on which the Consultancy Service is required, the Settlement System Administrator shall use all reasonable endeavours to provide the necessary manpower but shall have no absolute obligation so to do. The Charge for Consultancy Services Ordered on such notice shall be the SCR Rate as referred to in sub-section 4.2(c) of Part G. 3. ORDERING DEVELOPMENT SERVICES 3.1 Project Template: Subject to sub-section 3.5 below, Development Services shall be Ordered to a Project Template and the provisions of sub-sections 3.2 to 3.4 (inclusive) shall apply to any such Order. The Settlement System Administrator shall supply the Contract Manager with copies of Project Templates to the values agreed from time to time between the Account Manager and the Contract Manager. 3.2 Minimum manpower periods: The minimum periods for which manpower can be Ordered for Development Services are:- (a) if charged at the FSC Rate, one month; (b) if charged at the ASC Rate, four months; and (c) if charged at the SCR Rate, one day. 3.3 Extensions of manpower: If manpower of a particular skill category has been Ordered for Development Services and the Contract Manager requires further manpower of that skill category for Development Services with the same stated objective as the earlier Order, the Contract Manager may Order the extension of such manpower requirement:- (a) where the earlier Order is charged at the ASC Rate, for one or more whole months at the same rate upon giving at least one month's prior notice to the Settlement System Administrator; and (b) where the earlier Order is charged at the SCR Rate, for one or more periods of five days at the same rate upon giving at least five working days' prior notice to the Settlement System Administrator. Once the stated objective of a Development Service has been achieved or otherwise satisfied, there shall be no extension of manpower under this sub-section 3.3 in relation to that stated objective. 3.4 Short Notice Ordering: If the Order for Development Services is received by the Settlement System Administrator less than three working days before the date on which the Development Service is required, the Settlement System Administrator shall use all reasonable endeavours to provide the necessary manpower but shall have no absolute obligation so to do. The Charge for Development Services Ordered on such notice shall be the SCR Rate as referred to in sub-section 5.3(c) of Part G. 3.5 Fixed Price: Notwithstanding the foregoing provisions of this Section 3, the Contract Manager and the Settlement System Administrator may agree from time to time that Development Services shall be Ordered on a fixed price basis and, if so agreed, shall record the terms of that fixed price agreement (including payment terms) in writing. 4. ORDERING NON-MENU SERVICES A Non-Menu Service may not be Ordered unless and until documentation recording the terms and conditions on which it is to be provided has been agreed as provided in Section 1 of Part C. 5. REQUESTS BY DIRECTOR The Director or his staff may make requests for Services under and in accordance with Service Line 9 (Service to the Director General of Electricity Supply). 6. INDIVIDUAL POOL MEMBER REQUESTS Individual Pool Members may make requests for Services under and in accordance with Service Line 10 (Service to CEO and Pool Members) or Service Line 11 (Listing and Load Modules). 7. THIRD PARTY PROCUREMENT 7.1 Third Party Contract: Subject to sub-section 7.2 below, upon receipt of an Order and on and subject to the terms and conditions thereof, the Settlement System Administrator shall enter into or (as the case may be) amend, vary or modify (or agree to an amendment, variation or modification of) a contract or other arrangement with a third party for the provision of a resource to or for the benefit of the Settlement System Administrator to enable it to provide a Service the costs of which are to be passed directly to Pool Members (a "Third Party Contract"), but shall not do any of the foregoing in the absence of such an Order. 7.2 Exceptional circumstances: If by reason of:- (a) a term in any licence of Licensed Software (as defined in Section 9 of Schedule 4); or (b) the Service requiring the provision of skill sets outside the defined scope of the Manpower Menu of Prices; or (c) the Service requiring product knowledge outside the defined scope of the SSA Arrangements, the Settlement System Administrator has no option but to contract with a third party for the provision of a resource to or for the benefit of the Settlement System Administrator to enable it to provide a Service, it shall request the Contract Manager to issue an Order to that effect and shall give a written explanation in support of that request and allow the Contract Manager sufficient time to consult the Executive Committee provided that the Contract Manager shall have no obligation to issue any such Order and, if no such Order is issued, the Settlement System Administrator shall not enter into any such contract. PART G CHARGES FOR SERVICES: GENERAL PRINCIPLES 1. GENERAL The Settlement System Administrator shall have the right to charge Pool Members for Services it has provided or is to provide and to recover from them the charges set out in this Part G and in Part H upon and subject to the terms and conditions set out in such Parts. A summary of the charges recoverable by the Settlement System Administrator in respect of any month is set out in Section 9 below. 2. CHARGES FOR PRODUCTION SERVICES 2.1 Continuous Production Services: The charge for each Continuous Production Service shall be the corresponding price set out in the Menu of Production Services Prices. 2.2 Ad Hoc Production Services: The charge for each Ad Hoc Production Service shall be the corresponding price set out in the Menu of Production Services Prices. 3. CHARGES FOR SECOND TIER METERING 3.1 Charges: The Settlement System Administrator shall have the right to charge for the provision of Services in Service Line 14 (Second Tier Metering) in accordance with the Menu of Second Tier Metering Prices (being an annex to the Menu of Production Services Prices). 3.2 Separate Account: The Settlement System Administrator shall open and maintain a separate account (the "STSSC Account") to which it shall credit monthly ------------- the Second Tier Suppliers System Charge received for that month. 3.3 Debits against Account: The Settlement System Administrator shall debit the STSSC Account each month with the amount that it is entitled to charge in accordance with sub-section 3.1 above for the provision of Services in Service Line 14 (Second Tier Metering). 3.4 Interest: Interest shall accrue and be chargeable on credit and debit balances on the STSSC Account as follows:- (a) the Settlement System Administrator shall have the right to charge interest on any debit balance on the STSSC Account; and (b) the Settlement System Administrator shall be liable to pay interest on any credit balance on the STSSC Account. The rate of interest shall be agreed from time to time between the Executive Committee and the Settlement System Administrator and shall accrue from day to day on the basis of a 365-day year on the credit or debit balances outstanding. 3.5 Over-recovery: If at the end of an Accounting Period there shall be a credit balance on the STSSC Account the Settlement System Administrator shall account for that balance to such persons as the Executive Committee shall direct. 4. CHARGES FOR CONSULTANCY SERVICES 4.1 Standing Charge: The Settlement System Administrator shall have the right to recover in respect of each month the standing charge for Consultancy Services set out in the Menu of Consultancy Services Prices, whether or not Consultancy Services are Ordered or the volume of service under the relevant Service Line has been reduced to zero or the relevant Service Line cancelled. It is agreed that standing charges for Consultancy Services are applicable only to Service Lines 8 (Service to Pool Auditor), 10 (Service to CEO and Pool Members), 12 (Management of Settlement Change) and 13 (Consultancy, Committee Support and Training Services). 4.2 Manpower Charges: The Settlement System Administrator shall have the right to charge for manpower provided or to be provided for Consultancy Services at the following rates, subject as provided in sub-section 4.3 below:- (a) if the Order for Consultancy Services is received by the Settlement System Administrator 12 months or more before the date on which the Consultancy Service is required, the FSC Rate; (b) if the Order for Consultancy Services is received by the Settlement System Administrator two or more months but less than 12 months before the date on which the Consultancy Service is required, the ASC Rate; (c) if the Order for Consultancy Services is received by the Settlement System Administrator less than two months before the date on which the Consultancy Service is required, the SCR Rate; and (d) if the Order for Consultancy Services is an extension of an existing manpower commitment in accordance with sub-section 2.2 of Part F, at the relevant rate provided in that sub-section. 4.3 Revisions to charges: If in connection with Orders for Consultancy Services with the same stated objective the total period (being the original period and all extensions pursuant to sub-section 2.2 of Part F) for which manpower in a particular skill category charged by reference to:- (a) the ASC Rate is provided equals or exceeds 12 months then, from the date which is two months after receipt of the Order which extends the total aggregate period for the provision of such manpower up to or beyond 12 months, the Settlement System Administrator shall charge for the provision of such manpower at the FSC Rate provided that in no event shall the FSC Rate apply within the minimum four month period referred to in sub-section 2.1 of Part F; and (b) the SCR Rate is provided equals or exceeds two months then, from the date which is one month after receipt of the Order which extends the total aggregate period for the provision of such manpower up to or beyond two months, the Settlement System Administrator shall charge for the provision of such manpower at the ASC Rate provided that in no event shall the SCR Rate apply within the two month period following the date such manpower was first provided. 5. CHARGES FOR DEVELOPMENT SERVICES 5.1 Standing Charge: The Settlement System Administrator shall have the right to recover in respect of each month the standing charge for Development Services set out in the Menu of Development Services Prices, whether or not Development Services are Ordered or the volume of service under the relevant Service Line has been reduced to zero or the relevant Service Line cancelled. It is agreed that standing charges for Development Services are applicable only to Service Lines 15 (Design Authority), 18 (System Development) and 19 (System Integration). 5.2 Template Charging: Subject as provided in the following sub-sections of this Section 5, the Settlement System Administrator shall charge for Development Services Ordered to a Project Template in accordance with the terms of that Project Template. 5.3 Manpower Charges: The Settlement System Administrator shall have the right to charge for manpower provided or to be provided for Development Services at the following rates, subject as provided in sub-section 5.4 below:- (a) if the Order for Development Services is received by the Settlement System Administrator 12 months or more before the date on which the Development Services is required, the FSC Rate; (b) if the Order for Development Services is received by the Settlement System Administrator two or more months but less than 12 months before the date on which the Development Service is required, the ASC Rate; (c) if the Order for Development Services is received by the Settlement System Administrator less than two months before the date on which the Development Services is required, the SCR Rate; and (d) if the Order for Development Services is an extension of an existing manpower commitment in accordance with sub-section 3.2 of Part F, at the relevant rate provided in that sub-section. 5.4 Revisions to Charges: If in connection with Orders for Development Services with the same stated objective the total period (being the original period and all extensions pursuant to sub-section 3.2 of Part F) for which manpower in a particular skill category charged by reference to:- (a) the ASC Rate is provided equals or exceeds 12 months then, from the date which is two months after receipt of the Order which extends the total aggregate period for the provision of such manpower up to or beyond 12 months, the Settlement System Administrator shall charge for the provision of such manpower at the FSC Rate provided that in no event shall the FSC Rate apply within the minimum four month period referred to in sub-section 3.1 of Part F; and (b) the SCR Rate is provided equals or exceeds two months then, from the date which is one month after receipt of the Order which extends the total aggregate period for the provisions of such manpower up to or beyond two months, the Settlement System Administrator shall charge for the provision of such manpower at the ASC Rate provided that in no event shall the SCR Rate apply within the two month period following the date such manpower was first provided. 5.5 Fixed Charges: Notwithstanding the provisions of sub-sections 5.2, 5.3 and 5.4 above, if Development Services have been Ordered on a fixed price basis in accordance with sub-section 3.5 of Part F, the Settlement System Administrator shall charge for such Development Services on the terms of the written fixed price agreement referred to in that sub-section and not on the terms of sub-sections 5.2, 5.3 and 5.4 above (but without prejudice to the Settlement System Administrator's right to recover the standing charge referred to in sub-section 5.1 above). 6. CHARGES FOR NON-MENU SERVICES The charge for each Non-Menu Service shall be the price set out in the agreed documentation for the provision of such Non-Menu Service. 7. THIRD PARTY PROCUREMENT COSTS In respect of any Third Party Contract where in accordance with the terms of the Order relating thereto the Third Party Costs are to be invoiced to the Settlement System Administrator and passed directly through to Pool Members, the Settlement System Administrator shall have the right to recover the Handling Charge in respect of such Third Party Costs. 8. POOL DATA CATALOGUE FEES 8.1 Amount of Pool Data Catalogue Fees: The fee payable by a Party pursuant to Clause 34.2.1 (the "Pool Data Catalogue Fee") shall be determined from time to time by the Executive Committee and confirmed by Order, but shall not be less than the aggregate of (a) the cost to the Settlement System Administrator of providing all such data and other information or (as the case may be) such of it as is requested by such Party, and (b) the Handling Charge, provided that the Executive Committee may, in its discretion, determine that such fee shall be less than the aggregate of (a) and (b) but, in such event, such Order shall also specify that the difference between such fee and such aggregate amount shall be charged to all Pool Members as if it were a Third Party Cost. 8.2 Payment of Pool Data Catalogue Fees: The Pool Data Catalogue Fee shall be payable in arrears within 15 days after the issue by the Settlement System Administrator of an invoice therefor or within such other period as may be agreed from time to time by the relevant Party and the Settlement System Administrator. All such payments shall be made in sterling in cleared funds in full without set-off or counter-claim, withholding or deduction of any kind whatsoever but without prejudice to any other remedy. 8.3 Disputes: In the event of any dispute regarding payment of the Pool Data Catalogue Fee, a Party may not withhold payment of any invoiced amount therefor but may refer such dispute to arbitration in accordance with Clause 83 following payment. 8.4 Interest on non-payment: The provisions of sub-section 3.3 of Part J shall apply mutatis mutandis to any amount due to the Settlement System Administrator pursuant to sub-section 8.2 above which is not received on the due date. 8.5 Absence of Order: In the absence of an Order confirming the Pool Data Catalogue Fee, the Settlement System Administrator may charge Parties a fee pursuant to Clause 34.2.1 equal to the aggregate of (a) the cost to the Settlement System Administrator of providing all such data and other information or (as the case may be) such of it as is requested by the relevant Party and (b) the Handling Charge. 9. SUMMARY OF CHARGES RECOVERABLE In respect of any month the Settlement System Administrator shall have the right to recover from all Pool Members the following amounts in respect of Services provided or to be provided during that month:- (a) charges for all Continuous Production Services provided or to be provided during such month, determined as provided in sub-section 2.1 above; (b) charges for all Ad Hoc Production Services provided or to be provided during such month, determined as provided in sub-section 2.3 above; (c) charges for the provision of Services in Service Line 14 (Second Tier Metering) provided or to be provided during such month, determined as provided in sub-section 3.1 above; (d) the monthly standing charge for Consultancy Services, determined as provided in sub-section 4.1 above; (e) charges for all Consultancy Services provided or to be provided during each month, determined as provided in sub-section 4.2 above; (f) the monthly standing charge for Development Services, determined as provided in sub-section 5.1 above; (g) charges for all Development Services provided or to be provided during such month, determined as provided in sub-section 5.2 or 5.5 above; (h) charges for Services provided or to be provided during such month requested by the Director or his staff pursuant to Service Line 9 (Service to the Director General of Electricity Supply) (or a substitute Service Line in agreed form); (i) charges for all Non-Menu Services, determined as provided in Section 6 above; (j) Third Party Costs that have been invoiced to the Settlement System Administrator during such month, and the Handling Charge in respect thereof; (k) the shortfall (if any) in the Minimum Manpower Charge Commitment, determined as provided in Section 10 below; and (l) any charges which are expressed in this Agreement as recoverable "in accordance with the Charging Procedure" provided that with the exception of:- (i) the recovery of the standing charges for Consultancy Services and Development Services; (ii) until such time as an ordering procedure is agreed between the Settlement System Administrator and the Executive Committee, the recovery of charges for Services referred to in paragraph (c) above; (iii)the recovery of charges for Services referred to in paragraph (h) above; (iv) the recovery of the Monthly Minimum Manpower Charge Commitment; (v) the recovery of the Minimum Contract Price; and (vi) the recovery of charges for Services referred to in Sections (2)(b) and 2(e) of Part E, the Settlement System Administrator shall not have the right to recover charges in respect of Services provided or to be provided unless an Order in respect of those Services has been received by the Settlement System Administrator. 10. MONTHLY MINIMUM MANPOWER CHARGE COMMITMENT 10.1 Monthly recovery: If in respect of any month the aggregate of the charges referred to in paragraphs (e) and (g) of Section 9 above shall be less than the Monthly Minimum Manpower Charge Commitment, the Settlement System Administrator shall have the right to recover the amount of such shortfall without an Order. 10.2 Reconciliation procedure: A reconciliation of the Services provided against the amounts received on account of the Monthly Minimum Manpower Charge Commitment shall be carried out at the times and in the manner provided in sub-section 6.2 of Part D, and any resultant adjustment shall be taken into account in the next invoice for Post Charges to be issued under Part J. 11. MINIMUM CONTRACT PRICE 11.1 Annual recovery: If in respect of any SSA Accounting Period the aggregate of the charges referred to in paragraphs (a), (b), (d), (e), (f), (g) and (k) of Section 9 above (but excluding any such charges under paragraphs (a), (b), (e) and (g) of Section 9 referable to Services provided under Service Lines 9, 11, 14, 16, 17, 18 and 21) recovered for all months in such SSA Accounting Period shall be less than the Minimum Contract Price, the Settlement System Administrator shall have the right to recover the amount of such shortfall without an Order in the first monthly invoice to be issued under Part J after the end of such SSA Accounting Period. 11.2 Monthly recovery: If in any SSA Accounting Period it appears to the Account Manager (acting reasonably) after consultation with the Contract Manager and by reference to Orders received that the sum of the charges referred to in sub-section 11.1 above for the remainder of such SSA Accounting Period when aggregated with the sum of such charges already recovered in such SSA Accounting Period will be less than the Minimum Contract Price, the amount of such shortfall may be recovered without an Order in monthly instalments over the remaining months of such SSA Accounting Period, the amount of such instalments being agreed in advance by the Contract Manager and the Account Manager, such agreement not to be unreasonably withheld. 11.3 Minimum Contract Price: The Minimum Contract Price in respect of any SSA Accounting Period shall be the amount set out against such SSA Accounting Period in the document entitled Minimum Contract Price Menu in the agreed form. PART H CHARGES FOR SERVICES: EXCEPTIONAL ITEMS 1. EXTENSION PERIOD CHARGES The Settlement System Administrator shall be entitled to charge in accordance with the Charging Procedure for all and any Services provided during the Extension Period by the Settlement System Administrator as follows:- (a) where the first Extension Notice is served on the Settlement System Administrator at least six months before the Termination Date:- (i) for the first three months of all Extension Periods (taken together), the Settlement System Administrator shall be entitled to charge for Services in accordance with the appropriate rates for those Services in the relevant Menu of Prices multiplied by 1.0; and (ii) for the second three months of all Extension Periods (taken together), the Settlement System Administrator shall be entitled to charge for Services in accordance with the appropriate rates for those Services in the relevant Menu of Prices multiplied by 1.1; and (iii) for any period thereafter, the Settlement System Administrator shall be entitled to charge for Services in accordance with the appropriate rates for those Services in the relevant Menu of Prices multiplied by 1.2; (b) where the first Extension Notice is served on the Settlement System Administrator less than six months but more than three months before the Termination Date:- (i) for the first three months of all Extension Periods (taken together), the Settlement System Administrator shall be entitled to charge for Services in accordance with the appropriate rates for those Services in the relevant Menu of Prices multiplied by 1.1; and (ii) for any period thereafter, the Settlement System Administrator shall be entitled to charge for Services in accordance with the appropriate rates for those Services in the relevant Menu of Prices multiplied by 1.2; and (c) where the first Extension Notice is served on the Settlement System Administrator less than three months before the Termination Date, the Settlement System Administrator shall be entitled to charge for Services in the Extension Period in accordance with the appropriate rates for those Services in the relevant Menu of Prices multiplied by 1.2. If the aggregate of any additional or consequential costs (other than manpower costs) properly incurred in any Extension Period and reported on by the auditor of the Settlement System Administrator exceeds the aggregate of the incremental rates charged in any such Extension Period in accordance with paragraphs (a) to (c) above the amount of such cost shall be recoverable by the Settlement System Administrator. 2. BAD DEBTS The total cost of any bad debts (including interest thereon) of the Settlement System Administrator in providing the Services and arising in any SSA Accounting Period may be recovered by the Settlement System Administrator in any subsequent SSA Accounting Period as if it were a Third Party Cost (but the Settlement System Administrator shall not have the right to recover the Handling Charge in respect thereof). 3. NEW TAXES OR NEW LEGISLATION 3.1 New taxes: If by reason of the introduction of a new tax (other than a tax on overall net income) the cost to the Settlement System Administrator of providing the Services is increased or the amount of any payment received or receivable by the Settlement System Administrator under the SSA Arrangements for providing the Services is reduced, then:- (a) forthwith upon becoming aware of the happening of such event the Settlement System Administrator shall notify the Executive Committee who shall thereupon notify the Pool Members; (b) the Settlement System Administrator shall, as soon as is reasonably practicable, give the Executive Committee (who shall thereupon notify the Pool Members) a certificate giving details of the new tax and the amount of such additional cost or reduction and the calculation thereof and the period to which it applies together with a report from its auditors confirming that they have reviewed the basis of the calculation of the additional cost or reduction and confirming the accuracy of the calculation; and (c) subject to the Settlement System Administrator complying with its obligations under paragraphs (a) and (b) above, the Settlement System Administrator shall have the right to recover from Pool Members the amount of such additional cost or reduction through an adjustment to the Menus of Prices or in such other manner as may be agreed with the Executive Committee as will in either case ensure that the Settlement System Administrator is kept whole in respect of such additional cost or reduction. 3.2 New legislation: If at any time the Settlement System Administrator becomes subject to either a new statute passed by the government of the United Kingdom or a new European Union regulation which is directly applicable, in either case under which the Settlement System Administrator is obliged to act in a manner which materially increases the cost to it of providing the Services then it shall notify the Executive Committee of such a change and if the Executive Committee is satisfied, in its sole discretion, that:- (a) the Settlement System Administrator is obliged to act in accordance with the new legislation; and (b) the cost to the Settlement System Administrator of providing the Services as a whole will be materially increased as a result of complying with such legislation, the Executive Committee shall enter into good faith negotiations with the Settlement System Administrator to agree (but with no absolute obligation on the Executive Committee or the Settlement System Administrator to agree) amendments to the Menus of Prices to reflect such increased costs. 4. EXCEPTIONAL ITEMS If, where Service Line 21 (Emergency Services) is invoked by the Executive Committee, the Settlement System Administrator shall necessarily incur additional costs in running the Settlement Business during a Security Period, those costs shall be regarded as beyond the control of the Settlement System Administrator and the Settlement System Administrator may recover the same, together with an administration charge of 2.5 per cent., as if they were Third Party Costs (but shall not have the right to recover the Handling Charge in respect thereof) provided that such costs have been verified as additional costs by the Settlement System Administrator's auditors. Pool Members shall be obliged to pay the actual amount of such costs and all reasonable costs of the Settlement System Administrator's auditors in verifying the same. 5. MARKET TEST COSTS Where any market test is commissioned by the Executive Committee, Pool Members shall be liable according to their Contributory Shares for:- (a) all Third Party Costs (if any) incurred in contracting for the market test services; and (b) all costs (if any) directly and properly incurred by ESIS in appraising the result of a market test of which the Settlement System Administrator has been asked to take account pursuant to sub-section 9.3 of Part B and in requesting clarification of the method and clarification and correction of the results thereof. 6. PIP REBATES If as a result of the implementation of a Performance Improvement Programme there shall be any rebate due to Pool Members in respect of the charges of the Settlement System Administrator for the provision of Services, Pool Members will be credited a proportionate sum of such rebate according to their Contributory Shares in the next invoice issued by the Settlement System Administrator under Part J. PART J COST RECOVERY 1. CHARGES RECOVERABLE BY THE SETTLEMENT SYSTEM ADMINISTRATOR The Settlement System Administrator shall have the right to recover from all Pool Members all sums due to it from them under the SSA Arrangements provided that such sums are invoiced in accordance with this Part. All sums to be recovered must be included in an invoice for Prior Charges or an invoice for Post Charges. In respect of any month, the amounts invoiced on an invoice for Prior Charges and on an invoice for Post Charges shall together be known as the Total Sum Due in respect of that month. 2. INVOICING 2.1 Invoice Statement for Prior Charges: The Settlement System Administrator shall send the Contract Manager an invoice statement for Prior Charges in the agreed form in respect of each month no later than 45 days prior to the commencement of such month. 2.2 Content of Invoice Statement: Each invoice statement for Prior Charges shall specify the amount due in respect of Services to be provided during the relevant month as follows:- (a) the charge for Continuous Production Services; (b) the monthly standing charge for Consultancy Services; (c) the monthly standing charge for Development Services; (d) the greater of (i) the Monthly Minimum Manpower Charge Commitment and (ii) the charges for manpower Ordered for that month in connection with Consultancy Services and Development Services at the FSC and ASC Rates; and (e) (i) one-twelfth of the Suppliers Second Tier Charge for that Accounting Period; and (ii) the anticipated under-recovery (if any) in the Accounting Period to date of charges for the provision of Services in Service Line 14 (Second Tier Metering), plus or minus the interest accrued on the debit or credit balance (as the case may be) on the STSSC Account. 2.3 Invoice Statement for Post Charges: The Settlement System Administrator shall send the Contract Manager an invoice statement for Post Charges in the agreed form in respect of each month no later than ten days after the end of such month. 2.4 Content of Invoice Statement: Each invoice statement for Post Charges shall specify the amount due in respect of Services provided during the relevant month and not contained in the invoice statement for Prior Charges for such month as follows:- (a) the charge for Continuous Production Services not charged under sub-section 2.2(a) above; (b) the charge for Ad Hoc Production Services; (c) the charge for Consultancy Services and Development Services not charged under sub-section 2.2(d) above; (d) the charge for Non-Menu Services; (e) any Third Party Costs together with the associated Handling Charge; (f) any charges for Services provided during such month requested by the Director or his staff under Service Line 9 (Service to the Director General of Electricity Supply); and (g) any charges for items expressly stated to be otherwise recoverable "in accordance with the Charging Procedure". 2.5 Disputes: The Contract Manager shall raise, in writing, any concerns in relation to any such invoice statements as are referred to in sub-section 2.1 or 2.3 above within five working days of receipt of the same, but shall not be precluded from raising any such concerns at any later stage. If any concerns are not settled by the date the invoices are required to be despatched to Pool Members, such invoices may be despatched by the Settlement System Administrator on the basis it reasonably believes to be correct insofar as they relate to Prior Charges or Post Charges which are not disputed by the Contract Manager. Any Prior Charges or Post Charges which are believed in good faith to be wrong by the Contract Manager and continue to be disputed in good faith may not be included in any invoice until the amount outstanding has been settled between the Settlement System Administrator and the Contract Manager. Where, after investigation, it is agreed between the Contract Manager and the Settlement System Administrator that the amount disputed has in fact been correctly calculated by the Settlement System Administrator, the Settlement System Administrator shall have the right to charge interest on such Prior Charges or Post Charges in accordance with and on the basis set out in sub-section 3.3 below from the date upon which they would have been due for payment if undisputed. Any adjustment following settlement of outstanding concerns will be made through the next invoice issued under this Part. 2.6 Invoices to Pool Members: The Settlement System Administrator shall send each Pool Member an invoice:- (a) in respect of an invoice for Prior Charges, no later than the first day of the month prior to the month in respect of which the relevant charges are to be recovered; and (b) in respect of an invoice for Post Charges, no later than ten days after such statement is sent to the Contract Manager, in each case for an amount determined in accordance with Part K. 2.7 Resignation or removal of the Settlement System Administrator: Where the Settlement System Administrator resigns in accordance with Section 14 of Schedule 4 or is removed in accordance with Section 17 of Schedule 4, the Settlement System Administrator shall be responsible for all Transition Costs. Accordingly:- (a) Orders placed by Pool Members cannot be used to defray Transition Costs; and (b) the Settlement System Administrator shall not include any Transition Costs in any future invoice statements. 3. PAYMENTS 3.1 Payments by Pool Members: Pool Members shall settle any invoices delivered to them pursuant to Section 2 above on, and the due date for payment shall be:- (a) in the case of an invoice for Prior Charges, the last working day of the month prior to the month in respect of which the charges relate; and (b) in the case of an invoice for Post Charges, the last working day of the month in which the invoice is delivered to Pool Members. All amounts shall be paid in sterling in cleared funds and in full without set-off or counter claim, withholding or deduction of any kind whatsoever but without prejudice to any other remedy. All charges are exclusive of United Kingdom Value Added Tax which shall be added to such charges, if applicable. 3.2 Disputes: If there is any dispute regarding charges in any month, a Pool Member may not withhold payment of any invoiced amount but, for the avoidance of doubt, may refer such dispute to arbitration in accordance with Clause 83 following payment. 3.3 Interest on non-payment: If any amount due to the Settlement System Administrator is not received on the due date the Pool Member is required to pay such amount, such Pool Member shall pay interest to the Settlement System Administrator on such amount from and including the date of default up to but excluding the date of actual payment (after as well as before judgment) at the rate which is 4 per cent. per annum above the base rate from time to time during each period of default of National Westminster Bank plc. 3.4 Payment of charges: Each Pool Member shall pay its due proportion of the Settlement System Administrator's charges for each SSA Accounting Period determined in accordance with Part K. 4. ALLOCATION OF CHARGES 4.1 Allocation: The Settlement System Administrator shall allocate its charges amongst Pool Members in accordance with Part K. 4.2 New and former Pool Members: Any Pool Member which is a Pool Member for part only of any month shall pay charges on an interim basis of such amount apportioned on a daily basis for each day that it was a Pool Member during that month on the basis of the allocation of charges set out in Part K. Adjustments to charges on all Pool Members as a result of existing Pool Members leaving or new Pool Members joining will be set out in the invoice published for the Post Charges for the relevant month whereupon the Pool Members and/or former Pool Members shall be required to pay such additional amount or shall be entitled to such reimbursement. PART K ALLOCATION OF CHARGES 1. THE SETTLEMENT SYSTEM ADMINISTRATOR'S CHARGES 1.1 Payment of Total Sum Due: Each Pool Member shall be obliged to pay the amount allocated to it in accordance with this Part K. The total aggregate amount allocated to all Pool Members in respect of any month shall equal the Total Sum Due in respect of such month. 1.2 Allocation of Total Sum Due: The Total Sum Due in respect of each month shall be allocated amongst Pool Members as follows:- (a) first, each Pool Member:- (i) shall pay the costs (if any), as detailed in the relevant invoice, associated with any change to the Software necessitated by such Pool Member's request for:- (A) data from Settlement additional to that which is generally provided to other Pool Members of the same class; or (B) for reporting of data in a format different from that in which data are generally provided to other Pool Members of the same class (which costs shall, in the first SSA Accounting Period that they are charged to such Pool Member, have added to them a single lump sum payment for maintenance equal to 40 per cent. of the costs of such charge, as reasonably determined by the Settlement System Administrator); (ii) shall pay the costs (if any and as far as the same are directly referable to such Pool Member) for the use by such Pool Member of electronic mail, the provision and maintenance of telecommunication circuits from data collector outstations and any other services procured or provided by the Settlement System Administrator which are directly referable to such Pool Member; and (iii) if it is a Supplier, shall pay its Supplier's Second Tier Charge for that month; (b) secondly:- (i) each Generator shall pay (pound)500 (or such other amount as the Executive Committee and the Settlement System Administrator may agree) for each of its Generating Units in respect of which standing data have been submitted; and (ii) each Pool Member shall pay (pound)750 (or such other amount as the Executive Committee and the Settlement System Administrator may agree) for each Metering System in respect of which it is the Registrant; (c) thirdly, but only in respect of the first month in an SSA Accounting Period in which a Generator or Supplier is a Pool Member:- (i) subject as provided in paragraphs (ii) to (vii) inclusive below, each Pool Member shall pay an annual membership fee as follows:- Category Fee (A) Small (1) A Supplier with a maximum demand at any time (pound) 9,000 during such year (as reasonably determined by the Executive Committee) of less than 200MW or a Generator with an aggregate Registered Capacity of less than 50MW (other than a Supplier or Generator referred to in (2) below) (2) A Supplier with a maximum demand at any time (pound) 2,500 during such year (as reasonably determined by Executive Committee) of less than 200MW or a Generator with aggregate Registered Capacity of less than 50MW, in either case which requires to have delivered to it only its own trading information (B) Intermediate A Supplier with a maximum demand at any time (pound)20,000 during such year (as reasonably determined by the Executive Committee) of 200MW or more up to (but excluding) 2000MW or a Generator with aggregate Registered Capacity of 50MW or more up to (but excluding) 1000MW (C) Large A Supplier with a maximum demand at any time (pound)45,000 during such year (as reasonably determined by the Executive Committee) of 2000MW or more or a Generator with aggregate Registered Capacity of 1000MW or more (ii) any Pool Member which is both a Generator and a Supplier shall pay only one membership fee, being that fee which is the greater of its annual membership fee as a Generator and its annual membership fee as a Supplier (and, if both are the same amount, such Pool Member shall pay only its membership fee as a Generator): such fee shall continue to be payable regardless of any change during the relevant year in the capacity(ies) in which such Pool Member participates as a Pool Member; (iii) unless otherwise resolved by the Executive Committee with respect to the relevant Pool Member, a Pool Member with no demand or generation shall not pay any membership fee and, if the Executive Committee shall so resolve, shall pay only that membership fee referable to a Pool Member falling within the relevant sub-category of paragraph (i)(A) above; (iv) if, in its reasonable opinion, the Executive Committee considers:- (A) any Pool Member (not being a Pool Member referred to in paragraph (iii) above) to be insignificant in terms of generation or demand, it may waive the membership fee for such Pool Member until further notice; and (B) if inequitable or otherwise inappropriate to levy the full amount of the membership fee that would otherwise be payable by any Pool Member, it may waive all or part of such fee on such terms and for such period(s) as it reasonably sees fit; (v) (A) any Pool Member falling within sub-category (2) of paragraph (i)(A) above which wishes to receive data by electronic mail shall be required to pay an additional monthly membership fee of one-twelfth of (pound)800; and (B) any Pool Member which wishes to receive data by courier shall be required to pay an additional monthly membership fee of one-twelfth of (pound)1,000; (vi) the Executive Committee may from time to time amend the categories of membership and the fees (with the consent of the Settlement System Administrator, such consent not to be unreasonably withheld or delayed); (vii) the charges referred to in paragraph (b) above and in this paragraph (c) shall be adjusted in relation to each Pool Member, Generator or Supplier, as the case may be, by reference to the number of days during each year for which such Party was a Pool Member and (where appropriate) the number of Generating Units or Metering Systems allocated to it during such period; (d) fourthly, 100 per cent. of the balance of the Total Sum Due during any month not recovered pursuant to paragraphs (a) to (c) (inclusive) above shall be allocated amongst all Pool Members during such month by reference to the Contributory Shares of each Pool Member. For this purpose, each Pool Member's due proportion of the charges shall be assessed first by reference to the then latest Contributory Shares of all Pool Members calculated by the Executive Committee for the period and each part thereof to which such charges relate (or, if and to the extent that the charges relate to a period for which no such calculation has yet been made, by reference to the then most recently calculated current Contributory Shares of all Pool Members) and shall thereafter be readjusted from time to time for each day within the relevant period following changes to the Contributory Shares of Pool Members for all or any part of such period or (as the case may be) following the calculation of the Contributory Shares for such period. Provided that, in calculating the balance of the Total Sum Due payable by each Pool Member in any month, the annual membership fee payable by each Pool Member in accordance with paragraph (c) above shall be divided by the number of complete months in the SSA Accounting Period remaining after the date of payment of such annual membership fee and the resultant figure (after rounding to the nearest (pound)1) shall be credited to the relevant Pool Member for offset against its proportionate share of the Total Sum Due for each such remaining month. 1.3 Prima facie evidence: The Settlement System Administrator's determination of the allocation of all costs during any month shall, in the absence of manifest error, be prima facie evidence thereof. 1.4 Contributory Shares: The Settlement System Administrator shall advise each Pool Member of its Contributory Share and how such Contributory Share is calculated. SCHEDULE 5 Form of Admission Application The Executive Committee for the Pooling and Settlement System in England and Wales Dear Sir, 1. We [insert full legal name and address of registered/principal office of applicant] refer to the Pooling and Settlement Agreement for the electricity industry in England and Wales dated 30th March, 1990 (as amended, varied, supplemented, modified or suspended, the "Pooling and Settlement Agreement"). 2. Unless the context otherwise requires, words and expressions defined in the Pooling and Settlement Agreement shall bear the same meanings respectively when used herein. 3. We hereby apply to be admitted as an additional party to the Pooling and Settlement Agreement pursuant to Clause 3 thereof. We wish to participate as a [[Generator]/[Supplier]/[Externally Interconnected Party]]*. 4. We confirm that:- (A)**(i) we have been granted and have in full force and effect a Generation Licence or we have made and have current an application for such a licence; or (ii) we are exempted from the obligation to hold a Generation Licence by reason of an exemption under section 5 of the Act; or (iii)we have entered into an Interconnection Agreement under which we will, subject to becoming a Pool Member, have the right (whether alone or together with others) then or at any time in the future to use all or any part of an External Interconnection for the delivery of electricity to the NGC Transmission System; or (iv) we are acting as the agent for a person generating or proposing to generate electricity on terms whereby we have the exclusive right to all the output of those Generating Unit(s) of such person and in respect of which we have been appointed agent; (B)*** (i) we have been granted and have in full force and effect a PES Licence or a Second Tier Supply Licence or we have made and have current an application for such a licence; or (ii) we are exempted from the obligation to hold a PES Licence or (as the case may be) a Second Tier Supply Licence by reason of an exemption under section 5 of the Act; or (iii) we have entered into an Interconnection Agreement under which we will, subject to becoming a Pool Member, have the right (whether alone or together with others) then or at any time in the future to use all or any part of an External Interconnection for the taking of electricity from the NGC Transmission System; (C) (i) we are [or [ ] (being our agent and a person which the Executive Committee has confirmed in writing to us is acceptable to the Executive Committee, a copy of which confirmation is enclosed) is]* registered for United Kingdom Value Added Tax purposes; (ii) we have [or our agent has]* so arranged matters that any payment receivable by us under or pursuant to the Pooling and Settlement Agreement will constitute for United Kingdom Value Added Tax purposes the consideration for a taxable supply made in the United Kingdom by us [or our agent]* as a taxable person in the United Kingdom in the course of furtherance of a business; (iii) we have [or our agent has]* so arranged matters that any payment required to be made by us under or pursuant to the Pooling and Settlement Agreement will constitute for United Kingdom Value Added Tax purposes the consideration for a taxable supply made in the United Kingdom to us [or our agent]*; and (iv) in any case where any electricity has been or will be generated or produced by us outside the United Kingdom, we have [or our agent has]* so arranged matters that any import thereof for the purposes of or otherwise in connection with the Pooling and Settlement Agreement will constitute for United Kingdom Value Added Tax purposes an importation or acquisition of goods solely by us [or our agent]* and so not by any other Party. 5. We hereby represent and warrant to the Executive Committee (for itself and on behalf of all the Parties) that:- (A) we are duly organised and validly existing under the laws of the jurisdiction of our organisation or incorporation; (B) we have the power to execute and deliver our Accession Agreement and any other documentation relating to that Agreement or the Pooling and Settlement Agreement and such other agreements as are required thereby and to perform our obligations hereunder or thereunder and we have taken all necessary action to authorise such execution, delivery and performance; and (C) such execution, delivery and performance do not violate or conflict with any law applicable to us, any provision of our constitutional documents, any order or judgment of any court or other agency of government applicable to us or any of our assets or any contractual restriction on or affecting us or any of our assets. We confirm that these representations and warranties will also be true and correct in all material respects at the date of our admission as a New Party. 6. We enclose the application fee of (pound)[ ].**** 7. We accept and agree to be bound by the terms of Clause 3 of the Pooling and Settlement Agreement. Yours faithfully, duly authorised for and on behalf of - ----- * Complete/delete as appropriate. ** Include paragraph (A) if applying to be admitted as a Generator. *** Include paragraph (B) if applying to be admitted as a Supplier. **** Insert current application fee prescribed by the Executive Committee. SCHEDULE 6 Form of Pool Membership Application The Executive Committee for the Pooling and Settlement System in England and Wales. Dear Sir, 1. We [insert full legal name and address of registered/principal office of applicant] refer to the Pooling and Settlement Agreement for the electricity industry in England and Wales dated 30th March, 1990 (as amended, varied, supplemented, modified or suspended, the "Pooling and Settlement Agreement"). 2. Unless the context otherwise requires, words and expressions defined in the Pooling and Settlement Agreement shall bear the same meanings respectively when used herein. 3. We hereby apply to be admitted as a Pool Member pursuant to Clause 8.2 of the Pooling and Settlement Agreement. We wish to participate as a [[Generator]/[Supplier]/[and an External Pool Member]]*. 4. We confirm that:- (A)**(i) we have been granted and have in full force and effect a Generation Licence; or (ii) we are exempted from the obligation to hold a Generation Licence by reason of an exemption under section 5 of the Act; or (iii)we have entered into an Interconnection Agreement under which we will, subject to becoming a Pool Member, have the right (whether alone or together with others) then or at any time in the future to use all or any part of an External Interconnection for the delivery of electricity to the NGC Transmission System; or (iv) we are acting as the agent for a person generating or proposing to generate electricity on terms whereby we have the exclusive right to all the output of those Generating Unit(s) of such person and in respect of which we have been appointed agent; (B)*** (i) we have been granted and have in full force and effect a PES Licence or a Second Tier Supply Licence; or (ii) we are exempted from the obligation to hold a PES Licence or (as the case may be) a Second Tier Supply Licence by reason of an exemption under section 5 of the Act; or (iii)we have entered into an Interconnection Agreement under which we will, subject to becoming a Pool Member, have the right (whether alone or together with others) then or at any time in the future to use all or any part of an External Interconnection for the taking of electricity from the NGC Transmission System; (C) with effect from the date of our admission as a Pool Member, we will accede as a party to the Funds Transfer Agreement and to the Deed of Indemnity in favour (inter alia) of the Chief Executive in accordance with their respective terms; (D) on or before our admission as a Pool Member, we will open a Settlement Account and comply with all other applicable requirements of Schedule 11 to the Pooling and Settlement Agreement; (E) (i) we are [or [ ] (being our agent and a person which the Executive Committee has confirmed in writing to us is acceptable to the Executive Committee, a copy of which confirmation is enclosed) is]* registered for United Kingdom Value Added Tax purposes; (ii) we have [or our agent has]* so arranged matters that any payment receivable by us under or pursuant to the Pooling and Settlement Agreement will constitute for United Kingdom Value Added Tax purposes the consideration for a taxable supply made in the United Kingdom by us [or our agent]* as a taxable person in the United Kingdom in the course of furtherance of a business; (iii) we have [or our agent has]* so arranged matters that any payment required to be made by us under or pursuant to the Pooling and Settlement Agreement will constitute for United Kingdom Value Added Tax purposes the consideration for a taxable supply made in the United Kingdom to us [or our agent]*; and (iv) in any case where any electricity has been or will be generated or produced by us outside the United Kingdom, we have [or our agent has]* so arranged matters that any import thereof for the purposes of or otherwise in connection with the Pooling and Settlement Agreement will constitute for United Kingdom Value Added Tax purposes an importation or acquisition of goods solely by us [or our agent]* and so not by any other Party; and (F)**** Option 1 we have entered into and have in full force and effect (or, prior to our admission as a Pool Member, will enter into and have in full force and effect) all appropriate Connection Agreements; - or - Option 2 all appropriate Connection Agreements with [ ], being the relevant Externally Interconnected Party, in relation to [ ], being the relevant External Interconnection, are in full force and effect. 5. We enclose:- [insert details of evidence in support of fulfilment of the other Pool Membership Conditions set out in Clause 8.3 of the Pooling and Settlement Agreement]. Yours faithfully, ------------------------------- duly authorised for and on behalf of [insert full legal name of the applicant] - --------------------------------------------------------------------------- * Complete/delete as appropriate. ** Include paragraph (A) if applying to be admitted as a Generator. *** Include paragraph (B) if applying to be admitted as a Supplier. **** Include Option 2 if applying to be admitted as an External Pool Member. Otherwise include Option 1. SCHEDULE 7 Form of Escrow Agreement THIS AGREEMENT is made on [ ] BETWEEN:- (1) NGC SETTLEMENTS LIMITED (registered number 2444282) whose registered office is situate at National Grid House, Sumner Street, London SE1 9JU for itself and on behalf of the Pool Members (as defined in the Pooling and Settlement Agreement hereinafter referred to) acting through the Executive Committee (as hereinafter defined) (the "Settlement System Administrator", which expression shall include the Settlement System Administrator's successors in title); and (2) THE NATIONAL COMPUTING CENTRE LIMITED (registered number 881195) whose registered office is situate at Oxford Road, Manchester M1 7ED (the "Custodian"). --------- WHEREAS:- (A) by various agreements (the "Pooling and Settlement Arrangements") details of which are set out in Schedule A NGC Settlements Limited has agreed to act as Settlement System Administrator and operate a settlements system requiring the use of certain computer package(s) comprising computer programs and related systems; (B) certain technical information and documentation describing or otherwise relating to the said computer programs and related systems is required for the understanding, maintaining, modifying and correcting of the said computer programs and related systems; and (C) the Settlement System Administrator acknowledges that in certain circumstances a successor Settlement System Administrator may require possession of the said technical information and documentation, up-to-date and in good order, NOW IT IS HEREBY AGREED as follows:- 1. DEFINITIONS AND INTERPRETATION 1.1 In this Agreement:- "Director" means the Director General of Electricity Supply; "Executive Committee" means the Executive Committee established under the Pooling and Settlement Arrangements and "Committee Member" means a member of the Executive Committee; "Material" means the source code and load (machine executable) modules and the technical information, manuals and other documentation described in Schedule B; "Modifications" means the source code and load (machine executable) modules and the technical information, manuals and other documentation relating to all modifications, updates and changes to the Material as accepted from time to time by the Executive Committee for use in the settlement process; and "Receptacle" means the receptacle to contain a copy of the Material pursuant to Clause 2.2 and copies of all Modifications delivered pursuant to Clause 3.1. 1.2 Unless the context otherwise requires, words and expressions defined in the Pooling and Settlement Arrangements shall bear the same meanings respectively when used herein. 2. DEPOSIT 2.1 Forthwith upon execution and delivery of this Agreement, the Settlement System Administrator will deposit and the Custodian will accept as custodian for the Pool Members (acting through the Executive Committee) a copy of the Material. 2.2 The Custodian will place the copy of the Material in the Receptacle. 2.3 The Custodian shall bear no obligation or responsibility to any person to determine the existence, relevance, completeness, accuracy or any other aspect of the Material and/or Modifications. The Custodian shall have no responsibility to determine that whatever is deposited or accepted by it for deposit is or is not Material and/or Modifications. 3. MODIFICATIONS 3.1 Subject to and in accordance with the Pooling and Settlement Arrangements, the Settlement System Administrator will deposit a copy of all Modifications with the Custodian within 28 days of such Modifications being accepted by the Executive Committee. 3.2 The Custodian shall as soon as possible confirm receipt of all Modifications in writing to the Executive Committee and the Settlement System Administrator. 3.3 The Custodian will place a copy of all Modifications in the Receptacle. 4. RELEASE 4.1 The Custodian shall forthwith release to any successor Settlement System Administrator appointed pursuant to and in accordance with the Pooling and Settlement Arrangements the copy(ies) of the Material and/or all the Modifications upon the written request of the Executive Committee provided that the Settlement System Administrator has resigned or has been removed as Settlement System Administrator under the Pooling and Settlement Arrangements and has not complied with its obligations relevant to the Material under Clauses 28.1.1 and 28.1.4 of the Pooling and Settlement Agreement for the Electricity Industry in England and Wales dated 30th March, 1990 (as amended, varied, supplemented, modified or suspended from time to time, the "Pooling and Settlement Agreement"). 4.2 Any written request of the Executive Committee referred to in Clause 4.1 shall be in the form of a statutory declaration by one or more Committee Members setting out the grounds on which release is sought and exhibiting such documentation in support thereof as the Custodian shall reasonably require. 4.3 Where any dispute shall arise as to the occurrence of the event set out in Clause 4.1, such dispute will be referred at the instance of either the Settlement System Administrator, the Custodian or the Executive Committee to the Director whose decision shall be final and binding. 5. CONFIDENTIALITY The Custodian agrees to maintain all information and/or documentation coming into its possession or to its knowledge under this Agreement in strictest confidence and secrecy, not to make use thereof other than for the purposes of this Agreement and not to disclose or release it other than in accordance with the terms hereof. 6. FEES The Settlement System Administrator will pay the Custodian's fees as detailed in Schedule C as amended from time to time by written agreement between the parties. Such fees shall be invoiced monthly and paid within one month of the date of the invoice. 7. TERMINATION 7.1 This Agreement shall terminate upon the release of the copy of the Material and copies of all Modifications in accordance with Clause 4.1. 7.2 This Agreement may be terminated by the Custodian by giving not less than 90 days' written notice to both the Executive Committee and the Settlement System Administrator. 7.3 This Agreement may be terminated by the Settlement System Administrator giving not less than 90 days' written notice to the Custodian provided that it may not terminate this Agreement without the consent of the Executive Committee first being given in writing unless it has been removed or has resigned as Settlement System Administrator and has complied with its obligations relevant to the Material under Clauses 28.1.1 and 28.1.4 of the Pooling and Settlement Agreement. 7.4 Upon termination under the provisions of Clause 7.2 or 7.3 the Custodian will deliver the copy(ies) of the Material and all the Modifications to the Settlement System Administrator (unless jointly instructed to the contrary by the Settlement System Administrator and the Executive Committee). 7.5 Termination of this Agreement for whatever reason will not relieve the Custodian from the obligations of confidentiality contained in Clause 5. 8. TESTS The Executive Committee shall be entitled to require the Custodian to carry out such tests in the presence of the Settlement System Administrator which in the reasonable opinion of the Custodian would reasonably establish that the Material and Modifications contain true and accurate versions of the source codes and load (machine executable) modules in use at the time of testing in the settlement process. Any reasonable charges and expenses incurred by the Custodian in carrying out such tests will be paid by the Settlement System Administrator. 9. OBSOLETE MATERIAL AND MODIFICATIONS 9.1 The Executive Committee shall be entitled to review from time to time the Material and Modifications on deposit with the Custodian. Where the Executive Committee is satisfied that any part of the Material or Modifications on deposit has ceased to be used in the settlement process and will be of no further use, whether directly or indirectly, it may request the Custodian to release any such part to the then current Settlement System Administrator. Such request shall be in writing and identify the part or parts of the Material or Modifications to be released by the Custodian and state that the reason for such release is that such part or parts is or are no longer of use. The Custodian shall release such part or parts to the then current Settlement System Administrator as soon as conveniently possible after receipt of any such written request from the Executive Committee. 9.2 Notwithstanding the release of any part or parts of the Material or Modifications to the Settlement System Administrator pursuant to Clause 9.1, in the event that any such released Material or Modifications or copies thereof are subsequently used in the settlement process such Material or Modifications shall be placed on deposit and held in escrow pursuant to this Agreement on the same terms and conditions as any Modification. 10. NOTICES 10.1 Any notice or other communication to be given by one person to another person under, or in connection with the matters contemplated by, this Agreement shall be addressed to the recipient and sent to the address, telex number or facsimile number or such other person given in this Agreement for the purpose and marked for the attention so given or to such other address, telex number and/or facsimile number and/or marked for such other attention as such other person may from time to time specify by notice given in accordance with this Clause to the person giving the relevant notice or other communication to it. 10.2 Any notice or other communication to be given to the Settlement System Administrator shall be given to:- Address: Fairham House, Green Lane, Clifton, Nottingham NG11 9LN Telex No: N/A Facsimile No: 0602 456728 Attention: General Manager Any notice or other communication to be given to the Custodian shall be given to:- Address: Oxford House, Oxford Road, Manchester M1 7ED Telex No: 66 8962 Facsimile No: 061-228 2579 Attention: Legal Department Any notice or other communication to be given to the Executive Committee shall be given to:- Address: Chief Executive (Pooling and Settlement) 30 Millbank, London SW1P 4RD Telex No: N/A Facsimile No: 071-233 8254 Attention: Chief Executive 10.3 Any notice or other communication to be given by one person to another person under, or in connection with the matters contemplated by, this Agreement shall be in writing and shall be given by letter delivered by hand or sent by first class prepaid post (airmail if overseas) or telex or facsimile, and shall be deemed to have been received:- 10.3.1 in the case of delivery by hand, when delivered; or 10.3.2 in the case of first class prepaid post, on the second day following the day of posting or (if sent airmail overseas or from overseas) on the fifth day following the day of posting; or 10.3.3 in the case of telex, on the transmission of the automatic answer-back of the addressee (where such transmission occurs before 1700 hours on the day of transmission) and in any other case on the day following the day of transmission; or 10.3.4 in the case of facsimile, on acknowledgement by the addressee's facsimile receiving equipment (where such acknowledgement occurs before 1700 hours on the day of acknowledgement) and in any other case on the day following the day of acknowledgement. 11. COUNTERPARTS This Agreement may be executed in counterpart by the parties on separate counterparts each of which when executed and delivered shall constitute an original but which shall together constitute one and the same instrument. 12. DISPUTE RESOLUTION 12.1 Save where expressly stated in this Agreement to the contrary, and subject to any contrary provision of the Act or any Licence or the rights, powers, duties and obligations of the Director or Secretary of State under the Act, any Licence or otherwise howsoever, any dispute or difference of whatever nature howsoever arising under, out of or in connection with this Agreement between the parties shall be and is hereby referred to arbitration pursuant to the arbitration rules of the Electricity Arbitration Association in force from time to time. 12.2 Whatever the nationality, residence or domicile of either party and wherever the dispute or difference or any part thereof arose the law of England shall be the proper law of any reference to arbitration hereunder and in particular (but not so as to derogate from the generality of the foregoing) the provisions of the Arbitration Acts 1950 (notwithstanding anything in Section 34 thereof) to 1979 shall apply to any such arbitration wherever the same or any part of it shall be conducted. 13. GOVERNING LAW This Agreement shall be governed by, and construed in all respects in accordance with, English law. SCHEDULE A Details of the Pooling and Settlement Arrangements (A) Pooling and Settlement Agreement for the Electricity Industry in England and Wales dated 30th March, 1990 and made between the Founder Generators named therein (1), the Founder Suppliers named therein (2), NGC Settlements Limited as Settlement System Administrator (3), Energy Pool Funds Administration Limited as Pool Funds Administrator (4), The National Grid Company plc as Grid Operator and Ancillary Services Provider (5) and Scottish Power plc and Electricite de France, Service National as Externally Interconnected Parties(6). (B) Initial Settlement Agreement for the Electricity Industry in England and Wales dated 30th March, 1990 and made between the Founder Generators named therein (1), the Founder Suppliers named therein (2), NGC Settlements Limited as Settlement System Administrator (3), Energy Pool Funds Administration Limited as Pool Funds Administrator (4), The National Grid Company plc as Grid Operator and Ancillary Services Provider (5) and Scottish Power plc and Electricite de France, Service National as Externally Interconnected Parties (6). (C) Two Supplemental Agreements relating to the Initial Settlement Agreement and the Pooling and Settlement Agreement for the Electricity Industry in England and Wales, each dated as of 30th June, 1990 and made between the Founder Generators named therein (1), the Founder Suppliers named therein (2), NGC Settlements Limited as Settlement System Administrator (3), Energy Pool Funds Administration Limited as Pool Funds Administrator (4), The National Grid Company plc as Grid Operator and Ancillary Services Provider (5) and Scottish Power plc and Electricite de France, Service National as Externally Interconnected Parties (6). (D) Third Supplemental Agreement relating to the Initial Settlement Agreement and the Pooling and Settlement Agreement for the Electricity Industry in England and Wales dated as of 15th October, 1990 and made between the Founder Generators named therein (1), the Suppliers named therein (2), NGC Settlements Limited as Settlement System Administrator (3), Energy Pool Funds Administration Limited as Pool Funds Administrator (4), The National Grid Company plc as Grid Operator and Ancillary Services Provider (5) and Scottish Power plc and Electricite de France, Service National as Externally Interconnected Parties (6). (E) Fourth Supplemental Agreement relating to the Initial Settlement Agreement and the Pooling Settlement Agreement for the Electricity Industry in England and Wales dated as of 15th October, 1990 and made between the Founder Generators named therein (1), the Suppliers named therein (2), NGC Settlements Limited as Settlement System Administrator (3), Energy Pool Funds Administration Limited as Pool Funds Administrator (4), The National Grid Company plc as Grid Operator and Ancillary Services Provider (5) and Scottish Power plc and Electricite de France, Service National as Externally Interconnected Parties (6). SCHEDULE B The Material SYSTEM REF ITEM SMP 101 Source Code - Hardcopy 102 Source Code - Tape 103 Executable Code - Tape 104 DCL - Hardcopy 105 DCL - Tape 106 User Requirement Specification 107 Design Specification 108 Test Plan 109 Program Upgrades Test Specification 110 Acceptance Test Schedule 111 Test Schedule(s) 112 Test Specification 113 User Guide 114 Quality Assurance 115 Licensed software list 116 Licensed software licences 117 Licensed software system tables 118 Acceptance certificates CDCS 201 Source Code - Tape: GRID02 202 Source Code - Hardcopy 203 Executes clists 204 DB2 Database Request Modules 205 Declaration Libraries 206 Compilation JCL 207 Compilation JCL - Hardcopy 208 Load Modules 209 Menu Library 210 Skeleton Execution JCL 211 Skeleton Execution JCL - Hardcopy 212 Backup JCL and clists 213 System Test Specification 214 User Acceptance Test Specification 215 User Requirement Specification 216 Logical Design Specification 217 User Guide 218 First Line Support Procedures 219 Licensed software list 220 Licensed software certificates 221 Compilation Instructions 222 Special Fixes List 223 Licensed software system tables 224 Acceptance certificates L&G 301 Source Code - Hardcopy 302 Source Code - 3.5 Diskette 303 DOS Batch Files - Hardcopy 304 DOS Batch Files - 3.5 Diskette 305 Executables - 3.5 Diskette 306 System Documentation 307 Documentation Source Files (VMS Backup save set) 308 Acceptance Test Specification 309 Guide for 2nd-line Maintenance 310 CEGB(NGD) Power Station Collectors Manual 311 Licensed software list 312 Licensed software certificates 313 Compilation Instructions 314 Licensed software system tables 315 Acceptance certificates LOLP 401 Source Code - Hardcopy 402 Source Code - Disk 403 Object Code - Disk 404 Batch Files - Hardcopy 405 Batch Files - Disk 406 Test Plan and Specification 407 Acceptance Test Data Ph1 408 Test Schedule FAT Ph1 409 Test Schedule SAT Ph1 410 Test Schedule SAT Overview Ph1 411 Format Spec. LOLP to Sys Ops. 412 User Guide 413 User Requirements Spec. 414 Functional Spec. 415 Basic Info. Flow 416 Statement of Principles 417 Project Report 418 Op. Procedures Manual 419 Test Plan LOLP 5.0 420 System Test Execution Vol. 1-4 421 LOLP PEC site Acc. Test Review 422 Regression Test Matrix 423 Model Parameters - Vesting Day Vals 424 Promod Vol. 1-2 425 Software Release 4.7 426 S/W Install and Update Guidelines 427 Software Releases 4.0 to 4.8 428 Licensed software list 429 Licensed software licences 430 Acceptance certificates SD-SCICON S2/SC1 501 Source Code Fortran, ProFortran, SQL Forms: HCPY 502 Source Code Fortran, ProFortran, SQL Forms: TPE 503 Executable Fortran, ProFortran, SQL Forms: TPE 504 Executable DCL, SQL-PLUS, SQL-RPT: (inc *.MMS) 505 Acceptance Test Specification 506 Test Schedules 507 Test Schedule SAT 508 Op Subsystem Design Specification 509 CR Subsystem Design Specification 510 SY Subsystem Design Specification 511 DT Subsystem Design Specification 512 Level 1 Design Specification 513 CSM Team Guide 514 Process Leader User Guide 515 Training Course - Input Clerks 516 Training Course - Process Leader 517 Training Course - Team Leader 518 Training Course - Data Trans Clerk 519 Input Clerk User Guide 520 Team Leader User Guide 521 Data Trans Clerk User Guide 522 Auditor User Guide 523 Work Breakdown Structure 524 Functional Specification 525 Performance Scoping Study 526 Regression Testing Matrix 527 Migration From SID to 2.21 528 Review of Initial Pool Rules vs Func. Spec. 529 PMW Project Standards 530 Implementation Guide 531 System Build Instructions 532 User Requirements Specification 533 Acceptance Cert: Functional Spec. 534 Acceptance Cert: Acceptance Test Spec. 535 Acceptance Cert: Test Schedules and Data 536 Licensed software list 537 Licensed software certificates GOALPOST 601 Source Code - Hardcopy 602 Source Code - Tape 603 Executable - Tape 604 Application File (JCL) - Tape 605 Test Document 606 Module Design Specification 607 User Manual 608 Quality Assurance Plan 609 User Requirements Specification 610 Licensed software list 611 Licensed software certificates 612 Compilation Instructions 613 Licensed software system tables 614 Acceptance certificates GOAL 701 Source Code - Hardcopy 702 Source Code - Tape 703 Executable Code - Tape 704 JCL - Hardcopy 705 JCL - Tape SCHEDULE C The Custodian's fees 1. Initial fee - (pound)2,000 2. Annual fee - (pound)500 3. Release fee - (pound)500 plus reasonable expenses 4. Storage fee -(pound)20 per cubic foot per annum (reduced proportionately for part of any year) 5. Update fee - (pound)100 per update 6. Additional work (testing, etc.) - normal senior consultancy rates from time to time published by the Custodian. All such fees are exclusive of VAT and are to be specified in reasonable detail in each invoice by the Custodian. IN WITNESS whereof this Agreement has been duly executed the day and year first above written As Settlement System Administrator - ---------------------------------- (for itself and on behalf of the Pool Members acting through the Executive Committee) THE COMMON SEAL of ) NGC SETTLEMENTS LIMITED ) was hereunto affixed in the ) presence of:- ) Director Director/Secretary As Custodian THE COMMON SEAL of ) THE NATIONAL COMPUTING CENTRE LIMITED was ) hereunto affixed in the presence of:- ) ) Director Director/Secretary SCHEDULE 8 [Not used]. SCHEDULE 9 The Pool Rules The sequential page numbering is suspended for Schedule 9 and resumes at Schedule 10 SCHEDULE 10 Form of Resignation Notice The Secretary of the Executive Committee for the Pooling and Settlement System in England and Wales (copied to: (A) the Settlement System Administrator; and (B) the Pool Funds Administrator). Dear Sir, We [insert full legal name and address of registered/principal office of applicant] refer to the Pooling and Settlement Agreement for the electricity industry in England and Wales dated 30th March, 1990 as amended, varied, supplemented, modified or suspended (the "Pooling and Settlement Agreement"). Unless the context otherwise requires, words and expressions defined in the Pooling and Settlement Agreement shall bear the same meanings respectively when used herein. We hereby give notice pursuant to Clause 8.7 of the Pooling and Settlement Agreement that we are resigning as a Party with effect from the date falling 28 days after receipt by you of this Resignation Notice. We confirm that, in giving this notice of resignation, we are not and will not be in breach of any of the restrictions on resignation set out in Clause 8.8 of the Pooling and Settlement Agreement. We [enclose]/[confirm that we have already provided]* such notices (if any) as are required to be given by us pursuant to the provisions of Part XV of the Pooling and Settlement Agreement. We acknowledge that our resignation as a Party is without prejudice to our accrued rights and liabilities and any rights and liabilities which may accrue to us in relation to the period during which we were a Party under the Pooling and Settlement Agreement, the Funds Transfer Agreement or any agreement referred to in Clause 8.8.1(c) of the Pooling and Settlement Agreement. Yours faithfully, --------------------------- duly authorised for and on behalf of [insert full legal name of Party] SCHEDULE 11 Billing and Settlement PART 1: PRELIMINARY 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions 1.2 Interpretation PART 2: ESTABLISHMENT OF SYSTEMS 2. PAYMENTS CALENDAR 2.1 Preparation 2.2 Principles 2.3 Form 2.4 Default 2.5 Distribution 3. INFORMATION SYSTEMS 3.1 Provision of information 3.2 Communications Equipment 3.3 Authorised persons 4. BANKING SYSTEM 4.1 Funds Transfer Agreement 4.2 Establishment of Accounts 4.3 Rights and obligations under Funds Transfer Agreement 4.4 Settlement Account 4.5 Further information 4.6 Change of Settlement Account 4.7 Maintenance of Settlement Account and Settlement Bank Mandate 4.8 Details of Accounts 5. ESTABLISHMENT OF TRUSTS 5.1 Trusts 5.2 Trusts in respect of the Credit Facility 5.3 Rights of Pool Creditors other than the Ancillary Services Provider 5.4 Rights of Ancillary Services Provider 5.5 Trusts in respect of Pool Reserve Assets 5.6 Overdue amounts 5.7 Shortfall 5.8 Providing Members' rights to funds 5.9 Funds not to be withdrawn 5.10 Providing Members' rights to withdraw funds 5.11 Waiver of Providing Members' rights 5.12 Pool Reserve Assets 5.13 Providing Members' rights and interests in the Pool Reserve Account 5.14 Overpayments to be held on trust 5.15 Reimbursement of overpayments 5.16 Repayment of loans 5.17 No claim for breach of trust 6. POOL LEDGER ACCOUNTS 6.1 Maintenance of Pool Ledger Accounts 6.2 Ledger extracts 6.3 Certified copy extracts 6.4 Confidentiality 6.5 Information 6.6 Review of extracts 6.7 Dispute of accuracy [Sections 7 to 14 (inclusive) not used] PART 3: SECURITY COVER AND CREDIT MONITORING 15. SECURITY COVER 15.1 Provision of Security Cover 15.2 Letters of Credit 15.3 Cash deposit 15.4 Maintenance of Security Cover 15.5 Failure to supply Security Cover 15.6 Substitute Letter of Credit 16. CREDIT MONITORING 16.1 Determination of Security Cover 16.2 Criteria for provision of Security Cover 16.3 Six monthly variation 16.4 Review of Security Cover 16.5 Increase or Decrease of Security Cover 16.6 Notification in respect of Security Cover 16.7 Release from Security Cover Obligations 16.8 No liability for amount of Security Cover PART 4: BILLING AND PAYMENT PROCEDURES 17. RECEIPT AND VERIFICATION OF INFORMATION 17.1 Receipt of Information from Settlement System Administrator 17.2 Information for each Settlement Day 17.3 Information - taking of electricity 17.4 Information - provision of electricity 17.5 Information - Ancillary Services Provider 17.6 Verification of Information 17.7 Deemed Verification 17.8 Rectification of Errors 17.9 Amounts in Advice Notes; Adjustments 17.10 Postponed Payment Date 17.11 Further notification 17.12 Payment by Pool Debtor 17.13 Liability several 18. ADVICE NOTES 18.1 Despatch of Advice Notes 18.2 Method of despatch 18.3 Content of Advice Notes 18.4 Interest 19. PAYMENT PROCEDURE 19.1 Instructions for payment 19.2 Pool Funds Administrator's responsibilities 19.3 Non-payment by Pool Member 19.4 Excess payments 19.5 Payment to Pool Creditors 19.6 Making good the Pool Reserve Account 19.7 Prohibition on transfers 19.8 Application of payments 19.9 Bank contacts 20. ALTERNATIVE PAYMENT PROCEDURE 20.1 Alternative Payment procedure 20.2 Pool Debtor to effect remittance 20.3 Receipt of remittance 20.4 Method of remittance 20.5 Notification of non-payment 20.6 Payment default 20.7 Late payment 20.8 Payments to Pool Creditors 20.9 Construction 21. PAYMENT DEFAULT 21.1 Payment default 21.2 Amount in default likely to be remedied 21.3 Loans part of Pool Reserve Assets 21.4 Repayment of loans 21.5 Reduction of payments to Pool Creditors 21.6 Obligation to make calls 21.7 Indemnification by non-paying Pool Debtor 21.8 Notification to Pool Creditors 21.9 Default Interest 21.10 Application of payments 21.11 Clearing of Pool Clearing Account 21.12 Credit Facility 22. CONFIRMATION NOTICES 22.1 Despatch of Confirmation Notices 22.2 Information - taking of electricity 22.3 Information - supplies of electricity 22.4 Information - Ancillary Services Provider 22.5 Interest 23. PAYMENT ERRORS 23.1 Overpayments 23.2 Repayment of overpayment (1) 23.3 Repayment of overpayment (2) 23.4 Underpayments 24. ENFORCEMENT OF CLAIMS 24.1 Notification of amount in default 24.2 Duties of Pool Funds Administrator 24.3 Notice before action 24.4 Proceedings to Recover Overdue Amounts 25. CREDIT FACILITY: PAYMENT DEFAULTS 25.1 Purpose of Credit Facility 25.2 Modification of other provisions of this Schedule 25.3 Payment default 25.4 Amounts in default 25.5 Application of payments 25.6 Payments to Facility Bank 25.7 Reduction in payments to Pool Creditors 25.8 Enforcement of Claims and other provisions 25.9 Unavailability of Credit Facility 25.10 Interpretation 26. CREDIT FACILITY: GENERAL 26.1 Notifications to the Executive Committee 26.2 Notifications to Providing Members 26.3 Amendment and Cancellation 26.4 Extension and Renewal 26.5 Fees not attributable to a particular Providing Member 26.6 No additional charge Annex 1: Form of Advice Note Annex 2: Form of Confirmation Notice Annex 3: Part 1 - Form of Settlement Account Designation Part 2 - Form of Change of Settlement Account Annex 4: Form of Letter of Credit SCHEDULE 11 Billing and Settlement PART 1 PRELIMINARY 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions: In this Schedule, except where the context otherwise requires:- "Advice Note" means a statement substantially in the form and containing the information set out in Annex 1 (or in such other form or containing such further information as may from time to time be specified by the Executive Committee) issued in the name of the Pool Funds Administrator to a Pool Member, the Ancillary Services Provider or the Grid Operator; "Approved Credit Rating" means, in relation to a Pool Member or the Grid Operator a short-term debt rating of not less than A1 by Standard and Poor's Corporation or a rating of not less than P1 by Moody's Investors Service or an equivalent rating from any other reputable credit rating agency approved by the Executive Committee; "Banking System" means the banking system described in Section 4, for the transfer of funds from Pool Debtors to Pool Creditors in accordance with this Schedule, as amended or replaced from time to time in accordance with the provisions of the Agreement; "Billing System" means the systems and procedures described in Sections 18 and 22 for the issuing of Advice Notes and Confirmation Notices by the Pool Funds Administrator to Pool Members, the Ancillary Services Provider and the Grid Operator, as amended or replaced from time to time in accordance with the provisions of the Agreement; "CHAPS" means the Clearing House Automated Payments System; "Collection Account" means an account denominated in sterling maintained by the Pool Funds Administrator at a branch of a Settlement Bank, and designated from time to time as a Collection Account in accordance with Section 4; "Confirmation Notice" means a statement substantially in the form and containing the information set out in Annex 2 (or in such other form or containing such further information as may from time to time be specified by the Executive Committee) issued in the name of the Pool Funds Administrator to a Pool Member, the Ancillary Services Provider or the Grid Operator; "Credit Facility" means the credit facility in a principal amount of up to (pound)20,000,000 provided to the Pool Funds Administrator by Barclays Bank PLC (acting through its branch at 54 Lombard Street, London EC3 9EX) with effect from 1st January, 1993 as from time to time extended, renewed or modified and any other facility provided to the Pool Funds Administrator by Barclays Bank PLC or any other bank (approved by the Executive Committee) whether in substitution for or in addition to the same in any such case on terms approved by the Executive Committee; "Credit Facility Contribution" means a sum equal to 5 per cent. of the fees (and any additional amounts payable under the terms of the Credit Facility which are not the responsibility of any particular Providing Member or the Grid Operator) charged under the Credit Facility to the Pool Funds Administrator; "Default Interest Rate" means:- (i) a rate per annum determined by the Pool Funds Administrator to be equal to the aggregate of:- (a) 4 per cent. per annum; and (b) the Pool Banker's base lending rate from time to time; or (ii) such other rate as the Executive Committee may from time to time determine; "Facility Bank" means Barclays Bank PLC (acting through its branch at 54 Lombard Street, London EC3 9EX) or such other bank as may from time to time provide a Credit Facility; "Funds Transfer Agreement" means the agreement of that name dated 30th March, 1990 and made between Energy Pool Funds Administration Limited, Barclays Bank PLC, the Pool Members named therein and The National Grid Company plc, as amended, varied, supplemented, modified or suspended from time to time in accordance with the terms hereof and thereof; "Funds Transfer Business" means the business of the Pool Funds Administrator in operating the Funds Transfer System and providing the Services; "Funds Transfer Hardware" has the meaning ascribed to it in Schedule 15; "Funds Transfer Software" has the meaning ascribed to it in Schedule 15; "Funds Transfer System" means the Banking System, the Billing System and the Information Systems; "Information Systems" means the information systems described in Section 3 for the transfer of information to be given by or to the Pool Funds Administrator in connection with the Funds Transfer Business, as amended or replaced from time to time in accordance with the provisions of the Agreement; "Letter of Credit" means an unconditional irrevocable standby letter of credit substantially in the form set out in Annex 4 (or such other form as the Executive Committee may approve) issued for the account of a Providing Member or the Grid Operator in sterling in favour of the Pool Funds Administrator as trustee on the trusts set out in Section 5 by any United Kingdom clearing bank or any other bank which has a long term debt rating of not less than single A by Standard and Poor's Corporation or by Moody's Investors Service, or such other bank as the Executive Committee may approve, and which shall be available for payment at a branch of the issuing bank; "Notification Date" means, in respect of any Settlement Day, the day specified in the Payments Calendar as the day on which the Settlement Run shall be required to be delivered by the Settlement System Administrator to the Pool Funds Administrator for that Settlement Day; "Notified Payment" means a payment notified in accordance with Section 18 by the Pool Funds Administrator to a Pool Member, the Ancillary Services Provider or the Grid Operator as being a payment required to be cleared through the Pool Clearing Account; "Notified Payments System" means the system to be established by Section 19 for the settling of Notified Payments, as amended or replaced from time to time in accordance with the provisions of the Agreement; "Payment Date" means, in relation to any Settlement Day, the date fixed in accordance with Section 2 upon which Notified Payments in respect of supplies of electricity, the provision of Ancillary Services and payments due in accordance with the provisions of Clause 49 of the Agreement must be settled in accordance with this Schedule; "Payments Calendar" means the calendar prepared and issued in accordance with Section 2 showing a Notification Date and a Payment Date in respect of each Settlement Day; "Pool Accounts" means the Pool Clearing Account, the Pool Borrowing Account, the Pool Reserve Account and the Collection Accounts and such other accounts as may be established in accordance with sub-section 4.2; "Pool Banker" means Barclays Bank PLC or such other person nominated from time to time by the Executive Committee as Pool Banker and appointed as Pool Banker; "Pool Borrowing Account" means the account of that title in the name of the Pool Funds Administrator with the Facility Bank which may from time to time be opened in respect of the Credit Facility; "Pool Clearing Account" means the account in the name of the Pool Funds Administrator (holding as trustee on the trusts set out in Section 5) with the Pool Banker to which Notified Payments are required to be transferred for allocation to Pool Creditors in accordance with their respective entitlements; "Pool Creditor" means each Pool Member, the Ancillary Services Provider and the Grid Operator to whom moneys are payable pursuant to the terms of this Schedule, other than a Providing Member or the Grid Operator, in respect of (i) amounts standing to the credit of its account with the Pool Reserve Account or (ii) amounts owing to it by another Providing Member or (as the case may be) the Grid Operator pursuant to the operation of sub-section 21.1; "Pool Debt" means, in respect of a Pool Member, the Ancillary Services Provider or the Grid Operator, the aggregate amount payable by such Pool Member, the Ancillary Services Provider or (as the case may be) the Grid Operator pursuant to the terms of this Schedule; "Pool Debtor" means each Pool Member, the Ancillary Services Provider and the Grid Operator, but in any such case only where it is required to make payment under this Schedule; "Pool Ledger Accounts" means the accounting records required to be maintained by the Pool Funds Administrator in accordance with Section 6 for the recording of transactions settled in accordance with this Schedule; "Pool Reserve Account" means the account established pursuant to sub-section 4.2 for the purpose of holding a cash deposit which may be used in or towards clearing the Pool Clearing Account in accordance with Section 21; "Pool Reserve Assets" has the meaning given to that expression in sub-section 5.12; "Providing Member" means each Pool Member who may, under the terms of this Schedule, become at any time a Pool Debtor; "Reserve Interest Rate" means the rate of interest payable from time to time by the Pool Banker on amounts standing to the credit of the Pool Reserve Account; "Security Amount" means, in respect of a Providing Member or the Grid Operator (as the case may be), the aggregate of available amounts of each outstanding Letter of Credit plus the principal amount (if any) of cash that such Providing Member or the Grid Operator has paid to the credit of the Pool Reserve Account (and which has not been repaid to such Providing Member or the Grid Operator) and less the amount of all outstanding loans deemed to be made under paragraphs 21.1.3 or 21.1.5 of this Schedule to such Providing Member or the Grid Operator. For the purposes of this definition, in relation to a Letter of Credit, "available amount" means the face amount thereof less (i) payments already made thereunder and (ii) claims made thereunder but not yet paid; "Security Cover" means, in respect of each Providing Member and the Grid Operator, the aggregate amount for the time being which it shall be required by the Executive Committee to provide and maintain by way of security in accordance with Part 3; "Services" means the services and responsibilities to be supplied or discharged by the Pool Funds Administrator pursuant to the Agreement; "Settlement Account" means, in relation to a Pool Member, the Ancillary Services Provider or the Grid Operator, an account maintained at a Settlement Bank and designated in accordance with sub-section 4.4; "Settlement Account Designation" means a notice substantially in the form set out in Part 1 of Annex 3 or in such other form as may be specified by the Executive Committee, completed and signed by a Pool Member, the Ancillary Services Provider or the Grid Operator designating a Settlement Account for the purposes of this Schedule; "Settlement Bank" means a bank which:- (a) has its head office or a branch situated in the United Kingdom and which holds sterling denominated accounts at such office or branch; (b) is a settlement member of the Clearing House Automated Payment System ("CHAPS") or is a CHAPS participant by virtue of an agency agreement with a settlement member; and (c) is either:- (i) a European institution under the Banking Coordination (Second Council Directive) Regulations 1992; or (ii) an authorised institution under the Banking Act 1987; "Settlement Bank Mandate" means any mandate referred to in sub-section 4.7 to be given by the Pool Funds Administrator in favour of a Settlement Bank or, as the context may require, a particular one of them in such form(s) as the Executive Committee may approve, such approval not to be unreasonably withheld, such mandate being given for the purpose of establishing and maintaining a Collection Account; "Settlement Re-run" means any re-run of Settlement in accordance with Part XII of the Agreement; "Settlement Run" means, in respect of transactions occurring on the relevant Settlement Day for which payments are to be settled pursuant to this Schedule, the data which the Settlement System Administrator is required to deliver from time to time to the Pool Funds Administrator pursuant to Section 17 in respect of such transactions; and "Shortfall" has the meaning given to that expression in sub-section 5.7. 1.2 Interpretation: In this Schedule, except where the context otherwise requires, references to a particular Annex, Part, Section, sub-section, paragraph or sub-paragraph shall be a reference to that Annex to or Part of this Schedule or, as the case may be, that Section, sub-section, paragraph or sub-paragraph in this Schedule and references to any amount being exclusive or inclusive of United Kingdom Value Added Tax shall mean that that amount is exclusive or inclusive (as the case may be) of a sum equal to such amount, if any, of United Kingdom Value Added Tax as is properly chargeable on the supply to which the first-mentioned amount is attributable as being all or part of the consideration for that supply. PART 2 ESTABLISHMENT OF SYSTEMS 2. PAYMENTS CALENDAR 2.1 Preparation: No later than 31st January in each year the Pool Funds Administrator and the Settlement System Administrator shall agree on a Payments Calendar showing for the period from 1st April in that year to 31st March in the next succeeding year (both dates inclusive) the Payment Dates on which payments pursuant to the Agreement in respect of supplies of electricity, the provision of Ancillary Services and in respect of sums payable by the Grid Operator in relation to Transport Uplift on each Settlement Day are required to be settled and showing the Notification Dates on which the Settlement Run in respect of such supplies shall be delivered by the Settlement System Administrator to the Pool Funds Administrator. 2.2 Principles: Each Payments Calendar shall give effect to the following principles:- 2.2.1 the Settlement Run shall be required to be delivered by the Settlement System Administrator to the Pool Funds Administrator no later than the 24th day after the Settlement Day to which the Settlement Run relates (or, if such day is not a Business Day, the next succeeding day which is a Business Day); 2.2.2 the Payment Date shall not fall earlier than two clear Business Days after the day on which the Settlement Run is required to be delivered by the Settlement System Administrator to the Pool Funds Administrator; 2.2.3expressed as an average over the entire period covered by the Payments Calendar, the Payment Date shall fall, as near as practicable, 28 days after the Settlement Day to which it relates; and 2.2.4 each Payment Date shall fall as close as is reasonably practicable to the 28th day after the Settlement Day to which it relates, and shall be prepared in accordance with the relevant Agreed Procedure. 2.3 Form: The Payments Calendar shall be in such form as the Executive Committee shall from time to time prescribe. 2.4 Default: If the Pool Funds Administrator and the Settlement System Administrator shall fail to agree a Payments Calendar for any period by the date stated in sub-section 2.1 or the Payments Calendar prepared by them does not give effect to the principles set out in sub-section 2.2, the Executive Committee shall prepare or cause to be prepared a Payments Calendar for that period giving effect to the said principles and that shall be the Payments Calendar for use for that period. 2.5 Distribution: Any Payments Calendar prepared pursuant to this Section 2 shall be distributed promptly to each Pool Member, the Ancillary Services Provider, the Grid Operator, the Pool Banker, the Pool Auditor and the Director and (if prepared by the Pool Funds Administrator and the Settlement System Administrator) the Executive Committee and (if prepared by or for the Executive Committee) the Pool Funds Administrator and the Settlement System Administrator. 3. INFORMATION SYSTEMS 3.1 Provision of information: Unless otherwise required by the Executive Committee, all written information to be given by or to the Pool Funds Administrator in connection with the Banking System and the Billing System shall be provided in the following manner:- 3.1.1 for information flowing between the Pool Funds Administrator, the Settlement System Administrator, the Ancillary Services Provider and the Grid Operator by electronic mail as designated from time to time by the recipient in a written notice to the sender of the information or if such electronic mail systems are not operational by the Effective Date then, until such systems are operational, by such means as such parties shall agree; 3.1.2 for information flowing between the Pool Funds Administrator and the Pool Banker, in the manner prescribed in the Funds Transfer Agreement or in such other manner as may be agreed between the Pool Funds Administrator and the Pool Banker; 3.1.3 for information flowing between the Pool Funds Administrator and a Settlement Bank, in the manner prescribed in the relevant Settlement Bank Mandate or in such manner as may be agreed between the Pool Funds Administrator and the Settlement Bank; 3.1.4 for information flowing between the Pool Funds Administrator and any Pool Member who has installed an electronic mail transfer system compatible with the Pool Funds Administrator's electronic mail transfer system, by electronic mail as designated from time to time by the recipient in a written notice to the sender of the information; and 3.1.5 for information flowing between the Pool Funds Administrator and any other Pool Member, by facsimile transmission and addressed for the attention of the Authorised Person (as defined in sub-section 3.3) for such Pool Member and sent to the then latest facsimile number of such Authorised Person notified to the Pool Funds Administrator pursuant to sub-section 3.3 provided that, if at the relevant time there is no Authorised Person for such Pool Member, such information shall be sent by facsimile transmission and addressed for the attention of the company secretary of such Pool Member and sent to the facsimile number of its registered or principal office. 3.2 Communications Equipment: Each Party undertakes to exercise reasonable skill and care to ensure that its communications equipment at all times is adequate to transmit and receive information in connection with the Banking System and the Billing System. In the case of any breakdown, failure or non-availability of the communications or other equipment, each Party affected shall use all reasonable efforts to agree promptly on the use and implementation of alternative, effective and secure means of communication (and, in default of agreement, notices or other communications shall be by letter delivered or sent in accordance with Clause 75). 3.3 Authorised persons: Upon written request of the Pool Funds Administrator each Pool Member shall (and may of its own accord) provide the Pool Funds Administrator in writing with the name of, and communication details for, one or more individuals ("Authorised Persons") who are authorised (and, until it receives written notice to the contrary, the Pool Funds Administrator shall be entitled to assume that they are authorised) to take action on behalf of such Pool Member in respect of all communications and other dealings under this Schedule between the Pool Funds Administrator and such Pool Member. Each Pool Member shall promptly advise the Pool Funds Administrator in writing of any change of any such individual or his communication details. The Pool Funds Administrator shall notify all Pool Members and the Executive Committee of the names and communication details of all Authorised Persons and of any change in any such individual or his communication details. 4. BANKING SYSTEM 4.1 Funds Transfer Agreement: On the Effective Date the Pool Funds Administrator, the Pool Banker, each Pool Member and NGC (in each case as at such date) entered into the Funds Transfer Agreement. 4.2 Establishment of Accounts: The Pool Funds Administrator shall establish and operate in accordance with the Agreement and the Funds Transfer Agreement a Pool Clearing Account to and from which all payments calculated in accordance with this Schedule are to be made, a Pool Reserve Account from which any debit balances on the Pool Clearing Account at the close of banking business on each Business Day shall be settled or reduced in accordance with this Schedule, a Collection Account at each bank at which, from time to time, any Pool Member, the Ancillary Services Provider or the Grid Operator maintains a Settlement Account and such other accounts (including a Pool Borrowing Account on which the Pool Funds Administrator may make drawings under the Credit Facility) as the Pool Funds Administrator (with the prior written consent of the Executive Committee) considers desirable to enable it efficiently to perform any obligations imposed on it pursuant to the Agreement. Each Pool Account shall be in the name of the Pool Funds Administrator and (save for the Pool Borrowing Account) shall be designated as being held in trust in accordance with the provisions of Section 5. The Pool Funds Administrator shall not commingle any funds standing to the credit of any Pool Account with its own personal funds. 4.3 Rights and obligations under Funds Transfer Agreement: The Pool Funds Administrator is authorised by the Pool Members, the Ancillary Services Provider and the Grid Operator to exercise the rights granted to it under, and shall perform its obligations pursuant to, the Funds Transfer Agreement except that it shall not remove the Pool Banker without the prior written consent of the Executive Committee; and that at the request of the Executive Committee it shall remove the Pool Banker in accordance with the Funds Transfer Agreement. Subject to the agreement of the Pool Banker, the Parties agree promptly to give effect to any amendment to the Funds Transfer Agreement as may be required by the Executive Committee. 4.4 Settlement Account: Each Pool Member, the Ancillary Services Provider and the Grid Operator shall deliver to the Pool Funds Administrator, in the case of a Pool Member, not later than the later of the Effective Date and 10 Business Days (or such lesser number of Business Days as the Executive Committee may, in respect of any Pool Member, by notice to such Pool Member and the Pool Funds Administrator specify) before it is admitted as a Pool Member, in the case of the Ancillary Services Provider, not later than the later of the Effective Date and the date of its admission as a Party and, in the case of the Grid Operator, not later than the date on which the Grid Operator first becomes a Pool Debtor, a duly completed and signed Settlement Account Designation providing details of the Settlement Account to which the Pool Funds Administrator is instructed to make payments to such person and, if such person wishes to designate a second account as its Settlement Account from which payments due from such person are to be transferred in accordance with this Schedule, providing details of such other account. 4.5 Further information: Each Pool Member, the Ancillary Services Provider and the Grid Operator shall also supply to the Pool Funds Administrator and the Executive Committee such information or (as the case may be) further information concerning its Settlement Account as shall be reasonably requested by the Executive Committee or the Pool Funds Administrator. 4.6 Change of Settlement Account: Each Pool Member, the Ancillary Services Provider and the Grid Operator may, in consultation with the Pool Funds Administrator and the Pool Banker, change its Settlement Account at any time by delivering to the Pool Funds Administrator and the Pool Banker a duly completed and signed notice substantially in the form set out in Part 2 of Annex 3 (or in such other form as may from time to time be specified by the Executive Committee) specifying the effective date of the change (which shall be no less than 10 Business Days after the notice is received by the Pool Funds Administrator). 4.7 Maintenance of Settlement Account and Settlement Bank Mandate: Each Pool Member, the Ancillary Services Provider and the Grid Operator shall, unless otherwise agreed by the Executive Committee, at all times maintain a Settlement Account and the Pool Funds Administrator shall enter into and maintain a Settlement Bank Mandate with each of the relevant Settlement Banks. 4.8 Details of Accounts: The Pool Funds Administrator shall supply full details to each Pool Member, the Ancillary Services Provider and the Grid Operator of the Pool Clearing Account, the Pool Reserve Account and any relevant Collection Account and, for so long as it is maintained, the Pool Borrowing Account and shall supply the Executive Committee with full details of all Pool Accounts and Settlement Accounts. 5. ESTABLISHMENT OF TRUSTS 5.1 Trusts: The Pool Funds Administrator shall hold all moneys deposited with or paid to it (other than Pool Reserve Assets) and such rights as may from time to time be vested in it with regard to payment by Pool Members (apart from fees owed or paid to it for its services in accordance with Schedule 15 and any amounts payable to it pursuant to that Schedule upon its removal as Pool Funds Administrator or the expiry or termination of its appointment as such), by and from each Pool Debtor or with regard to the provision of Security Cover by each Pool Member or the Grid Operator including:- 5.1.1 subject as provided in sub-section 5.2, all moneys from time to time standing to the credit of each Pool Account other than the Pool Reserve Account and the Pool Borrowing Account; 5.1.2all rights of the Pool Funds Administrator to call for payment or Security Cover; 5.1.3 the Letters of Credit and all rights to, and (subject to sub-section 15.5) moneys representing, any proceeds therefrom other than proceeds repayable by loan in accordance with paragraphs 5.12.5 and 5.16; and 5.1.4 any interest received or receivable in respect of a Pool Debt or a Pool Account (other than interest on the Pool Reserve Account), on trust for Pool Creditors in accordance with their respective individual entitlements as they arise in accordance with the Agreement. Upon termination of the said trust any residual balance after satisfaction of the entitlement of all Pool Creditors shall be held for Providing Members, the Ancillary Services Provider and the Grid Operator in accordance with their respective individual entitlements as they arise in accordance with the Agreement. 5.2 Trusts in respect of the Credit Facility: The Pool Funds Administrator shall hold all moneys from time to time standing to the credit of the Pool Clearing Account on trust first for the Facility Bank to the extent that there is an aggregate amount outstanding under the Credit Facility but on terms that no funds shall be withdrawn in favour of the Facility Bank except in satisfaction of a payment due to the Facility Bank under the terms of the Credit Facility or in accordance with this Schedule and on terms that the Pool Funds Administrator will be entitled to make payments out of the account to Pool Members and other Parties in accordance with the other provisions of this Schedule. 5.3 Rights of Pool Creditors other than the Ancillary Services Provider: The respective rights of Pool Creditors other than the Ancillary Services Provider to the assets held by the Pool Funds Administrator on the trusts set out in sub-section 5.1 shall be determined in accordance with the Agreement and in accordance with the following principles:- 5.3.1 the extent of each Pool Creditor's individual rights shall be deemed to consist of the aggregate of the claims (to the extent not paid or otherwise satisfied) of such Pool Creditor in respect of each Settlement Period; and 5.3.2 the assets referred to in sub-section 5.1 shall be deemed to consist of a series of funds, each fund representing the rights or moneys owed, paid, held or otherwise attributable to each Settlement Period. The Pool Funds Administrator shall not be obliged to segregate moneys into separate funds. 5.4 Rights of Ancillary Services Provider: The rights of the Ancillary Services Provider to assets held on trust shall be determined in accordance with Section 23 of Schedule 9. 5.5 Trusts in respect of Pool Reserve Assets: The Pool Funds Administrator shall stand possessed of the Pool Reserve Assets on the following trusts, that is to say:- 5.5.1 at any time when no amounts owed by Pool Debtors are overdue, on trust to repay (subject to and in accordance with the provisions of sub-sections 5.8 and 5.9) to each Providing Member and the Grid Operator the respective share of such Providing Member or (as the case may be) the Grid Operator (determined in accordance with sub-section 5.13) of the Pool Reserve Assets; and 5.5.2 with automatic effect as soon as any amount owed by a Pool Debtor becomes overdue, to hold an amount of the moneys credited from time to time to the Pool Reserve Account equal to the Shortfall or the amount held in the Pool Reserve Account attributable to such Pool Debtor (whichever is less) on the trusts set out in sub-section 5.1 and the balance (if any) shall be held on the trusts set out in paragraph 5.5.1. 5.6 Overdue amounts: In respect of a Pool Debtor and for the purposes of sub-section 5.5, an amount shall be deemed to become overdue at the time at which the Pool Funds Administrator becomes aware that such Pool Debtor has not made or will not make by 12.30 hours payment in full to the credit of the Collection Account of such Pool Debtor of such an amount as it is required on such day to make and, for as long as the Credit Facility remains unconditionally available, the Pool Funds Administrator considers in good faith that the amount in default is not likely to be remedied on the next Business Day and the amount overdue shall be the amount of the Shortfall. 5.7 Shortfall: The term "Shortfall", as used in this Section 5, means the amount from time to time of Notified Payments which have become overdue by application of the rule set out in sub-section 5.6 and which have not subsequently been paid (whether by remittance from a Pool Debtor, payment out of the Pool Reserve Account or a call under a Letter of Credit). To the extent that the Pool Funds Administrator is unable to determine the precise amount of a Shortfall, it shall be deemed to be such amount as the Pool Funds Administrator and the Pool Banker shall agree, or failing agreement, the entire amount of the Notified Payment. 5.8 Providing Members' and the Grid Operator's rights to funds: Each Providing Member and the Grid Operator remitting funds for credit to the Pool Reserve Account agrees that the following terms shall apply. None of the remittances shall be repayable until a Providing Member has ceased to be a Pool Member or (as the case may be) the Grid Operator has ceased to be a Party and has paid in full all amounts actually or contingently owed by it to any Pool Creditor, the Settlement System Administrator or the Pool Funds Administrator. Furthermore, if and to the extent that, at any time when an amount would be repayable to a Providing Member or the Grid Operator pursuant to this sub-section 5.8, all or any part of the Providing Member's or the Grid Operator's interest in the Pool Reserve Assets is represented by a loan to a Pool Member or the Grid Operator deemed to be made in accordance with paragraph 21.1.3 or 21.1.5 the rights of a Providing Member or (as the case may be) the Grid Operator as against the Pool Funds Administrator to receive a payment of its share in the Pool Reserve Assets (or the relevant portion of such share) shall be conditional on repayment in full of the relevant loan. 5.9 Funds not to be withdrawn: Each Providing Member and the Grid Operator undertakes not to seek withdrawal of any funds to which it may be entitled except in the circumstances permitted by sub-section 5.10 or 16.7. The Pool Funds Administrator shall be entitled to disregard any purported notice of withdrawal not complying with this sub-section 5.9. 5.10 Providing Members' and Grid Operator's rights to withdraw funds: Notwithstanding sub-sections 5.8 and 5.9, if a Providing Member or (as the case may be) the Grid Operator is not in default in respect of any amount owed to a Pool Creditor:- 5.10.1 the Pool Funds Administrator shall transfer to the relevant Providing Member or the Grid Operator quarterly its share of interest credited to the Pool Reserve Account; and 5.10.2 the Pool Funds Administrator shall transfer to such Providing Member or the Grid Operator within a reasonable time after a written request of such Providing Member or (as the case may be) the Grid Operator therefor any amount of cash which exceeds the amount which such Providing Member or the Grid Operator is required to maintain in the Pool Reserve Account from time to time in accordance with Section 16. 5.11 Waiver of Providing Members' and Grid Operator's rights: Each Providing Member and the Grid Operator waives any right it might otherwise have to set off against any obligation owed to the Pool Funds Administrator, the Pool Banker, any Pool Member, the Ancillary Services Provider or the Grid Operator any claims such Providing Member or the Grid Operator may have to or in respect of the Pool Reserve Assets. 5.12 Pool Reserve Assets: "Pool Reserve Assets" means the aggregate of:- 5.12.1 amounts from time to time credited to the Pool Reserve Account; 5.12.2 amounts which any Providing Member or the Grid Operator is from time to time obliged to pay to the Pool Funds Administrator for credit to the Pool Reserve Account and claims in respect of such amounts; 5.12.3 interest accrued and accruing on the Pool Reserve Account; 5.12.4 any amounts credited to the Pool Reserve Account pursuant to paragraph 15.4.3; and 5.12.5 any loans deemed to be made from any amounts credited to the Pool Reserve Account pursuant to paragraph 21.1.3 or 21.1.5. 5.13 Providing Members' and Grid Operator's rights and interests in the Pool Reserve Account: At any time when it is necessary to determine the respective rights and interests of Providing Members and the Grid Operator in and to funds standing to the credit of the Pool Reserve Account, such rights shall be determined in accordance with the following rules:- 5.13.1 any amount withdrawn from the Pool Reserve Account following the occurrence of a Shortfall which the Pool Funds Administrator has determined to be attributable to a particular Providing Member or (as the case may be) the Grid Operator (the "Relevant Provider") (irrespective of the existence or otherwise of actual fault on the part of the Relevant Provider) shall in the first instance reduce pro tanto the Relevant Provider's interest in the Pool Reserve Assets; 5.13.2 if, in any circumstances described in paragraph 5.13.1, the Shortfall exceeds the Relevant Provider's interest in the Pool Reserve Account, then any excess required to be withdrawn from the Pool Reserve Account shall reduce the respective interests of Providing Members and the Grid Operator, other than the Relevant Provider, in proportion to their respective interests in the Pool Reserve Account prior to the withdrawal; 5.13.3 any proceeds of a Letter of Credit which are to be credited to the Pool Reserve Account pursuant to sub-section 5.16, and any amounts paid by a Relevant Provider to make up a payment out of the Pool Reserve Account, shall be applied in priority in or towards reinstating (rateably among themselves) the respective interests of Providing Members and the Grid Operator other than the Relevant Provider in the Pool Reserve Account; 5.13.4 subject to the rules set out in paragraphs 5.13.1 to 5.13.3 (inclusive), the respective rights of each Providing Member and the Grid Operator in and to funds standing to the credit of the Pool Reserve Account shall be to receive (subject to sub-sections 5.8 and 5.9) an amount equal to the aggregate amounts remitted by the Providing Member and the Grid Operator to the Pool Reserve Account and not subsequently withdrawn, together with a proportionate share of any interest from time to time credited to the Pool Reserve Account; and 5.13.5 in the absence of a Shortfall, any amounts credited to the Pool Reserve Account following a call under a Letter of Credit pursuant to sub-section 15.5 shall be considered as an interest in the Pool Reserve Assets of the Relevant Provider in respect of the relevant Letter of Credit. 5.14 Overpayments to be held on trust: If and to the extent that payments under this Schedule actually made on any day by the Pool Funds Administrator to Pool Members or the Ancillary Services Provider in respect of supplies of electricity under the Agreement or the provision of Ancillary Services do not correspond exactly with their respective payment entitlements established in accordance with the Agreement in relation to supplies of electricity or the provision of Ancillary Services in respect of that same day, then the person receiving any overpayment shall receive and be deemed to hold the amount of such overpayment on trust for the Pool Member or rateably for the Pool Members, the Ancillary Services Provider or (as the case may be) for the Grid Operator which, in respect of that same day was (were) underpaid and, on the written instruction of the Pool Funds Administrator, shall account in accordance with sub-section 23.2 to the Pool Funds Administrator accordingly for redistribution of the moneys. 5.15 Reimbursement of overpayments: Subject to sub-sections 5.8 and 5.14, all payments under this Schedule shall be made on the basis that a Pool Member or the Grid Operator shall only be entitled to claim reimbursement of an overpayment made by it (whether to the Pool Funds Administrator or (through the Pool Funds Administrator) to another Pool Member, the Ancillary Services Provider or the Grid Operator) if, and then only to the extent that:- (a) the aggregate amounts paid by the Pool Member or (as the case may be) the Grid Operator in respect of the relevant Payment Date exceed (b) the total amounts payable by that Pool Member or (as the case may be) the Grid Operator to Pool Creditors in respect of that Payment Date together with all amounts (if any) overdue by that Pool Member or (as the case may be) the Grid Operator in respect of periods prior to the relevant Payment Date. 5.16 Repayment of loans: Notwithstanding their rights pursuant to sub-section 5.1 in and to Letters of Credit and the proceeds thereof, Pool Creditors agree that if:- 5.16.1 a payment is received under a Letter of Credit after a sum has been withdrawn from the Pool Reserve Account to make good (in whole or in part) a discrepancy between amounts owed and amounts received by the due time on a particular Payment Date; and 5.16.2 the aggregate of the amounts paid out of the Pool Reserve Account and paid under the Letter of Credit exceeds the amounts owed in respect of the relevant Payment Date, then any excess paid under the Letter of Credit over the amount then remaining unpaid in respect of the relevant Payment Date shall be credited to the Pool Reserve Account. Where appropriate, any such credit shall pro tanto constitute repayment of any loans deemed to be made pursuant to paragraphs 21.1.3 or 21.1.5. 5.17 No claim for breach of trust: Provided that the Pool Funds Administrator carries out its duties under the Agreement, none of the Pool Members, Ancillary Services Provider nor the Grid Operator shall have any claim against the Pool Funds Administrator for breach of trust or fiduciary duty arising solely out of any discrepancy between payments actually made in respect of any day and the entitlement of Pool Members, Ancillary Services Provider or the Grid Operator to receive payments in respect of that same day. 6. POOL LEDGER ACCOUNTS 6.1 Maintenance of Pool Ledger Accounts: The Pool Funds Administrator shall maintain ledger accounts showing all amounts payable and receivable by each Pool Member, the Ancillary Services Provider and the Grid Operator according to calculations made and notifications issued by the Pool Funds Administrator pursuant to this Schedule. 6.2 Ledger extracts: Each Pool Member, the Ancillary Services Provider and the Grid Operator shall be entitled to receive a quarterly extract of the ledger account which is relevant to it showing all amounts debited and credited to its account provided that, if a Pool Member, the Ancillary Services Provider or the Grid Operator so requests of the Pool Funds Administrator, it shall be entitled to receive a monthly extract of such ledger account. 6.3 Certified copy extracts: Without prejudice to the generality of the general duties and responsibilities of the Pool Funds Administrator set out in Schedule 15, in the event of any enforcement proceedings being brought by a Pool Creditor against a non-paying Pool Member or the Grid Operator, the Pool Funds Administrator shall forthwith upon request being made to it at the cost of the requesting Pool Creditor provide a certified copy of an extract of the ledger accounts sufficient to establish the details of each transaction in respect of which the Pool Creditor has a claim against the non-paying Pool Member or the Grid Operator. 6.4 Confidentiality: The ledger accounts maintained by the Pool Funds Administrator shall be kept confidential in accordance with Part XVIII of the Agreement from Committee Members and from all Pool Members and the Grid Operator (except as required pursuant to Clause 63.1.5 or 63.1.6 or sub-section 6.2 or 6.3) but the Pool Funds Administrator shall disclose such ledger accounts to the Pool Auditor for the purpose of any audit requested to be conducted pursuant to Part IX of the Agreement. 6.5 Information: Any extract of a ledger account of any other records, data or information provided pursuant to Clause 63.1.5 or 63.1.6 or sub-section 6.2 (collectively referred to in this Section 6 as the "information") shall, save in the case of manifest error, be deemed prima facie evidence of its contents. 6.6 Review of extracts: Each Pool Member, the Ancillary Services Provider and the Grid Operator shall promptly review all extracts of ledger accounts sent to it and shall (without prejudice to any of its rights under the Agreement) where practicable within 10 Business Days after receiving such information notify the Pool Funds Administrator of any errors in such account of which it is aware. 6.7 Dispute of accuracy: If the Pool Funds Administrator at any time receives a notice disputing the accuracy of any ledger account, records, data or information, it shall consult with the Pool Member who gave the notice, the Ancillary Services Provider or (as the case may be) the Grid Operator and each shall use all reasonable endeavours to agree the information. Promptly after agreement is reached, the Pool Funds Administrator shall, if necessary, issue corrected information and notifications under the provisions of sub-section 17.8. [Sections 7 to 14 (inclusive) not used]. PART 3 SECURITY COVER AND CREDIT MONITORING 15. SECURITY COVER 15.1 Provision of Security Cover: Each Providing Member and the Grid Operator shall provide Security Cover from time to time in accordance with the following provisions:- 15.1.1 each Providing Member and the Grid Operator (with the exception of any entity of or wholly-owned or Controlled by the United Kingdom Government) shall:- (a) deliver to the Pool Funds Administrator evidence reasonably satisfactory to the Executive Committee that:- (i) it presently holds an Approved Credit Rating; or (ii) it has provided and is not in default under alternative or additional security as may be approved from time to time by unanimous decision of all Committee Members (Committee Members being under no obligation to approve any such security); or (b) comply with the provisions of paragraph 15.1.3; 15.1.2 in addition to the provisions of paragraph 15.1.1 but subject as provided in Sections 21.12 and 25:- (a) each Supplier (including any Supplier which is an entity of or wholly-owned or Controlled by the United Kingdom Government) shall, not later than the date of its admission as a Pool Member, deliver to the Pool Funds Administrator:- (i) a Letter of Credit (available for an initial period of not less than 12 months); and (ii) cash for credit to the Pool Reserve Account, in both cases in such amount as shall be notified by the Executive Committee in accordance with Section 16; and (b) each Providing Member, not being a Supplier, (including any entity of or wholly-owned or Controlled by the United Kingdom Government and not referred to in paragraph 15.1.2(a) above) shall, not later than the date of its admission as a Pool Member or 31st March, 1995 (whichever is the later) and the Grid Operator shall, not later than 1st April, 1997, deliver to the Pool Funds Administrator:- (i) a Letter of Credit (available for an initial period of not less than 12 months); and (ii) cash for credit to the Pool Reserve Account, in both cases in such amount as shall be notified by the Executive Committee in accordance with Section 16; 15.1.3 each Providing Member and the Grid Operator mentioned in paragraph 15.1.1 to which paragraph (b) of paragraph 15.1.1 applies and (if paragraph (b) of paragraph 15.1.1 applies to it) the Grid Operator shall immediately be required (in addition to its obligations, if any, under paragraph 15.1.2) to deliver to the Pool Funds Administrator a Letter of Credit (available for an initial period of not less than 12 months) or cash for credit to the Pool Reserve Account in such amount and in such proportions as shall be notified by the Executive Committee in accordance with Section 16. 15.2 Letters of Credit: For the avoidance of doubt nothing in sub-section 15.1 or 15.6 shall prevent any Providing Member or the Grid Operator from delivering a single Letter of Credit in respect of its obligations under paragraphs 15.1.2 and 15.1.3. 15.3 Cash deposit: Any cash amount delivered to the Pool Funds Administrator for credit to the Pool Reserve Account shall be held on the terms set out in Section 5. Amounts standing to the credit of the Pool Reserve Account shall bear interest at the Reserve Interest Rate. 15.4 Maintenance of Security Cover: Each Providing Member and the Grid Operator shall be required to provide and at all times thereafter maintain a Security Amount equal to or more than the Security Cover applicable to it in such aggregate amount as shall be set from time to time in accordance with this Part 3. Immediately upon any reduction occurring in the Security Amount provided by any Providing Member or the Grid Operator or any Letter of Credit being for any reason drawn down (and including the deemed making of any loan to that Providing Member or the Grid Operator under the provisions of paragraph 21.1.3 or 21.1.5) the Providing Member or (as the case may be) the Grid Operator will procure that new Letters of Credit are issued or existing Letters of Credit are reinstated (to the satisfaction of the Pool Funds Administrator) to their full value or that cash is placed to the credit of the Pool Reserve Account in an amount required to restore the Security Amount to an amount at least equal to the Security Cover applicable to the Providing Member or (as the case may be) the Grid Operator and in such proportions of Letters of Credit and cash as this Part 3 requires. Not later than 10 Business Days before any outstanding Letter of Credit is due to expire, the Providing Member or the Grid Operator providing such Letter of Credit shall procure to the satisfaction of the Pool Funds Administrator that its required Security Amount will be available for a further period of not less than 12 months which may be done in one of the following ways:- 15.4.1 (subject to the issuing bank continuing to have the credit rating referred to in sub-section 15.6) provide the Pool Funds Administrator with confirmation from the issuing bank that the validity of the Letter of Credit has been extended for a period of not less than 12 months on the same terms and otherwise for such amount as is required by this Part 3; or 15.4.2 provide the Pool Funds Administrator with a new Letter of Credit issued by an issuing bank with the credit rating required by this Schedule for an amount at least equal to the required Security Amount applicable to it (less its balance on the Pool Reserve Account) which Letter of Credit shall be available for a period of not less than 12 months; or 15.4.3 procure such transfer to the Pool Funds Administrator for credit to the Pool Reserve Account as shall ensure that the credit balance applicable to it standing to the credit of the Pool Reserve Account shall be at least equal to the required Security Amount. 15.5 Failure to supply Security Cover: If a Providing Member or the Grid Operator fails at any time to provide Security Cover to the satisfaction of the Pool Funds Administrator in accordance with the provisions of this Section 15, the Pool Funds Administrator may at any time while such default continues, and if at such time any Letter of Credit forming part of the Security Cover is due to expire within nine Business Days it shall immediately, and without notice to such Providing Member or (as the case may be) the Grid Operator, demand payment of the entire amount of any outstanding Letter of Credit and shall credit the proceeds of the Letter of Credit to the Pool Reserve Account to be held on the terms and on the trusts set out in Section 5. 15.6 Substitute Letter of Credit: If the bank issuing the Letter of Credit of any Providing Member or the Grid Operator ceases to have the credit rating as is set out in sub-section 1.1 under "Letter of Credit", such Providing Member or (as the case may be) the Grid Operator shall forthwith procure the issue of a substitute Letter of Credit by a bank that has such credit rating. 16. CREDIT MONITORING 16.1 Determination of Security Cover: The amount of Security Cover which each Providing Member and the Grid Operator shall be required to maintain and, in respect of the amounts of Security Cover to be provided under paragraph 15.1.2 (so long as applicable) and paragraph 15.1.3 the proportions as between cash and Letter of Credit that may be permitted, shall be determined from time to time by the Executive Committee in consultation with the Pool Funds Administrator in accordance with this Section 16 and on the basis of the criteria set out in sub-section 16.2, and shall be notified to such Providing Member or (as the case may be) the Grid Operator, and to the Pool Funds Administrator. 16.2 Criteria for provision of Security Cover: 16.2.1 If paragraph (b) of paragraph 15.1.1 applies to a Providing Member or the Grid Operator, the amount of Security Cover required to be provided by such Providing Member or (as the case may be) the Grid Operator in addition to the amounts referred to in paragraph 15.1.2 (so long as applicable) shall be provided by Letter of Credit in an amount to be assessed by the Executive Committee in consultation with the Pool Funds Administrator as the aggregate amounts payable pursuant to the Agreement by the relevant Providing Member or (as the case may be) the Grid Operator in respect of purchases of, or as the case may be, prospective purchases of electricity (including Ancillary Services) made by the relevant Providing Member or in respect of sums payable in accordance with Clause 49 of the Agreement by the Grid Operator over a 28 day period, as determined by the Executive Committee provided that with the approval of the Executive Committee, all or part of the required Security Cover may be provided in cash credited to the Pool Reserve Account. 16.2.2 In respect of all Providing Members and the Grid Operator, the amounts required to be provided by each of them which are referred to in paragraph 15.1.2 (so long as applicable) shall (subject as provided in sub-section 21.12 and Section 25) be initially as to a minimum of 20 per cent. in cash and the remainder by way of Letter of Credit, and thereafter as revised by the Executive Committee. Such amounts shall be assessed by the Executive Committee in consultation with the Pool Funds Administrator to cover banking error and to minimise reductions of payments to Pool Creditors. 16.3 Six monthly variation: In respect of paragraphs 16.2.1 and 16.2.2, the Executive Committee shall calculate two amounts for the two six-month periods commencing 1st April and 1st October in each year and shall advise the Pool Funds Administrator and the relevant Providing Members or (as the case may be) the Grid Operator accordingly. Such six monthly variation shall not apply to paragraph 16.2.2 where Section 25 is applicable. 16.4 Review of Security Cover: The Pool Funds Administrator shall keep under review the Security Amounts relating to each Providing Member and the Grid Operator and shall promptly advise the Executive Committee, the relevant Providing Member or (as the case may be) the Grid Operator whenever the Security Cover maintained by such Providing Member or (as the case may be) the Grid Operator is significantly more or less than the amount required to be maintained pursuant to this Part 3. 16.5 Increase or Decrease of Security Cover: If, after considering the recommendations of the Pool Funds Administrator and any representations which may be made by the relevant Providing Member or (as the case may be) the Grid Operator, the Executive Committee determines that the Security Cover of a Providing Member or the Grid Operator should be increased or decreased, it shall so notify the Providing Member or the Grid Operator (as the case may be), the Pool Funds Administrator and the Director. If the Executive Committee determines that such Security Cover should be decreased, the Providing Member or (as the case may be) the Grid Operator consents and the Director so approves, that reduction shall take place. The Pool Funds Administrator shall consent to an appropriate reduction in the available amount of any outstanding Letter of Credit and/or shall repay to the Providing Member or (as the case may be) the Grid Operator such part of the deposit held in the Pool Reserve Account for the account of such Providing Member or the Grid Operator (together with all accrued interest on the part to be repaid) sufficient to reduce the Providing Member's or Grid Operator's Security Amount to the level of Security Cover applicable to it. If the Executive Committee determines that the Providing Member's or the Grid Operator's Security Cover should be increased, the relevant Providing Member or (as the case may be) the Grid Operator shall, within five Business Days of notice as aforesaid, procure an additional or replacement Letter of Credit or transfer to the Pool Funds Administrator a cash deposit for credit to the Pool Reserve Account in an amount sufficient to increase its Security Amount so as to be at least equal to the level of Security Cover applicable to it. 16.6 Notification in respect of Security Cover: The Pool Funds Administrator shall notify the Executive Committee, the Settlement System Administrator and the Director promptly if:- 16.6.1 a Providing Member or the Grid Operator fails to provide, extend or renew a Letter of Credit which it is required to maintain pursuant to Section 15; or 16.6.2 the Pool Funds Administrator shall make a call under any such Letter of Credit; or 16.6.3 the Pool Funds Administrator becomes aware that a Providing Member or the Grid Operator (a) shall cease to retain an Approved Credit Rating, or (b) shall be placed on credit watch by the relevant credit rating agency (or becomes subject to an equivalent procedure) which in any case casts doubt on the Providing Member or the Grid Operator retaining an Approved Credit Rating, or (c) shall be in default under the additional or alternative security referred to in paragraph 15.1.1; or 16.6.4 the Security Amount in relation to any Providing Member or the Grid Operator is at any time less than the level of its required Security Cover for the time being; or 16.6.5 the Pool Funds Administrator becomes aware that any bank that has issued a Letter of Credit which has not expired ceases to have the credit rating required by this Schedule. 16.7 Release from Security Cover Obligations: Upon a Providing Member ceasing to be a Pool Member or the Grid Operator ceasing to be a Party to the Agreement (as the case may be) and provided that all amounts owed by the Providing Member or the Grid Operator have been duly and finally paid and that it is not otherwise in default in any respect under the Agreement, the Providing Member or the Grid Operator shall be released from the obligation to maintain Security Cover and the Pool Funds Administrator shall consent to the revocation of any outstanding Letter of Credit. 16.8 No liability for amount of Security Cover: Any recommendations made by the Pool Funds Administrator pursuant to this Section 16 shall be given in good faith. Any instructions given by the Executive Committee in respect of the amount of Security Cover to be maintained by a Providing Member or the Grid Operator if given in good faith shall, insofar as applicable in terms of this Schedule, be binding on all Pool Members, the Ancillary Services Provider and the Grid Operator and neither the Pool Funds Administrator nor any Committee Member shall incur any liability by reason of the Security Cover of a Providing Member or the Grid Operator proving to be inadequate or excessive. PART 4 BILLING AND PAYMENT PROCEDURES 17. RECEIPT AND VERIFICATION OF INFORMATION 17.1 Receipt of Information from Settlement System Administrator: Not later than 12.00 hours on the Notification Date the Pool Funds Administrator shall require of, and take all steps available to it to procure from, the Settlement System Administrator, and the Settlement System Administrator shall use its best endeavours to provide to the Pool Funds Administrator, the information referred to in sub-sections 17.2 to 17.5 (inclusive) concerning supplies of electricity, the provision of Ancillary Services and the sums payable in relation to Transport Uplift in respect of each Settlement Day. 17.2 Information for each Settlement Day: The information required in respect of each Settlement Day is as follows:- 17.2.1 the Settlement Day; 17.2.2 the corresponding Payment Date; 17.2.3 the Settlement Run identification number; 17.2.4 the total amount owing in accordance with the Agreement (exclusive of United Kingdom Value Added Tax) in respect of electricity supplied and Ancillary Services provided and Transport Uplift due during each Settlement Day; and 17.2.5 the total amount owing (exclusive of United Kingdom Value Added Tax) in respect of Ancillary Services provided during each Settlement Day. 17.3 Information - taking of electricity: The information required in respect of each Pool Member taking electricity in each Settlement Day is as follows:- 17.3.1 the Pool Member's identification number; 17.3.2 the Pool Member's name; and 17.3.3 the total amount owing in accordance with the Agreement (exclusive of United Kingdom Value Added Tax) in respect of electricity taken by such Pool Member during each Settlement Day. 17.4 Information - provision of electricity: The information required in respect of each Pool Member providing electricity during each Settlement Day is as follows:- 17.4.1 the Pool Member's identification number; 17.4.2 the Pool Member's name; and 17.4.3 the total amount owing in accordance with this Agreement (exclusive of United Kingdom Value Added Tax) in respect of electricity provided by such Pool Member during each Settlement Day. 17.5 Information - Ancillary Services Provider and Grid Operator: The information required in relation to the Ancillary Services Provider and the Grid Operator in respect of each Settlement Day is the total amount receivable in accordance with the Agreement by the Ancillary Services Provider (exclusive of United Kingdom Value Added Tax) for the provision of Ancillary Services during each Settlement Day and the total amount (exclusive of United Kingdom Value Added Tax) payable by the Grid Operator in relation to Transport Uplift (including in relation to Ancillary Services) during each Settlement Day. 17.6 Verification of Information: Upon receipt of the information supplied by the Settlement System Administrator, the Pool Funds Administrator shall verify whether, on the basis of such information, the sum of the amounts shown to be receivable by each Pool Member in respect of its sales of electricity plus the amount shown to be payable to the Ancillary Services Provider in respect of its provision of Ancillary Services on the relevant Settlement Day is equal to the sum of the amounts shown to be payable by each Pool Member in respect of its purchases of electricity on the same Settlement Day and by the Grid Operator in relation to Transport Uplift. 17.7 Deemed Verification: Unless the Pool Funds Administrator shall, by close of business on the Notification Date, otherwise inform the Settlement System Administrator, each Pool Member, the Ancillary Services Provider and the Grid Operator to the contrary before the Payment Date, the information provided by the Settlement System Administrator shall be deemed to be verified. 17.8 Rectification of Errors: If the Pool Funds Administrator determines that the information provided by the Settlement System Administrator cannot be verified in accordance with sub-section 17.6, it shall as soon as possible notify the Settlement System Administrator, each Pool Member, the Ancillary Services Provider and the Grid Operator accordingly and require the Settlement System Administrator to correct any errors and obtain the Pool Funds Administrator's verification of the corrected information as quickly as possible. As soon as the Pool Funds Administrator verifies that the information provided by the Settlement System Administrator can be verified in accordance with sub-section 17.6, the Pool Funds Administrator shall notify the Settlement System Administrator, each Pool Member, the Ancillary Services Provider and the Grid Operator of the verified information required to be given pursuant to sub-section 17.6. The Settlement System Administrator shall use its best endeavours to provide such corrected information as may be necessary for the Pool Funds Administrator to issue verification. 17.9 Amounts in Advice Notes; Adjustments: 17.9.1 The amounts to be incorporated in the Advice Notes in accordance with sub-section 18.1 (and in all cases together with United Kingdom Value Added Tax thereon) shall be:- (a) if verification has been made in accordance with sub-section 17.6, the full relevant amounts so verified; (b) to the extent verification can reasonably be made in circumstances where all the information cannot be fully verified as described in sub-section 17.6, those amounts which are shown against the name of each Pool Debtor in such information as is received under the provisions of sub-section 17.1 (whether or not such information is an estimate only) and such amounts will be shared amongst the relevant Pool Creditors in the proportion which the amount shown as due to each of them in such information as aforesaid bears to the amounts which are so shown as due to all of them; and (c) to the extent that for any reason whatever the amounts to be paid cannot be verified at all (including, but not limited to, application of Force Majeure and failure to provide information on the part of the Settlement System Administrator) or the appropriate calculations to permit payment in accordance with sub-paragraph (b) above cannot properly be made, the same as the amounts calculated as being payable by and to Pool Members, to the Ancillary Services Provider and by the Grid Operator in respect of the last same day of the week in respect of which payments were verified under sub-section 17.6 (provided that any Pool Member who was not at that earlier time a Pool Member, or vice versa, shall be ignored and such adjustment made as the Pool Funds Administrator considers appropriate). 17.9.2 In the event that payments are made in the circumstances set out in paragraph 17.9.1(b) or (c), the Settlement System Administrator in conjunction with the Pool Funds Administrator shall, as soon as actual verification can thereafter be made, make such adjustments as may be necessary (and, where relevant, apply interest at the Reserve Interest Rate or at such rate as shall be set from time to time by the Executive Committee) to account for any differences between payments made and actual verified payment information. 17.10 Postponed Payment Date: If for any reason beyond the reasonable control of the Pool Funds Administrator it is not possible, after application of sub-section 17.9, for the Pool Funds Administrator to determine by the close of business on the Notification Date the amounts to be incorporated in the Advice Notes, the Pool Funds Administrator shall inform the Settlement System Administrator, each Pool Member, the Ancillary Services Provider and the Grid Operator that the Payment Date shall be postponed so that it falls on the second Business Day after the day on which the Pool Funds Administrator verifies the information provided by the Settlement System Administrator pursuant to sub-section 17.6 (any such Payment Date being the "Postponed Payment Date" and a reference to a Payment Date in this Schedule shall where applicable include a reference to a Postponed Payment Date). On the Postponed Payment Date, each Pool Member who took electricity on the Settlement Day to which the Postponed Payment Date applies and the Grid Operator shall pay interest on all such amounts for each day from and including the originally scheduled Payment Date to (but excluding) the Postponed Payment Date at such rate as shall be set from time to time by the Executive Committee or, in the absence of such rate, at the Reserve Interest Rate and all Pool Members who supplied electricity and the Ancillary Services Provider on such Settlement Day shall be entitled to receive in addition to the amounts that they are entitled to receive in respect of such supplies, interest on such amounts for each day during the same period and at the same rate. Interest shall accrue from day to day and shall be calculated by the Pool Funds Administrator on a 365 day year basis. 17.11 Further notification: Where instructed by the Executive Committee, or where there is an award by a Court of competent jurisdiction or an arbitrator, or a decision of the Pool Auditor or where rendered appropriate by Clause 52, the Pool Funds Administrator shall issue further or other notification to the Pool Members, the Ancillary Services Provider and the Grid Operator in accordance with the provisions of this Section 17; and the Business Day which falls five Business Days after the date of such notification or earlier if practicable shall be a Payment Date. 17.12 Payment by Pool Debtor: Without prejudice to its obligations in respect of supplies of electricity in accordance with the provisions of the Agreement, each Pool Debtor shall without defence, set-off or counterclaim (but without prejudice to any other rights or remedies available to such Pool Debtor) make payment on the relevant Payment Date of the full amount (including United Kingdom Value Added Tax) so notified as being payable by it for the account of those Pool Members and, as the case may be, the Ancillary Services Provider so notified as being entitled to receive payments. Payment shall be made in accordance with the terms of this Schedule. For the avoidance of doubt no payment made shall be treated as being paid on account or subject to any condition or reservation, notwithstanding the provisions for the making of subsequent adjusting payments provided in this Schedule. The provisions of sub-section 5.14 shall apply to any payment insofar as it is or may constitute an overpayment. 17.13 Liability several: Save as otherwise expressly provided, the liability of each Pool Member and the Grid Operator for amounts payable by it pursuant to this Schedule is several and no Pool Member shall be liable for the default of any other Pool Member or the Grid Operator and the Grid Operator shall not be liable for the default of any Pool Member. 18. ADVICE NOTES 18.1 Despatch of Advice Notes: Not later than 17.00 hours on the relevant Notification Date (and, if this is not practicable, in good time (as that expression is explained in more detail in the relevant Agreed Procedure) to enable Pool Members, the Ancillary Services Provider and the Grid Operator to give all necessary instructions for payments to be effected on the relevant Payment Date) the Pool Funds Administrator shall:- 18.1.1 despatch to Pool Members, the Ancillary Services Provider and the Grid Operator Advice Notes showing amounts (inclusive of United Kingdom Value Added Tax) which, according to its calculations, are to be paid by or to each Pool Member, the Ancillary Services Provider and the Grid Operator on each Payment Date in respect of supplies of electricity, the provision of Ancillary Services and sums to be paid in relation to Transport Uplift during each Settlement Day to which that Notification Date relates; 18.1.2 notify each Settlement Bank of amounts payable by the Pool Members, the Ancillary Services Provider or the Grid Operator maintaining a Settlement Account at the relevant Settlement Bank; and 18.1.3 notify the Pool Banker of the amount to be remitted to the Pool Clearing Account by each Settlement Bank. 18.2 Method of despatch: All Advice Notes shall be despatched by the means established in accordance with paragraphs 3.1.1 and 3.1.5, or by such other means as the Executive Committee may reasonably direct. 18.3 Content of Advice Notes: All Advice Notes will include an appropriate indication if payment is being made under the provisions of paragraph 17.9.1(b), 17.9.1(c) or 17.9.2. 18.4 Interest: Where interest is payable by or to any Pool Member, the Ancillary Services Provider or the Grid Operator pursuant to this Schedule, the Pool Funds Administrator shall, at the same time as it despatches the Advice Notes, despatch to each Pool Member and the Ancillary Services Provider who is required to pay interest and to each Pool Member, the Ancillary Services Provider and the Grid Operator who is entitled to receive interest a statement showing the amount of interest payable or receivable by it, the rate of interest applicable thereto and the amount (if any) of tax to be withheld. 19. PAYMENT PROCEDURE 19.1 Instructions for payment: Each Pool Member, the Ancillary Services Provider and the Grid Operator shall, in respect of each Payment Date on which it is under an obligation to make a payment under this Schedule, make such arrangements as will ensure that such payment is credited to the relevant Collection Account in sufficient time to allow such Settlement Bank to make irrevocable arrangements to remit to the Pool Clearing Account by 12.30 hours the amount payable by that Pool Member, the Ancillary Services Provider or (as the case may be) the Grid Operator in respect of that Payment Date. Each Pool Member, the Ancillary Services Provider and the Grid Operator shall ensure all remittances by its bank to the relevant Collection Account shall be remittances for value on the relevant Payment Date. 19.2 Pool Funds Administrator's responsibilities: 19.2.1 As soon as practicable and in any event not later than 13.00 hours on each Payment Date the Pool Funds Administrator shall take such action as is required to ensure that all amounts required to be credited to each Collection Account on such Payment Date have been so credited (or if not so credited, the reason therefor established). 19.2.2 As soon as practicable and in any event not later than 13.30 hours on each Payment Date the Pool Funds Administrator shall take such action as is required to ensure that all amounts credited to each Collection Account on such Payment Date in accordance with sub-section 19.1 have been remitted to the Pool Clearing Account. 19.2.3 As soon as practicable and in any event not later than 14.30 hours on each Payment Date the Pool Funds Administrator shall take such action as is required to ensure that it verifies the actual amounts credited to each Collection Account and remitted to the Pool Clearing Account on or before 13.30 hours on that Payment Date and the aggregate of such amounts. 19.3 Non-payment: If a Pool Member or the Grid Operator becomes aware that a payment for which it is responsible will not be credited to the relevant Collection Account by 12.30 hours on the relevant Payment Date, it will immediately notify the Pool Funds Administrator, giving all details available to the Pool Member or (as the case may be) the Grid Operator. The Pool Funds Administrator shall, as soon as it becomes aware that a payment will not be remitted, use its best endeavours to establish the cause of non-payment. 19.4 Excess payments: If by 12.30 hours on any Payment Date the Pool Funds Administrator is advised by a Settlement Bank that the Settlement Bank will be making a payment in excess of the amount notified to the Pool Member or the Grid Operator pursuant to sub-section 18.1 in respect of that Payment Date, or if the Pool Banker notifies the Pool Funds Administrator by 13.30 hours that amounts greater than the amounts notified to the Pool Banker pursuant to paragraph 18.1.3 have been credited to the Pool Clearing Account, the Pool Funds Administrator shall use its best endeavours to ascertain the nature of the excess payment, to calculate the entitlement to such payment and to instruct the Pool Banker by 14.30 hours that day to credit the appropriate Settlement Account(s) with the amount determined by the Pool Funds Administrator as falling due to each Pool Creditor in accordance with this Schedule provided that, where an External Pool Member makes a payment in excess of the amount owing by it on any Payment Date and the reason for such overpayment is the difficulty in remitting funds on a future Payment Date because of the mismatch of bank and public holidays between countries, the Pool Funds Administrator shall instruct the Pool Banker to credit the Pool Reserve Account with the amount of the excess. Any Pool Member or the Grid Operator who instructs its bank to make a payment in excess of the amount owing by that Pool Member or (as the case may be) the Grid Operator on any Payment Date shall simultaneously with giving such instructions advise the Pool Funds Administrator in writing of the amount of the excess payment providing a description of what the Pool Member or the Grid Operator considers the excess payment relates to. 19.5 Payment to Pool Creditors: The Pool Funds Administrator shall, prior to 14.30 hours on each day, calculate the amounts available for distribution to Pool Creditors on that day. As soon as practicable and not later than 14.30 hours on that day the Pool Funds Administrator shall give irrevocable instructions to the Pool Banker to remit from the Pool Clearing Account to the relevant Settlement Accounts maintained by the Pool Creditors the aggregate of amounts determined by the Pool Funds Administrator to be available for payment to Pool Creditors and, if required, to transfer amounts from the Pool Reserve Account or the Pool Borrowing Account to the Pool Clearing Account or vice versa. 19.6 Making good the Pool Reserve Account: If the Pool Reserve Account is debited or credited in or towards clearing the Pool Clearing Account, the Pool Funds Administrator shall as soon as possible thereafter take the necessary steps, including making any calculations or taking any action in accordance with Section 21, to reverse the debit or credit to the Pool Reserve Account and/or to make a call under a Letter of Credit. 19.7 Prohibition on transfers: The Pool Funds Administrator shall not at any time instruct the Pool Banker to transfer any sum from a Pool Account to another account (not being a Pool Account) unless that account is a Settlement Account. 19.8 Application of payments: Where payments in respect of more than one Settlement Day are required to be settled on a Payment Date, payments in respect of the longest outstanding Settlement Day shall be, and be deemed to be, settled first. 19.9 Bank contacts: Upon written request of the Pool Funds Administrator each Pool Member, the Ancillary Services Provider and the Grid Operator shall provide the Pool Funds Administrator in writing with the name of, and communication details for, one or more individuals at the branch of its Settlement Bank from which payments or payment instructions required to be made or given by it pursuant to this Schedule originate (the "Local Branch") who is (are) familiar with the payment procedures set out in this Section 19 applicable to such Pool Member, the Ancillary Services Provider or (as the case may be) the Grid Operator, and shall promptly advise the Pool Funds Administrator in writing of any change of any such individual or his communication details. Each Pool Member, the Ancillary Services Provider and the Grid Operator hereby authorises the Pool Funds Administrator to contact any such individual to enquire in respect of any Payment Date whether and in respect of what amount instructions have been given for the remittance of any payment required to be made by such Pool Member, the Ancillary Services Provider or (as the case may be) the Grid Operator under this Schedule and/or whether such payment has been remitted or otherwise made as provided for in this Schedule, and undertakes not to withdraw, qualify or revoke such authority at any time. Each Pool Member, the Ancillary Services Provider and the Grid Operator shall instruct its Local Branch to co-operate with the Pool Funds Administrator accordingly and to provide the Pool Funds Administrator with all such information as is necessary to answer such enquiries. The Pool Funds Administrator shall comply with all reasonable security arrangements imposed by the relevant Pool Member, the Ancillary Services Provider or the Grid Operator or any Local Branch. 20. ALTERNATIVE PAYMENT PROCEDURE 20.1 Alternative Payment procedure: Without prejudice to other obligations in the Agreement not substituted by the provisions of this Section 20, the provisions set out in this Section 20 shall apply:- 20.1.1 if, on the Effective Date, it has not been possible to establish the Notified Payments System (in which case they shall continue to apply until the Notified Payments System is established, or until such other time as the Executive Committee may determine); or 20.1.2 if, for any reason, it is not possible to apply the procedures contemplated by the Notified Payments System and for so long as it is not possible to apply such procedures. 20.2 Pool Debtor to effect remittance: Each Pool Debtor shall, in respect of each Payment Date on which it is under an obligation to make a payment under the Agreement, give instructions to its bank, which it undertakes not to qualify, withdraw or revoke, to effect remittance to the Pool Clearing Account of the amount payable by that Pool Debtor to be received on that Payment Date. 20.3 Receipt of remittance: Any remittance must be received by the Pool Banker in the Pool Clearing Account no later than 12.30 hours on the Payment Date unless arrangements have been made between the Pool Banker and the relevant Pool Member or the Grid Operator (as the case may be) which shall be notified to the Pool Funds Administrator and which are satisfactory to the Pool Banker such that funds will be received for value on that Payment Date. The Pool Members and the Grid Operator shall ensure that instructions are given to their banks in sufficient time to ensure that their respective banks comply with this time limit. 20.4 Method of remittance: The Parties acknowledge and agree that when practicable to give effect to sub-section 20.3 a Pool Debtor shall cause remittances to be effected through CHAPS but, where not practicable or where the amount payable is less than the minimum individual amount then processed through CHAPS, the Pool Member and the Grid Operator shall ensure by whatever means at their disposal that remittance for value on the relevant Payment Date is made for credit to the Pool Clearing Account not later than 12.30 hours. 20.5 Notification of non-payment: The Parties acknowledge and agree that if a Pool Debtor becomes aware that a payment for which it is responsible will not be remitted to the Pool Banker by 12.30 hours on the relevant day, and where satisfactory arrangements, as referred to in sub-section 20.3 have not been made, it shall immediately notify the Pool Funds Administrator, giving all details available to that Pool Debtor. 20.6 Payment default: If the Pool Funds Administrator determines at any time after 12.30 hours on any day that a remittance which should have been credited on that day to the Pool Clearing Account has not been made (or that the credit has not been received) (in whole or in part) and where satisfactory arrangements, as referred to in sub-section 20.3, have not been made, the provisions of Section 21 shall apply mutatis mutandis. 20.7 Late payment: If, after the Pool Funds Administrator has either debited the Pool Reserve Account or made a call under a Letter of Credit, the Pool Banker receives the remittance which had not been credited to the Pool Clearing Account by 12.30 hours, then such remittance shall be credited to the Pool Reserve Account. 20.8 Payments to Pool Creditors: The Pool Funds Administrator shall, prior to 14.30 hours on each day, calculate the amounts available for distribution to Pool Creditors on that day (including amounts resulting from the application of sub-section 20.6). Not later than 14.30 hours on that day the Pool Funds Administrator shall give instructions to the Pool Banker, which it undertakes not to qualify, withdraw or revoke, to make same day value remittances to the Pool Creditors. 20.9 Construction: Where the provisions of this Section 20 apply references in Sections 5 and 18 and sub-section 21.1 to "Settlement Bank" and "Collection Account" shall be construed as references to "bank" and "Pool Clearing Account" respectively. 21. PAYMENT DEFAULT 21.1 Payment default: Subject as provided by sub-section 21.12, if, by 12.30 hours on a Payment Date, the Pool Funds Administrator has been notified by a Settlement Bank or it otherwise has reason to believe that a Settlement Bank will not remit to the Pool Clearing Account all or any part (the "amount in default") of any amount which has been notified by the Pool Funds Administrator as being payable by a Pool Debtor (the "non-paying Pool Debtor") on the relevant Payment Date in sufficient time to ensure that such amount can be cleared through the Pool Clearing Account not later than the close of banking business on such Payment Date, the Pool Funds Administrator shall act in accordance with the following provisions (or whichever of them shall apply) in the order in which they appear until the Pool Funds Administrator is satisfied that the Pool Clearing Account will clear not later than the close of business on the relevant Payment Date:- 21.1.1 if the Pool Funds Administrator has been able to identify the non-paying Pool Debtor in sufficient time to apply this paragraph 21.1.1 and to the extent that the non-paying Pool Debtor is entitled to receive payment from any Pool Debtor pursuant to this Schedule on the relevant Payment Date, then the Pool Funds Administrator shall (unless it reasonably believes that such set-off shall be unlawful) set off the amount of such entitlement against the amount in default; 21.1.2 if the Pool Funds Administrator has been able to identify the non-paying Pool Debtor in sufficient time to apply this paragraph 21.1.2, the Pool Funds Administrator shall debit the Pool Reserve Account and credit the Pool Clearing Account with a sum not exceeding the amount of funds standing to the credit of the non-paying Pool Debtor in the Pool Reserve Account; 21.1.3 subject to sub-section 21.2, the Pool Funds Administrator shall debit the Pool Reserve Account and credit the Pool Clearing Account with a sum not exceeding the amount of funds then standing to the credit of the Pool Reserve Account to the extent that they represent Security Cover provided in accordance with paragraph 15.1.2, the transfer of such amount as is not attributable to the funds standing to the credit of the non-paying Pool Debtor being deemed to give rise to a series of loans to the non-paying Pool Debtor by each Providing Member and the Grid Operator rateably according to its share of the funds standing to the credit of the Pool Reserve Account to the extent that they represent Security Cover provided in accordance with paragraph 15.1.2, at the time immediately prior to the transfer, such loans to be repayable on demand and to carry interest at the Reserve Interest Rate and in any case repayable not later than two Business Days after they arise after which, to the extent that any such loans remain outstanding, such loans shall carry interest at the Default Interest Rate (which interest shall be credited to the Pool Ledger Account of the relevant Providing Member and (where applicable) the Grid Operator). Each Providing Member and the Grid Operator hereby irrevocably authorises the Pool Funds Administrator to advance, collect in and enforce payment of such loans for its account and on its behalf and each Pool Member and the Grid Operator hereby irrevocably consents to the making of such loans to the extent that such Pool Member or (as the case may be) the Grid Operator has a share in the Pool Reserve Account; 21.1.4 if the Pool Funds Administrator has been able to identify the non-paying Pool Debtor in sufficient time to apply this paragraph 21.1.4 and provided that the Pool Funds Administrator is satisfied that the proceeds of a call under the Letter of Credit will be paid into the Pool Clearing Account in sufficient time to ensure that it will clear not later than the close of business on the relevant Payment Date, the Pool Funds Administrator shall make a call under the Letter of Credit supplied by the non-paying Pool Debtor in a sum not exceeding the available amount of such Letter of Credit, and the Pool Funds Administrator shall cause the proceeds of such call to be paid into the Pool Clearing Account; 21.1.5 subject to sub-section 21.2 and provided that the Pool Funds Administrator is satisfied that the proceeds of a call under a Letter of Credit will be paid into the Pool Clearing Account in sufficient time to ensure that it will clear not later than the close of business on the relevant Payment Date, the Pool Funds Administrator shall make a call under one or more Letters of Credit supplied by Pool Members or the Grid Operator (other than the non-paying Pool Debtor) in a total sum not exceeding the total available amount of all such Letters of Credit to the extent that such amount represents Security Cover provided in accordance with paragraph 15.1.2, and the Pool Funds Administrator shall cause the proceeds of such call or calls to be paid into the Pool Clearing Account. The transfer of such proceeds into the Pool Clearing Account shall be deemed to give rise to a series of loans to the non-paying Pool Debtor by each Providing Member or the Grid Operator whose Letter of Credit was called rateably according to the amounts called under their respective Letter of Credit, such loans to be repayable on demand and to carry interest at the Reserve Interest Rate and in any case repayable not later than two Business Days after they arise after which, to the extent that any such loans remain outstanding, such loans shall carry interest at the Default Interest Rate (which interest shall be credited to the Pool Ledger Account of the relevant Providing Member and (where applicable) the Grid Operator). Each Providing Member and the Grid Operator hereby irrevocably authorises the Pool Funds Administrator to advance, collect in and enforce payment of such loans for its account and on its behalf and each Pool Member and the Grid Operator hereby irrevocably consents to the making of such loans to the extent that such Pool Member or (as the case may be) the Grid Operator has a share in the Pool Reserve Account; and 21.1.6 if and to the extent that, notwithstanding application of the foregoing measures, it is not possible to clear the Pool Clearing Account by any of the foregoing means, the Pool Funds Administrator shall reduce payments to all Pool Creditors in proportion to the amounts payable to them on the relevant Payment Date by an aggregate amount equal to the amount necessary to clear the Pool Clearing Account and shall account for such reduction in the Pool Ledger Accounts as amounts due and owing by the non-paying Pool Debtor to each Pool Creditor whose payments were reduced. 21.2 Amount in default likely to be remedied: The Pool Funds Administrator shall not apply paragraph 21.1.3 or 21.1.5 unless it considers in good faith that the amount in default is likely to be remedied by the non-paying Pool Debtor no later than the next Business Day and in such a case the Pool Funds Administrator shall only apply paragraphs 21.1.2 and 21.1.4 to the extent of any amounts provided by way of Security Cover pursuant to paragraph 15.1.2. 21.3 Loans part of Pool Reserve Assets: Any loans arising pursuant to paragraph 21.1.3 or 21.1.5 shall be deemed to constitute part of the Pool Reserve Assets and all repayments of such loans, together with interest thereon, shall be paid into the Pool Reserve Account for the account of each Providing Member or the Grid Operator who is deemed to have made such loan. 21.4 Repayment of loans: If any loans to a non-paying Pool Debtor arising pursuant to paragraph 21.1.3 or 21.1.5 shall not have been repaid in full (together with interest at the rate or rates specified therein) by 12.00 hours on the next Business Day after such loan is deemed to have arisen, the Pool Funds Administrator shall make a call under the Letter of Credit (if any) which shall have been supplied by the non-paying Pool Debtor and which remains outstanding in an amount not exceeding the amount necessary to repay such loans and all accrued interest in full and, if the proceeds of any Letter of Credit are insufficient to repay all outstanding loans to the relevant non-paying Pool Debtor, such proceeds shall be applied towards repayment of each such outstanding loan rateably. 21.5 Reduction of payments to Pool Creditors: If, after the date that any loans to a non-paying Pool Debtor arise pursuant to paragraph 21.1.3 or 21.1.5, the Pool Funds Administrator shall reasonably be of the opinion that the non-paying Pool Debtor will not repay forthwith all of such loans and all accrued interest in full or the loans have not been repaid with all interest within two Business Days after they arose (whichever occurs first), the Pool Funds Administrator shall reduce payments to all Pool Creditors in proportion to the amounts payable to them on the Payment Date to which the default relates and any succeeding Payment Dates as may be required by an aggregate amount necessary to restore the balance in the Pool Reserve Account to the sum for the time being required under this Schedule to be deposited by the Pool Members and the Grid Operator other than the non-paying Pool Debtor, to the intent that all loans arising under paragraphs 21.1.3 and 21.1.5 and remaining undischarged after application of the non-paying Pool Debtor's Letter of Credit are discharged in full together with interest thereon at the Reserve Interest Rate. 21.6 Obligation to make calls: If and whenever the Pool Funds Administrator has not applied the provisions of paragraph 21.1.4, and has reduced payments to Pool Creditors in accordance with paragraph 21.1.6, it shall, on the relevant Payment Date or so soon thereafter as the non-paying Pool Debtor has been identified (but, in any event, not later than the close of business on the Business Day following such Payment Date) make a call under the Letter of Credit supplied by the non-paying Pool Debtor in a sum sufficient to cover the reduction made under paragraph 21.1.6 (but not exceeding the available amount of all such Letters of Credit) and the Pool Funds Administrator shall cause the proceeds of such call to be paid forthwith into the Pool Reserve Account. On the next Business Day following receipt of such proceeds, the Pool Funds Administrator shall pay such amounts as have been credited to the Pool Reserve Account to the Pool Creditors whose payments were reduced in full or (as the case may be) in proportion to their respective entitlements including interest on such amounts at the Reserve Interest Rate. 21.7 Indemnification by non-paying Pool Debtor: The non-paying Pool Debtor shall indemnify and keep indemnified each Pool Member and the Grid Operator whose Letter of Credit is called under paragraph 21.1.5 and/or who is deemed to have made loans under paragraph 21.1.3 or 21.1.5 on demand against all costs, expenses and losses (including the costs of management time) suffered or incurred by such Pool Member or (as the case may be) the Grid Operator arising from its Letter of Credit being so called (including the costs of reinstating the same) or such loans being deemed to have been made to the extent that such Pool Member or (as the case may be) the Grid Operator is not compensated under this Section 21. This indemnity shall be in addition to and without prejudice to the liability of the non-paying Pool Debtor to repay the loan, together with accrued interest, which arises pursuant to paragraph 21.1.5. The Pool Creditors, in proportion to the amounts payable to them on the Payment Date to which a default relates in respect of which the Pool Funds Administrator has operated sub-section 21.5, and any succeeding Payment Dates as may be required, shall indemnify and keep indemnified each Pool Member as is referred to in the earlier provisions of this sub-section 21.7 and the Grid Operator to the extent of any failure by the non-paying Pool Debtor to fulfil its obligations under this sub-section 21.7. 21.8 Notification to Pool Creditors: The Pool Funds Administrator shall use all reasonable endeavours promptly to notify the relevant Pool Creditors whenever it makes any such reduction as is referred to in paragraph 21.1.6. 21.9 Default Interest: Save as otherwise provided in the Agreement (including where an express rate of interest is provided), if any amount payable by any Pool Debtor pursuant to this Schedule is not given value for the due date by close of banking business on the due date the Pool Debtor shall on written demand by the Pool Funds Administrator pay to the Pool Funds Administrator, for the account of the person or persons entitled to receive the amount in default, interest on such amount from the due date up to the day of actual receipt by the Pool Funds Administrator (after as well as before judgment) at the Default Interest Rate. 21.10 Application of payments: Any amount received by the Pool Funds Administrator from a non-paying Pool Debtor for the credit of any Pool Account shall be applied by the Pool Funds Administrator in or towards payment of amounts payable by the non-paying Pool Debtor to Pool Creditors on each successive Payment Date in respect of which there is an outstanding default (with the longest outstanding default being settled first). 21.11 Clearing of Pool Clearing Account: All amounts standing to the credit of the Pool Clearing Account at the close of business on any Payment Date shall be transferred to the Pool Reserve Account so that the balance in the Pool Clearing Account shall at the end of such day be nil. 21.12 Credit Facility: If and for so long as the Credit Facility remains unconditionally available, the provisions of this Section 21 shall apply with the modifications provided by Section 25. 22. CONFIRMATION NOTICES 22.1 Despatch of Confirmation Notices: Within two Business Days after each Payment Date the Pool Funds Administrator shall issue a Confirmation Notice to each Pool Member, the Ancillary Services Provider and the Grid Operator in respect of the corresponding Payment Date setting out the information required in sub-sections 22.2, 22.3 and 22.4. 22.2 Information - taking of electricity: The information required on a Confirmation Notice in respect of each Pool Member taking electricity on each Settlement Day is as follows:- 22.2.1 the Pool Member's identification number; 22.2.2 the Pool Member's name; 22.2.3 the total amount (inclusive of United Kingdom Value Added Tax) received in the Pool Clearing Account on the relevant Payment Date by the Pool Funds Administrator in respect of electricity taken by such Pool Member during the Settlement Day and Ancillary Services attributable thereto; 22.2.4 the amount received in the Pool Clearing Account on the relevant Payment Date by the Pool Funds Administrator in respect of electricity taken by such Pool Member during the Settlement Day and Ancillary Services attributable thereto, exclusive of United Kingdom Value Added Tax; and 22.2.5 the amount of United Kingdom Value Added Tax received in the Pool Clearing Account on the Payment Day by the Pool Funds Administrator in respect of electricity taken by such Pool Member during the Settlement Day and Ancillary Services attributable thereto. 22.3 Information - supplies of electricity: The information required on a Confirmation Notice in respect of each Pool Member supplying electricity on each Settlement Day shall include:- 22.3.1 the Pool Member's identification number; 22.3.2 the Pool Member's name; 22.3.3 the Settlement Run identification number; 22.3.4 the total amount (inclusive of United Kingdom Value Added Tax) paid out of the Pool Clearing Account on the relevant Payment Date by the Pool Funds Administrator in respect of electricity supplied by such Pool Member during the Settlement Day; 22.3.5 the amount paid out and the date on which such amount is paid out of the Pool Clearing Account on the relevant Payment Date by the Pool Funds Administrator in respect of electricity supplied by such Pool Member during the Settlement Day exclusive of United Kingdom Value Added Tax and the Settlement Run identification number; and 22.3.6 the amount of United Kingdom Value Added Tax paid out of the Pool Clearing Account on the relevant Payment Date by the Pool Funds Administrator in respect of electricity supplied by such Pool Member during the Settlement Day. 22.4 Information - Ancillary Services Provider and Grid Operator: The information required on a Confirmation Notice in respect of the Ancillary Services Provider and the Grid Operator is as follows:- 22.4.1 the total amount receivable by the Ancillary Services Provider for the provision of Ancillary Services and the total amount payable by the Grid Operator in relation to Transport Uplift (in each case exclusive of United Kingdom Value Added Tax) during the Settlement Day; 22.4.2 the total amount receivable by the Ancillary Services Provider for the provision of Ancillary Services and the total amount payable by the Grid Operator in relation to Transport Uplift (in each case inclusive of United Kingdom Value Added Tax) during the Settlement Day; and 22.4.3 the total amount of United Kingdom Value Added Tax receivable by the Ancillary Services Provider for the provision of Ancillary Services and the total amount payable by the Grid Operator in relation to Transport Uplift during the Settlement Day. 22.5 Interest: Where interest has been paid to any Pool Member, the Ancillary Services Provider or the Grid Operator, the Pool Funds Administrator shall promptly after such payment provide to each Pool Member, the Ancillary Services Provider or the Grid Operator (as the case may be) a statement showing the amount of interest paid or received, the rate of interest applicable thereto and the amount (if any) of tax withheld. If applicable, the Pool Funds Administrator shall provide to the relevant Pool Member, the Ancillary Services Provider or the Grid Operator an appropriate tax deduction certificate in respect of any withholding tax. 23. PAYMENT ERRORS 23.1 Overpayments: If for any reason whatsoever (including the negligence of the Pool Banker or the Pool Funds Administrator) a Pool Creditor receives on any Payment Date a payment in excess of the amount disclosed in the Pool Ledger Account as calculated as being payable to it (an "overpayment") (including but not limited to the proceeds of any loan made or deemed to be made in accordance with Section 21 or Section 25 to any non-paying Pool Debtor which becomes insolvent before such advance is repaid) the provisions of sub-section 5.15 apply, and the Pool Creditor shall forthwith notify the Pool Funds Administrator of the amount of the overpayment and shall forthwith pay the overpayment into a Pool Account specified by the Pool Funds Administrator. 23.2 Repayment of overpayment (1): If prior to a Pool Creditor notifying the Pool Funds Administrator of the overpayment, the Pool Funds Administrator receives notice (from the Pool Banker or otherwise) of the overpayment, the Pool Funds Administrator shall forthwith require (by written notice) that the recipient of the overpayment pay the overpayment to a Pool Account specified by the Pool Funds Administrator and any Pool Creditor who receives such notice shall forthwith pay the amount to an account specified by the Pool Funds Administrator. If the overpayment is repaid within two Business Days of receiving the notice, the overpayment (or any part not paid) shall bear interest at the Reserve Interest Rate or at such rate as shall be set from time to time by the Executive Committee from the date the overpayment was received up to the date that value is given in a Pool Account by the Pool Funds Administrator (after as well as before judgment). Any overpayment (or part thereof) not repaid within two Business Days after demand therefor in accordance with this Section 23 shall bear interest at the Default Interest Rate from the expiry of that period and shall be recoverable in accordance with Section 24. The Pool Funds Administrator shall account to those entitled to payment by reason of an overpayment. 23.3 Repayment of overpayment (2): Upon receipt of the overpayment (including any interest) the Pool Funds Administrator shall (forthwith upon entitlement to it being ascertained) pay the amount received to the Pool Member, the Ancillary Services Provider or the Grid Operator who should have received the payment on the Payment Date. 23.4 Underpayments: If for any reason whatsoever (including the negligence of the Pool Banker or the Pool Funds Administrator) a Pool Creditor does not receive on the relevant Payment Date the full amount disclosed as owing to it pursuant to the Pool Ledger Account (an "underpayment") that Pool Creditor shall forthwith notify the Pool Funds Administrator of the amount of the underpayment, and the Pool Funds Administrator after consultation with the Pool Banker shall use all reasonable endeavours to identify such person as shall have received any corresponding overpayment and promptly to correct the underpayment. If, by reason of negligence, the Pool Funds Administrator holds or has under its control amounts which it ought properly to have paid to Pool Members, the Ancillary Services Provider or the Grid Operator, such Pool Members, the Ancillary Services Provider or the Grid Operator shall be entitled to interest on such amounts at the Default Interest Rate and for such period as the Pool Funds Administrator improperly holds or has such amounts under its control. 24. ENFORCEMENT OF CLAIMS 24.1 Notification of amount in default: Without prejudice to the provisions of Section 21, if a Pool Member or the Grid Operator shall fail to pay any amount payable pursuant to this Schedule on the due date, the Pool Funds Administrator shall notify the Director, the Executive Committee and each Pool Creditor to whom the amount in default is owed pursuant to this Agreement of the name of the non-paying Pool Debtor, the aggregate amount in default and the amount owed to each Pool Creditor. 24.2 Duties of Pool Funds Administrator: Except as otherwise expressly provided in this Schedule, the Pool Funds Administrator shall not be required to ascertain or enquire as to the performance or observance by any Pool Member, the Ancillary Services Provider or the Grid Operator of its obligations under the Agreement and shall have no duty to inform the Executive Committee or any Pool Member, the Ancillary Services Provider or the Grid Operator of any default, other than a failure to pay as may come to its attention. 24.3 Notice before action: Each Pool Creditor shall give notice to the Pool Funds Administrator before instituting any action or proceedings in any court to enforce payments due to it pursuant to this Schedule. Upon receipt of any notice under this sub-section 24.3, the Pool Funds Administrator will as soon as practicable notify the Executive Committee, all Pool Members, the Settlement System Administrator, the Ancillary Services Provider, the Grid Operator and the Director. 24.4 Proceedings to Recover Overdue Amounts: Without prejudice to the right of any Pool Member or the Grid Operator to bring such proceedings as it sees fit in connection with matters related to the Agreement, the Pool Funds Administrator shall, if instructed to do so by the Executive Committee, bring proceedings against a Pool Member or the Grid Operator (on behalf of those Pool Members and/or (as the case may be) the Grid Operator who have (has) indicated their (its) willingness to the Executive Committee for the Pool Funds Administrator first so to act) for the recovery of any amounts due by that Pool Member or (as the case may be) the Grid Operator pursuant to this Schedule so long as the Pool Funds Administrator has first reached agreement with the Executive Committee, those Pool Members and/or (as the case may be) the Grid Operator as to appropriate remuneration, is indemnified to its reasonable satisfaction or, if it so requires, provided that it shall have received such security as it may reasonably request against all costs, claims, expenses (including legal fees) and liabilities which it will or may sustain or incur in complying with such instructions. Save as provided in the foregoing provisions of this sub-section 24.4, the Pool Funds Administrator shall not be obliged to bring any such proceedings. 25. CREDIT FACILITY: PAYMENT DEFAULTS 25.1 Purpose of Credit Facility: It is acknowledged that the Credit Facility provides an alternative to the Security Cover referred to in paragraph 15.1.2 and the Pool Funds Administrator will use the Credit Facility to cover banking error and payment error and to minimise reductions of payments to Pool Creditors unless it considers in good faith that an amount in default is not likely to be remedied by the non-paying Pool Debtor no later than the next Business Day. 25.2 Modification of other provisions of this Schedule: If and so long as the Credit Facility is unconditionally available to the Pool Funds Administrator (whether or not there remains any amount undrawn), paragraphs 15.1.2, 21.1.3 and 21.1.5 shall be of no effect and the remaining provisions of this Schedule shall be implemented on the basis that the following sub-sections apply. 25.3 Payment default: The Pool Funds Administrator shall operate the Credit Facility on the following basis:- 25.3.1 the Credit Facility may be drawn down by the Pool Funds Administrator if, by 12.30 hours on any Payment Date, there is an amount in default unless the Pool Funds Administrator considers in good faith that the amount in default is not likely to be remedied by the non-paying Pool Debtor no later than the next Business Day; 25.3.2 if paragraph 25.3.1 applies such that the Credit Facility may be drawn down, the Pool Funds Administrator will first act in accordance with paragraph 21.1.1, will then draw on the Credit Facility for an amount not exceeding the available amount under the Credit Facility (after allowing for any repayment to be made to the Facility Bank under sub-section 25.6) and, if it is not possible to clear the Pool Clearing Account by either or both of those means, it will then act in accordance with paragraph 21.1.6; and 25.3.3 if paragraph 25.3.1 does not apply, then the Pool Funds Administrator will act in accordance first with paragraph 21.1.1, then with paragraph 21.1.2, then with paragraph 21.1.4 and only then with paragraph 21.1.6. 25.4 Amounts in default: Each non-paying Pool Debtor will be responsible in relation to any amount in default in accordance with the following paragraphs:- 25.4.1 each non-paying Pool Debtor will be responsible for the repayment of all amounts of principal drawn down under the Credit Facility in respect of any amount in default relating to that Pool Debtor as if the Pool Funds Administrator had made a loan to such Pool Debtor of the relevant amount and the amounts so payable are to be paid to, or otherwise made available for credit to, the Pool Clearing Account as soon as possible, but in any event no later than two Business Days after the relevant Payment Date; 25.4.2 each non-paying Pool Debtor will be responsible also for interest (determined in accordance with paragraph 25.4.4) on all amounts of principal drawn down under the Credit Facility in respect of any amount in default relating to that Pool Debtor as if the Pool Funds Administrator had made a loan to such Pool Debtor of the relevant amount and the amount so payable by way of interest is to be paid to, or otherwise made available for credit to, the Pool Clearing Account by no later than the day notified by the Pool Funds Administrator to such Pool Debtor for payment thereof (being the date which is 2 Business Days prior to the date on which interest is payable under the Credit Facility by the Pool Funds Administrator to the Facility Bank for the month in which the principal amount in question was outstanding); 25.4.3 each non-paying Pool Debtor will further be responsible for its proportionate share (determined in accordance with paragraph 25.4.5) of any additional sum payable to the Facility Bank pursuant to the terms of the Credit Facility as if the Pool Funds Administrator had made a loan to such Pool Debtor of the relevant amount and the amount so payable is to be paid to, or otherwise made available for credit to, the Pool Clearing Account forthwith on notification thereof by the Pool Funds Administrator to the Pool Debtor in question; 25.4.4 for the purposes of paragraph 25.4.2, interest is to be calculated using the effective daily rate of interest reasonably determined by the Pool Funds Administrator on the basis of the aggregate interest (including any compound interest) payable under the Credit Facility in relation to any particular day; and 25.4.5 for the purposes of paragraph 25.4.3, the proportionate share for a particular non-paying Pool Debtor is the amount (if any) which the Pool Funds Administrator reasonably determines (after consultation with the Facility Bank) as being the amount of any additional sum payable in accordance with the terms of the Credit Facility attributable to drawings under the Credit Facility made in respect of that Pool Debtor. 25.5 Application of payments: On the Relevant Date the Pool Funds Administrator shall, if the amount in question has not been received in full from the non-paying Pool Debtor:- 25.5.1 first debit the Pool Reserve Account and credit the Pool Clearing Account with a sum not exceeding the amount of funds (if any) standing to the credit of the non-paying Pool Debtor in the Pool Reserve Account; 25.5.2 if that sum is insufficient to repay in full the amount in question, the Pool Funds Administrator shall call the Letter of Credit (if any) provided by the non-paying Pool Debtor (for an amount not exceeding the available amount) and pay or cause the proceeds thereof to be paid into the Pool Clearing Account; and 25.5.3 if the amount credited to the Pool Clearing Account after following the foregoing procedure is insufficient, reduce payments to all Pool Creditors in proportion to the amounts payable to them on the Payment Date to which the default relates, so that, in any case, the Pool Funds Administrator has available to it on the Pool Clearing Account sufficient funds to comply with paragraph 25.6. For the purposes of this paragraph, the "Relevant Date" is whichever of the following is applicable:- (a) in relation to any principal amount for which a non-paying Pool Debtor is responsible under paragraph 25.4.1, the last date specified for payment under paragraph 25.4.1; (b) in relation to any principal amount as referred to in sub-paragraph (a), the first date (if earlier than the date referred to in sub-paragraph (a)) on which the Pool Funds Administrator is reasonably of the opinion that the non-paying Pool Debtor will not repay forthwith all of the amounts of principal in question; (c) in relation to payment of interest under paragraph 25.4.2, the last date for payment thereof; and (d) in relation to an additional amount under paragraph 25.4.3 the last date for payment of this amount. 25.6 Payments to Facility Bank: To the extent of any payment by the non-paying Pool Debtor and/or if any of the circumstances described in sub-section 25.5 occur, the Pool Funds Administrator will forthwith repay to the Facility Bank by credit to the Pool Borrowing Account, if applicable, an amount equal, in the former case, to the amount so paid and, in the latter case, to the amount which should have been paid by the non-paying Pool Debtor. 25.7 Reduction in payments to Pool Creditors: A reduction in payments as contemplated by paragraph 25.5.3 will also apply in the event of any amounts drawn down under the Credit Facility being required to be repaid in accordance with the terms of the Credit Facility and the Pool Funds Administrator shall account for such reduction in the Pool Ledger Accounts as amounts due and owing by the non-paying Pool Debtor to each Pool Creditor whose payments were reduced. 25.8 Enforcement of Claims and other provisions: Sub-sections 21.7, 21.8, 21.9, 21.10 and Section 24 shall have effect in relation to amounts due from a non-paying Pool Debtor which arise under the foregoing sub-sections. 25.9 Unavailability of Credit Facility: If at any time the Credit Facility ceases to be unconditionally available and paragraph 15.1.2 shall thereupon have become effective, the whole or any part of the Security Cover thereby required to be provided by each Providing Member or the Grid Operator may be provided by a credit to the Pool Reserve Account, unless otherwise determined by the Executive Committee. The Executive Committee shall from time to time assess (in consultation with the Pool Funds Administrator) and determine the amount of Security Cover which would be required pursuant to paragraph 15.1.2 as if that paragraph were in effect and such assessment and determination shall apply for the purposes of paragraph 16.2.2 if paragraph 15.1.2 becomes applicable, pending any revised assessment by the Executive Committee. 25.10 Interpretation: Terms and expressions used in this Section 25 shall, unless the context otherwise requires, have the same meanings as are given to them for the purposes of Clause 21. 26. CREDIT FACILITY: GENERAL 26.1 Notifications to the Executive Committee: The Pool Funds Administrator shall notify the Executive Committee forthwith:- 26.1.1 on it becoming aware of any circumstances which might lead to an event under the Credit Facility as a result of which the Credit Facility might cease to be available; and 26.1.2 upon receipt of a written demand from the Facility Bank pursuant to the terms of the Credit Facility as a result of which the Facility ceases to be available; and 26.1.3 in the event that the Facility Bank requires any additional amount to be paid under the Credit Facility by reason of any increased costs to the Facility Bank or any changes in circumstances. 26.2 Notifications to Providing Members and the Grid Operator: The Pool Funds Administrator shall notify the Providing Members and the Grid Operator as soon as reasonably practicable after receipt by it of a notice from the Facility Bank that an additional amount will or may be payable by the Pool Funds Administrator to the Facility Bank under the terms of the Credit Facility. 26.3 Amendment and Cancellation: 26.3.1 The Pool Funds Administrator shall not:- (a) amend or supplement, or agree to any amendment or supplement to, the terms of the Credit Facility without the approval of the Executive Committee; or (b) cancel the Credit Facility unless either the approval of the Executive Committee has been obtained or paragraph 26.3.2 applies. 26.3.2 The Pool Funds Administrat or shall cancel the Credit Facility in full at any time if a resolution to that effect is passed (on a simple majority vote) by the Providing Members in separate general meeting and the Grid Operator consents or if all Providing Members and the Grid Operator have requested such cancellation. 26.4 Extension and Renewal: The Pool Funds Administrator shall negotiate with the Facility Bank an extension or renewal of the Credit Facility on the instructions of the Executive Committee and, in the absence of such instructions, shall begin negotiations with the Facility Bank no later than ten weeks before the Credit Facility is due to terminate in accordance with its terms, with a view to the extension or renewal of the Credit Facility on substantially the same terms for a further year and, in any event, to keep the Executive Committee informed on a timely basis of the progress of any such negotiations. The Pool Funds Administrator shall, however, act only with the approval and consent of the Executive Committee in agreeing any extension or renewal of the Credit Facility and the Executive Committee shall be responsible for deciding whether or not to renew or extend the Credit Facility and, if so, on what terms and for what period. 26.5 Fees not attributable to a particular Providing Member or the Grid Operator: Any fees (and any additional amounts payable under the terms of the Credit Facility which are not the responsibility of any particular Providing Member or the Grid Operator) charged under the Credit Facility to the Pool Funds Administrator shall be recharged to the Providing Members, in accordance with their respective Providing Member Contributory Shares (to be calculated on the basis of those current on the date on which the relevant fee (or the relevant portion thereof) or additional amount is payable by the Pool Funds Administrator under the Credit Facility and having deducted the relevant Credit Facility Contribution). 26.6 Fees attributable to the Grid Operator: The Grid Operator shall, from the date on which it first becomes a Pool Debtor and for the period thereafter during which the Credit Facility is in place, pay each year to the Pool Funds Administrator the Credit Facility Contribution on a date agreed from time to time by the Grid Operator and the Pool Funds Administrator (and, failing such agreement, on 31st January in each year). If the Credit Facility is available for part of a year only, the Credit Facility Contribution shall be adjusted accordingly on a pro rata basis. 26.7 No additional charge: The Pool Funds Administrat or shall not make any additional charge for arranging, participating in or administering the Credit Facility. ANNEX 1 Form of Advice Note ADVICE NOTE DATE: Energy Pool Funds Administration Ltd Room 157.2 185 Park Street London SE1 9DY TELEPHONE: (0171) 620 9456 FAX NO: (0171) 401 2799 NAME: ADDRESS: ADVICE NOTE: PAYMENT DATE: FAX NO: THIS IS NOT A TAX INVOICE Advice Note issued in accordance with the Pooling and Settlement Agreement for the Electricity Industry in England and Wales dated 30th March 1990 as amended, varied or supplemented from time to time. SETTLEMENT DATE RUN/TYPE DESCRIPTION AMOUNT PAYABLE AMOUNT PAYABLE EXC VAT INC VAT DO NOT NET YOUR PAYABLES TO YOUR RECEIVABLES A wholly owned subsidiary of The National Grid Company plc. Regd. in England No. 2444187 VAT No 547 8630 11 ANNEX 2 Form of Confirmation Notice CONFIRMATION NOTICE DATE: Energy Pool Funds Administration Limited Room 157.2 185 Park Street London SE1 9DY TELEPHONE: FAX NO: TELEX: NAME: ADDRESS: CONFIRMATION NO: PAYMENT DATE: FAX NO: Confirmation notice issued in accordance with the Pooling and Settlement Agreement for the Electricity Industry in England and Wales dated 30th March 1990 as amended, varied or supplemented from time to time. THIS IS A TAX INVOICE
PAYMENT DATE SETTLEMENT DATE DESCRIPTION AMOUNT PAID EXC VAT VAT RATE VAT PAID AMOUNT PAID INC VAT A wholly owned subsidiary of The National Grid Company plc. Regd. in England No 2444187 VAT No 547 8630 11
ANNEX 3 Part 1 Form of Settlement Account Designation To: Energy Pool Funds Administration Limited as Pool Funds Administrator and Barclays Bank PLC 54 Lombard Street Branch as Pool Banker Date: Settlement Account Designation 1. [Insert name of Pool Member/Ancillary Service Provider/Grid Operator] hereby designates the following account as its Settlement Account to which you are instructed to remit all amounts which are payable to us through the Pool Clearing Account in accordance with Schedule 11 to the Pooling and Settlement Agreement for the Electricity Industry in England and Wales dated 30th March, 1990, as amended, varied or supplemented from time to time (the "Agreement").
Name of Bank Branch Address Sorting Code Name of Account Account No. - ------------ -------------- ------------ --------------- ----------- 2. We hereby designate the following account as our Settlement Account from which all payments due from us in accordance with Schedule 11 to the Agreement will be remitted. Name of Bank Branch Address Sorting Code Name of Account Account No. - ------------ -------------- ------------ --------------- -----------
Signed by .................................................... Position ....................................................... For and on behalf of [Name of Pool Member/Ancillary Services Provider/Grid Operator] ANNEX 3 Part 2 Form of Change of Settlement Account To: Energy Pool Funds Administration Limited as Pool Funds Administrator and Barclays Bank PLC 54 Lombard Street Branch as Pool Banker In accordance with sub-section 4.6 of Schedule 11 to the Pooling and Settlement Agreement [insert name] hereby gives you notice that, with effect from [insert date] (or 10 Business Days after you receive this notice, whichever is later), our new Settlement Account [from which payments due from the undersigned/to which payments due to the undersigned]* will be paid shall be:- Name of Bank Branch Address Sorting Code Name of Account Account No. - ------------ -------------- ------------ --------------- ----------- Yours sincerely, [ ] for and on behalf of [Name of Pool Member/Ancillary Services Provider/Grid Operator] *Please complete as appropriate ANNEX 4 Form of Letter of Credit To: Energy Pool Funds Administration Limited as Pool Funds Administrator At the request of [Providing Member] [the Grid Operator] we have opened in your favour our irrevocable Letter of Credit Number ( ) for(pound)[ ] (amount in words). This Letter of Credit is available against your sight drafts accompanied by a signed statement either that the applicant has failed to pay to you the amount you are claiming under the terms of the Pooling and Settlement Agreement for the electricity industry in England and Wales dated 30th March, 1990 (the "Agreement") or that the claim is being made under sub-section 15.5 or Section 21 of Schedule 11 to the Agreement. Payments under this Letter of Credit shall be effected immediately to [insert relevant account details]. Partial drawings are allowed hereunder. Claims under this Letter of Credit shall be made at the counters of [insert details of the branch of the issuing bank]. This Letter of Credit expires on [ ]. We waive any right to set off against any amount payable hereunder any claims we may have against you. Any demand hereunder must comply with all the above requirements [and signatures thereon must be confirmed by your Bankers]. This Letter of Credit is subject to Uniform customs and practice for Documentary Credits (1983 Revision) International Chamber of Commerce. We undertake that drafts and documents drawn under and in strict conformity with the terms of this credit will be honoured upon presentation. This Letter of Credit shall be governed by and construed in accordance with English law. For and on behalf of [ ] Bank [Plc]. 2 SCHEDULE 13 Contributory Shares 1. Contributory Share: The Contributory Share of a Pool Member shall be calculated in accordance with the following provisions of this Schedule. 2. Points: Subject as provided in Section 3, in respect of each Quarter:- 2.1 each Pool Member which is a Generator shall receive in that capacity one point (a "Point") for each MWh of Genset Metered Generation of all Allocated Generating Units for all Settlement Periods falling in the Votes Calculation Period relative to such Quarter, as determined from the final run of Settlement for each such Settlement Period; and 2.2 each Pool Member which is a Supplier shall receive in that capacity such number of points (each a "Point") as is equal to the total MWh of Consumer Metered Demand taken by that Pool Member in all Settlement Periods falling in the Votes Calculation Period relative to such Quarter, as determined from the final run of Settlement for each such Settlement Period. For the purposes of this paragraph 2:- (A) a Generating Unit shall be an Allocated Generating Unit of a Pool Member (in this paragraph, the "Identified Pool Member") if it belongs to the Identified Pool ---------------------- Member as of the date on which the Executive Committee calculates the Contributory Shares of Pool Members for the relevant Quarter pursuant to paragraph 6. If at any time during such Quarter an Allocated Generating Unit shall belong to another Pool Member (in this paragraph, the "Transferee Pool Member"), the Contributory Shares ---------------------- attributed to the Identified Pool Member for such Quarter by reason of the Allocated Generating Unit belonging to it shall be transferred to the Transferee Pool Member as of the date on which such Allocated Generating Unit first belongs to the Transferee Pool Member (and the Identified Pool Member and the Transferee Pool Member shall jointly notify the Executive Committee in writing of such date in good time before its occurrence); (B) a Generating Unit shall belong to a Pool Member if it is owned by that Pool Member and not leased to another person or if it is leased by that Pool Member from another person; (C) a Pool Member shall notify the Executive Committee promptly on request of its Allocated Generating Units and the Executive Committee and each other Party may rely on the information in that notification and in any notification under paragraph (A) above without further enquiry or need to verify that information; (D) in determining the meaning of "good time" for the purposes of paragraph (A) above one factor to be taken into account is that the Settlement System Administrator must be allowed sufficient time to effect the necessary changes in Settlement associated with the transfer of the relevant Allocated Generating Unit; and (E) the Executive Committee may, upon application of any Pool Member involved in any transfer of assets between Pool Members during any Quarter, adjust as between the Pool Members involved in such transfer, the number of Points and/or Weighted Votes to which they in their capacities as Suppliers are entitled in respect of the remaining part of that Quarter and/or one or both of the two immediately succeeding Quarters if, in the opinion of the Executive Committee, such adjustment would help accommodate the consequences of such a transfer and not prejudice the interests of any other Pool Member in any material respect. 3. New Pool Members: Until the third Quarter Day next falling after the date of its admission as a Pool Member, any Party which is admitted as a Pool Member pursuant to Clause 8.2 shall receive that number of Points as is equal to one thousand times the number of Weighted Votes to which such Pool Member would have been entitled under Clause 11.3.1(b) had:- 3.1 the provisions of Clause 11.3.3 been ignored; and 3.2 any applicable restrictions under Clause 11.4 been ignored, as determined by the Executive Committee. Thereafter, such Pool Member's Points shall be calculated in accordance with paragraph 2. 4. Calculation of Points: On or prior to each Quarter Day and at such other times as are referred to in paragraph 6 the Executive Committee shall, on the basis of information to be supplied by the Settlement System Administrator as referred to in Clause 11.3.2, calculate for the Following Quarter or (as the case may be) the remainder of the then current Quarter the number of Points which each Pool Member whose Points are to be calculated in accordance with paragraph 2 shall receive, and shall notify each Pool Member and the Director in writing of the number of Points received by all Pool Members (whether calculated in accordance with paragraph 2 or 3). The determination of the Executive Committee as to the number of Points of each Pool Member shall (in the absence of manifest error) be final and binding for all purposes of this Agreement. 5. Contributory Shares: The Contributory Share of a Pool Member shall be calculated in accordance with the following formula:- CS = X + Y Where:- X = A 2 x B Y = C 2 x D and where:- CS = the Contributory Share of such Pool Member, expressed as a percentage A = the number of Points for the time being of such Pool Member in its capacity as a Generator B = the number of Points for the time being of all Pool Members which are Generators, in their capacity as such C = the number of Points for the time being of such Pool Member in its capacity as a Supplier D = the number of Points for the time being of all Pool Members which are Suppliers, in their capacity as such. 6. Calculation of Contributory Shares: On or prior to:- 6.1 each Quarter Day; 6.2 each date upon which a New Party is admitted, resigns or is removed as a Pool Member; and 6.3 each date upon which there is a change in the capacity in which a Pool Member participates as a Pool Member, the Executive Committee shall calculate for the Following Quarter or (as the case may be) the remainder of the then current Quarter the Contributory Share for the time being of each Pool Member, and shall notify each Pool Member and the Director in writing of the Contributory Share of each of the Pool Members. The determination of the Executive Committee as to the Contributory Share of each Pool Member shall (in the absence of manifest error) be final and binding for all purposes of this Agreement. 7. Records: The provisions of Clause 11.9 shall apply mutatis mutandis in respect of each Pool Member's Points and Contributory Share. 8. Additional Capacity: For the purposes of Section 3, any Pool Member who acquires an additional capacity in which it participates as a Pool Member shall be deemed to have been admitted as a new Pool Member pursuant to Clause 8.2 in that additional capacity and, until the third Quarter Day next falling after the date such Pool Member's application to the Executive Committee pursuant to Clause 8.12 is approved, it shall receive that number of Points as is equal to one thousand times the number of Weighted Votes to which such Pool Member would have been entitled under Clause 11.3.1(b) had:- 8.1 the provisions of Clause 11.3.3 been ignored; and 8.2 any applicable restrictions under Clause 11.4 been ignored, as determined by the Executive Committee. Thereafter, such Pool Member's Points shall be calculated in accordance with paragraph 2. SCHEDULE 15 The Pool Funds Administrator's Contract Contents 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions 1.2 Incorporation by reference 1.3 Interpretation 1.4 Pool Funds Administrator's consent 2. APPOINTMENT 2.1 Continuation of Appointment 2.2 Term 2.3 Extension of term 2.4 Wholly-owned subsidiary 2.5 Independent Contractor 2.6 Restriction on business 3. EXPIRY OF TERM AND REMOVAL 3.1 Expiry of term 3.2 Removal by Executive Committee 3.3 Acknowledgement 3.4 Removal as a Party 4. APPOINTMENT OF A SUCCESSOR 4.1 Right to appoint 4.2 Appointment following removal 4.3 Tender process 5. TRANSFER OF RESPONSIBILITIES AND ASSETS 5.1 Transfer of responsibilities and assets 5.2 Co-operation 5.3 PFA Unwinding Costs 5.4 Without prejudice to rights 5.5 Reference to Arbitration 6. SPECIFIC DUTIES AND RESPONSIBILITIES 6.1 Tests of the Funds Transfer Hardware and Software 6.2 Insurance 6.3 Instructions 6.4 Changes 6.5 General 7. FUNDS TRANSFER SOFTWARE 7.1 Representations and warranties 7.2 Future Funds Transfer Software 7.3 Notification 7.4 Infringement 7.5 Restrictions 7.6 Indemnity 7.7 Maintenance 7.8 Escrow arrangements 8. ANNUAL FEE 8.1 General 8.2 Calculation of fee 8.3 Review of fee 9. PFA BUDGETS AND NOTICES OF ANNUAL FEE 9.1 PFA Budgets 9.2 Contents of PFA Budgets 9.3 Form of PFA Budgets 9.4 Notice of Annual Fee 10. STATEMENT OF COSTS AND FEES 10.1 Statement of Costs and Fees 10.2 Form of Statement of Costs and Fees 10.3 Accompanying Report 10.4 Tender Costs 10.5 Basis of preparation 10.6 Accounting Practices 10.7 Statement of Charges 11. QUALITY OF SERVICE REVIEW 11.1 Complaints 11.2 Report 11.3 Quality of Service Review 11.4 Consultants 11.5 Terms of engagement 11.6 Review Report 11.7 Implementation 11.8 Arbitration 11.9 Access 11.10 Confidentiality 11.11 Additional rights 12. AUDITORS' OPINION 13. PFA ACCOUNTING PERIOD 14. THE POOL FUNDS ADMINISTRATOR'S CHARGES 15. AMOUNT 15.1 Annual Charges 15.2 Recovery of Charges 15.3 Interest on non-payment 15.4 Payment of Charges 15.5 Amount of Charges 15.6 New and Former Pool Members 16. BANK CHARGES 17. ALLOCATION OF CHARGES 17.1 Total Sum Due 17.2 Payment of Total Sum Due 17.3 Allocation of Total Sum Due 17.4 Prima facie evidence 18. ADJUSTMENT 19. ADDITIONAL COMPENSATION 19.1 General 19.2 Compensation 19.3 Reservation 20. RECOVERY OF POOL ADMINISTRATION COSTS 20.1 Applicability 20.2 Approval 20.3 Payment 20.4 Recovery 20.5 Collection procedure 20.6 Proportionate Share 20.7 Bad Debts Annex 1: PFA Budget for the 1992 PFA Accounting Period Annex 2: Pro-forma Statement of Charges Annex 3: Pro-forma Statement of Costs and Fees Annex 4: Existing Funds Transfer Software Annex 5: Escrow Arrangements 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions: In this Schedule, except where the context otherwise requires:- "Active Trading Pool Member" means a Pool Member which buys and/or sells electricity pursuant to this Agreement on a regular basis or which is an Externally Interconnected Party; "Active Trading Pool Member Identities" means at any time the sum of:- (i) one; and (ii) the aggregate number of Pool Member identities which at that time have been accorded to all Active Trading Pool Members by the Settlement System Administrator for the purposes of its operation of the Settlement System provided that (unless EPFAL and the Executive Committee shall otherwise agree in writing) for the purposes of this definition a Pool Member shall have no more than one Pool Member identity in each of the following categories applicable to it, namely:- (a) category 1: a Pool Member which generates electricity; (b) category 2: a Pool Member which generates electricity and which is also a Consumer (as defined in the Pool Rules); (c) category 3: a Pool Member which supplies electricity within the meaning of section 4 of the Act; and (d) category 4: an Externally Interconnected Party; and accordingly may not have more than four Pool Member identities; "Annual Fee" has the meaning given to it in Section 8; "Bank Charges" has the meaning given to it in Section 16; "Base Sum" has the meaning given to it in paragraph 8.2.1; "Consultants" means an independent firm of chartered accountants or management consultants of international repute selected by the Executive Committee in consultation with EPFAL; "EPFAL" means Energy Pool Funds Administration Limited (registered number 2444187) whose registered office is situate at 185 Park Street, London SE1 9DY; "Funds Transfer Hardware" means all the computer equipment and accessories whether existing or coming into existence in the future which are used at any time by EPFAL in connection with the Funds Transfer Business; "Funds Transfer Software" means all the computer programs and codes (both source code and object code) and all documents and materials relating thereto or developed therefrom (including those documents and materials on which the programs and codes are embodied and all user documentation) and whether existing or coming into existence in the future which are used at any time by EPFAL in connection with the Funds Transfer Business, including (as at the date hereof) the software listed in Annex 4; "Notice of Annual Fee" means any notice of the Annual Fee prepared by EPFAL pursuant to Section 9; "PFA Accounting Period" means each successive period of 12 months beginning on 1st April in each year or of such other length and/or beginning on such other date as may be agreed in writing between EPFAL and the Executive Committee; "PFA Budget" means any budget prepared by EPFAL pursuant to Section 9 and, in the case of the PFA Accounting Period beginning in 1992, the budget set out in Annex 1; "PFA Commencement Date" means 1st April, 1992; "PFA Handling Charge" means, in respect of any amount, five per cent. of such amount; "PFA Operating Costs" means, in respect of any PFA Accounting Period or part thereof, the total expenditure properly incurred or accrued by EPFAL in such PFA Accounting Period or (as the case may be) the relevant part thereof in respect of:- (i) the costs of effecting and maintaining insurance in accordance with the requirements of sub-section 6.2; (ii) the costs of any tests of the Funds Transfer Hardware and Funds Transfer Software under sub-section 6.1; (iii) audit fees for the Funds Transfer Business and the costs and expenses of the Pool Auditor under sub-section 6.1; (iv) bank administration charges levied by the Pool Banker on EPFAL in respect of the operation of the Pool Banker Accounts (as defined in the Funds Transfer Agreement) (and excluding, for the avoidance of doubt, Bank Charges and any interest charges); (v) the fees and expenses of the PFA Custodian (as defined in Annex 5) incurred in respect of the updating of all historical data referred to in paragraph 1.1.3 of Annex 5; and (vi) the costs of the maintenance arrangements referred to in sub-section 7.7; together with the total amount of EPFAL's bad debts recognised in such PFA Accounting Period and arising from a Pool Member's failure to pay its due proportion of EPFAL's charges determined in accordance with Section 17; as conclusively certified in the event of any dispute by the auditors for the time being of EPFAL, at the cost and expense of EPFAL; "Quality of Service Review" means a review of the manner and standard of performance (both overall and on a day-to-day basis) by EPFAL of those of its obligations under the Agreement (including this Schedule) and the Agreed Procedures, the performance of which is called into question by reason of the notification received by the Executive Committee under sub-section 11.1; "Retail Price Index" means the general index of retail prices published by the Central Statistical Office each month in respect of all items provided that if:- (i) the index for any month in any year shall not have been published on or before the last day of the third month after such month; or (ii) there is a material change in the basis of the index, the Executive Committee and EPFAL shall agree a substitute index for such month or (as the case may be) a substitute index (and, in default of agreement, the matter shall be referred to arbitration pursuant to Clause 83); "Statement of Charges" means the statement of charges required to be submitted by EPFAL pursuant to sub-section 10.7 substantially in the form set out in Annex 2 (or in such other form as EPFAL and the Executive Committee may from time to time agree in writing) showing the total charges to be made by EPFAL on all Pool Members in accordance with Sections 15 and 16; "Statement of Costs and Fees" means any statement of costs and fees required to be submitted by EPFAL pursuant to Section 10 which shall be substantially in the form set out in Annex 3 or in such other form as EPFAL and the Executive Committee may from time to time agree in writing; and "Total Sum Due" means, in respect of any PFA Accounting Period, the total aggregate amount chargeable by EPFAL for that PFA Accounting Period in accordance with Sections 15 and 16. 1.2 Incorporation by reference: In this Schedule, the following definitions, namely:- "Funds Transfer Agreement"; "Funds Transfer Business"; "Funds Transfer System"; "Letter of Credit"; "Pool Account"; and "Pool Banker" shall have the meanings respectively ascribed to them in Schedule 11. 1.3 Interpretation: In this Schedule, except where the context otherwise requires, references to a particular Annex, Section, sub-section, paragraph or sub-paragraph shall be a reference to that Annex to this Schedule or, as the case may be, that Section, sub-section, paragraph or sub-paragraph in this Schedule. 1.4 Pool Funds Administrator's consent: The Parties acknowledge and agree that, notwithstanding any other provision of the Agreement, insofar as directly affects in any material respect the rights, benefits, duties, responsibilities, liabilities and/or obligations of the Pool Funds Administrator, no amendment to or variation of any of the matters dealt with in any of the following provisions of the Agreement shall take effect:- 1.4.1without the prior written consent of EPFAL (but only for so long as it is the Pool Funds Administrator):- (a) Clauses 7.3, 9.5, 10.9, 19.4, 25, 66, 68, 69, 74 and 78.2 of the Agreement; and (b) this sub-section 1.4; and 1.4.2 without the prior written consent of EPFAL (but only for so long as it is the Pool Funds Administrator), such consent not to be unreasonably withheld or delayed:- (a) Clauses 18.1.2, 70, 71.5 and 71.6 of the Agreement; and (b) Part XVI (other than Clause 63.1), Part XX (other than Clauses 74 and 78.2) of and Schedule 11 to the Agreement; and (c) this Schedule. 2. APPOINTMENT 2.1 Continuation of Appointment: On 30th March, 1990 EPFAL was appointed by each Pool Member and the Ancillary Services Provider and agreed to act as the Pool Funds Administrator. This Schedule sets out the terms and conditions on and subject to which EPFAL shall continue and agrees to continue to act as the Pool Funds Administrator for the period referred to in sub-section 2.2 (as such period may be extended or further extended in accordance with the terms of this Schedule). 2.2 Term: EPFAL's appointment as the Pool Funds Administrator on and subject to the terms and conditions set out in this Schedule shall be deemed to have commenced on the PFA Commencement Date and, subject as hereinafter provided in this Schedule, shall end on 31st March, 1995 (the period from the PFA Commencement Date to 31st March, 1995 being the "Current Term"). 2.3 Extension of term: EPFAL's appointment as the Pool Funds Administrator may be extended beyond the expiry of the Current Term or (as the case may be) any extended or further extended term either:- 2.3.1 if it successfully tenders pursuant to sub-section 4.3 for continuation of its appointment and then on and subject to the terms and conditions of the tender; or 2.3.2 if at any time prior to that expiry EPFAL and the Executive Committee so agree in writing and then on and subject to such terms and conditions as are so agreed. 2.4 Wholly-owned subsidiary: NGC shall procure that, so long as EPFAL acts or is obliged to act as the Pool Funds Administrator, EPFAL at all times remains a wholly-owned subsidiary of NGC. 2.5 Independent Contractor: In carrying out its duties and responsibilities and otherwise in acting as the Pool Funds Administrator under the Agreement, EPFAL shall act as an independent contractor and (unless expressly authorised to the contrary) shall neither act nor hold itself out nor be held out as acting as agent for any of the other Parties. 2.6 Restriction on business: For so long as EPFAL is the Pool Funds Administrator EPFAL undertakes to each Party and the Executive Committee that it shall not render to any other Party any billing service or any other service of any nature whatsoever which is likely to give rise to a conflict of interest in the performance by EPFAL of its duties and responsibilities as the Pool Funds Administrator under the Agreement. EPFAL further undertakes that if it carries on any business other than that of Pool Funds Administrator it shall maintain separate accounts and records in respect of any other business. EPFAL acknowledges and agrees that this undertaking has been the subject of discussion and negotiation and is fair and reasonable having regard to the revision of the terms and conditions of EPFAL's appointment as the Pool Funds Administrator with effect from the PFA Commencement Date. 3. EXPIRY OF TERM AND REMOVAL 3.1 Expiry of term: If on expiry of the Current Term (or, if EPFAL's term of appointment has been extended or further extended in accordance with paragraph 2.3.1 or 2.3.2, expiry of that extended or further extended term) the term of EPFAL's appointment as the Pool Funds Administrator has not been or will not be extended or (as the case may be) further extended in accordance with paragraph 2.3.1 or 2.3.2, EPFAL shall, at the request of the Executive Committee, continue to serve as the Pool Funds Administrator for such additional period not exceeding one year from the date of expiry of the Current Term) (or, if EPFAL's term of appointment has been extended or further extended in accordance with paragraph 2.3.1 or 2.3.2, expiry of that extended or further extended term) as the Executive Committee may request in order to provide an opportunity for a successor to be appointed. The Executive Committee shall make such a request as soon as possible after becoming aware of the above circumstances but in any event no later than three months (or such other period as EPFAL and the Executive Committee may from time to time agree in writing) before the date of expiry of the Current Term or (as the case may be) the extended or further extended term. 3.2 Removal by Executive Committee: The Executive Committee may at any time remove EPFAL as the Pool Funds Administrator forthwith or after such period of notice as it thinks fit if:- 3.2.1 EPFAL shall have committed a material breach of any of its obligations as the Pool Funds Administrator under the Agreement or the Agreed Procedures (other than a technical breach of trust covered by the provisions contained in Section 5.16 of Schedule 11) and, if such breach is capable of remedy, shall have failed to remedy such breach within:- (a) three Business Days (in the case of a failure to make payment (other than where any Pool Member, the Ancillary Services Provider or the Grid Operator is in default which results in EPFAL's inability to make such payment) or a failure to call a Letter of Credit when required); (b) 14 days (in the case of any breach of its undertaking in sub-section 2.6); or (c) 15 Business Days (in the case of any other default), in any such case after it shall have received written notice from the Executive Committee specifying the breach and requiring it to be remedied; or 3.2.2 EPFAL:- (i) is unable to pay its debts (within the meaning of section 123(1) or (2) of the Insolvency Act 1986, but subject as hereinafter provided in this paragraph 3.2.2) or if any voluntary agreement is proposed in relation to it under section 1 of that Act or enters into any scheme of arrangement (other than for the purpose of reconstruction or amalgamation upon terms and within such period as may previously have been approved in writing by the Executive Committee); or (ii) has a receiver (which expression shall include an administrative receiver within the meaning of section 29 of the Insolvency Act 1986) of the whole or any material part of its assets or undertaking appointed; or (iii) has an administration order under section 8 of the Insolvency Act 1986 made in relation to it; or (iv) passes any resolution for winding-up other than a resolution previously approved in writing by the Executive Committee; or (v) becomes subject to an order by the High Court for winding-up. For the purposes of sub-paragraph (i) above section 123(1) of the Insolvency Act 1986 shall have effect as if for "(pound)750" there was substituted "(pound)150,000" and, further, EPFAL shall not be deemed to be unable to pay its debts for the purposes of sub-paragraph (i) above if any such demand as is mentioned in the said section is being contested in good faith by EPFAL with recourse to all appropriate measures and procedures. 3.3 Acknowledgement: EPFAL acknowledges and agrees that, for the purposes of paragraph 3.2.1, any breach by it of its undertaking in sub-section 2.6 shall be deemed to be a material breach of its obligations under the Agreement. 3.4 Removal as a Party: 3.4.1 Upon the expiry or termination for whatever reason of EPFAL as the Pool Funds Administrator each of the Parties shall promptly at its own cost and expense execute and deliver all agreements and other documentation and do all such other acts, matters and things as may be necessary to effect (without prejudice to paragraph 3.4.2) EPFAL's release as the Pool Funds Administrator and (if appropriate) as a Party. 3.4.2 The expiry or termination for whatever reason of EPFAL's appointment as the Pool Funds Administrator shall be without prejudice to any accrued rights and liabilities of the Parties (including EPFAL as the Pool Funds Administrator) under the Agreement. 4. APPOINTMENT OF A SUCCESSOR 4.1 Right to appoint: The Executive Committee shall have the right to appoint any successor Pool Funds Administrator. In making any such appointment the Executive Committee shall take account of the views (if any) expressed by any Pool Member, the Ancillary Services Provider or the Grid Operator. The appointment of a successor Pool Funds Administrator shall take effect upon the removal or, as the case may be, expiry of the term of appointment of EPFAL as the Pool Funds Administrator. 4.2 Appointment following removal: If EPFAL is removed pursuant to sub-section 3.2 the Executive Committee may appoint a successor without being obliged to carry out or complete the process set out in sub-section 4.3, such appointment to be on and subject to such terms and conditions as the Executive Committee sees fit. 4.3 Tender process: 4.3.1The Executive Committee shall invite tenders for appointment as successor Pool Funds Administrator:- (a) not later than one year before the expiry of the Current Term (or, if EPFAL's term of appointment has been extended or further extended in accordance with paragraph 2.3.2, not later than a date agreed between EPFAL and the Executive Committee and falling before the expiry of that extended or further extended term); and (b) if EPFAL's term of appointment has been extended or further extended in accordance with paragraph 2.3.1 or EPFAL has been requested to continue to serve as the Pool Funds Administrator pursuant to sub-section 3.1, not later than six months (or such other period as EPFAL and the Executive Committee may agree in writing) before the expiry of that extended or further extended term. 4.3.2 The persons invited to tender and the terms and conditions of that invitation, of the tender procedure and of the appointment shall be determined by the Executive Committee provided that the tender process shall be completed and the Executive Committee shall have made its decision as to the successor (or shall have decided not to appoint a successor from those persons who submitted tenders) no later than the date falling three months before the expiry of the Current Term or (as the case may be) the extended or further extended term. The Executive Committee shall not be bound to appoint the successor Pool Funds Administrator from any of those persons who have submitted tenders. The Executive Committee shall use its reasonable endeavours to ensure that in the tender process the Executive Committee does not discriminate unfairly between those eligible to tender or the tenders received. 5. TRANSFER OF RESPONSIBILITIES AND ASSETS 5.1 Transfer of responsibilities and assets: Upon a successor Pool Funds Administrator being appointed under Section 4 and accepting such appointment, EPFAL shall, at the request of such successor:- 5.1.1 (a) at EPFAL's option:- (i) fully and effectively assign, transfer and deliver to such successor all Funds Transfer Software (and copies thereof) beneficially owned by EPFAL together with all rights, title and interest therein or thereunder vested in EPFAL; or (ii) irrevocably license such successor to use all Funds Transfer Software beneficially owned by EPFAL, which licence shall be on terms enabling such successor to grant sub-licences and permitting the benefit of such licence to be assigned to any further successor Pool Funds Administrator and shall include an undertaking by EPFAL promptly to provide such access to source and object codes and other documents and materials thereto relating to the operation of the Funds Transfer System as each such successor may reasonably require for the purpose of maintaining and enhancing all Funds Transfer Software; and (b) use its best endeavours to assign or novate or procure the assignment or novation of any licence or other agreement to use any Funds Transfer Software which is not beneficially owned by EPFAL or to such successor and/or to maintain any Funds Transfer Software; (c) deliver to the successor Pool Funds Administrator two copies of the Funds Transfer Software and any associated documentation at the request of the Executive Committee for use by the successor Pool Funds Administrator; 5.1.2 make over to such successor all such records, manuals, data and other information which EPFAL is required to retain pursuant to Clause 63.1.3 of the Agreement provided that EPFAL shall be entitled to retain copies of such of those manuals as have been prepared by EPFAL at its own cost and expense (and not recharged to Pool Members pursuant to the Agreement); 5.1.3 use all reasonable endeavours to novate or procure the novation of the Funds Transfer Agreement and any banking facility or financial accommodation made available to EPFAL as Pool Funds Administrator by the Pool Banker and to transfer all Letters of Credit to such successor and cause to be transferred to such successor to hold in its capacity as Pool Funds Administrator all balances standing to the credit of any Pool Account; 5.1.4 provide such training, assistance and systems support as such successor may reasonably require and for such period as such successor may reasonably require (not exceeding three months from the date of its removal or expiry of its term as the Pool Funds Administrator) to enable such successor to carry out its duties and responsibilities as successor Pool Funds Administrator; 5.1.5 use all reasonable endeavours to transfer or otherwise make available to such successor such of the freehold and leasehold property as is owned or occupied by EPFAL and is used by it in its capacity as the Pool Funds Administrator; and 5.1.6 transfer or otherwise make available to such successor all other assets, equipment (excluding computer hardware), facilities, rights, know-how and transitional assistance which it possesses and which is necessary or desirable for such successor to have in order to enable such successor efficiently to operate the Funds Transfer System in accordance with the Agreement and the Agreed Procedures with effect on and from the time of the removal of EPFAL or expiry of EPFAL's term as the Pool Funds Administrator (unless such removal is without notice in which case so soon thereafter as is reasonably practicable), and in any such case on such reasonable terms as may be agreed between EPFAL and its successor as Pool Funds Administrator (but only, in the case of such successor, after it has itself obtained the written consent of the Executive Committee to such terms) within one month after the commencement of negotiations (or such longer period as EPFAL, such successor and the Executive Committee may agree in writing) and, in default of agreement of terms, the dispute shall be referred to arbitration in accordance with Clause 83. 5.2 Co-operation: EPFAL further agrees, in consideration of the payment of such amount as may be agreed between EPFAL and its successor as Pool Funds Administrator (but only, in the case of such successor, after it has itself obtained the written consent of the Executive Committee to such terms) within the period referred to in the final paragraph of sub-section 5.1 (and, in default of agreement of terms, the dispute shall be referred to arbitration in accordance with Clause 83), to co-operate with any such successor and the Executive Committee so that the transfer of duties, responsibilities, assets and know-how to such successor is carried out causing as little disruption to the operation of the Funds Transfer System and as little inconvenience to the Parties as is practicable in all the circumstances. 5.3 PFA Unwinding Costs: Without prejudice to Section 18, EPFAL's costs and expenses of, or directly associated with, its removal or the expiry or termination for whatever reason of its appointment as the Pool Funds Administrator (including any redundancy or relocation costs or expenses and any costs and expenses arising from the vacation or surrender of any premises or disposal or its own re-deployment of any plant or equipment used in the Funds Transfer Business) shall be borne exclusively by EPFAL (and shall not be recharged to Pool Members). 5.4 Without prejudice to rights: Any payment made by all or any of the Pool Members to EPFAL under this Section 5 shall be without prejudice to any rights and remedies which the Pool Members (or any of them) may have against EPFAL in its capacity as the Pool Funds Administrator arising under the Agreement. 5.5 Reference to Arbitration: If any matter is referred to arbitration pursuant to this Section 5, EPFAL shall not by virtue of the reference to such arbitration be entitled to delay in the handing over of the Funds Transfer Software and any records, manuals, data or other information referred to in sub-section 5.1 and EPFAL shall not be entitled to withhold any training, assistance and system support but shall continue to co-operate with the Executive Committee and the successor Pool Funds Administrator including carrying out its obligations set out in sub-sections 5.1 and 5.2 and accordingly EPFAL shall not be entitled to withhold or delay the carrying out of its obligations. 6. SPECIFIC DUTIES AND RESPONSIBILITIES 6.1 Tests of the Funds Transfer Hardware and Software: 6.1.1EPFAL shall, upon receipt of not less than ten working days' notice from the Pool Auditor and subject to availability of computer time, arrange for such tests of the Funds Transfer Hardware and the Funds Transfer Software as are from time to time reasonably required by the Pool Auditor (either on its own initiative or on the instructions of the Executive Committee) for the performance of its functions under Part IX of the Agreement. EPFAL shall, if so required by the Pool Auditor, permit the Pool Auditor to carry out such tests provided that the person or persons allocated to carry out such tests by the Pool Auditor is or are suitably qualified in the operation of computers and computer systems to carry out such tests and, in any other case, EPFAL shall carry out such tests. 6.1.2 EPFAL shall give the Pool Auditor reasonable access to the Funds Transfer Hardware and the Funds Transfer Software for the purpose of carrying out and monitoring any test under paragraph 6.1.1. 6.1.3 The costs of any test under paragraph 6.1.1 shall be borne by EPFAL and recovered by it as part of the PFA Operating Costs in accordance with this Schedule. 6.2 Insurance: 6.2.1 Subject to the availability in the insurance market of such insurances, EPFAL shall effect and maintain in full force and effect with first class insurers the following insurances:- (a) professional indemnity insurance as Pool Funds Administrator in an amount of not less than (pound)60,000,000 any one claim and (pound)60,000,000 all claims in any one year (or such other amount as may from time to time be reasonably required by the Executive Committee after consultation with EPFAL); and (b) employee fidelity insurance in an amount of (pound)60,000,000. 6.2.2 All premia and other sums of money payable in respect of all insurances effected or to be effected pursuant to paragraph 6.2.1 shall be borne by EPFAL and recovered by it as part of the PFA Operating Costs in accordance with this Schedule. 6.2.3 EPFAL shall use all reasonable endeavours to make and collect claims promptly and shall apply all moneys received by it in respect of the insurances referred to in paragraph 6.2.1 in or towards making good the loss and fully repairing the damage or (as the case may be) satisfying the relevant liability in respect of which such moneys were receivable or reimbursing the cost of the same. 6.2.4 EPFAL shall promptly supply the Executive Committee upon request from time to time with an insurance broker's certificate in form and content reasonably satisfactory to the Executive Committee confirming that cover has been effected in respect of the insurances referred to in paragraph 6.2.1 and giving reasonable details of the terms and conditions of such insurances. 6.3 Instructions: Without prejudice to Section 19, EPFAL shall comply with all instructions and directions issued by the Executive Committee to EPFAL in its capacity as the Pool Funds Administrator unless such compliance would cause EPFAL to be in breach of any of its other obligations as the Pool Funds Administrator under the Agreement or the Agreed Procedures. 6.4 Changes: EPFAL in its capacity as the Pool Funds Administrator shall not make any change in its operation of the Funds Transfer System (or any part or aspect thereof) which in its reasonable opinion is or may (either alone or together with any other change(s)) be material without the prior written consent of the Executive Committee. If EPFAL wishes to make any such change, it shall promptly notify the Executive Committee in writing giving reasonable details of the proposed change. 6.5 General: EPFAL shall have such other duties, responsibilities, obligations and liabilities as are attributed to it in the Agreement and the Agreed Procedures. 7. FUNDS TRANSFER SOFTWARE 7.1 Representations and warranties: EPFAL hereby represents and warrants to each of the Pool Members and the Executive Committee that:- 7.1.1 the Funds Transfer Software referred to in Annex 4 (in this Section, "Existing Funds Transfer Software") is all the Funds Transfer Software used by EPFAL in connection with the Funds Transfer Business as at 31st March, 1992; 7.1.2 it is the sole beneficial owner of the Existing Funds Transfer Software referred to in Part A of Annex 4; 7.1.3 it is the licensee of the Existing Funds Transfer Software referred to in Part B of Annex 4 and that the details of the licences set out in Part B of Annex 4 are correct; 7.1.4 the Existing Funds Transfer Software is freely transferable to any successor Pool Funds Administrator pursuant to Section 5; 7.1.5 the use of the Existing Funds Transfer Software in connection with the Funds Transfer Business does not infringe the rights of any other person and EPFAL is not in breach of any of the terms of the licences referred to in Part B of Annex 4; and 7.1.6 it has not received any claim or notice challenging its title to, or its right to use, the Existing Funds Transfer Software. 7.2 Future Funds Transfer Software: As from the PFA Commencement Date EPFAL shall use its best endeavours to ensure it shall be the sole beneficial owner of all Funds Transfer Software used or to be used in the Funds Transfer Business after 31st March, 1992 (in this Section, "Future Funds Transfer Software"). In the event that EPFAL is unable to ensure that it will be sole beneficial owner of such Future Funds Transfer Software it shall use its best endeavours to ensure that it shall be the exclusive licensee thereof in relation to the Funds Transfer Business or any similar or related businesses on terms which enable it to grant sub-licences and the benefit of such licence to be assigned to any successor Pool Funds Administrator. 7.3 Notification: EPFAL undertakes to notify the Executive Committee forthwith in writing in the event that:- 7.3.1 it is unable to ensure that it is the owner of, or licensee on the terms set out in sub-section 7.2 under, Future Funds Transfer Software; or 7.3.2 it receives any claim or notice of any alleged infringement of the rights of any other person by its use of any Funds Transfer Software or challenging its title to, or its right to use, any Funds Transfer Software; or 7.3.3it is or becomes aware of any infringement by any third party of its rights in any Funds Transfer Software, and to consult with the Executive Committee as to any steps to be taken in respect of any such situation. 7.4 Infringement: EPFAL hereby further represents and warrants to and undertakes with each of the Pool Members and the Executive Committee that the use of any Future Funds Transfer Software in connection with the Funds Transfer Business will not infringe the rights of any other person and that it shall not breach any of the terms of any licences under Future Funds Transfer Software. 7.5 Restrictions: EPFAL shall not, without the prior written consent of the Executive Committee (not be to unreasonably withheld or delayed), grant to any person (other than a successor Pool Funds Administrator) any right, title or interest to, in or under any Funds Transfer Software or give to such person a copy of, or permit such person to use, Funds Transfer Software or otherwise derive any benefit or profit therefrom (other than by itself using such Funds Transfer Software for the purpose of the Funds Transfer Business). 7.6 Indemnity: EPFAL hereby agrees fully and effectively to indemnify and keep indemnified each of the Pool Members and the Executive Committee from and against any and all loss, liability, damages, costs and expenses which it may suffer or incur arising out of or resulting from any breach by the Pool Funds Administrator of any of the terms, representations, warranties and undertakings contained in this Section 7 and Annex 5. 7.7 Maintenance: EPFAL shall ensure that at all times it has in full force and effect proper arrangements for the maintenance of (and the prompt rectification of defects in) the Funds Transfer Hardware and the Funds Transfer Software and, upon the reasonable request of the Executive Committee, shall supply evidence reasonably satisfactory to the Executive Committee of the existence and nature of such arrangements. The costs of all such maintenance arrangements shall be borne by EPFAL and recovered by it as part of the PFA Operating Costs in accordance with this Schedule. 7.8 Escrow arrangements: EPFAL shall comply with the provisions of Annex 5 which relate to escrow arrangements for the Funds Transfer Software and gives the warranties therein stated. 8. ANNUAL FEE 8.1 General: In consideration of the carrying out by EPFAL of its duties and responsibilities as the Pool Funds Administrator as set out in the Agreement and the Agreed Procedures (other than in respect of those matters for which EPFAL is or will be compensated through the recovery of the PFA Operating Costs in accordance with this Schedule) EPFAL shall be paid an annual fee as the Pool Funds Administrator (the "Annual Fee") calculated in accordance with the following provisions of this Section 8. 8.2 Calculation of fee: 8.2.1 In respect of the PFA Accounting Period beginning on the PFA Commencement Date the Annual Fee for that PFA Accounting Period shall be (pound)1,250,000 (the "Base Sum"). 8.2.2 In respect of each PFA Accounting Period beginning on an anniversary of the PFA Commencement Date the Annual Fee (expressed in pounds sterling) for that PFA Accounting Period shall be calculated in accordance with the following formulae:- (a) ABS = Base Sum * (1+(RPIp/100)) where RPIp = the percentage change (whether of a positive or negative value) in the Retail Price Index between that published in, or (as the case may be) the substitute index for, the third month before the PFA Commencement Date and that published in, or the substitute index for, the third month before the anniversary from which the adjusted Annual Fee is to take effect; (b) ATPM = Base Sum * (I/100) where I = the value set out in column 2 below opposite the number of Active Trading Pool Member Identities set out in column 1 below as at the beginning of the third month before the anniversary from which the adjusted Annual Fee is to take effect:- Column 1 Column 2 -------- -------- Number of Active Trading Value Pool Member Identities 0 to 60 0 61 to 70 5 71 to 80 10 81 to 90 20 91 to 100 25 101 to 110 30 111 to 120 35 121 to 130 45 131 to 140 50 141 to 150 55 (c) Annual Fee = ABS + ATPM. 8.2.3If during any PFA Accounting Period beginning on an anniversary of the PFA Commencement Date the number of Active Trading Pool Member Identities shall change such that, were the Annual Fee for that PFA Accounting Period to be recalculated, it would yield a different result from that originally calculated for that PFA Accounting Period (or, as the case may be, from that most recently recalculated for that PFA Accounting Period pursuant to this paragraph 8.2.3) EPFAL shall promptly recalculate the Annual Fee and notify the Executive Committee in writing of the amount thereof. Such notification shall be accompanied by a statement showing in reasonable detail the calculation of such amount. Subject to paragraph 8.3.2(b), such recalculated Annual Fee shall take effect for the period from the date falling one month after the receipt by the Executive Committee of such notification until the end of the then current PFA Accounting Period (or until further recalculated under this paragraph 8.2.3). 8.3 Review of fee: 8.3.1 If at any time the total number of Active Trading Pool Member Identities shall exceed 150 EPFAL may request the Executive Committee to review the basis of calculation and/or the amount of the Annual Fee. Upon receipt of such request the Executive Committee and EPFAL shall negotiate in good faith for a period not exceeding three months (or such longer period as EPFAL and the Executive Committee may agree in writing) with a view to agreeing a revised basis of calculation and/or amount of the Annual Fee. 8.3.2 (a) If EPFAL and the Executive Committee shall agree a revised basis of calculation and/or amount of the Annual Fee, such revisions shall take effect in accordance with the terms of that agreement. (b) If at the end of the negotiation period referred to in paragraph 8.3.1 EPFAL and the Executive Committee shall not have agreed a revised basis of calculation and/or amount of the Annual Fee or if the Executive Committee shall dispute any calculation of the Annual Fee made by EPFAL and notified to the Executive Committee pursuant to sub-section 9.4 or paragraph 8.2.3, EPFAL or the Executive Committee may refer the dispute to arbitration pursuant to Clause 83. Pending the award of the arbitrator(s) the Annual Fee current as at the date of EPFAL's calculation or recalculation shall continue in force. 9. PFA BUDGETS AND NOTICES OF ANNUAL FEE 9.1 PFA Budgets: Not earlier than three nor later than two months prior to the first day of each PFA Accounting Period EPFAL shall prepare and submit to the Executive Committee a PFA Budget for such PFA Accounting Period. Such PFA Budget shall be indicative only but shall be prepared on a best estimates basis. The PFA Budget for the PFA Accounting Period beginning in 1992 is set out in Annex 1. 9.2 Contents of PFA Budgets: Each PFA Budget (other than the PFA Budget for the PFA Accounting Period beginning in 1992) shall compare each item or category of budgeted expenditure shown therein with the forecast expenditure in respect of such item or category for the remainder of the then current PFA Accounting Period and report any salient differences between any such forecast expenditure and the budgeted expenditure in respect of each such item or category in the immediately preceding PFA Budget. 9.3 Form of PFA Budgets: Each PFA Budget shall be substantially in the form of that set out in Annex 1 (or in such other form as EPFAL and the Executive Committee may from time to time agree in writing). 9.4 Notice of Annual Fee: Each PFA Budget (other than the PFA Budget for the PFA Accounting Period beginning in 1992) shall be accompanied by a Notice of Annual Fee prepared by EPFAL stating the Annual Fee for the PFA Accounting Period to which such PFA Budget relates and setting out in reasonable detail the calculation of the Annual Fee. Subject to paragraphs 8.2.3 and 8.3.2, the Annual Fee so stated shall take effect for such PFA Accounting Period. 10. STATEMENT OF COSTS AND FEES 10.1 Statement of Costs and Fees: No later than one month following the date in any PFA Accounting Period of the publication of the audited accounts for the Funds Transfer Business for the previous PFA Accounting Period, EPFAL shall prepare and submit to the Executive Committee and all Pool Members a Statement of Costs and Fees for such previous PFA Accounting Period. The audited accounts of EPFAL, the instruction letter from EPFAL to its auditors giving instructions for the auditing of those accounts and the auditors' management letter (to the extent that it relates to the economy, efficiency, effectiveness and quality of service of EPFAL in carrying out its duties and responsibilities as the Pool Funds Administrator) shall accompany each Statement of Costs and Fees for each entire PFA Accounting Period. 10.2 Form of Statement of Costs and Fees: The Statement of Costs and Fees for any PFA Accounting Period:- 10.2.1 in relation to the PFA Operating Costs, shall attribute actual and accrued expenditure for such period against, inter alia, each of the categories and sub-categories set out in the corresponding PFA Budget for such PFA Accounting Period; and 10.2.2 in relation to the Annual Fee, shall state the Annual Fee and any revisions thereto for such PFA Accounting Period and shall set out in reasonable detail the calculation thereof. 10.3 Accompanying Report: Each PFA Budget and Statement of Costs and Fees for an entire PFA Accounting Period submitted to the Executive Committee and, in the case of the Statement of Costs and Fees, Pool Members pursuant to sub-section 9.1 or 10.1 shall be supported by a written report of EPFAL commenting in reasonable detail upon the matters comprised in the categories of expenditure included in such PFA Budget or Statement of Costs and Fees. 10.4 Tender Costs: 10.4.1 If, during any PFA Accounting Period, the Pool Funds Administrator reasonably believes that any of the category of services within the definition of PFA Operating Costs are likely to exceed the amount of that expenditure for that category or sub-category or other items of cost provided for in the PFA Budget by more than 5 per cent., the Pool Funds Administrator shall notify the Executive Committee accordingly and explain the reasons for the increase. The Executive Committee may require the Pool Funds Administrator to invite tenders for any of the categories or sub-categories or items of cost which are so exceeded, in accordance with sub-section 10.4.3. 10.4.2 If the Executive Committee considers that the amount budgeted for any category or sub-category or other item of cost in the PFA Budget is unreasonable then the Executive Committee may require the Pool Funds Administrator to invite tenders for any of the categories or sub-categories or other items of cost in the PFA Budget in accordance with sub-section 10.4.3. 10.4.3 Within seven Business Days after receipt of a notice given pursuant to paragraph 10.4.1 the Executive Committee shall notify the Pool Funds Administrator in writing whether it wishes the Pool Funds Administrator to seek a further tender for the service in question. If the Executive Committee so notifies the Pool Funds Administrator that it requires a further tender to be sought, the Pool Funds Administrator shall obtain a further tender and shall give the Executive Committee reasonable details of that further tender and at the same time shall notify the Executive Committee of which tender it has chosen to accept together (if applicable) with reasons as to why it has not chosen the lowest price tender. 10.4.4 If the Executive Committee fails to notify the Pool Funds Administrator within the time period referred to in paragraph 10.4.2 or notifies the Pool Funds Administrator that it does not wish it to seek a further tender, the Pool Funds Administrator may accept the original tender. 10.5 Basis of preparation: All Statements of Costs and Fees other than a Statement of Costs and Fees in respect of an entire PFA Accounting Period shall be unaudited but prepared on a best estimates basis. The Statement of Costs and Fees in respect of an entire PFA Accounting Period shall be audited by EPFAL's auditors. 10.6 Accounting Practices: Each PFA Budget and Statement of Costs and Fees shall be prepared on the basis of the accounting principles and practices used to draw up the most recent audited accounts of EPFAL and consistently applied. If any Statement of Costs and Fees for an entire PFA Accounting Period is not prepared on such basis, EPFAL shall prepare and submit to the Executive Committee and all Pool Members a pro-forma set of its audited accounts for such entire PFA Accounting Period which is prepared on the basis of the accounting principles and practices used to prepare the relevant Statement of Costs and Fees. Any changes in the accounting principles and practices or their method of application used to prepare EPFAL's audited accounts shall be noted in the next following PFA Budget or Statement of Costs and Fees, as the case may be. 10.7 Statement of Charges: A Statement of Charges shall accompany each Statement of Costs and Fees. 11. QUALITY OF SERVICE REVIEW 11.1 Complaints: If the Executive Committee shall receive from any Pool Member written notification of a breach or an alleged breach of the Agreement or an Agreed Procedure involving EPFAL in its capacity as the Pool Funds Administrator it shall promptly notify EPFAL of receipt and shall send a copy of such notification to EPFAL. 11.2 Report: Within one month after receipt from the Executive Committee of any such notification as is referred to in sub-section 11.1 EPFAL shall prepare and submit to the Executive Committee a written report explaining in reasonable detail the circumstances which gave rise to, and the causes of, the breach (or, if it asserts that there has not been a breach, the reasons in support of that assertion), any remedial action taken by it and the consequences of such action. 11.3 Quality of Service Review: Promptly after receipt of EPFAL's written report referred to in sub-section 11.2 (or, if EPFAL shall fail to submit a report within the period referred to in that sub-section, promptly after expiry of that period) the Executive Committee shall determine whether it wishes to commission a Quality of Service Review. In making such determination the Executive Committee shall take into account the nature and seriousness of the notified breach (or alleged breach) and the said written report (if any). The Executive Committee shall notify EPFAL in writing of any such determination. 11.4 Consultants: If the Executive Committee shall determine to commission a Quality of Service Review, it shall instruct the Consultants to conduct such review and to report in writing (a "Review Report") to the Executive Committee and EPFAL. 11.5 Terms of engagement: The terms of engagement of the Consultants (including the objectives and scope of the work to be performed and the form of report to be issued) in respect of any Quality of Service Review shall (subject to sub-section 11.10) be determined by the Executive Committee in consultation with EPFAL. 11.6 Review Report: EPFAL shall be given the opportunity to examine and comment on any factual details contained in any Review Report before it is submitted in final form. Such final form shall, if the Consultants commissioned to carry out the Quality of Service Review shall think fit, take into consideration the comments of EPFAL on any factual details contained in the Review Report and include an indication of the response and proposed action of EPFAL. A copy of the final form of the Review Report shall be sent to EPFAL and may be distributed by the Executive Committee to Pool Members and the Director. 11.7 Implementation: Upon receipt of a Review Report, EPFAL shall (if so required by and in consultation with the Executive Committee) give effect to such recommendations, if any, as are set out in such report as soon as is reasonably practicable following the date of receipt by EPFAL of such report. 11.8 Arbitration: If EPFAL shall in good faith consider the recommendations in any Review Report to be impractical or inappropriate, the same shall be referred for resolution to arbitration in accordance with Clause 83. 11.9 Access: For the purposes of any Review Report, EPFAL shall permit the Consultants access to the Funds Transfer Hardware, the Funds Transfer Software and all data used by EPFAL in the operation of the Funds Transfer System and to such of its company books, accounts and vouchers as relate to any of the items or categories of expenditure which make up the PFA Operating Costs and as are necessary for the performance of the Quality of Service Review. The Consultants shall also be entitled to require from EPFAL's officers, employees or agents such information and explanations as are necessary for the performance of the Quality of Service Review (but, for the avoidance of doubt, the Consultants shall not have access to any data used, information held or records kept in relation to any Pool Member without such Pool Member's prior written consent). 11.10 Confidentiality: The terms of engagement of the Consultants commissioned to carry out the Quality of Service Review shall include a written obligation of the Consultants and signed on their behalf in favour of EPFAL to keep confidential information made available by EPFAL to the Consultants or to which the Consultants have access for the purposes of the Quality of Service Review save that the Consultants shall be entitled to disclose any such information:- 11.10.1 in the Review Report to the extent that the Consultants reasonably consider appropriate (after consultation with EPFAL) for the purposes of that report; or 11.10.2 with the prior written consent of EPFAL; or 11.10.3 in compliance with any requirement of law or pursuant to the arbitration rules of the Electricity Arbitration Association or pursuant to any judicial or other arbitral process or tribunal having jurisdiction. 11.11 Additional rights: The provisions of this Section 11 are in addition to (and not in substitution for) and shall not prejudice any other rights which the Executive Committee or any Pool Member may have in respect of any such breach as is referred to in sub-section 11.1. 12. AUDITORS' OPINION The Statement of Costs and Fees in respect of an entire PFA Accounting Period to be sent to the Executive Committee and all Pool Members pursuant to sub-section 10.1 shall be accompanied by a report from EPFAL's auditors considering whether in such auditors' opinion:- (a) the Statement of Costs and Fees is in agreement with EPFAL's underlying books and records; (b) PFA Operating Costs have been properly extracted from EPFAL's audited financial statements; and (c) the calculations in respect of the Annual Fee are in accordance with the formulae set out in sub-section 8.2, and are correct and in agreement with EPFAL's underlying books and records. 13. PFA ACCOUNTING PERIOD Each PFA Accounting Period shall be for a period of 12 months unless otherwise agreed in writing by EPFAL and the Executive Committee. If EPFAL wishes to change its accounting reference date it shall give due notice thereof to the Executive Committee which shall agree to enter into an amending agreement to the Agreement in order to give effect to the same at EPFAL's cost and expense. 14. THE POOL FUNDS ADMINISTRATOR'S CHARGES EPFAL shall be entitled to recover from all Pool Members the charges set out in Sections 15 and 16 in respect of its operation of the Funds Transfer Business but, subject to Section 19, shall not be entitled to recover any other charges. 15. AMOUNT 15.1 Annual Charges: In respect of each PFA Accounting Period, EPFAL shall be entitled to recover from Pool Members annual charges equal to the aggregate of the following amounts:- 15.1.1 PFA Operating Costs for the relevant PFA Accounting Period (as identified by the Statement of Costs and Fees for such period submitted pursuant to Section 10); 15.1.2 the PFA Handling Charge, calculated on the total amount of the PFA Operating Costs; 15.1.3 the Annual Fee for such PFA Accounting Period; and 15.1.4 the Bank Charges. 15.2 Recovery of Charges: 15.2.1 The due proportion (determined in accordance with sub-section 15.4) of EPFAL's annual charges referred to in sub-section 15.1 payable by each Pool Member for each PFA Accounting Period shall be recovered by monthly payments in advance from each Pool Member or, where EPFAL and the Pool Member otherwise agree, semi-annually in advance (calculated on a best estimates and reasonable basis to be one twelfth or, as the case may be, one half of the annual charges payable by such Pool Member by reference to the most recent PFA Budget). 15.2.2 EPFAL shall advise each Pool Member of such amount by invoice despatched to each Pool Member approximately 15 days prior to the first day of each month or, as the case may be, other period. Such invoice shall be paid no later than the first day of such month or such other period. Each Pool Member shall pay the amount advised in the relevant invoice within 15 days after the invoice date. 15.2.3 Each Pool Member shall pay all amounts due hereunder in sterling in cleared funds in full without set off or counterclaim, withholding or deduction of any kind whatsoever but without prejudice to any other remedy. All charges are exclusive of United Kingdom Value Added Tax which shall be added to such charges, if applicable. 15.2.4 In the event of any dispute regarding charges in any month or period, no Pool Member may withhold payment of any invoiced amount but may refer such dispute to arbitration in accordance with Clause 83. 15.3 Interest on non-payment: If any amount due to EPFAL in its capacity as the Pool Funds Administrator is not received on the due date the Pool Member required to pay such amount shall pay interest to EPFAL on such amount from and including the date of default to the date of actual payment (as well after as before judgment) at the rate which is 4 per cent. per annum above the Base Rate from time to time of National Westminster Bank PLC during each period of default. 15.4 Payment of Charges: Each Pool Member shall pay its due proportion of EPFAL's charges for each PFA Accounting Period determined in accordance with Section 17. 15.5 Amount of Charges: The amount of each such payment shall be estimated initially by reference to the PFA Budget. EPFAL shall adjust the amount of each such payment by reference to the most recent Statement of Costs and Fees and so as to take into account PFA Operating Costs, the PFA Handling Charge, the Annual Fee and the Bank Charges during the previous PFA Accounting Period and anticipated costs in respect of the same during the current PFA Accounting Period and shall recover from or, as appropriate, credit to each Pool Member its due proportion of the difference between actual and anticipated PFA Operating Costs, the PFA Handling Charge, the Annual Fee and the Bank Charges and payments received in respect of such costs, fees and charges in each case for the previous and the current PFA Accounting Period. Such recovery or credit shall take place by reference to an adjustment to each Pool Member's charges for the current PFA Accounting Period. 15.6 New and Former Pool Members: Any Pool Member which is a Pool Member for part only of any PFA Accounting Period shall pay charges on an interim basis of such amount as the Executive Committee estimates to be reasonable for such PFA Accounting Period on the basis of the allocation of charges set out in Section 17. Adjustments to charges on all Pool Members as a result of existing Pool Members leaving or new Pool Members joining will be made following, and shall be set out in, the Statement of Charges submitted for the relevant PFA Accounting Period pursuant to sub-section 10.7 whereupon the Pool Members and/or former Pool Members shall be required to pay such additional amount or be entitled to such reimbursement as may be determined in accordance with the Agreement by an adjustment to charges in the then current PFA Accounting Period. 16. BANK CHARGES Bank Charges: EPFAL in its capacity as the Pool Funds Administrator shall collect from Pool Members the amounts they are obliged to pay by way of bank transaction charges towards the costs of the Pool Banker and all Settlement Banks ("Bank Charges") and shall account for the same to the Pool Banker and such Settlement Banks. 17. ALLOCATION OF CHARGES 17.1 Total Sum Due: In respect of each PFA Accounting Period, the Total Sum Due shall be allocated amongst Pool Members in accordance with the following provisions of this Section 17. 17.2 Payment of Total Sum Due: Each Pool Member shall be obliged to pay the amount allocated to it in accordance with this sub-section. The total aggregate amount allocated to all Pool Members in respect of any PFA Accounting Period shall equal the Total Sum Due in respect of such PFA Accounting Period. 17.3 Allocation of Total Sum Due: The Total Sum Due in respect of each PFA Accounting Period shall be allocated amongst Pool Members in the following manner:- 17.3.1 first, in order to recover the discrete costs referable to each Pool Member during any PFA Accounting Period, the costs incurred by EPFAL in its capacity as the Pool Funds Administrator in complying with a request of such Pool Member made pursuant to Clause 63.1.7 or sub-section 6.3 of Schedule 11 which are directly referable to such Pool Member shall, as far as possible, be allocated to such Pool Member; and 17.3.2 secondly, 100 per cent. of the balance of the Total Sum Due during any PFA Accounting Period not recovered pursuant to paragraph 17.3.1 shall be allocated amongst all Pool Members during such PFA Accounting Period according to their respective Contributory Shares or such PFA Accounting Period. For this purpose, each Pool Member's due proportion of the charges shall be assessed first by reference to the then latest Contributory Shares of all Pool Members calculated by the Executive Committee for the period and each part thereof to which such charges relate (or, if and to the extent that the charges relate to a period for which no such calculation has yet been made, by reference to the then most recently calculated current Contributory Shares of all Pool Members) and shall thereafter be readjusted from time to time for each day within the relevant period following changes to the Contributory Shares of Pool Members for all or any part of such period or (as the case may be) following the calculation of the Contributory Shares for such period. 17.4 Prima facie evidence: EPFAL's determination of the allocation of all costs during any PFA Accounting Period shall, in the absence of manifest error, be prima facie evidence thereof. 18. ADJUSTMENT If the Executive Committee requests EPFAL to continue to serve as the Pool Funds Administrator pursuant to sub-section 3.1 to allow a successor to be appointed, EPFAL and the Executive Committee shall negotiate in good faith for a period not exceeding six weeks (or such longer period as EPFAL and the Executive Committee may agree in writing) with a view to agreeing a revision in the amount of the Base Sum to be used in the calculation of the Annual Fee for the duration of the additional period referred to in sub-section 3.1. If EPFAL and the Executive Committee shall agree to revise the amount of the Base Sum, such revision (and any consequential revision in the Annual Fee) shall take effect in accordance with the terms of that agreement. If no agreement is reached within the said negotiation period the Executive Committee or EPFAL may refer the dispute to arbitration pursuant to Clause 83. Pending any such agreement being reached or any such dispute being resolved by arbitration, EPFAL shall continue to serve as the Pool Funds Administrator for the additional period referred to in sub-section 3.1. 19. ADDITIONAL COMPENSATION 19.1 General: A direction or instruction of the Executive Committee to EPFAL in its capacity as the Pool Funds Administrator shall not materially increase the duties, responsibilities or liabilities of EPFAL as the Pool Funds Administrator beyond those detailed in the Agreement as at the PFA Commencement Date and as detailed in the Agreed Procedures without proper compensation. 19.2 Compensation: If the Executive Committee gives a direction or instruction to EPFAL in its capacity as the Pool Funds Administrator which materially increases the duties, responsibilities or liabilities of EPFAL as the Pool Funds Administrator beyond those detailed in the Agreement as at the PFA Commencement Date and as detailed in the Agreed Procedures, then (subject to sub-section 19.3):- 19.2.1 EPFAL shall carry out that direction or instruction unless it has reasonable grounds for refusing so to do in which event it shall forthwith notify the Executive Committee in writing of its refusal and its reasons therefor (and, for this purpose, an increase in the duties, responsibilities or liabilities of EPFAL in its capacity as the Pool Funds Administrator shall not of itself constitute reasonable grounds); 19.2.2 EPFAL and the Executive Committee shall negotiate in good faith for a period not exceeding one month (or such longer period as EPFAL and the Executive Committee may agree in writing) with a view to agreeing an appropriate increase in the Base Sum to reflect such increase in EPFAL's duties, responsibilities and liabilities as the Pool Funds Administrator; 19.2.3 if EPFAL and the Executive Committee shall agree an increase in the Base Sum, such increase shall take effect in accordance with the terms of that agreement; and 19.2.4 if there shall be any dispute as to whether that direction or instruction does or did materially increase the duties, responsibilities or liabilities of EPFAL as the Pool Funds Administrator or whether EPFAL has reasonable grounds for refusing to carry out that direction or instruction or if no agreement is reached under paragraph 19.2.2, EPFAL or the Executive Committee may refer the dispute to arbitration in accordance with Clause 83. 19.3 Reservation: The performance by EPFAL of any direction or instruction of the Executive Committee shall not prevent EPFAL from later claiming that such direction or instruction materially increased its duties, responsibilities or liabilities as the Pool Funds Administrator provided always that EPFAL shall not be entitled so to claim unless it gave written notice to the Executive Committee promptly (and in any event within seven days) after first becoming aware that such direction or instruction materially increased or was likely materially to increase such duties, responsibilities or liabilities, such notice to contain detailed reasons in support of why there has been or is likely to be such an increase. 20. RECOVERY OF POOL ADMINISTRATION COSTS 20.1 Applicability: The provisions of this Section 20 shall apply to:- 20.1.1 the costs and expenses (within the extended meaning of that expression in Clause 23.5 of the Agreement) of the Executive Committee, its sub-committees and sub-groups and the personnel referred to in Clause 17.2.1 together with the liabilities (if any) associated with the termination of any lease of any business accommodation required by the Executive Committee, the Chief Executive, the sub-committees, the sub-groups of such personnel; 20.1.2 the costs and expenses of Committee Members and members of the sub-committees and sub-groups of the Executive Committee; 20.1.3 the costs and expenses of the Pool Chairman; 20.1.4 the remuneration, costs and expenses of the personnel referred to in Clause 17.2.1 of the Agreement; 20.1.5 the remuneration, costs and expenses of the Secretary; 20.1.6 the costs and expenses of the Pool Auditor; 20.1.7 the overhead costs of the Electricity Arbitration Association; 20.1.8 all such other costs, fees, expenses, liabilities, losses and other amounts which are required by the Agreement (or any other agreement, document or arrangement prepared, executed or entered into pursuant to the Agreement and for this purpose approved by the Executive Committee) to be dealt with "in accordance with Section 20 of Schedule 15" or "in accordance with the PFA Accounting Procedure"; and 20.1.9 any bad debts which are to be treated as Pool Administration Costs pursuant to sub-section 20.7, (together "Pool Administration Costs"). 20.2 Approval: The Executive Committee (or its delegate) shall approve all Pool Administration Costs in advance of submitting the same to EPFAL for payment. 20.3 Payment: Upon receipt of an invoice or other statement relating to Pool Administration Costs which has been approved by or on behalf of the Executive Committee in accordance with sub-section 20.2, EPFAL shall pay the amount stated in such invoice or other statement (together with Value Added Tax thereon, if applicable) to such person or persons as the Executive Committee (or its delegate) shall direct. 20.4 Recovery: 20.4.1 EPFAL shall collect from Pool Members the amounts which they are obliged to pay towards the Pool Administration Costs and Pool Members shall be obliged to pay in accordance with sub-section 20.6 their respective proportionate share of the Pool Administration Costs (together with Value Added Tax thereon, if applicable) against receipt of an invoice or other statement therefor issued by EPFAL and otherwise in accordance with paragraph 20.5.1; 20.4.2 EPFAL shall collect from the Grid Operator, and the Grid Operator shall be obliged to pay against receipt of an invoice or other statement therefor issued by EPFAL and otherwise in accordance with paragraph 20.5.2, 10 per cent. of the annual overhead costs of the Electricity Arbitration Association (together with Value Added Tax thereon, if applicable). 20.5 Collection procedure: 20.5.1 EPFAL shall arrange for collection from Pool Members of their respective proportionate share of the Pool Administration Costs in such manner as may be agreed by EPFAL with the Executive Committee from time to time (which may include collection in advance) and Pool Members shall comply with such collection procedures and, in particular, shall make payment within the time period prescribed by such procedures. The provisions of paragraphs 15.2.3, 15.2.4 and sub-section 15.3 shall in any event apply mutatis mutandis in respect of all payments required to be made by Pool Members pursuant to this Section 20. 20.5.2 The Grid Operator shall make payment of the amount referred to in paragraph 20.4.2 within 15 days after receipt of the invoice or other statement therefor. 20.6 Proportionate Share: Pool Members shall contribute towards the Pool Administration Costs referable to a Quarter in the proportions which their respective Contributory Shares bear to each other during such Quarter. 20.7 Bad Debts: If in any PFA Accounting Period the Executive Committee recognises bad debts arising from a Pool Member's failure to pay its due proportion of Pool Administration Costs, the aggregate amount of those bad debts shall be carried forward to the immediately succeeding PFA Accounting Period and shall form part of the Pool Administration Costs for that PFA Accounting Period (spread evenly so far as practicable over the four Quarters thereof). ANNEX 1 PFA Budget for the 1992 PFA Accounting Period Category/Item Budgeted Cost (pound)000 Insurance costs 200 Funds Transfer Hardware and Funds Transfer Software testing and maintenance costs 75 Audit fees 75 Bank administration charges 100 Bad debt allowance 0 ============= Total Sum Due 450 ============= ANNEX 2 Pro-forma Statement of Charges - -------- -------------------- ---------------------------------- ---------- Name Contributory Share Period to which charges relate Amount - -------- -------------------- ---------------------------------- ---------- ANNEX 3 Pro-forma Statement of Costs and Fees (A) PFA Operating Costs Budgeted Cost for Actual Out-Turn previous PFA for previous PFA Accounting Period Accounting Period (pound)000 (pound)000 Insurance costs Funds Transfer Hardware and Funds Transfer Software testing and maintenance costs Audit fees Bank administration charges Bad debt allowance Total Sum Due
(B) Annual Fee Annual Fee (initial): the Annual Fee for the [19 ] PFA Accounting Period was(pound)[ ]. Annual Fee (revisions): the Annual Fee for the [19 ] PFA Accounting Period was revised as from [ ] to(pound)[ ] [and as from [ ] to (pound)[ ]]. Calculation of Annual Fee (initial and revisions):
ANNEX 4 Existing Funds Transfer Software Part A Beneficially Owned Pool Funds Transfer System (PFTS) PHASE 1 System Administration - User Guide (2/5/90) Clerical Procedures (3/5/90) Self Study Training Module (4/7/90) Billing Sub-Project - Test Specification v.1.0 (29/3/90), v.1.1 (3/4/90) Test Plan - Issue 1.1 (3/4/90) System Testing Log (4/4/90) Quality Assurance Plan (16/5/90) Test Data (2/4/90) Test Schedules (3/4/90) Implementation Paper Security Controls (22/3/90) Pool Funds Transfer System (PFTS) PHASE 1.1 Test Plan Issue 1.0 (18/6/90) Summary Test Report (13/7/90) Pool Funds Transfer System (PFTS) PHASE 2.0 Documentation EPFAL PFTS Phase II User Manual Version 1 Documentation EPFAL PFTS Phase II DBA Guide Version 1 Physical Design Documentation (volumes 1-4) (22/6/90) Functional Specification - Appendices (April 1990) Addendum to the Detailed Physical Design (May 1991) Part B Licensed (VMS, unless otherwise stated) VAX System VMS Sun Account 3.5.14 purchased 1/7/90. Licence No. 002505. Documentation - Standard Reference/Installation/Getting started and Tutorial manuals. VMS v.5.4 issued 1/5/90. Licence pack LP594621 s/no. 01440169. PCSA/Decnet v.4 End User Node issued 1/5/90. Licence pack LP594624 s/no. 01440172. Lotus123 v.2.2 Server Version purchased 1/91 - upgraded to v.3.1+ 18/9/91. Note a VMS version. Oracle RDBMS v.6 purchased 16/5/91 with full set of delivered documentation. PC based Novell Network Novell Advanced Network 286 v.2.15 Rec C purchased 3/90 via 3rd party. Full set Netware documentation Reference Installation/Guides etc. Sun Account v.3.5.3 purchased via 3rd party 3/90. Full set documentation - -Reference/Installation/Getting started and Tutorials. Lotus 123 v.3.1 Server purchased 18/9/91. Upgrade from v.2.2 purchased 1/91. ANNEX 5 Escrow Arrangements 1.1 EPFAL Escrow Agreement No later than 1st February, 1993 (or such later date as EPFAL and the Executive Committee may agree in writing) EPFAL in its capacity as the Pool Funds Administrator (for itself and on behalf of the Pool Members acting through the Executive Committee) shall enter into and deliver an escrow agreement (the "PFA Escrow Agreement") in the form to be agreed between EPFAL and the Executive Committee with a reputable escrow agent to be agreed between EPFAL and the Executive Committee (the "PFA Custodian"). Forthwith upon entering into the PFA Escrow Agreement EPFAL shall deposit with the PFA Custodian to the extent then in existence (and, if not in existence, as soon as possible after it comes into existence):- 1.1.1 a copy of the source code and load (machine executable) modules relating to all Funds Transfer Software beneficially owned by it together with all job control language and licensed software system tables, each in a machine readable form and the source code and job control language in a hard copy form; 1.1.2 a copy of all related manuals and other associated documentation, including:- (a) any user requirement documents, together with all associated authorised change requests; (b) any functional specification documents associated with those documents described in sub-paragraph (a) above, together with all authorised change requests associated with the relevant functional specification; (c) to the extent available to EPFAL, any design specification documents associated with those documents described in sub-paragraphs (a) and (b) above, together with all authorised change requests associated with the relevant design specification; (d) any program and/or user guides prepared to assist in the day-to-day operation and future development of the computer programs (including records of test cases together with the associated test input and output data used for validation purposes); (e) any relevant test strategy schedules and acceptance test schedules as specified for functional and operational end to end testing; (f) any relevant test acceptance certificates and reports for all tests recording comments and observations made on the appropriate tests where such tests commissioned by EPFAL; (g) any relevant client acceptance certificates and Pool Auditor's reports, together with any reports recording such clients' and the Pool Auditor's observations and comments on the tests; (h) any relevant compilation or detailed operating procedures required in connection with any of the relevant paragraphs in this paragraph 1.1.2; (i) all software licences for Funds Transfer Software licensed to EPFAL; and (j) a list detailing all versions of Funds Transfer Software licensed to EPFAL (including operating systems and compilers) used in creating such versions of the object code detailing the version numbers used and any program temporary fixes or equivalent modes; 1.1.3 a copy of all historical data (including all transaction, reference and audit data and changes to standing data) relating to the operations of EPFAL in its capacity as Pool Funds Administrator; 1.1.4 all the material referred to in sub-clauses 1.1.1 to 1.1.3 above is hereafter together referred to in this Annex 5 as the "PFA Material". 1.2 Licensed Funds Transfer Software If, after consultation with EPFAL, the Executive Committee shall so request, EPFAL shall use its reasonable endeavours to procure that the owner of any Funds Transfer Software shall permit the deposit of such Funds Transfer Software licensed to EPFAL with the PFA Custodian or other reputable escrow agent on the terms of the Escrow Agreement or similar agreement approved by the Executive Committee. 1.3 Updating EPFAL shall ensure that the PFA Material deposited with the PFA Custodian is kept fully up-to-date and reflects all Modifications (as defined in the PFA Escrow Agreement) and shall deposit a copy of all Modifications with the PFA Custodian as soon as the same are available, all in accordance with the terms of and subject to the conditions of the PFA Escrow Agreement. EPFAL shall notify the Executive Committee promptly of the delivery of each Modification to the PFA Custodian. SCHEDULE 16 Matters requiring consent of the Settlement System Administrator The Settlement System Administrator's membership of, and the procedures and powers of, the Project Board Terms of reference of project managers Approval of project documents Quality standards (including design, coding, testing, implementation and documentation) Role of Pool Auditor in systems development Components of project life cycle Ownership and warranties on development Housekeeping The Settlement System Administrator's responsibilities and rights Use of the Settlement System Administrator's resources Implementability of systems - technical compatibility with existing system - use of the Settlement System Administrator's facilities for testing - parallel operation - migration into production - configuration control - implementation planning Operability of systems - operational feasibility - operational support requirements - operational testing - interface design - performance - security - auditability - reliability Maintainability of systems - design integrity - design documentation - adherence to design and coding standards - reliability - configuration control SCHEDULE 17 Trading Sites Part A General 1. Introduction: A site shall be identified as a Trading Site for the purposes of this Agreement in accordance with the following provisions of this Schedule. 2. Application: A Party may apply to the Executive Committee for a site to be treated as a Trading Site by sending to the Executive Committee a written application in the form prescribed by the relevant Agreed Procedure (in this Schedule, a "Trading Site Application") stating the class of application and containing the other information and supported by the documents and other matters referred to in Part C and signed by or on behalf of the Generator concerned and the Supplier concerned where there exists a Supplier in respect of that site (together in this Schedule, the "Applicants"). 3. Decision: The Executive Committee shall consider any Trading Site Application within 45 days after receipt in accordance with the procedures set out in Part B and (subject to paragraph 5 of Part B) shall within that period make a determination as to whether the site the subject of such application (in this Schedule, the "Nominated Site") shall be treated as a Trading Site and shall promptly notify the Applicants and the Settlement System Administrator of its determination. Part B Procedures 1. Classes: Every Trading Site Application shall state whether it is a Class 1, Class 2, Class 3 or Class 4 application and the Executive Committee shall consider a Trading Site Application by reference to the provisions set out in this Part B for the stated class (or, in the case of paragraph 5, as provided therein). 2. Class 1: If the Trading Site Application shall state that it is a Class 1 application then the Executive Committee shall determine from the Trading Site Application and supporting documentation and other matters (and any further evidence provided in accordance with paragraph 6) if the Nominated Site is a Power Station which is or is to be electrically configured in the same manner as is prescribed in one of the line diagrams contained in the relevant Agreed Procedure and fulfils all the conditions specified in such Agreed Procedure applicable to a Class 1 application, in which event the Nominated Site shall be treated as a Trading Site. 3. Class 2: If the Trading Site Application shall state that it is a Class 2 application then the Executive Committee shall determine from the Trading Site Application and supporting documentation and other matters (and any further evidence provided in accordance with paragraph 6) if the generation and demand at the Nominated Site are electrically connected solely by Dedicated Assets, in which event the Nominated Site shall be treated as a Trading Site. In this paragraph, "Dedicated Assets" means assets and equipment which are used solely to connect electrically (a) the location at which the generation originates with (b) the location at which the demand is taken (and no other), and additionally satisfy one of the diagrammatic representations of Dedicated Assets contained in the relevant Agreed Procedure. 4. Class 3: If the Trading Site Application shall state that it is a Class 3 application then the Executive Committee shall determine from the Trading Site Application and supporting documentation and other matters (and any further evidence provided in accordance with paragraph 6) if the generation and demand at the Nominated Site are electrically connected by Contiguous Assets, in which event the Nominated Site shall be treated as a Trading Site. In this paragraph:- (a) "Contiguous Assets" means those Specified Assets and Equipment at a location which connect by one continuous electrical connection the location at which the generation originates with the location at which the demand is taken, which Specified Assets and Equipment are all owned by the Applicants and/or are Specified Assets and Equipment in respect of which a contribution is or will be made by the Applicants to the provision and installation or maintenance and repair costs thereof or where such Specified Assets and Equipment are already provided and installed, the maintenance and repair costs thereof; and (b) "Specified Assets and Equipment" means assets and equipment identified and quoted in the Connection Agreement of either Applicant where such assets and equipment include assets and equipment identified and quoted in the Connection Agreements relating to both Applicants which form part of the continuous electrical connection for the purposes of (a) above. 5. Class 4: 5.1 If the Trading Site Application shall state that it is a Class 4 application or if the Executive Committee shall determine that the Nominated Site the subject of a Class 1, Class 2 or Class 3 Trading Site Application does not satisfy the conditions specified in paragraph 2, 3 or (as the case may be) 4, the Executive Committee shall determine from the Trading Site Application and supporting documentation and other matters (and any further evidence provided in accordance with paragraph 6) if the Nominated Site shall be treated as a Trading Site having regard to the criteria set out in paragraph 5.2. 5.2 The criteria referred to in paragraph 5.1 are:- (a) whether special circumstances existed before 30th March, 1990 which demonstrate to the reasonable satisfaction of the Executive Committee that the generation and demand were treated as being on a Trading Site; (b) whether special circumstances existed before 11th December, 1991 which demonstrate to the reasonable satisfaction of the Executive Committee that the generation and demand should have been treated as on a Trading Site; (c) whether, although not satisfying the conditions applicable to a Class 1, Class 2 or Class 3 Trading Site Application, if, to the reasonable satisfaction of the Executive Committee, the Trading Site Application demonstrates sufficient similarities with sites which would satisfy those conditions such that it would be unreasonable not to treat the Nominated Site as a Trading Site; (d) whether there are any other facts or evidence in support of the Trading Site Application which in the reasonable opinion of the Executive Committee demonstrate that the Nominated Site ought to be treated as a Trading Site. 6. Further evidence: The Executive Committee may request an Applicant to produce such further evidence as the Executive Committee may reasonably require in support of its Trading Site Application before the Executive Committee makes any determination as to whether the Nominated Site is to be treated as a Trading Site, and the Executive Committee shall not be bound to make any determination on the issue of whether the Nominated Site is a Trading Site pending receipt of such further evidence. 7. Majorities: Any determination of the Executive Committee in favour of treating a Nominated Site as a Trading Site shall require a simple majority of the votes cast by Committee Members at the relevant meeting provided that in the case of a Trading Site Application which falls to be considered under paragraph 5 the necessary majority shall be 75 per cent. of all the votes cast by Committee Members. 8. Effect of determination: If the Executive Committee shall determine pursuant to paragraph 2, 3, 4 or (as the case may be) 5 that a Nominated Site is a Trading Site all metered values of all meters associated with the Nominated Site and identified in the Trading Site Application shall be aggregated in accordance with the provisions of sub-section 3.3 of, and paragraph 2F of Appendix 6 to, Schedule 9. Part C Trading Site Applications 1. Every Trading Site Application shall contain the following information:- (a) the name and address of the Applicants; (b) a full description of the Nominated Site; (c) a full description of the Metering Systems (if any) located or to be located at the Nominated Site and of their location together with a full description of the points at which all electricity flows relative to the Nominated Site are to be measured; (d) such other information as may be specified in the relevant Agreed Procedure; and (e) such other information as the Applicants shall consider relevant to their application. 2. Every Trading Site Application shall be accompanied by the following documents and other matters:- (a) line diagrams showing the electrical connections and energy flows at the Nominated Site and the location of Metering Systems (if any) and evidence demonstrating that the assets and equipment electrically connecting the generation and demand are capable of transmitting or distributing the quantity of electricity to be transmitted or distributed to the Nominated Site; (b) confirmation from the Settlement System Administrator, having duly notified the Grid Operator, that it is satisfied that the metering arrangements at the Nominated Site are compatible with the operation of Settlement; (c) in the case of a Class 2 or Class 3 Trading Site Application, other evidence demonstrating the existence of Dedicated Assets or (as the case may be) Contiguous Assets (including any Connection Agreements or relevant parts thereof). Part D Additional Provisions 1. (a) The Settlement System Administrator, the Grid Operator and each Public Electricity Supplier shall co-operate with the Applicants (insofar as is reasonable) to enable them to prepare and deliver a Trading Site Application by making available (upon reasonable notice) line diagrams relevant to the Nominated Site. (b) The Settlement System Administrator and the Grid Operator shall review the Metering Systems relative to the Nominated Site for the purposes of issuing confirmations required by the Executive Committee and, where such confirmations are considered appropriate by the Settlement System Administrator and the Grid Operator, shall issue the requisite confirmations. (c) In relation to (a) and (b), the reasonable costs and expenses of the Settlement System Administrator, the Grid Operator and each relevant Public Electricity Supplier shall be borne by the Applicants. 2. A Nominated Site which the Executive Committee resolves should be treated as a Trading Site (or is otherwise to be so treated) shall cease to be treated as a Trading Site if the Executive Committee reasonably determines that the site no longer fulfils the conditions upon which the approval for it being so treated was based. The Generator Applicant shall forthwith notify the Executive Committee if the site no longer fulfils such conditions. SCHEDULE 18 The Ancillary Services Accounting Procedure 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions: In this Schedule, unless the context otherwise requires, the words and expressions set out in this Section 1.1 shall bear the meanings respectively set out herein:- "ASP Budget" means any budget prepared by the Ancillary Services Provider pursuant to Section 2.1; "Audit Adjustments" means the aggregate value of all changes in the Cost Base required to be taken into account by the Ancillary Services Provider during any Accounting Period in order to give effect to the conclusions resulting from an audit commissioned pursuant to Clause 51.5; "Capital Expenditure" means, in respect of any Accounting Period, expenditure by the Ancillary Services Provider on fixed assets required for the purposes of the Ancillary Services Business including assets acquired on lease which are required by generally accepted accounting principles to be capitalised; "Cost Base" means, in respect of any Accounting Period, Total Operating Costs for such period less Depreciation during such period; "Depreciation" means, in respect of any Accounting Period, the aggregate value of all depreciation on assets owned or employed by the Ancillary Services Provider in the Ancillary Services Business, such assets being depreciated in accordance with the accounting policies of the Ancillary Services Provider for such period as stated in the audited accounts of the Ancillary Services Provider for such period and treated as depreciation in accordance with the terms of the Agreement; "Efficiencies" means, in respect of any Accounting Period, the amount (if any) by which the Cost Base in such Accounting Period is less than the Cost Base in the immediately preceding Accounting Period (the "First Period") after adjustments on a pound for pound basis to any difference between such two Cost Bases to offset movements from the Cost Base in the First Period due to the Rate of Inflation, Audit Adjustments and any other matters beyond the control of the Ancillary Services Provider and changes in the accounting principles or practices of the Ancillary Services Provider made during the Accounting Period in question; "Executive" means those members of the Executive Committee representing Suppliers; "Individual Limit" means, in respect of Capital Expenditure in any Accounting Period, (pound)25,000, as the same may be increased from the Effective Date by the Rate of Inflation; "Margin" means:- (i) in respect of each of the first three Accounting Periods, such amount as when added to the Total Operating Costs (excluding for this purpose any payments made by the Ancillary Services Provider for Ancillary Services, and the price of any goods and services referred to in Section 6.2 if the price exceeds the aggregate cost of supplying such goods and services actually incurred by the relevant affiliate of, or other division of, the company of which the Ancillary Services Provider is a division) in the relevant Accounting Period is equal to 10 per cent. of the sum of such amount and such Total Operating Costs; and (ii) thereafter, such margin as may be agreed between the Executive and the Ancillary Services Provider (or, in default of agreement, such margin as is reasonable in all the circumstances as determined pursuant to Clause 83); "Overall Limit" means, in respect of Capital Expenditure in any Accounting Period, (pound)100,000, as the same may be increased from the Effective Date by the Rate of Inflation; "Statement of Charges" means the statement of charges required to be submitted by the Ancillary Services Provider pursuant to Section 2.8 in the form or substantially in the form set out in Part 3 of the Annex or such other form as the Executive and the Ancillary Services Provider may agree showing the total charges to be made by the Ancillary Services Provider on all Suppliers in accordance with this Schedule; "Statement of Costs" means the statement of costs required to be submitted by the Ancillary Services Provider pursuant to Section 2.4 setting out the actual and accrued expenditure incurred by the Ancillary Services Provider in any period which shall be substantially in the form set out in Part 2 of the Annex or such other form as the Executive and the Ancillary Services Provider may agree; and "Total Operating Costs" means, in respect of any Accounting Period or part thereof:- (i) the total expenditure properly incurred or accrued by or on behalf of the Ancillary Services Provider in operating the Ancillary Services Business in such period or part thereof (other than that referred to in (ii) and (iii) below); plus (ii) all Depreciation in such period on all assets owned and employed by the Ancillary Services Provider in the Ancillary Services Business; plus (iii) all other expenditure properly incurred or accrued during such period which, under this Schedule, is permitted to be included in any Statement of Costs; plus (iv) Efficiencies which are permitted to be included in any Statement of Costs pursuant to Section 5.4. 1.2 Interpretation: 1.2.1 In this Schedule, except where the context otherwise requires, references to a particular Section, sub-section or paragraph or to the Annex shall be a reference to that Section, sub-section or paragraph of, or the Annex to, this Schedule. 1.2.2 In this Schedule the expression "Rate of Inflation" shall have the meaning assigned to it in Schedule 4. 2. ASP BUDGETS, STATEMENTS OF COSTS AND STATEMENTS OF CHARGES Budgets 2.1 ASP Budgets: Not earlier than six nor later than three months prior to the first day of each Accounting Period (other than the first) the Ancillary Services Provider shall prepare and submit to the Suppliers an ASP Budget for such Accounting Period. Such ASP Budget shall be indicative only but prepared on a best estimates basis. The ASP Budget for the first Accounting Period shall be that set out in Part 1 of the Annex. 2.2 Contents of ASP Budgets: Each ASP Budget (other than the first) shall compare each item or category of budgeted expenditure shown therein with the forecast expenditure in respect of such item or category for the remainder of the then current Accounting Period and report any salient differences between any such forecast expenditure and the budgeted expenditure in respect of each such item or category in the immediately preceding ASP Budget. 2.3 Form of ASP Budgets: Each ASP Budget shall be substantially in the form of that set out in Part 1 of the Annex (or in such other form as the Ancillary Services Provider and the Executive may from time to time agree). Statement of Costs 2.4 Statement of Costs: No later than one month following the date in any Accounting Period of the publication of the audited accounts for the Ancillary Services Business for the previous Accounting Period, the Ancillary Services Provider shall prepare and submit to each Supplier a Statement of Costs for such previous Accounting Period. The audited accounts of the Ancillary Services Provider and the auditors' management letter, to the extent it relates to the economy, efficiency and effectiveness of the Ancillary Services Provider in carrying out its duties, shall accompany each Statement of Costs for each entire Accounting Period. 2.5 Form of Statement of Costs: The Statement of Costs for any Accounting Period shall attribute actual expenditure for such period against, inter alia, each of the categories and sub-categories set out in the corresponding ASP Budget for such Accounting Period. 2.6 Accompanying Report: Each ASP Budget and Statement of Costs for an entire Accounting Period submitted to the Suppliers pursuant to Section 2.1 or 2.4 shall be supported by a written report of the Ancillary Services Provider commenting in reasonable detail upon the matters comprised in the categories of expenditure included in such ASP Budget or Statement of Costs drawing attention to and giving reasons for any unusual commitment or item of expenditure proposed to be incurred or which has been incurred and, in the case of a Statement of Costs, explaining the difference (if material) between:- 2.6.1 the amount set against each item or category therein; and 2.6.2 the amount set against each corresponding item or category in the immediately preceding ASP Budget. 2.7 Accounting Practices: Each ASP Budget and Statement of Costs shall be prepared on the basis of the accounting principles and practices used to draw up the most recent audited accounts of the Ancillary Services Provider and consistently applied. If any Statement of Costs for an entire Accounting Period is not prepared on such basis, the Ancillary Services Provider shall prepare and submit to the Suppliers a pro-forma set of audited accounts of the Ancillary Services Provider for such entire Accounting Period which is prepared on the basis of the accounting principles and practices used to prepare the relevant Statement of Costs. Any changes in the accounting principles and practices or their method of application used to prepare audited accounts of the Ancillary Services Provider shall be noted in the next following ASP Budget or Statement of Costs, as the case may be. 2.8 Statement of Charges: A Statement of Charges shall accompany each Statement of Costs. 2.9 Bad debts: The total cost of any bad debts of the Ancillary Services Provider arising in any Accounting Period may be taken into account by the Ancillary Services Provider in its Statement of Costs for such Accounting Period or any subsequent Accounting Period and accordingly recovered as part of Total Operating Costs for any such Accounting Period. 3. AUDITORS' OPINION The Statement of Costs to be sent to the Suppliers pursuant to Section 2.4 shall be accompanied by a report from the auditors of the Ancillary Services Provider considering whether in such auditors' opinion:- 3.1 the Statement of Costs is in agreement with the underlying books and records of the Ancillary Services Provider; and 3.2 Total Operating Costs and Depreciation have been properly extracted from the audited financial statements. Such auditors' report shall also contain such other matters as the Executive may agree with the auditors of the Ancillary Services Provider. 4. ACCOUNTING PERIOD The first Accounting Period shall run from (and including) 31st March, 1990 to (and including) 31st March, 1991. Thereafter, unless agreed by the Ancillary Services Provider and the Executive each Accounting Period shall be for a period of twelve months. In the event that the Ancillary Services Provider wishes to change its accounting reference date it shall give due notice thereof to the Executive which shall agree to enter into an amending agreement to give effect to the same at the cost and expense of the Ancillary Services Provider. 5. ANCILLARY SERVICES PROVIDER'S CHARGES 5.1 Ancillary Services Provider's charges: In respect of each Accounting Period, the Ancillary Services Provider shall be entitled to recover from the Grid Operator in addition to the cost of Ancillary Services the aggregate of:- 5.1.1 Total Operating Costs for the relevant Accounting Period (as identified by the Statement of Costs for such Accounting Period to be submitted pursuant to Section 2.4); and 5.1.2 the Margin. 5.2 Recovery of Charges: The Ancillary Services Provider's charges in respect of any Accounting Period shall be recovered from the Grid Operator on a daily basis in accordance with the Pool Rules and by reference to the allocation provided therein by:- 5.2.1 estimating a daily amount necessary to recover the charge by reference to the ASP Budget and, where appropriate, any under- or over-recovery in respect of any previous Accounting Period; and 5.2.2 adjusting that amount by reference to any subsequent Statement of Costs. 5.3 Revision of Estimates: If the Ancillary Services Provider reasonably believes that the amount which will be recovered under Section 5.2 is likely to be 10 per cent. more or less than the amount to which it is entitled under Section 5.1 it shall, with the consent of the Executive (such consent not to be unreasonably withheld or delayed), revise as appropriate the estimate made in accordance with Section 5.2. 5.4 Sharing of Efficiency: The Ancillary Services Provider shall be entitled to the benefit of all Efficiencies and, accordingly, to charge Grid Operator the amount of all Efficiencies by including them in ASP Budgets and Statements of Cost in the following manner. The amount of any Efficiency arising in any Accounting Period shall be identified in the Statement of Costs for such Accounting Period submitted pursuant to Section 2.4 and shall be taken into account in the Statement of Costs for the two successive Accounting Periods thereafter. Accordingly, the amount of any Efficiency may be included in any Statement of Costs for the two Accounting Periods following that in which the Efficiency is identified. In the Statement of Costs for the third consecutive Accounting Period and all following Accounting Periods thereafter the amount of such Efficiency shall be eliminated. 6. CORPORATE OVERHEAD CHARGES AND PURCHASES 6.1 Corporate Overhead Charges: The Ancillary Services Business may take into account in any ASP Budget or Statement of Costs (and consequently its charges to Suppliers) all corporate overhead charges payable by the Ancillary Services Provider to its immediate holding company or any other division of the company of which it is a division provided such corporate overhead charges are reasonable and in due proportion to the corporate overhead charges payable by other affiliates of the Ancillary Services Provider or divisions of the company of which the Ancillary Services Provider is a division as reported upon by the auditors of the Ancillary Services Provider. 6.2 Goods or services: Purchases of goods or services from affiliates of the Ancillary Services Provider shall be on arm's length terms. 7. FUEL SECURITY Except to the extent recoverable under any other provision of this Schedule, any additional costs necessarily incurred by the Ancillary Services Provider in running the Ancillary Services Business during a Security Period shall be regarded as beyond the control of the Ancillary Services Provider, which may recover the same in full from Suppliers provided such costs have been verified as additional costs by the auditors of the Ancillary Services Provider. Suppliers shall be obliged to pay the actual amount of such costs and expenses. 8. CAPITAL EXPENDITURE 8.1 Capital Expenditure (1): The following provisions apply to Capital Expenditure by the Ancillary Services Provider in respect of the Ancillary Services Business:- 8.1.1 save as provided below, Capital Expenditure by the Ancillary Services Provider which may be recovered by Depreciation charged to Suppliers shall require the prior approval of the Executive in writing, such approval to take into account an appropriate sharing of the Efficiencies arising from such Capital Expenditure; 8.1.2 Capital Expenditure which may be recovered by Depreciation charged to Suppliers specified in any ASP Budget shall be regarded as approved by the Executive unless the Executive notifies the Ancillary Services Provider to the contrary within one month after receipt of such ASP Budget; 8.1.3 in any Accounting Period the Ancillary Services Provider may incur Capital Expenditure which may be recovered by Depreciation charged to Suppliers without the need to consult or obtain the approval of the Suppliers up to a maximum of the Individual Limit for each item of Capital Expenditure and a maximum of the Overall Limit for all items of Capital Expenditure and, in the event of the Ancillary Services Provider incurring such Capital Expenditure, it shall notify the Executive as soon as practicable thereafter; and 8.1.4 the Ancillary Services Provider shall be entitled to incur Capital Expenditure which may be recovered by Depreciation charged to Suppliers of any amount without the need to obtain the approval of the Executive in circumstances where:- (a) the Ancillary Services Provider would be in breach of its duties under the NGC Transmission Licence unless such Capital Expenditure were incurred; and (b) it has not reached agreement with the Executive on such Capital Expenditure within a reasonable period of time. 8.2 Capital Expenditure (2): Capital Expenditure not falling within Section 8.1 may not be charged as Depreciation to Suppliers. ANNEX Part 1 ASP Budget for the First Accounting Period (pound)M Purchases of Ancillary Services 85.00 Local Overheads 0.81 NGC Corporate Management Charge 0.48 NGC System Operations Charge 0.25 NGC Settlement Systems Charge 0.25 ============= 86.79 ============= Part 2 Pro-forma Statement of Costs (pound)M Purchases of Ancillary Services Local Overheads NGC Corporate Management Charge NGC System Operations Charge NGC Settlement Systems Charge Part 3 Pro-forma Statement of Charges - -------- --------------------------------------------------------------------- Name Contributory Share Period to which charges relate Amount - -------- ---------------------------------------------------------------------- SCHEDULE 19 Objective and Scope of the Scheduling and Despatch Review 1. Objective: The objective of the Scheduling and Despatch Review will be to establish that:- 1.1 scheduling and despatch is carried out in accordance with the Scheduling and Despatch Code; and 1.2 information is entered into PORTHOLE in accordance with the Pool Rules. 2. Scope: The scope of the review will be to:- 2.1 review internal scheduling and despatch operating procedures for consistency with the Scheduling and Despatch Code; 2.2 review the internal checks that the Grid Operator has established to ensure that the operation of scheduling and despatch has been carried out in accordance with the procedures referred to in Section 2.1; 2.3 perform compliance testing of the operation of the internal checks referred to in Section 2.2; 2.4 review the operating procedures in relation to the use of the BPS GOAL program, including:- (a) controls over the input of data and the output of data to establish that they are appropriate to ensure an adequate level of control; and (b) procedures for the retention of records of the nature and extent of and reasons for any manual adjustments to BPS GOAL output or where BPS GOAL is run using non-standard parameters, for consistency with the Scheduling and Despatch Code; 2.5 perform compliance testing of the operating procedures referred to in Section 2.4; 2.6 review the operating procedures referred to in Sections 2.1, 2.2 and 2.4 to establish that there is no bias in favour of or against any particular Pool Member on the part of the Grid Operator; 2.7 review the operating procedures relating to the recording of despatch instructions, availability declarations, generation offer prices and the application of reason codes and the entry of data into PORTHOLE for consistency with the Pool Rules; 2.8 perform compliance testing of the operating procedures referred to in Section 2.7; 2.9 review the operating procedures referred to in Section 2.1 to establish that in the call for the delivery of Ancillary Services by the Grid Operator there is no bias in favour of or against any particular Pool Member on the part of the Grid Operator; 2.10 review the call for the delivery of Ancillary Services; 2.11 compare the generation schedule forecast demand with actual demand; and 2.12 review the generation schedule forecast demand for consistency with Section OC1 of the Grid Code. SCHEDULE 20 Accountable Interest 1. Definitions: In this Schedule:- "Generating Unit" means any Generating Unit whether or not situate in England or Wales; "Operator" means, in relation to any Generating Unit, the Authorised Electricity Operator or any other person for the time being responsible (under contract or otherwise) for the generation or sale of electricity from such unit; "Own Generating Unit" means any Generating Unit the majority beneficial ownership of which is vested in the person or an affiliate of the person or in respect of which the person or an affiliate of the person is the Operator; and "Underlying Interest" means, in relation to any Generating Unit, any interest arising by reason of the person or affiliate or any related undertaking of the person or affiliate (whether alone or with others): (a) holding or being entitled to acquire an interest in the land on which the Generating Unit, or any part thereof, is built; (b) being in partnership with or party to any arrangement for sharing of profits or cost-savings or any joint venture with any person holding or entitled to acquire an interest in the land on which the Generating Unit, or any part thereof, is built; (c) owning any electrical plant situated on or operated as a unit with the Generating Unit (and for such purpose, any electrical plant or equipment to the possession of which the person, affiliate or related undertaking is entitled under any agreement for hire, hire purchase, conditional sale or loan shall be deemed to be owned by such person) provided always that such electrical plant shall not be deemed to be operated as a unit with any Generating Unit by reason only of connections with any other system for the transmission or distribution of electricity; or (d) having obtained any consent under section 36 of the Act required for the construction or extension of the Generating Unit or any part thereof. 2. Accountable Interests: The rules for determining whether or not any person has an Accountable Interest in any Generating Unit and, if so, the MW in respect of which that person shall be treated as having such an Accountable Interest shall, subject to the following sections of this Schedule, be ascertained in such manner as the Executive Committee with the approval of the Director may determine being the appropriate share (namely the share representing that person's economic interest therein) in the declared net capacity of any Generating Unit. 3. Net capacity: There shall be attributed to the person the whole of the declared net capacity represented by any Own Generating Unit. 4. Determination of Accountable Interest: For the purposes of this Schedule and subject to Section 5, the person shall have an Accountable Interest in a Generating Unit (not being an Own Generating Unit) in circumstances where:- 4.1 the Operator is a related undertaking of the person or any affiliate of the person; or 4.2 the person or any affiliate of the person is in partnership with or is party to any arrangement for sharing profits or cost-savings or any joint venture with the Operator or with any third party with regard to the Operator; or 4.3 the person or any affiliate of the person has (directly or indirectly):- (a) any beneficial shareholding interest in the Operator; or (b) any beneficial Underlying Interest in the Generating Unit; or (c) provided or agreed to provide finance to the Operator otherwise than on arm's length terms; or (d) provided or agreed to provide, or has determined or is responsible for determining the price (or other terms affecting the financial value) of, the fuel used in the Generating Unit. 5. No Accountable Interest: The person shall not be deemed to have an Accountable Interest in a Generating Unit where:- 5.1 such Generating Unit is owned and operated by NGC under a licence granted pursuant to section 6 of the Act; or 5.2 the person's interest arises wholly under the terms of the Agreement or under any electricity purchase or sale contract; or 5.3 the person's interest arises solely by virtue of arrangements for the sharing with the Operator of any Generating Unit of the risks associated with changes in the price of fuel used by the Generating Unit during the term of any contract for the provision of electricity from the Generating Unit to the person. 6. Amount of Capacity: The Pool Member submitting an Admission Application shall provide to the Executive Committee and the Director a statement identifying (in such detail and with such supporting documents or information as the Executive Committee or the Director may require) the amount of capacity in MW represented by the Registered Capacity of Generating Units in which any person who has an Accountable Interest in the Generating Unit which is the subject of the Admission Application, including the Pool Member, has an Accountable Interest, as at the date of the statement. 7. Alternative Basis of Calculations: Where the Executive Committee or the Director is satisfied that the basis of calculation used by the Pool Member is not in conformity with this Schedule, the Executive Committee or the Director may issue directions specifying an alternative basis of calculation, and the basis of calculation provided by the Pool Member shall be adjusted accordingly with effect from the date of issue of the directions or such other date as may be specified in the directions. SCHEDULE 21 METER OPERATOR SCHEDULE PART 1 PRELIMINARY 1. INTRODUCTION 1.1 Definitions and constructions: The Parties and Meter Operator Parties expressly agree and acknowledge that the words and expressions listed below, and which are used for the purposes of this Schedule, shall not be capable of amendment without the consent of Meter Operator Parties, but that any word or expression which is not so listed in this Schedule but is a definition for the purposes of this Agreement and is used primarily for parts of this Agreement other than this Schedule shall, subject to paragraph 2.2.3 and without prejudice to paragraph 2.5, be capable of being amended without such consent notwithstanding that it may also be used in this Schedule:- Active Energy; Active Power; Agreed Procedure; Agreed Procedures Index; Code of Practice; Communications Equipment; Embedded Non-Franchise Site; Equipment Owner; ERS; ERS First Tier Customer; Exports; FMS Codes of Practice; FMS Date; FMS Metering Equipment; FMS Trading Date; Force Majeure; Generic Dispensations; Good Industry Practice; Host PES; Imports; Invitee; Licence Restricted Party; Meter; Metering Equipment; Metering System; Meter Operator Admission Application; Meter Operator Party; Meter Operator Party Accession Agreement; Meter Operator Party Resignation Notice; MVAr Metering Equipment; New Meter Operator Party; Non-Pooled Generator Operator; Outstation; Potential Operator; Reactive Energy; Reactive Power; Register; Registrant; Second Tier Customer; Substantial Part; Synopsis of Metering Codes; Tariff or relevant Tariff; Tariff Operator; and Third Parties. 1.2 Interpretation: Wherever a reference is made in this Schedule to a Meter Operator Party or to an Operator, such reference shall be to a Meter Operator Party in its capacity as such Meter Operator Party or, where the context so requires, to an Operator in its capacity as Operator, but shall not refer to the person which is that Meter Operator Party or Operator in, and shall be in all cases without prejudice to, any other capacity in which such person may be party to this Agreement. 1.3 Agreed Procedures and Codes of Practice: 1.3.1 Each of the Parties and each of the Meter Operator Parties undertakes to comply with the Agreed Procedures and the Codes of Practice insofar as applicable to it. 1.3.2 The Settlement System Administrator shall retain copies of all Agreed Procedures and Codes of Practice and of any other documentation referred to in such Agreed Procedures or Codes of Practice and shall provide a copy of all or any thereof to any Party or Meter Operator Party on request and may make a reasonable charge for such provision. 1.3.3 Notwithstanding the absence from time to time of its express consent, each Meter Operator Party hereby expressly acknowledges and agrees to be bound by the provisions contained in this Agreement which govern the method by which all Agreed Procedures and Codes of Practice may be, from time to time, changed or substituted and which determine the meaning in any given context of the terms the "relevant Agreed Procedure" and the "relevant Code of Practice". 1.4 Agreed Procedures and Codes of Practice: Referral to the Director: 1.4.1 Without prejudice to paragraph 1.3.3, where any Meter Operator Party considers that any change proposed to be made to any Agreed Procedure or to any Code of Practice would have a material adverse effect on its rights and liabilities as a registered Operator, a Potential Operator or Tariff Operator as set out in this Schedule (the "proposed change"), it shall have the right in the prescribed time limits to refer the matter in writing to the Director (such referral to be copied to the Executive Committee) who shall determine, taking into account the views expressed by the Executive Committee and any Parties referred to below in this paragraph, whether such proposed change has such a material adverse effect. The Director's determination shall be final and binding for all purposes. 1.4.2 For the purposes of enabling any Meter Operator Party to appeal to the Director against a proposed change to any Agreed Procedure or Code of Practice in accordance with paragraph 1.4.1, the Executive Committee shall give all Parties, Meter Operator Parties and the Director notice of the proposed changes at least fourteen clear days prior to the implementation of such proposed change in accordance with the provisions of this Agreement. 1.4.3 If an appeal to the Director against a proposed change to any Agreed Procedure or Code of Practice is made within 14 days after notification by the Executive Committee pursuant to paragraph 1.4.2, the change shall not come into effect until the determination of the Director has been made and then subject to paragraph 1.4.4. If no appeal is made within the said 14 days, the change shall come into effect on the expiry of that period (or such later date as the Executive Committee may determine). 1.4.4 The Director shall within 28 days of receipt of a referral (or within such extended period as the Director shall have notified to the Executive Committee within that 28 day period as being necessary to enable him to reach a considered determination) pursuant to paragraph 1.4.1 make the determination referred to therein giving supporting reasons and:- (i) if the determination of the Director is that the proposed change does not have a material adverse effect upon the rights and liabilities as set out in Schedule 21 of the appellant Meter Operator Party as registered Operator, as Potential Operator or as Tariff Operator then the proposed change shall come into effect in accordance with the provisions of this Agreement; and (ii) if the determination of the Director is that the proposed change does have a material adverse effect upon the rights and liabilities as set out in Schedule 21 of the appellant Meter Operator Party as registered Operator, as Potential Operator or as Tariff Operator, the Director may require that the proposed change not come into effect (in which case such proposed change shall not come into effect) or require that modifications be made to the proposed change to obviate or mitigate such material adverse effect. In the latter case the Executive Committee and each Party whose consent is required to the relevant amendment to that Agreed Procedure or, as the case may be, Code of Practice, shall take all reasonable steps to implement any decision of the Director (for which reasons shall be given) requiring changes to be made to such Agreed Procedure or Code of Practice with the purposes of obviating or, where the Director considers appropriate, mitigating such material adverse effect on such Meter Operator Party. 2. AMENDMENTS AND MODIFICATIONS 2.1 Obligations: The Parties and Meter Operator Parties expressly acknowledge and agree that each Meter Operator Party is bound only to the extent of the obligations which are expressly set out or referred to in this Schedule (including those provisions incorporated herein by reference in paragraph 24) and not by any other provision of this Agreement. Each Meter Operator Party agrees to comply with the provisions of this Schedule (including those provisions of this Agreement incorporated herein by reference in paragraph 24). The Parties and Meter Operator Parties further expressly agree that any Meter Operator Party (in its capacity as such) shall be conferred only with such rights in respect of this Agreement as are expressed to be conferred on it as Operator or Meter Operator Party pursuant to provisions which are expressly set out in this Schedule (including those provisions incorporated herein by reference in paragraph 24) or are definitions listed in paragraph 1.1. 2.2 Consent: 2.2.1 The consent or agreement of any Meter Operator Party shall not be required to any modification, abrogation, amendment or suspension of any provision of this Agreement which is not expressly set out in this Schedule (and for this purpose the provisions of this Agreement incorporated herein by reference in paragraph 24 shall be deemed to be not set out in this Schedule) or which is not a definition listed in paragraph 1.1. Each Meter Operator Party hereby irrevocably waives any rights which it might be considered or held to have to consent or agree to any such modification, abrogation, amendment or suspension. 2.2.2 Where under paragraph 2.2.1 a Meter Operator Party would otherwise have a right to consent or agree to a modification, abrogation, amendment or suspension of a provision of this Agreement then that consent or agreement shall not be required in circumstances where the consent or agreement of any Party (not being the Settlement System Administrator, the Grid Operator, the Ancillary Services Provider or the Pool Funds Administrator) is also not required under this Agreement to such modification, abrogation, amendment or suspension. 2.2.3A Meter Operator Party whose consent or approval need not by virtue of this paragraph 2 be sought or obtained to any modification, abrogation, amendment or suspension of any provision of this Agreement may refer the matter to the Director as if it were a referral under and in accordance with paragraph 1.4 (and such that the provisions of that paragraph shall apply mutatis mutandis to such referral) provided that in reaching any determination as to whether the proposed change shall come into effect the Director shall consider the nature of the changes upon Meter Operator Parties as a class and shall not have locus standi to consider any perceived or actual prejudice as an individual Meter Operator Party. 2.3 Authorisation to amend: Without prejudice to paragraphs 2.1 and 2.2, each Meter Operator Party hereby unconditionally and irrevocably authorises and instructs the Chief Executive and each person authorised for the purpose by the Executive Committee to sign on its behalf amending agreements to this Agreement, to execute any agreement which modifies, abrogates, amends or suspends any provision of this Agreement in circumstances where such Meter Operator Party's consent or approval is not required, and undertakes not to withdraw, qualify or revoke such authority and instruction at any time. 2.4 Notification: The Executive Committee shall notify each Meter Operator Party of all amendments, modifications, abrogations and suspensions which are made to this Agreement for which the consent or agreement of such Meter Operator Party is not required. 2.5 Further rights: The Executive Committee shall from time to time consider any representations which Meter Operator Parties may make to the effect that there are provisions set out in the Agreement but not in this Schedule 21 and, accordingly, in respect of which Meter Operator Parties are not conferred with rights by virtue of this paragraph 2, which are operating in a manner which is having a material effect on the rights and liabilities of such Meter Operator Parties as set out herein. The Executive Committee shall consider whether, and the extent to which (if at all), such provisions should be recommended for incorporation into this Schedule 21. PART 2 ADMISSION, RESIGNATION AND REMOVAL 3. ADMISSION 3.1 General: Subject to the following provisions of this paragraph 3, the Parties and the Meter Operator Parties shall admit as an additional party for the purposes of this Schedule only, on the terms set out in paragraph 2, any person (the "New Meter Operator Party") who applies to be admitted in the capacity of Meter Operator Party. 3.2 Procedure for admission: Admission Application: A New Meter Operator Party wishing to be admitted as an additional party for the purposes only of this Schedule, on the terms set out in paragraph 2 hereof, shall complete a Meter Operator Party Admission Application and shall deliver it to the Executive Committee together with the fee (which shall be non-refundable). 3.3 Procedure for admission as Meter Operator Party: Executive Committee response: 3.3.1 Upon receipt of any Meter Operator Party Admission Application duly completed the Executive Committee shall notify all Parties, Meter Operator Parties and the Director of such receipt and of the name of the New Meter Operator Party. 3.3.2 Any Pool Member may by written notice to the Executive Committee, stating the grounds for the objection, object to the admission of any person in respect of which a Meter Operator Party Admission Application has been received by the Executive Committee and where any such notice of objection is received the Executive Committee:- (i) in the case of an application which the Executive Committee considers, taking into account any objection made pursuant to this paragraph, to be frivolous or vexatious, may reject such application and such rejection shall on that application be final and binding and there shall not be conferred upon the relevant New Meter Operator Party, by virtue of such rejection, any further right of appeal to the Director in respect thereof; or (ii) in the case of an application which the Executive Committee does not consider, taking into account any objection made pursuant to this paragraph, to be frivolous or vexatious, shall refer the matter to the Director for determination and the provisions of paragraph 3.4 shall apply to such determination. Any objection to be effective must be received by the Executive Committee within 7 days of notification by the Executive Committee of the relevant Meter Operator Party Admission Application in accordance with paragraph 3.3.1 (the "objection period"), and the Executive Committee shall disregard any notice of objection which is received outside the prescribed period. Any notice of objection shall be copied by the Executive Committee upon its receipt to all Parties, Meter Operator Parties and the Director. 3.3.3 Within 7 days of the expiry of the objection period (the "consideration period") the Executive Committee shall notify the New Meter Operator Party and the Director either:- (a) that the New Meter Operator Party shall be admitted as a Meter Operator Party, in which event the provisions of paragraph 3.5 shall apply; or (b) that the Executive Committee has received an objection, or objections, to the admission of that New Meter Operator Party and, on the basis thereof, considers the application to be frivolous or vexatious and for that reason is rejecting the application without further right of appeal; or (c) that the Executive Committee has received an objection, or objections, to the admission of that New Meter Operator Party in accordance with paragraph 3.3.2 and has referred the matter to the Director in accordance with paragraph 3.4. If the Executive Committee shall fail so to notify the New Meter Operator Party and the Director, the New Meter Operator Party may within 7 days after the expiry of the consideration period refer the matter to the Director pursuant to paragraph 3.4, in which event the provisions of that paragraph shall apply. 3.4 Procedure for application: Reference to the Director: 3.4.1 If:- (a) a notice of objection or notices of objection to the admission of the New Meter Operator Party as a Meter Operator Party within the objection period has (or have) been received and the Executive Committee has not notified the New Meter Operator Party that it is rejecting its application on the basis that those objections demonstrate that the relevant application is frivolous or vexatious; or (b) the Executive Committee shall have failed to notify the New Meter Operator Party as provided in paragraph 3.3.3 within the consideration period, the matter may be referred by way of written application of the New Meter Operator Party, copied to the Executive Committee, to the Director for determination. The determination of the Director, which shall be made within 28 days after receipt of the said written application and shall be to the effect that the New Meter Operator Party should or should not be admitted as a Meter Operator Party for the purposes of this Schedule, shall be final and binding for all purposes. The Director shall publish reasons supporting his determination. 3.4.2 (a) If the determination is to the effect that the New Meter Operator Party should be admitted as a Meter Operator Party, the New Meter Operator Party shall be admitted and the provisions of paragraph 3.5 shall apply. (b) If the determination is to the effect that the New Meter Operator Party should not be admitted as a Meter Operator Party, the New Meter Operator Party's application for admission shall lapse and be of no effect and the New Meter Operator Party shall not be, and shall not be entitled to be, admitted as a Meter Operator Party consequent upon such application (but without prejudice to any new application it may make thereafter). 3.5 Admission: If:- 3.5.1 the Executive Committee shall notify the New Meter Operator Party and the Director as provided in paragraph 3.3.3(a); or 3.5.2 the New Meter Operator Party is to be admitted as a Meter Operator Party pursuant to paragraph 3.4, the Executive Committee shall forthwith prepare or cause to be prepared a Meter Operator Party Accession Agreement. Subject to the Executive Committee making all notifications and filings (if any) required of it for regulatory purposes and obtaining all regulatory consents and approvals (if any) required to be obtained by it, the Executive Committee shall instruct the Chief Executive or another person authorised by the Executive Committee for the purpose to prepare a Meter Operator Party Accession Agreement and to sign and deliver the Meter Operator Party Accession Agreement on behalf of all Parties and Meter Operator Parties other than the New Meter Operator Party and the New Meter Operator Party shall also execute and deliver the Meter Operator Party Accession Agreement and, on and subject to the terms and conditions of the Meter Operator Party Accession Agreement, the New Meter Operator Party shall become a Meter Operator Party on the terms set out in paragraph 2, for the purposes of this Schedule, with effect from the date specified in such Meter Operator Party Accession Agreement (and, if no such date is so specified, the date of such Meter Operator Party Accession Agreement). The New Meter Operator Party shall pay all costs and expenses associated with the preparation, execution and delivery of its Meter Operator Party Accession Agreement. Each Party and Meter Operator Party hereby authorises and instructs the Chief Executive and each person authorised for the purpose by the Executive Committee to sign on its behalf Meter Operator Party Accession Agreements and undertakes not to withdraw, qualify or revoke such authority and instruction at any time. The Executive Committee shall promptly notify all Parties and Meter Operator Parties and the Director of the execution and delivery of each Meter Operator Party Accession Agreement. 3.6 Additional Agreements: Upon and as a condition of admission as a Meter Operator Party, a New Meter Operator Party shall execute and deliver such further agreements and documents and shall do all such other acts, matters and things as the Executive Committee may reasonably require. 3.7 Application fees: All fees received by the Executive Committee in respect of any application by a New Meter Operator Party to become a Meter Operator Party shall be used to defray the costs and expenses of the Executive Committee and shall be paid to such account as the Executive Committee may direct. The application fee shall be (pound)250 or such other amount as the Executive Committee may, with the prior approval of the Director, from time to time prescribe. 3.8 Acknowledgement that provisions not exhaustive of being Operator: The compliance by any person with the provisions of this paragraph 3 with regard to its admission as a Meter Operator Party shall not of itself mean that all things have been done and agreements or arrangements have been entered into with other Parties and persons such that the duly admitted Meter Operator Party is entitled or enabled to comply as an operational, physical or legal matter with its obligations, or to enjoy its rights, as an Operator under this Schedule and the provisions of this Schedule shall always be without prejudice to the rights and obligations of such Meter Operator Party under any other agreement or arrangement with such other Parties or persons. 3.9 Compliance: Each Meter Operator Party shall procure that for so long as it is a Meter Operator Party it shall at all times satisfy or otherwise comply with the admission conditions set out in its Meter Operator Party Admission Application applicable to it (and/or such further or other conditions as the Executive Committee may from time to time reasonably specify) and upon request from time to time shall promptly provide the Executive Committee with evidence reasonably satisfactory to the Executive Committee of such satisfaction and compliance. 3.10 Change of capacities: 3.10.1 Any Meter Operator Party admitted as an additional party pursuant to this paragraph 3 may apply, whether in substitution for or in addition to being a Meter Operator Party, to become a Party to this Agreement in accordance with Clause 3 of this Agreement and, if appropriate, a Pool Member in accordance with Clause 8 of this Agreement. Such Meter Operator Party shall only be entitled to become a Party and, as the case may be, Pool Member in accordance with those provisions of this Agreement. 3.10.2 Subject to the transitional arrangements set out in paragraph 23, any Party to this Agreement may, upon application to the Executive Committee and satisfaction of such conditions (if any) as the Executive Committee may reasonably require, whether in substitution for or in addition to being a Party, become a Meter Operator Party for the purposes of and on the terms set out in this Schedule. 4. REGISTRATION OF OPERATORS 4.1 Registration: Subject to Clause 60.4, the identity of the Operator for each Metering System which the Settlement System Administrator shall take into account for the purposes of Settlement and which shall be the Operator for all purposes of this Schedule shall be as notified to the Settlement System Administrator in accordance with this Schedule and as recorded by it, for the time being and from time to time, in the Register. 4.2 Who can be Operator: The operator of any Metering System proposed to be registered with the Settlement System Administrator or the new operator of any Metering System already so registered shall be either:- 4.2.1 the Meter Operator Party specified as such in a notice served by it upon the Settlement System Administrator in accordance with the relevant Agreed Procedure and which has acknowledged its appointment therein; or 4.2.2 where no Meter Operator Party is specified pursuant to paragraph 4.2.1 or such Meter Operator Party has not acknowledged its appointment, the Registrant deemed to be Operator pursuant to Clause 60.4.4 in accordance with the provisions thereof. 4.3 Consents: Subject to Clause 60.4.9, no person shall be the Operator of a Metering System without the prior written consent of:- (i) the person (if not the Operator or Registrant in respect thereof) which is at that time the Equipment Owner; (ii) in the case of a Metering System to be operated in respect of supplies to a Second Tier Customer, and if different from the Equipment Owner, that Second Tier Customer; and (iii)in the case of a Metering System to be operated in respect of supplies from a Non-Pooled Generator, and if different from the Equipment Owner, that Non-Pooled Generator. The Registrant in respect of that Metering System shall provide evidence of such consent to the Executive Committee and to the Settlement System Administrator at the time of the registration of that Meter Operator Party as Operator in respect of such Metering System. The Settlement System Administrator shall not register as an Operator in respect of such Metering System any person in respect of which evidence of consent of the Equipment Owner, and where applicable and where different, the relevant Second Tier Customer or Non-Pooled Generator, is required but has not been so provided. Where no such evidence or insufficient evidence is provided the Settlement System Administrator shall notify the relevant Meter Operator Party accordingly. 4.4 Power to prescribe new registration conditions: 4.4.1The Executive Committee shall have the power to prescribe, from time to time, such further conditions to be imposed upon the registration of any Meter Operator Party as an Operator under this Schedule as it shall consider appropriate with the consent of the Meter Operator Parties. In the case of a Meter Operator Party, such consent shall not be unreasonably withheld or delayed and notification of such consent or refusal to consent shall be made to the Executive Committee within 7 days of its consent being requested. If any Meter Operator Party refuses to consent or does not consent within the prescribed 7 day period, the Director shall determine whether such consent was unreasonably withheld. 4.4.2 The conditions to be imposed pursuant to paragraph 4.4.1 shall be as specified from time to time in an Agreed Procedure and each Operator shall be required, upon the bringing into effect of new or revised conditions, to demonstrate to the satisfaction of the Executive Committee in accordance with the provisions of such Agreed Procedure, the ability to comply with the standards laid down therein. 4.4.3 Any Operator which is not able to demonstrate compliance with such revised standards in accordance with paragraph 4.4.2 shall at the time specified in that Agreed Procedure cease to be a Meter Operator Party for the purposes hereof, but such cessation shall be without prejudice to any right to make a future application to become a Meter Operator Party or Operator in accordance with the provisions of this Schedule. 5. RESIGNATION 5.1 Resignation as Meter Operator Party: Subject as provided in paragraph 5.2:- 5.1.1 a Meter Operator Party shall be entitled at any time to resign as a Meter Operator Party by delivering a Meter Operator Party Resignation Notice to the Secretary; and 5.1.2 such resignation shall take effect 28 days after receipt of the Meter Operator Party Resignation Notice by the Secretary. Promptly after receipt of a duly completed Meter Operator Party Resignation Notice from a Meter Operator Party, the Secretary shall notify (for information only) all of the other Parties, Meter Operator Parties, the Executive Committee and the Director of such receipt and of the name of the Meter Operator Party wishing to resign. 5.2 Restrictions on resignation: A Meter Operator Party may not resign as a Meter Operator Party (and any Meter Operator Party Resignation Notice delivered pursuant to paragraph 5.1.1 shall lapse and be of no effect) unless:- (i) as at the date its resignation would otherwise become effective all sums due from such Meter Operator Party to the Executive Committee or any other Party or Meter Operator Party under this Agreement or any agreement entered into pursuant to and in accordance with this Agreement (whether by or on behalf of such Meter Operator Party) and notified for the purposes of this paragraph 5.2 by the Executive Committee to such Meter Operator Party prior to the date of its resignation have been paid in full; and (ii) the Meter Operator Party is not registered as the Operator in respect of any Metering System. 5.3 Resignation as an Operator: 5.3.1 An Operator shall be entitled at any time to resign as Operator of a Metering System by service of a duly completed notice in the form prescribed by the relevant Agreed Procedure upon the Settlement System Administrator. 5.3.2 Such resignation shall take effect (unless otherwise agreed with the Settlement System Administrator) on the date specified therein which shall be no earlier than the date specified in the relevant Agreed Procedure. 5.3.3The Settlement System Administrator shall notify the relevant Registrant and, where applicable, Host PES of receipt by it of a notice pursuant to this paragraph 5.3 within one working day following such receipt. 5.4 Release as a Meter Operator Party: Without prejudice to Clause 66.7 as incorporated into this Schedule by paragraph 24 hereof and its accrued rights and liabilities and its rights and liabilities which may accrue in relation to the period during which it was a Meter Operator Party under this Schedule pursuant to paragraph 2 hereof or to any agreement referred to in paragraph 5.2, upon a Meter Operator Party's resignation becoming effective in accordance with paragraph 5.1:- 5.4.1 such Meter Operator Party shall be automatically released and discharged from all its obligations and liabilities in its capacity as Meter Operator Party under this Schedule and any agreement referred to in paragraph 5.2; and 5.4.2 each of the other Parties and Meter Operator Parties shall be automatically released and discharged from its obligations and liabilities to such Meter Operator Party in its capacity as Meter Operator Party under this Schedule and any agreement referred to in paragraph 5.2. Each Meter Operator Party shall promptly at its own cost and expense execute and deliver all agreements and other documentation and do all such other acts, matters and things as may be necessary to confirm such cessation, release and discharge. 6. REMOVAL AND CESSATION 6.1 Removal as Operator by Registrant: Without prejudice to any rights under any other agreement between any Operator and any other person (which the Settlement System Administrator shall not be obliged to take into account or acknowledge for the purposes of this Agreement) and without prejudice to its accrued rights and liabilities and its rights and liabilities which may accrue in relation to the period during which it was Operator pursuant to this Schedule, the Registrant of any Metering System may remove the Operator of such Metering System upon service of a duly completed notice in the form prescribed by the relevant Agreed Procedure to be served upon the Settlement System Administrator (with a copy to be served upon the relevant Second Tier Customer (if any) or ERS First Tier Customer (if any) or Non-Pooled Generator (if any)) and such notice to take effect (unless otherwise agreed with the Settlement System Administrator) on the date specified therein which shall be no earlier than the date specified in the relevant Agreed Procedure. The Settlement System Administrator shall notify the relevant Operator and, where applicable, Host PES of the receipt by it of a notice pursuant to this paragraph 6.1 following such receipt. 6.2 Removal as Operator or Meter Operator Party for cause: Subject:- 6.2.1 to good cause for the removal of a Meter Operator Party as (i) Operator in respect of one or more, but not all, Metering Systems in respect of which it is the Operator, or (ii) as Meter Operator Party in respect of all, but not some, Metering Systems in respect of which it is the Operator, having been demonstrated to the satisfaction of the Executive Committee; and 6.2.2 as provided in paragraphs 6.3 and 6.4, an Operator (where removal is in respect of one or more, but not all, such Metering Systems) or, as the case may be, a Meter Operator Party (where removal is in respect of all such Metering Systems), may at any time be removed by:- (a) resolution of the Executive Committee passed by a majority of not less than 75% of the total votes of all Committee Members which may be exercised whether or not any such Committee Member is present in accordance with the provisions of this Agreement; and (b) the giving by the Executive Committee to the Operator or, as the case may be, Meter Operator Party after such resolution has been passed or deemed effective (which the Executive Committee shall promptly do) of not less than 28 days' notice in writing of such removal. 6.3 Good cause for removal: Good cause for the purposes of paragraph 6.2.1 may include the following:- 6.3.1 the failure by the Operator or Meter Operator Party as Operator in any persistent, material respect or in any single, major respect to perform or comply with any of the obligations expressed to be assumed by it under this Schedule and such default (if capable of remedy) is not remedied within a reasonable period of time after the Executive Committee has given notice to that Operator or, as the case may be, Meter Operator Party of the occurrence thereof and requiring the same to be remedied; and 6.3.2in the case of removal as a Meter Operator Party, where a Meter Operator Party:- (a) is unable to pay its debts (within the meaning of section 123(1) or (2) of the Insolvency Act 1986) or has any voluntary agreement proposed in relation to it under section 1 of that Act or enters into any scheme of arrangement (other than for the purpose of reconstruction or amalgamation upon terms and within such period as may previously have been approved in writing by the Executive Committee); (b) has a receiver (which expression shall include an administrative receiver within the meaning of section 29 of the Insolvency Act 1986) of the whole or any material part of its assets or undertaking appointed; (c) has an administration order under section 8 of the Insolvency Act 1986 made in relation to it; (d) passes any resolution for winding-up other than a resolution previously approved in writing by the Executive Committee; or (e) becomes subject to an order by the High Court for winding-up. For the purposes of paragraph (a) above the Meter Operator Party shall not be deemed to be unable to pay its debts if any such demand as is mentioned in the said section is being contested in good faith by the Meter Operator Party with recourse to all appropriate measures and procedures. For the avoidance of doubt, the Parties and Meter Operator Parties hereby acknowledge and agree that a resolution of the Executive Committee to remove the Operator as Operator or a Meter Operator Party as Meter Operator Party shall not, of itself, constitute good cause. 6.4 Referral to the Director: An Operator or, as the case may be, a Meter Operator Party may in writing within the 28 day period referred to in paragraph 6.2(b) refer a decision of the Executive Committee to remove it for cause pursuant to paragraph 6.2 to the Director. Where such referral is made in accordance with this paragraph 6.4, the removal of such Meter Operator Party as Operator or, as the case may be, Meter Operator Party for cause shall not become effective until such time as the Director determines, in accordance with paragraph 6.5, that good cause exists for such removal. 6.5 Determination by Director: The Director, upon any referral being made pursuant to paragraph 6.4, shall determine whether there is good cause within the meaning of this paragraph 6 for the removal of such Meter Operator Party as Operator or, as the case may be, as Meter Operator Party, within 28 days of the receipt of the written referral of the decision of the Executive Committee. Any decision of the Director that there is, or is not, good cause for removal shall be final and binding on the Parties and Meter Operator Parties. Where the Director determines that there is not good cause for the removal of a Meter Operator Party, the relevant decision of the Executive Committee shall lapse and cease to be effective and such Meter Operator Party shall not be removed as Operator or, as the case may be, Meter Operator Party by virtue of the passing of that resolution. 6.6 Notification of removal: Within 7 days of any Operator or Meter Operator Party being removed for cause in accordance with the provisions of this paragraph 6, the Secretary shall notify all Parties, Meter Operator Parties, relevant Second Tier Customers, relevant ERS First Tier Customers, relevant Non-Pooled Generators and the Director in accordance with the provisions of this Agreement of the identity of the relevant Operator or, as the case may be, Meter Operator Party and of the fact of its removal. 6.7 Right to representation: Any Party or Meter Operator Party against whom the Executive Committee is considering exercising powers pursuant to this paragraph 6 shall have the right to representation at any meeting of the Executive Committee which considers the exercise of such powers. 6.8 Cessation as Operator: An Operator of any Metering System shall cease to be the Operator therefor when the Plant or Apparatus in respect of such Metering Equipment ceases to be connected at the relevant Site. 6.9 Cessation as Meter Operator Party: Without prejudice to any rights under any other agreement between an Operator and any other person (which the Settlement System Administrator shall not be obliged to take into account or acknowledge for the purposes of this Agreement) and without prejudice to its accrued rights and liabilities and its rights and liabilities which may accrue in relation to the period during which it was a Meter Operator Party under this Schedule, an Operator shall cease to be a Meter Operator Party where it has not been registered by the Settlement System Administrator (save in the case of manifest error or bad faith on the part of the Settlement System Administrator) as an Operator in respect of any Metering System registered with the Settlement System Administrator for any consecutive period of fifteen months. 6.10 Termination of Rights and Obligations under this Agreement: A Meter Operator Party shall only cease to be party to this Agreement in the capacity as a Meter Operator Party in the circumstances and to the extent specified in either paragraph 4, 5 or 6. 6.11 Rights and liabilities as Party: Where any Party which is also a Meter Operator Party resigns as, is removed as, or ceases to be, a Meter Operator Party for the purposes of, and in accordance with, this Schedule, such resignation, removal or cessation shall be without prejudice to all past, present and future accrued and accruing rights and liabilities of that Party as Party in any capacity whatsoever other than as Meter Operator Party. 6.12 Paragraph exhaustive: The Parties and Meter Operator Parties agree that the foregoing provisions of this paragraph 6, when read with the provisions referred to in this paragraph, are exhaustive of cessation as a Meter Operator Party and of cessation of rights and liabilities as a Meter Operator Party. PART 3 METER OPERATOR'S RESPONSIBILITIES 7. OBLIGATION TO ENSURE COMPLIANT METERING EQUIPMENT 7.1 General Obligation and Commercial Boundary: 7.1.1 There must always be one and, at any point in time, no more than one Operator for each Metering System which is registered with the Settlement System Administrator. 7.1.2 All Metering Systems at the site of a Non-Pooled Generator, which are part of the same Metering Equipment, must have the same Operator. 7.1.3Each Operator shall ensure there is installed a Metering System complying with the provisions of this Schedule and Part XV of this Agreement which meets the required levels of accuracy at the commercial boundary at each Site for which it is the Operator and which is as close as reasonably practicable to that commercial boundary taking into account relevant financial considerations. The Parties and Meter Operator Parties acknowledge and agree that Metering Equipment at Power Stations either existing or under construction at the Effective Date might not be situated at the commercial boundary. In such cases, loss adjustment factors may be applied after the Effective Date subject to it being demonstrated to the reasonable satisfaction of the Settlement System Administrator that such loss adjustment factors have been correctly derived. 7.1.4To the extent that the required levels of accuracy referred to in paragraph 7.1.3 depend upon associated current and voltage transformers which are not in the ownership or control of the relevant Operator, the relevant Equipment Owner agrees to take reasonable steps to assist the Operator in complying with its obligations under paragraph 7.1.3 by the maintenance and repair of such current and voltage transformers in accordance with the provisions of this Schedule provided that this paragraph 7.1.4 shall be without prejudice to any right to charge for the same and provided further that an Equipment Owner shall not be required by this paragraph 7.1.4 to take steps which would cause it to be in breach of its obligations under its Licence, its Nuclear Site Licence (as defined in paragraph 21.9(a)), the Grid Code or any Distribution Code. 7.2 Description of Metering Equipment: 7.2.1 Metering Equipment and its component parts shall comply, as a minimum, with the requirements referred to or set out in any relevant Code of Practice or shall be the subject of, and comply with, a dispensation agreed in accordance with paragraph 14. 7.2.2 Metering Equipment comprising a Metering System shall use such communication protocols selected, with the approval of the Settlement System Administrator, as appropriate for that Metering Equipment from a list of communication protocols approved and maintained from time to time by the Settlement System Administrator. 7.3 Accuracy of Metering Equipment: 7.3.1 The Metering Equipment comprising any Metering System shall be accurate within the prescribed limits for such Metering Equipment referred to or set out in the relevant Code of Practice except only in the case where such Metering Equipment is the subject of, and complies with, a dispensation relevant to those prescribed limits agreed in accordance with paragraph 14. 7.3.2 The accuracy limits referred to in the relevant Code of Practice shall be applied after adjustments have been made to Metering Equipment to compensate for any errors due to measuring transformers and connections thereto. Beyond the ranges specified in the relevant Code of Practice and power factors other than unity or zero (as the case may be) limits of accuracy will depend on the characteristics of the individual meters and measuring transformers specified for the Metering Equipment. Such levels of accuracy will, in the event of any uncertainty or dispute, be specified by the Executive Committee. 7.4 Calibration of Metering Equipment: Each Operator shall ensure that all Metering Equipment which is registered with the Settlement System Administrator pursuant to this Agreement and for which it is Operator pursuant to this Schedule shall be calibrated in order to meet the accuracy requirements referred to in paragraph 7.3.1 and otherwise in accordance with the relevant Code of Practice or, where appropriate, any relevant dispensation agreed in accordance with paragraph 14. Subject to paragraph 21, the Settlement System Administrator and the Pool Auditor shall be granted access to all such Metering Equipment and any other Plant or Apparatus on any Site in order to inspect the basis of any adjustments made to Metering Equipment. 8. MAINTENANCE OF METERING EQUIPMENT 8.1 Proper order: Each Operator shall at its own cost and expense (but without prejudice to its right to charge any other person for such service pursuant to another agreement or arrangement) keep in good working order, repair and condition all Metering Equipment in respect of which it is the Operator to the extent necessary to allow the correct registration, recording and transmission of the requisite details of the quantity of Active Energy and/or Reactive Energy measured by the relevant Meter. 8.2 Inspection and Testing: 8.2.1No less frequently than such period as may be specified in the relevant Code of Practice each Operator shall carry out a routine test of the accuracy of all Metering Equipment in respect of which it is the Operator. The Operator shall also carry out a test of the accuracy of all Metering Equipment in respect of which it is the Operator and which replaces defective or inaccurate Metering Equipment as soon as is reasonably practicable after its installation. Such Operator will give the Settlement System Administrator and the Registrant at least 15 days' prior written notice of the date, time, place and nature of every such test and the Settlement System Administrator and Host PES and the Registrant shall have the right to attend such test should it so require. Any such test as envisaged in this paragraph 8.2.1 shall comply with the relevant Code of Practice. 8.2.2 If either:- (a) the Settlement System Administrator has reason to believe that the Metering Equipment which an Operator is required to maintain for the purposes of this Schedule is not performing within the prescribed limits of accuracy referred to in paragraph 7.3.1; or (b) such Operator or any other Party or Meter Operator Party has reason to believe there is any such failure to so perform, then, in the case of (b), such Operator, such other Party or such Meter Operator Party shall notify the Settlement System Administrator, the Registrant of the relevant Metering System and the Host PES (if any) and, in any case, the Settlement System Administrator:- (i) shall (if so requested by any Party or Meter Operator Party) and (in any other case) may, without giving notice to the relevant Operator or Registrant, inspect such Metering Equipment and make such tests as the Settlement System Administrator shall deem necessary to determine its accuracy; or (ii) in any other circumstances require the relevant Operator promptly to test the accuracy of the same but in any event within 24 hours of receiving notification of such requirement pursuant to this paragraph 8.2.2, whereupon the relevant Operator shall carry out such test. Such test shall comply with the relevant Code of Practice and shall take place in the presence of the Settlement System Administrator, if it so requires. Further, if an Operator has reason to believe that the Metering Equipment in respect of which it is the Operator is incorrectly recording data for any reason, it shall notify the Settlement System Administrator, the Registrant in respect of the relevant Metering System and the Host PES (if any). 8.2.3 Recovery of costs for non-routine testing (1): Subject to paragraph 8.2.4, the costs of any such test referred to in this paragraph 8.2 shall be borne by the Operator responsible for the maintenance of the relevant Metering Equipment (but without prejudice to its right to charge any other person for such service pursuant to another agreement or arrangement), save that the Settlement System Administrator shall bear the costs of its nominee's attendance thereat (subject to its right to recover the same through its charges). 8.2.4Recovery of costs for non-routine testing (2): Where any Metering Equipment passes all inspections and tests required pursuant to paragraph 8.2.2 or the test is in respect of Metering Equipment where the Operator is the deemed Operator pursuant to Clause 60.4.4, the costs of such inspections and tests shall, in the case of paragraph (a) of that paragraph, be borne by the Settlement System Administrator (subject to its right to recover the same through its charges) and, in the case of paragraph 8.2.2(i) where a test is required by another Party or Meter Operator Party, be borne by such other Party or Meter Operator Party which shall reimburse the relevant Operator its costs on demand. 8.3 Sealing: Metering Equipment shall be as secure as is practicable in all the circumstances and for this purpose:- (a) all Metering Equipment shall comply with the relevant Agreed Procedure; and (b) the Executive Committee and the Settlement System Administrator shall regularly review Agreed Procedures for security arrangements in relation to Metering Equipment. 8.4 Defective Metering Equipment: If at any time any Metering Equipment or any part thereof is destroyed or damaged or otherwise ceases to function, or is found to be outside the prescribed limits of accuracy referred to in paragraph 7.3.1, the Operator therefor shall, subject to compliance with its obligations under paragraph 8.3, promptly adjust, renew or repair the same or replace any defective component so as to ensure that the relevant Metering Equipment is back in service and operating within the prescribed limits of accuracy as quickly as is reasonably practicable in all the circumstances. 9. MAINTENANCE OF RECORDS AND PROVISION OF INFORMATION 9.1 Information: 9.1.1 An Operator shall inform the Settlement System Administrator of all relevant information relating to the Metering Equipment in respect of which it is the Operator, including any new or substituted Metering Equipment, and as may be required by the relevant Agreed Procedure. 9.1.2 All Meter Operator Parties shall give to the Settlement System Administrator all such information regarding Metering Equipment as the Settlement System Administrator shall reasonably require for the proper functioning of the Settlement System including information regarding the dates and time periods for installation of new Metering Equipment and the dates and periods when Metering Equipment is out of service. 9.1.3 All Meter Operator Parties shall give to the Pool Auditor all such information regarding Metering Equipment as the Pool Auditor shall reasonably require for the purposes of carrying out its functions under Part IX of this Agreement including information regarding the dates and time periods for installation of new Metering Equipment and the dates and periods when Metering Equipment is out of service and a copy of any record maintained in accordance with paragraph 9.2. 9.2 Records: Each Operator shall maintain a record in relation to each Metering System for which it is the Operator detailing all relevant matters as may be required by the relevant Code of Practice relating to the calibration of the Metering Equipment comprising each such Metering System including the dates and results of any tests, readings, adjustments or inspections carried out and the dates on which any seal was applied or broken, the reason for any seal being broken and the persons attending any such tests, readings, inspections or sealings. Such records shall also include any other details as may be reasonably required by the Settlement System Administrator. Each Operator shall pass such records or copies of the same to its successor as Operator in relation to any Metering Equipment. Any such records shall be complete and accurate and retained for the life of the relevant item of Metering Equipment. The Registrant in respect of any Metering Equipment shall be entitled to receive copies of all such records free of charge. 9.3 A Meter Operator Party shall permit the Pool Auditor unrestricted access to Metering Equipment forming part of any Metering System in respect of which it is Operator and all data used, information held and records kept by it or its agents in operating that Metering Equipment and shall make available members of its staff to explain the operation of that Metering Equipment and such other issues as the Pool Auditor considers relevant. PART 4 RIGHTS AND RESPONSIBILITIES RELATING TO THE SETTLEMENT SYSTEM ADMINISTRATOR 10. INSPECTIONS AND READINGS 10.1 Inspections: The Settlement System Administrator shall procure that all Metering Equipment comprising any Metering System which is registered with it for the purposes of the Settlement System is inspected and read by it or on its behalf not less than once in every three months for general and reconciliation purposes and shall give the Registrant and Operator notice thereof in accordance with the relevant Agreed Procedure. 10.2 Written reports: The Settlement System Administrator and the Operator shall keep written reports of all such inspections and readings as are referred to in paragraph 10.1 in accordance with sub-section 6.6 of Schedule 4 and the Settlement System Administrator shall provide copies in accordance with the relevant Agreed Procedure of such written reports to each Registrant whose Consumer Metered Demand determined in accordance with the Pool Rules is calculated by the Settlement System Administrator using data from such Metering System. 11. DATA COLLECTION 11.1 Collection, Retrieval, Validation and Estimation of Data: The Settlement System Administrator will notify the relevant Registrant, Operator and Host PES where, as determined by the relevant Agreed Procedure, it has reasonable grounds to believe or has established that data required from any Metering Equipment for the functioning of the Settlement System in accordance with this Agreement is incomplete, inaccurate or has not been received, such notice to include details of the relevant Metering Equipment and data which the Settlement System Administrator believes or has established is incomplete, inaccurate or has not been received. The Settlement System Administrator shall investigate and remedy the defect in accordance with the relevant Agreed Procedure taking into account the following priorities in the following order:- (a) the need to obtain accurate data; (b) the need to apply verification procedures; (c) the need to produce edited or substitute data where it is incorrect or unavailable. 11.2 Corrected, completed or received data: Once the Settlement System Administrator has remedied the defect identified in accordance with paragraph 11.1, it will notify the relevant Registrant, Operator and Host PES:- (a) in the case of data which it has established was inaccurate, of the validated data; and (b) in the case of data which it has established is incomplete or which has not been received, of the edited or substitute data, in each case established according to the relevant Agreed Procedure. 12. POLICING BY THE SETTLEMENT SYSTEM ADMINISTRATOR Policing: The Settlement System Administrator shall make or shall procure arrangements for spot visits to metering sites by suitably qualified inspectors in order to monitor compliance by Registrants and Operators of their obligations under Part XV of this Agreement and this Schedule, the appropriate Code of Practice and the Agreed Procedures. The sites chosen for, and the conduct of, such policing shall be determined by the Settlement System Administrator. The extent of policing shall be in accordance with instructions given to the Settlement System Administrator from time to time by the Executive Committee in accordance with the SSA Arrangements. PART 5 CODES OF PRACTICE AND DISPENSATIONS 13. CODES OF PRACTICE 13.1 Relevant Code of Practice: Subject to paragraph 13.2 and subject to the transitional arrangements described in paragraph 13.4, the relevant Code of Practice in respect of Metering Equipment shall be determined by reference to the version of the Code of Practice which is expressed to be applicable to that Metering Equipment at the time that the Metering System comprised therein is registered with the Settlement System Administrator for the first time, and such Metering Equipment shall only be required, save as provided in paragraph 13.2, to comply with such Code of Practice, and not with any Code of Practice which in any respect later amends, modifies or supersedes such Code of Practice, and references to the relevant Code of Practice in Part XV of this Agreement and this Schedule shall be construed accordingly. 13.2 Saving: Notwithstanding the provisions of paragraph 13.1: (a) without prejudice to sub-paragraphs (b) and (c) below, FMS Metering Equipment which is installed, or in the course of being installed, on the FMS Date, shall only be required to comply with the applicable FMS Code of Practice with which it would have been required to comply were this paragraph 13 not in effect; (b) where any material change is made to the Metering Equipment comprising a Metering System, details of the changes made shall be given immediately by the Operator in respect of that Metering System to the Settlement System Administrator (with a copy to the Registrant of that Metering System) who shall note the same on the Register pursuant to Clause 60.5. The noting of that change on the Register shall be deemed (but no other entry made on the Register shall be deemed) to constitute a registration of that Metering System comprised in that Metering Equipment for the purposes of paragraph 13.1, and the Code of Practice current at the time of that deemed new registration shall, from that time, be the relevant Code of Practice in respect of that Metering Equipment; (c) in sub-paragraph (b) above, the term "material change" shall mean a change to the Metering Equipment other than:- (i) a change by way of repair, modification or replacement of any component which is not in the judgement of the Operator, acting as a reasonable Operator in all the circumstances, a substantial part of the Metering Equipment (a "Substantial Part"); and (ii) a change to another part or other parts of the Metering Equipment, each of which is not of itself (and where taken together with other such changes, these changes together are not) a Substantial Part (determined as in (i) above) of the Metering Equipment, necessitated in the judgement of the Operator, acting as a reasonable Operator in all the circumstances, by any change under (i) above, in each case even where an enhanced or equivalent component is used for the repair, modification or replacement rather than an identical component; (d) Metering Equipment shall at all times comply with the latest version of the Code(s) of Practice which contains the requirements for the calibration, testing and commissioning of Metering Equipment; and (e) in relation to Metering Equipment which is associated with supplies to an ERS First Tier Customer, the relevant Code of Practice shall apply as amended by any modifications made (after the time that the relevant Metering System is registered with the Settlement System Administrator for the first time) solely in connection with the inclusion of ERS First Tier Customers in the definition of Site. 13.3 Record of Codes of Practice: The Executive Committee shall record in the Synopsis of Metering Codes each Code of Practice and the date at which that Code becomes effective as the relevant Code of Practice in respect of Metering Equipment comprising a Metering System registered or, in accordance with paragraph 13.2(b), re-registered at that date or thereafter. 13.4 FMS Codes of Practice: On or after the FMS Trading Date and in relation to any period on or after this date any relevant Code of Practice for the purposes of this Agreement shall be an FMS Code of Practice. 14. DISPENSATIONS 14.1 Dispensations: (a) If for financial reasons or reasons of practicality a Metering System or Metering Equipment does not comply with some or all of the requirements of the relevant Code of Practice or the requirements in relation to the commercial boundary of paragraph 7.1.2, the Registrant or potential Registrant of such Metering System or, as the case may be, Operator or Potential Operator of such Metering Equipment with the consent of such Registrant or, in the case of Potential Operators only, such potential Registrant, may make an application to the Executive Committee for a dispensation from such requirements. The Executive Committee shall consider and agree, on such conditions (if any) as it shall deem fit, or dismiss such application in accordance with the relevant Agreed Procedure and this paragraph 14. (b) The Executive Committee shall have the right to agree from time to time, in accordance with the relevant Agreed Procedure, dispensations from the requirements referred to in sub-paragraph (a), on such conditions (if any) as it shall deem fit, attaching generally to any item of Metering Equipment ("Generic Dispensations"). Generic Dispensations may be agreed upon the application of a Party or Meter Operator Party or be initiated by the Executive Committee at its discretion. (c) Before agreeing any dispensation (including any Generic Dispensation), the Executive Committee shall be obliged to seek and to obtain:- (i) in the case of a dispensation from a Code of Practice, the approval and agreement of those Parties whose approval and agreement is required in accordance with the definition of Code of Practice in respect of an amendment to or substitution of the Code(s) of Practice from which a dispensation is sought; (ii) the prior written consent (not to be unreasonably withheld or delayed) of the Settlement System Administrator where applicable in accordance with Clause 6.3; (iii) in the case of a dispensation from the requirements of paragraph 7.1.2 relating to the commercial boundary, the prior written consent (not to be unreasonably withheld or delayed) of the Grid Operator where applicable in accordance with Clause 6.5; and (iv) in the case of a dispensation from the requirements of paragraph 7.1.2 relating to the commercial boundary, the prior written consent (not to be unreasonably withheld or delayed) of the Ancillary Services Provider where applicable in accordance with Clause 6.6. Where, in accordance with (i) above, the amendment of the relevant Code of Practice would require the approval of the Suppliers in separate general meeting such approval shall be deemed to be given by a resolution of the Executive Committee to agree the relevant dispensation, save where any representative of any Supplier elects, upon that resolution, to refer the matter to a separate general meeting of Suppliers in which case, such meeting shall be convened and held in accordance with the provisions of Clause 13.2, and shall determine by resolution whether or not the approval and agreement of Suppliers to that dispensation be given in accordance with this paragraph 14.1. 14.2 Record of dispensations: The Executive Committee shall maintain, in accordance with the relevant Agreed Procedure, an up-to-date record of all dispensations agreed pursuant to this paragraph 14. The Executive Committee shall provide a duplicate copy of any such record to the Settlement System Administrator and shall provide the Settlement System Administrator with details of all amendments made to such record as soon as reasonably possible after the making of such amendment. 14.3 Existing dispensations: The Parties acknowledge that, prior to 1st April, 1993, dispensations (within the meaning of this paragraph 14) were agreed by the Executive Committee as if this paragraph 14 were at such time in full force and effect and agree that the record identified as such as at 1st April, 1993 is the definitive list of such dispensations. The Parties further agree that such dispensations shall be deemed, with effect from the date at which they were agreed, to have been effectively agreed in accordance with the provisions of this paragraph 14 (as formerly incorporated into this Agreement as Clause 60.10) as in force as at 1st April, 1993. This paragraph 14 shall be without prejudice to any claim an Operator or person acting as Operator:- (i) may have as at 31st March, 1993 against a Supplier arising out of any agreement between such Operator (or such person acting as Operator) and such Supplier or out of any representation; or (ii) may have against a Supplier arising out of facts and circumstances in existence prior to or as at 31st March, 1993, which relates to the installation by such Operator or such person acting as Operator of any Metering System installed or being installed as at the FMS Date or the installation of which was commenced prior to the FMS Date, and which relates to a Metering System which, by virtue of a dispensation granted pursuant to this paragraph 14, is not required by that Supplier. 14.4 Appeals: Any dispensation from the requirements of a Code of Practice or from the requirements relating to the commercial boundary of paragraph 7.1.2 agreed in accordance with this paragraph 14 shall be capable of being appealed in accordance with the provisions of paragraph 19.1, provided that no dispensation shall be considered to be agreed in accordance with this paragraph upon any appeal being granted where the approval and agreement of the relevant Parties as referred to in paragraph 14.1(c) has not been obtained. PART 6 FURTHER RIGHTS OF OPERATORS 15. OWNERSHIP AND USE OF DATA 15.1 Ownership of data: The Registrant of any Metering System shall own the data acquired therefrom provided that (and each Registrant hereby expressly agrees and acknowledges that) a Second Tier Customer, ERS First Tier Customer or Non-Pooled Generator of that Registrant in respect of which such data is generated shall be entitled at all times without charge by the Registrant to access, obtain and use such data and provided further that:- (i) such access, obtaining or use, or the method of such access, obtaining or use, does not interfere with the operation of Settlement; (ii) nothing in this paragraph 15.1 shall require the Registrant actively to provide such data to such Second Tier Customer, ERS First Tier Customer or Non-Pooled Generator or so to provide such data free of charge; and (iii) such access shall not be by using any communications link used by the Settlement System Administrator for the purposes of Clause 60.6 without the prior written consent of the Settlement System Administrator. 15.2 Use of data: The Settlement System Administrator and the Pool Auditor for the purposes of the performance by the Pool Auditor of its functions under Part IX of this Agreement are hereby authorised to use all data which is owned by the Registrant pursuant to paragraph 15.1 as may be permitted pursuant to this Agreement, and the Settlement System Administrator or, as the case may be, the Pool Auditor may only release such data to others to the extent set out in this Agreement. It is hereby expressly agreed that the Settlement System Administrator is permitted to and shall against request and payment of a reasonable charge therefor release to a Second Tier Customer, ERS First Tier Customer or Non-Pooled Generator such data relating to it as is referred to in paragraph 15.1. 15.3 Communications Equipment use: Communications Equipment need not be dedicated exclusively to the provision of data to the Settlement System Administrator for the purposes of Settlement provided that any other use shall not interfere at any time with the operation of Settlement and subject also to the relevant provisions (if any) in the relevant Tariff. 16. CHANGES OF SUPPLIERS Change of Supplier: Where notice is served on the Settlement System Administrator in the form prescribed by the relevant Agreed Procedure by a proposed Registrant of an existing Site which is the point of supply of a Second Tier Supplier or Second Tier Customer or ERS First Tier Customer or Non-Pooled Generator, the proposed Registrant and the Operator or proposed Operator (where the existing Operator is to be replaced) shall confirm that the Metering System required for the purposes of this Schedule and Part XV of this Agreement will be installed and Commissioned at the Site by the date required by the relevant Agreed Procedure. 17. ATTENDANCE AT MEETINGS AND RIGHTS OF REPRESENTATION 17.1 Attendance at Pool Members meetings: 17.1.1 Any notice convening any general meeting of Pool Members including any adjournment thereof in accordance with Clause 9.5 shall be additionally given to all Meter Operator Parties and be given in accordance with the provisions of that Clause. The accidental omission to give notice of a meeting to any Meter Operator Party entitled to receive notice shall not invalidate the proceedings at that meeting. 17.1.2 Each Meter Operator Party (or its duly appointed representative) shall have the right to attend at each general meeting of Pool Members and shall have the right to speak (but not to vote) thereat. 17.1.3 The Secretary shall circulate any minutes circulated in accordance with Clause 10.10 additionally to Meter Operator Parties in accordance with the provisions thereof. 17.2 Attendance at meetings of the Executive Committee, and sub-committees and sub-groups of the Executive Committee: 17.2.1 One representative for all Meter Operator Parties selected in accordance with paragraph 17.3 (a "Meter Operator Party Representative") shall be entitled to attend and speak (but ----------------------------------- not to vote) at meetings of the Executive Committee or at meetings of any sub-committee or sub-group of the Executive Committee on behalf of all Meter Operator Parties and shall be entitled to appoint from time to time alternates and delegates to assist him in those functions, where matters directly concerning the functions, duties or responsibilities of Operators, individually or collectively, have been identified or advised in the agenda for that meeting to be circulated pursuant to Clause 18.1.4 or, as the case may be, Clause 20.1. 17.2.2 Notice of meetings of the Executive Committee or meetings of any sub-committees or sub-group at which the relevant Meter Operator Party Representative is entitled to attend shall be given to him, together with all prescribed accompanying documentation and agendas, in accordance with Clause 18.1 or, as the case may be, Clause 20.1. The Meter Operator Party Representative shall as soon as is reasonably practicable copy such notice together with such accompanying documentation to all Meter Operator Parties. 17.2.3 The relevant Meter Operator Party Representative shall be entitled to receive copies of all minutes of meetings which he was entitled to attend and which the Secretary is required to circulate in accordance with Clause 18.1.6 or, as the case may be, Clause 20.1 in accordance with the provisions thereof. Such Meter Operator Party Representative, if he attended the relevant meeting, shall notify his approval or disapproval of the minutes to the Secretary no later than ten working days after receipt thereof and, if he fails to do so, he shall be deemed to have approved the same. 17.3 Appointment of representative for Meter Operator Parties: The Director shall nominate from time to time a representative who shall represent the collective and individual interests of Meter Operator Parties under this Agreement. 17.4 Class representation: The Executive Committee or any sub-committee or sub-group thereof shall be entitled to assume that any Meter Operator Party Representative represents the interests of Meter Operator Parties as a class and, where appropriate, represents any affected specific individual interests and, in considering matters or exercising its powers or discretions under this Agreement, the Executive Committee or any sub-committee or sub-group thereof shall not be obliged to seek, nor to take account of, the views, comments or consent or otherwise of any other Meter Operator Party. PART 7 FAILURE TO COMPLY AND DISPUTES 18. FAILURE TO COMPLY WITH OBLIGATIONS Defective Metering Equipment: Subject to the provisions of Clause 60.4.9, in the event that an Operator cannot or does not comply with its obligations to repair, adjust or replace or renew any defective component pursuant to paragraph 8.4, the Settlement System Administrator shall have the right to carry out or procure there is carried out such repair, adjustment, replacement or renewal and to recover its own costs, expenses and profit thereon from such Operator forthwith on demand or, where the Settlement System Administrator, having taken reasonable steps to recover such costs, expenses and profit from the relevant Operator is unable so to recover within a reasonable period of time, from the Registrant in respect of that Operator subject thereto forthwith on demand (such profit to be equivalent to the Handling Charge on such costs and expenses, as defined in sub-section 1.1 of the Appendix to Schedule 4). 19. DISPUTES 19.1 Disputes which may involve a Meter Operator Party: Any dispute regarding Metering Equipment (other than a dispute referred to in Clause 60.11.1 or one arising out of any decision made pursuant to paragraph 6.2, which in the latter case shall be determined in accordance with the provisions of that paragraph) shall be referred to the Executive Committee. If any Party or Meter Operator Party is not satisfied with the decision of the Executive Committee, the matter may be referred by such Party or Meter Operator Party to arbitration in accordance with Clause 83 of this Agreement as incorporated into this Schedule by paragraph 24. 19.2 Tests to determine disputes: Any testing of Metering Equipment required to settle any dispute (including a dispute under Clause 60.11.1) will, prima facie, be carried out by the relevant Operator on the relevant Metering Equipment mounted in its operational position in the presence of the Settlement System Administrator acting on behalf of the Executive Committee and in the presence of the Host PES. All testing will be carried out in accordance with the relevant Code of Practice or, where applicable, any relevant dispensation agreed in accordance with this Schedule. The test performance of any Metering Equipment shall be compared with calibrated test equipment by one of the following methods:- (a) injecting into the measuring circuits (i.e. excluding the primary current and voltage transformers) and comparing the readings or records over such period as may be required by the relevant Code of Practice or, where applicable, any relevant dispensation agreed in accordance with this Schedule to ensure a reliable comparison; or (b) where practicable, operating the calibrated test equipment from the same primary current and voltage transformers as the Metering Equipment under operating conditions. The readings or recordings of the Metering Equipment and the calibrated test equipment shall be compared over such period as may be required by the relevant Code of Practice or, where applicable, any relevant dispensation agreed in accordance with this Schedule; or (c) in exceptional circumstances, such other method as may be specified by the Settlement System Administrator. 19.3 Laboratory tests: Metering Equipment which fails any test whilst in its operational position shall be tested under laboratory conditions in accordance with the relevant Code of Practice. 19.4 Witnesses: No more than two persons representing all interested Parties or Meter Operator Parties nominated by the Executive Committee (including the Host PES) in addition to the Settlement System Administrator will be entitled to witness tests taken as a result of a dispute, including tests confirming the calibration of test equipment, or inspect evidence of valid calibration, or valid calibration certificates, as appropriate. 19.5 Saving: It is hereby expressly acknowledged and agreed by the Parties that the resolution of any dispute referred to in Clause 60.11.1 shall in all cases be without prejudice to the bringing or pursuing of any claim, by or against, or the resolving of any issue between any one or more of such Parties or any other Party arising out of the same facts or circumstances, or facts or circumstances incidental to the facts and circumstances giving rise to such dispute or upon the basis of which such dispute has been resolved, in favour of, or against, a Meter Operator Party or Meter Operator Parties. 19.6 Release of data: Upon the request of any Party or Meter Operator Party which is a party to a dispute referred to in paragraph 19.1 any relevant data derived from any Metering System may be submitted by the Settlement System Administrator to the body then having jurisdiction in respect of the relevant dispute for the purposes of resolving such dispute. PART 8 LIMITATION OF LIABILITY 20. LIMITATION OF LIABILITY 20.1 Limitation of liability: Subject to paragraph 20.2 and save where any provision of this Agreement provides for an indemnity, each Party and each Meter Operator Party agrees and acknowledges that no Party nor Meter Operator Party (excluding for this purpose the Settlement System Administrator) (in this paragraph 20, the "Party Liable") or any of its officers, employees or agents shall be liable ------------ to any of the other Parties or Meter Operator Parties for loss arising from any breach of this Schedule or of this Agreement other than for loss directly resulting from such breach and which at the date of this Agreement was reasonably foreseeable as not unlikely to occur in the ordinary course of events from such breach in respect of:- 20.1.1 physical damage to the property of any of the other Parties or Meter Operator Parties or its or their respective officers, employees or agents; and/or 20.1.2 the liability of any such other Party or Meter Operator Party to any other person for loss in respect of physical damage to the property of any other person. 20.2 Death and personal injury: Nothing in this Schedule or this Agreement shall exclude or limit the liability of the Party Liable for death or personal injury resulting from the negligence of the Party Liable or any of its officers, employees or agents and the Party Liable shall indemnify and keep indemnified each of the other Parties or Meter Operator Parties, its officers, employees or agents from and against all such and any loss or liability which any such other Party or Meter Operator Party may suffer or incur by reason of any claim on account of death or personal injury resulting from the negligence of the Party Liable or any of its officers, employees or agents. 20.3 Exclusion of certain types of loss: Subject to paragraph 20.2 and save where any provision of this Agreement provides for an indemnity, neither the Party Liable nor any of its officers, employees or agents shall in any circumstances whatsoever be liable to any of the other Parties or Meter Operator Parties for:- 20.3.1 any loss of profit, loss of revenue, loss of use, loss of contract or loss of goodwill; or 20.3.2 any indirect or consequential loss; or 20.3.3 loss resulting from the liability of any other Party or Meter Operator Party to any other person howsoever and whensoever arising save as provided in paragraphs 20.1.2 and 20.2. 20.4 Trust: Each Party and each Meter Operator Party acknowledges and agrees that each of the other Parties and Meter Operator Parties holds the benefit of Clauses 20.1, 20.2 and 20.3 of this Schedule for itself and as trustee and agent for its officers, employees and agents. 20.5 Survival: Each of paragraphs 20.1, 20.2, 20.3 and 20.4 shall:- 20.5.1 be construed as a separate and severable contract term, and if one or more of such paragraphs is held to be invalid, unlawful or otherwise unenforceable the other or others of such paragraphs shall remain in full force and effect and shall continue to bind the Parties and the Meter Operator Parties; and 20.5.2 survive termination of this Agreement. 20.6 Saving: For the avoidance of doubt, nothing in this Part 8 shall prevent or restrict any Party or Meter Operator Party enforcing any obligation (including suing for a debt) owed to it under or pursuant to this Schedule or this Agreement. 20.7 Full negotiation: Each Party and each Meter Operator Party acknowledges and agrees that the foregoing provisions of this Part 8 have been the subject of discussion and negotiation and are fair and reasonable having regard to the circumstances as at the date this Schedule came into effect. PART 9 ACCESS 21. ACCESS 21.1 Access to Party's and Meter Operator Party's property: Each Party and Meter Operator Party hereby agrees to grant to any Invitee and, in the case of a Meter Operator Party, the Registrant of the Metering System in respect of the Metering System of which it is Operator, and, in the case of a Registrant of a Metering System, the Meter Operator Party which is the Operator in respect of that Metering System:- (a) full right during the currency of this Agreement to enter upon and through and remain upon, or do any other act contemplated by this Schedule 21 which would otherwise constitute a trespass upon, any part of such Party's or, as the case may be, Meter Operator Party's, property; (b) in the case of the Operator or the Settlement System Administrator, full right to remove any part of Metering Equipment forming part of such property to a laboratory or test house in accordance with the provisions of this Schedule; and (c) in the case of the Pool Auditor, full right to perform such tasks and to do all such acts and things as are necessary for the purpose of performing audits, tests, reviews and checks under the SSA Arrangements, including full right to carry out such tests on Metering Equipment provided that the person or persons allocated to carry out such tests by the Pool Auditor is or are suitably qualified in the operation of Metering Equipment, provided always that such access rights conferred by or pursuant to this paragraph shall be granted only to the extent necessary for the purposes of this Schedule and shall be subject to the other provisions of this paragraph 21. 21.2 Invitees: An Invitee for the purposes of this paragraph 21 shall comprise any one or more of the following:- (i) the Settlement System Administrator acting through any reasonably nominated employees, agents or contractors; (ii) the Executive Committee acting through any reasonably nominated persons; (iii) the Equipment Owner for the purposes only of fulfilling its obligations under paragraph 7.1.3; (iv) the Pool Auditor acting through any partner or employee; (v) the auditor carrying out the Scheduling and Despatch Review acting through any partner or employee; (vi) the Ancillary Services Provider acting through any reasonably nominated employees, agents or contractors; and (vii) the Grid Operator acting through any reasonably nominated employees, agents or contractors. 21.3 Access to property of Second Tier Customers, ERS First Tier Customers, Non-Pooled Generators and Third Parties: The Registrant of a Metering System and the Meter Operator Party which is the Operator or Potential Operator of that Metering System hereby jointly and severally agree to use all reasonable endeavours to, and to co-operate with each other for the purpose of procuring for the benefit of each Invitee and for each other:- (a) full right to enter upon and through and remain upon, or do any other act contemplated by this Schedule which would otherwise constitute a trespass upon, any part of the property:- (i) of the Second Tier Customer or ERS First Tier Customer in respect of which that Registrant is the Supplier; (ii) of the Non-Pooled Generator from which that Registrant receives supply; and (iii) of any other person which is not a party to this Agreement (the "Third Party") but the exercise of whose rights would prevent, in relation to such Second Tier Customer, ERS First Tier Customer, Non-Pooled Generator, the Registrant, the Meter Operator Party or any Invitee from performing its obligations under this Schedule or this Agreement and the existence of whose rights is known to, or ought reasonably be known to, the Registrant or, as the case may be, the Meter Operator Party; (b) in the case of the Operator or the Settlement System Administrator, full right to remove all or any part of Metering Equipment forming part of such property to a laboratory or test house in accordance with the provisions of this Schedule; and (c) in the case of the Pool Auditor, full right to perform such tasks and to do all such acts and things as are necessary for the purpose of performing audits, tests, reviews and checks under the SSA Arrangements, including full right to carry out such tests on Metering Equipment provided that the person or persons allocated to carry out such tests by the Pool Auditor is or are suitably qualified in the operation of Metering Equipment, provided always that such access rights conferred by or pursuant to this paragraph shall be granted only to the extent necessary for the purposes of this Schedule and shall be subject to the other provisions of this paragraph 21. 21.4 Failure to procure access: If, after having used all such reasonable endeavours to procure access rights in accordance with this paragraph 21 in respect of a Second Tier Customer, an ERS First Tier Customer, a Non-Pooled Generator or Third Party referred to in paragraph 21.3, a Registrant and/or Meter Operator Party have been unable to procure any such rights the Registrant:- (i) hereby undertakes not to make any future supplies to such Second Tier Customer or ERS First Tier Customer at the Site in respect of which such access rights are required until such access rights have been obtained and if supplying such Second Tier Customer or ERS First Tier Customer at such Site to cease forthwith to supply such Second Tier Customer or ERS First Tier Customer at that Site; (ii) hereby undertakes not to take any future supply of electricity from such Non-Pooled Generator at the Site in respect of which such access rights are required until such access rights have been obtained and if taking a supply of electricity from such Non-Pooled Generator at such Site to cease forthwith to take a supply of electricity from such Non-Pooled Generator at that Site; and (iii) shall notify the Settlement System Administrator in accordance with the relevant Agreed Procedure of that fact. The Settlement System Administrator shall be entitled to assume that the consents of any Third Parties shall have been obtained in accordance with the provisions of this paragraph until such time as it is fixed with notice to the contrary. 21.5 Right of access: The right of access provided for in paragraphs 21.1 and 21.3 shall include the right to bring on to such Meter Operator Party's, Party's, Second Tier Customer's, ERS First Tier Customer's, Non-Pooled Generator's or Third Party's property such vehicles, plant, machinery and maintenance or other materials as shall be reasonably necessary for the purposes of this Schedule. 21.6 Authorisation: Each Meter Operator Party or, as the case may be, Party shall ensure that any particular authorisation or clearance which is required to be given to ensure access to any Invitee, Registrant or Meter Operator Party in accordance with this paragraph is available on arrival. 21.7 Safety: Subject to the right of the Settlement System Administrator to inspect without notice pursuant to paragraph 8.2.2, each Meter Operator Party or, as the case may be, Party shall procure that all reasonable arrangements and provisions are made and/or revised from time to time as and when necessary or desirable to facilitate the safe exercise of any right of access granted pursuant to paragraph 21.1 or 21.3 with the minimum of disruption, disturbance and inconvenience. Such arrangements and provisions may, to the extent that the same are reasonable, limit or restrict the exercise of such right of access and/or provide for any Meter Operator Party or Party to make directions or regulations from time to time in relation to a specified matter. Matters to be covered by such arrangements and/or provisions include:- (i) the identification of any relevant Metering Equipment; (ii) the particular access routes applicable to the land in question having particular regard for the weight and size limits on those routes; (iii) any limitations on times of exercise of the right of access; (iv) any requirements as to prior notification and as to authorisation or security clearance of individuals exercising such right of access and procedures for obtaining the same; (v) the means of communication to the Meter Operator Party or, as the case may be, Party (and all employees and/or contractors who may be authorised from time to time to exercise such right of access) of any relevant directions or regulations made by the Meter Operator Party or, as the case may be, Party; and (vi) the identification of and arrangements applicable to personnel exercising the right of access granted by paragraphs 21.1 or 21.3. Each Party or Meter Operator Party shall (and shall procure that all persons exercising any right of access on behalf of such Party or Meter Operator Party) observe and perform any such arrangements and all provisions (or directions or regulations issued pursuant thereto) made from time to time. 21.8 Damage: Each Party or Meter Operator Party shall procure that all reasonable steps are taken in the exercise of any right of access by or on behalf of such Party or Meter Operator Party to:- (a) avoid or minimise damage in relation to any Meter Operator Party's, Party's, Second Tier Customer's, ERS First Tier Customer's, Non-Pooled Generator's or other Third Party's property; and (b) cause as little disturbance and inconvenience as possible to any Meter Operator Party, Party, Second Tier Customer, ERS First Tier Customer, Non-Pooled Generator or other Third Party or other occupier of such Meter Operator Party's, Party's, Second Tier Customer's, ERS First Tier Customer's, Non-Pooled Generator's or other Third Party's property, and shall make good any damage caused to such property in the course of exercise of such rights as soon as may be practicable. Subject to this, all such rights of access shall be exercisable free of any charge or payment of any kind. 21.9 Licence Restricted Parties: (a) This paragraph 21.9 shall apply to any area owned or occupied by any Party, Meter Operator Party or any subsidiary of such Party or Meter Operator Party, Second Tier Customer, ERS First Tier Customer, Non-Pooled Generator or Third Party (each a "Licence Restricted ------------------ Party") which is the holder of or subject to a licence granted under the Nuclear Installations Act 1965 (a "Nuclear Site Licence") or subject to restrictions in relation -------------------- to a Nuclear Site Licence, where such area is subject to that Nuclear Site Licence but, in respect of Energy Settlements and Information Services Limited, this paragraph 21.9 shall apply subject to the provisions of any other agreement between the Licence Restricted Party and NGC (or any of its subsidiaries) imposing restrictions on NGC's (or any of its subsidiaries') right of access to any area owned by the Licence Restricted Party subject to (or subject to restrictions in relation to) a Nuclear Site Licence. (b) This paragraph 21.9 shall take precedence over any contrary provisions of this Schedule. (c) No Party or Meter Operator Party shall enter or attempt to enter or permit or suffer any person to enter or attempt to enter any area owned or occupied by the Licence Restricted Party to which a Nuclear Site Licence applies except strictly in accordance with the provisions, restrictions and conditions of the Nuclear Site Licence. (d) The Licence Restricted Party shall be entitled to take reasonable action of any kind whatsoever relating to or affecting access to its property as it considers on reasonable grounds to be necessary in order to enable the Licence Restricted Party to comply with the provisions, restrictions and conditions of a Nuclear Site Licence or avert or minimise any reasonably anticipated breaches thereof. 21.10 Denial of access: The Settlement System Administrator shall not incur any liability under this Schedule or this Agreement in the event it cannot perform any of its duties hereunder due to access to Metering Equipment being denied to it save that the Settlement System Administrator shall inform the Executive Committee thereafter. PART 10 COMMUNICATIONS EQUIPMENT 22. COMMUNICATIONS EQUIPMENT 22.1 Compatibility: Communications Equipment at or relating to any Site (which whenever used in this paragraph 22 shall include all Qualifying Sites) must be compatible with the communications links provided by the Settlement System Administrator pursuant to Clause 60.6.3(a) in respect of that Site. Prior to the installation of Communications Equipment at or relating to any Site the Tariff Operator shall consult with the Settlement System Administrator to ensure that such Communications Equipment will be compatible with such communication links. Where a Tariff Operator becomes aware that Communications Equipment at or relating to a Site is used for purposes other than in connection with Settlement, it shall notify the Settlement System Administrator of any such use or purposes to which that Communications Equipment is put. 22.2 Settlement System Administrator's responsibility in respect of communications links: Subject to the requirement of the Settlement System Administrator to collect data in accordance with Clause 60.6.1 and subject to the provisions of paragraph 22.1, the Settlement System Administrator shall use all reasonable endeavours to ensure that the communications link provided by it (but which, for the avoidance of doubt, does not form part of Communications Equipment) to any Site pursuant to Clause 60.6.3(a) is of the type requested by the Tariff Operator. 22.3 Tariff payments: (a) The Settlement System Administrator shall pay from time to time to each Tariff Operator in respect of a Site for which it is the Tariff Operator, an amount (if any) determined in accordance with the relevant Tariff and payable in respect of Communications Equipment installed and maintained at or relating to such Site by such Tariff Operator for the purposes of this Agreement. (b) The Settlement System Administrator shall recover from time to time (for credit to Pool Members as the Executive Committee shall from time to time direct) from a Tariff Operator and a Tariff Operator shall pay from time to time (for credit to Pool Members as the Executive Committee shall from time to time direct) to the Settlement System Administrator in respect of the costs of manual on-site interrogation or data estimation costs incurred by it in respect of each Site at which there is not installed and maintained Communications Equipment in accordance with the requirements of this Schedule, such amounts (if any) determined in accordance with the relevant Tariff. Where the Settlement System Administrator has received any such payment pursuant to this sub-paragraph 22.3(b) it shall be set off in full against amounts which may be recovered by the Settlement System Administrator pursuant to paragraph 22.6 or 22.7. (c) The Settlement System Administrator may, and at the direction of the Executive Committee shall, without notice to the relevant Tariff Operator set off amounts payable to it by that Tariff Operator under the relevant Tariff against amounts payable by the Settlement System Administrator to that Tariff Operator, under the relevant Tariff. Any amounts so set off by the Settlement System Administrator under this paragraph 22.3 shall be deemed to have been received by the Settlement System Administrator for the purposes of paragraph 22.3(b). (d) Notwithstanding the terms of any Tariff, a Tariff Operator shall not be entitled to receive payment of or otherwise recover any sums for or relating to goods or services delivered or provided by it under or for the purposes of this Agreement and invoiced or claimed by the Tariff Operator to or from the Settlement System Administrator or Pool Members more than 90 days after the end of the month in which such goods or services were delivered or provided. 22.4 Refunds: Where a Tariff Operator is removed, resigns or otherwise ceases to be Tariff Operator at or relating to any Site it shall pay to the Settlement System Administrator such amount (if any) as is set out in the relevant Tariff by way of reimbursement of amounts paid to it pursuant to paragraph 22.3. 22.5 Additional payments: If a Tariff Operator can demonstrate to the reasonable satisfaction of the Settlement System Administrator that any relevant payment to be made pursuant to this paragraph 22 and in accordance with the relevant Tariff in respect of any particular Site as is described in the relevant Tariff does not reflect the cost to such Tariff Operator of providing in respect of Communications Equipment at or relating to such Site installation and maintenance services in an efficient and economic manner then the Settlement System Administrator may negotiate an additional payment to such Tariff Operator in respect of Communications Equipment at or relating to such Site provided that the Tariff Operator shall be entitled to receive such additional payment only if and to the extent that the economic and efficient provision of installation and maintenance services in respect of the Communications Equipment at or relating to that Site is in fact effected. If the Tariff Operator and the Settlement System Administrator fail to agree on the amount of an additional payment, the Tariff Operator may refer the matter to the Executive Committee which shall determine the same. The relevant Meter Operator Party may refer any such decision of the Executive Committee to the Director and for the purposes thereof shall be deemed to be exercising a Dissentient Pool Member's right of appeal pursuant to and in accordance with Clause 13.5. The Settlement System Administrator shall send the Executive Committee on request a written report giving reasonable details of any such additional payments made or proposed to be made. 22.6 Costs beyond SSA's control: Payments which are made to Tariff Operators in respect of the provision of installation and maintenance services in respect of Communications Equipment (whether or not pursuant to or in addition to the relevant Tariff) and payments for communications links shall be a cost beyond the control of the Settlement System Administrator. 22.7 Recovery of costs: All costs and xpenses relating to the payment arrangements referred to in this Schedule for the installation and maintenance of Communications Equipment, the relevant Tariff or otherwise, including payments which are made to Tariff Operators for the provision of installation and maintenance services in respect of Communications Equipment, payments for communications links, management time and expenses of the Settlement System Administrator and the cost of funds borrowed to finance such costs, expenses and payments, may be recovered in full by the Settlement System Administrator in accordance with the Charging Procedure. 22.8 No agency: No agency relationship (whether express or implied) shall be, or be deemed to be, created between any Tariff Operator and the Settlement System Administrator or any other person as a result of the payments to be made pursuant to this paragraph 22. 22.9 Tariff Operators: (a) There shall at any point in time be no more than one Tariff Operator in respect of each Metering System or Metering Equipment. (b) Each Tariff Operator shall, for so long as it is entitled to receive payments in respect of Communications Equipment at or relating to a Site which is not a 1993/1994 Tariff Qualifying Site (as defined in the Tariff which is entitled the Tariff for 1993/1994 Sites), in respect of that Communications Equipment (but not in respect of any other Metering Equipment which is not Communications Equipment): (i) ensure there is installed Communications Equipment (including its component parts) which complies with the provisions of this Schedule, Part XV of this Agreement and the relevant Code of Practice or shall be the subject of, and comply with, a dispensation agreed in accordance with paragraph 14, and which uses such communications protocols as may be selected in accordance with paragraph 7.2.2 of this Schedule; (ii) at its own cost and expense (but without prejudice to its right to charge any other person for such service pursuant to another agreement or arrangement) keep installed, in good working order, repair and condition that Communications Equipment (including its component parts) to allow for the correct transmission of data in accordance with this Agreement (whether or not such data are actually required to be transmitted for the purposes of this Agreement); and (iii) provide to the Settlement System Administrator such information in respect of that Communications Equipment as it would be required to provide pursuant to this Schedule, Part XV of this Agreement and the relevant Agreed Procedure, were it, in respect of that Qualifying Site at or in relation to which that Communications Equipment is installed, an Operator in respect of a Site at the point of connection to a Second Tier Customer or an ERS First Tier Customer for the purposes of the Settlement System Administrator recording and keeping up-to-date details of that Communications Equipment on the Register. 22.10 Transitional Arrangements: It is hereby expressly acknowledged and agreed by the Parties and Meter Operator Parties that, with effect from the date this provision comes into effect, references in the Tariff, which on 22nd April, 1994 became effective as at 1st January, 1994 (if not then superseded), to "Potential Operator" shall be read, with respect to any obligation then unperformed, or right then unenjoyed, as if that reference were a reference to a Tariff Operator. PART 11 TRANSITIONAL ARRANGEMENTS 23. TRANSITIONAL ARRANGEMENTS 23.1 Transitional Arrangements: With effect from the date this Schedule came into effect (the "NSD Date") -------- each Party which is at that date an Operator or a Potential Operator shall be deemed to be a Meter Operator Party (in addition to continuing as a Party in any other capacity) and to have complied with all the requirements of or referred to in this Schedule 21 relating to admission as a Meter Operator Party and as an Operator. Such Parties are more particularly described in Annex 4 hereto. The Parties acknowledge and confirm that the deemed admission of an existing Party as a Meter Operator Party shall not affect that Party's rights and obligations under any agreement or arrangement relating to being an Operator entered into or existing between the Parties or any of them prior to such deemed admission, and that accordingly such agreement or arrangement shall continue notwithstanding the change and any reference to that Party being an Operator under this Agreement shall be construed as being an Operator as a Meter Operator Party. 23.2 Saving: Notwithstanding paragraph 23.1, each Party to which this Part 11 applies expressly acknowledges and agrees that, notwithstanding any deemed satisfaction of the conditions which are required to be fulfilled as at the NSD Date in accordance with this Schedule for the purposes of admission as a Meter Operator Party and as Operator, it shall be subject (but only with prospective effect; that is to say to the effect that any conditions which apply as at the NSD Date are deemed to be fulfilled and need not then be fulfilled as a continuing obligation) to the continuing and further conditions for registration as an Operator from time to time and to the provisions of paragraph 4.4, and that it shall be subject to the provisions for the resignation, removal and cessation as Operator in respect of any Metering System, or as Meter Operator Party, as the case may be, in accordance with the provisions of this Schedule as at the date hereof and from time to time, and after any such resignation, removal or cessation as a Meter Operator Party, it shall be subject in full to the procedures for admission as a Meter Operator Party and Operator as may be set out from time to time in this Schedule. PART 12 INCORPORATION OF OTHER PROVISIONS OF THIS AGREEMENT 24. INCORPORATION BY REFERENCE Incorporation by reference: The provisions of Clauses 1.2, 1.3, 8.6, 34.1, 34.2, 34.3, 37.3, 66.7, 68, 69, 70, 71, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84 and 85 of the Pooling and Settlement Agreement, Sections 4 and 7 of Schedule 4 thereto and Sections 3 and 4 of Part E of the Appendix to that Schedule shall be deemed to be incorporated into this Schedule 21 mutatis mutandis as if each reference therein to the word "Party" were a reference to the words "Party and Meter Operator Party" and to the word "Parties" were to the words "Parties and Meter Operator Parties". PART 13 QUALIFYING UNMETERED SUPPLIES 25. QUALIFYING UNMETERED SUPPLIES Notwithstanding any of the other provisions of this Schedule, the provisions of Clause 60.19 and any Second Tier Unmetered Supplies Procedures shall, to the extent they are supplemental to or conflict with any other provisions of this Schedule, govern the rights and obligations of the Parties (including each Operator and each Meter Operator Party) in relation to Qualifying Unmetered Supplies. ANNEX 1 Form of Meter Operator Party Admission Application The Executive Committee for the Pooling and Settlement System in England and Wales [copy to: the Settlement System Administrator] [Date] Dear Sir, 1. We [insert full legal name and address of registered/principal office of applicant] refer to Schedule 21 to the Pooling and Settlement Agreement for the electricity industry in England and Wales dated 30th March, 1990 (as amended, varied, supplemented, modified or suspended, the "Pooling and Settlement Agreement"). 2. Unless the context otherwise requires, words and expressions defined in the Pooling and Settlement Agreement for the purposes of Schedule 21 to the Pooling and Settlement Agreement shall bear the same meanings respectively when used herein. 3. We hereby apply to be admitted as an additional party in accordance with, and for the purposes only of, Schedule 21 to the Pooling and Settlement Agreement pursuant to paragraph 3 and subject to the terms set out in paragraph 2 thereof. We wish to participate thereunder in the capacity of a Meter Operator Party. 4. We hereby represent and warrant to the Executive Committee (for itself and on behalf of all the Parties and Meter Operator Parties) that:- (A) we are duly organised and validly existing under the laws of the jurisdiction of our organisation or incorporation; (B) we have the power to execute and deliver our Meter Operator Party Accession Agreement and any other documentation relating to that Agreement or the Pooling and Settlement Agreement and such other agreements as are required thereby and to perform our obligations hereunder or thereunder and we have taken all necessary action to authorise such execution, delivery and performance; and (C) such execution, delivery and performance do not violate or conflict with any law applicable to us, any provision of our constitutional documents, any order or judgment of any court or other agency of government applicable to us or any of our assets or any contractual restriction on or affecting us or any of our assets. We confirm that these representations and warranties will also be true and correct in all material respects at the date of our admission as a New Meter Operator Party. 5. We enclose the application fee of (pound)[ ]*. 6. We accept and agree to be bound by the terms of paragraph 3 of Schedule 21 to the Pooling and Settlement Agreement. Yours faithfully, ------------------------- duly authorised for and on behalf of [insert full legal name of the New Meter Operator Party] * Insert current application fee prescribed by the Executive Committee. ANNEX 2 Form of Meter Operator Party Resignation Notice The Secretary of the Executive Committee for the Pooling and Settlement System in England and Wales [copied to: the Settlement System Administrator] [Date] Dear Sir, 1. We [insert full legal name and address of registered/principal office of applicant] refer to Schedule 21 to the Pooling and Settlement Agreement for the electricity industry in England and Wales dated 30th March, 1990 (as amended, varied, supplemented, modified or suspended, the "Pooling and Settlement Agreement"). 2. Unless the context otherwise requires, words and expressions defined in the Pooling and Settlement Agreement for the purposes of Schedule 21 to the Pooling and Settlement Agreement shall bear the same meanings respectively when used herein. 3. We hereby give notice pursuant to paragraph 5.1 of Schedule 21 to the Pooling and Settlement Agreement that we are resigning as a Meter Operator Party with effect from the date falling 28 days after receipt by you of this Meter Operator Party Resignation Notice. 4. We confirm that in giving this notice of resignation, we are not and will not be in breach of the restriction on resignation set out in paragraph 5.2 of Schedule 21 to the Pooling and Settlement Agreement. 5. We acknowledge that our resignation as a Meter Operator Party is without prejudice to our accrued rights and liabilities and any rights and liabilities which may accrue to us in relation to the period during which we were a Meter Operator Party under Schedule 21 to the Pooling and Settlement Agreement or any agreement referred to in paragraph 5.2 of Schedule 21 to the Pooling and Settlement Agreement. 6. We further expressly acknowledge and confirm that our resignation as a Meter Operator Party pursuant to Schedule 21 to the Pooling and Settlement Agreement is without prejudice to our past, present and future accrued or accruing rights and liabilities as a Party to the Pooling and Settlement Agreement in any capacity whatsoever other than that of Meter Operator Party. Yours faithfully, ------------------------- duly authorised for and on behalf of [insert full legal name of Meter Operator Party] ANNEX 3 Form of Meter Operator Party Accession Agreement THIS SUPPLEMENTAL AGREEMENT is made on [ ] BETWEEN:- (1) [ ], a company incorporated [with limited liability] under the laws of [ ] [(registered number [ ])] and having its [registered] [principal] office at [ ] (the "New Meter Operator Party"); and (2) [ ] (the "Nominee") on behalf of all the parties to the Pooling and Settlement Agreement referred to below. WHEREAS:- (A) by an agreement dated 30th March, 1990 made between the Founder Generators named therein (1), the Founder Suppliers named therein (2), Energy Settlements and Information Services Limited (formerly NGC Settlements Limited) as Settlement System Administrator (3), Energy Pool Funds Administration Limited as Pool Funds Administrator (4), The National Grid Company plc as Grid Operator and Ancillary Services Provider (5), and Scottish Power plc and Electricite de France, Service National as Externally Interconnected Parties (6) (as amended, varied, supplemented, modified or suspended, the "Pooling and Settlement Agreement") the parties thereto agreed to give effect to and be bound by certain rules and procedures for the operation of an electricity trading pool and the operation of a settlement system; (B) by paragraph 2 of Schedule 21 to the Pooling and Settlement Agreement additional parties may be admitted to that Agreement for the purposes of, and only to be bound by and conferred rights in accordance with, Schedule 21 thereto in the capacity of Meter Operator Party; and (C) the New Meter Operator Party has requested that it be admitted as a Meter Operator Party pursuant to paragraph 3 of Schedule 21 to the Pooling and Settlement Agreement and each of the Parties and Meter Operator Parties hereby agrees to such admission. NOW IT IS HEREBY AGREED as follows:- 1. Unless the context otherwise requires, words and expressions defined in the Pooling and Settlement Agreement used for the purposes of Schedule 21 to the Pooling and Settlement Agreement shall bear the same meanings respectively when used herein. 2. The Nominee (acting on behalf of each of the Parties and Meter Operator Parties) hereby admits the New Meter Operator Party as an additional Meter Operator Party under Schedule 21 to the Pooling and Settlement Agreement on the terms and conditions hereof and with effect from [insert effective date of admission]. 3. The New Meter Operator Party hereby accepts its admission as a Meter Operator Party and undertakes with the Nominee (acting on behalf of each of the Parties and Meter Operator Parties) to perform and to be bound by the terms and conditions of Schedule 21 to the Pooling and Settlement Agreement as a Meter Operator Party as from the [insert effective date of admission]. 4. For all purposes in connection with the Pooling and Settlement Agreement the New Meter Operator Party shall as from the [insert effective date of admission] be treated including for the purposes of paragraph 2 of Schedule 21 to the Pooling and Settlement Agreement as if it had been a signatory of the Pooling and Settlement Agreement as a Meter Operator Party and as if this Agreement were part of the Pooling and Settlement Agreement, and the rights and obligations of the Parties and Meter Operator Parties shall be construed accordingly. 5. The New Meter Operator Party, the Parties and the Meter Operator Parties expressly acknowledge and confirm that, pursuant to paragraph 2.1 of Schedule 21 to the Pooling and Settlement Agreement with effect from [insert effective date of admission] the New Meter Operator Party shall only be bound by, and conferred rights in accordance with, Schedule 21 to the Pooling and Settlement Agreement in the sole capacity of Meter Operator Party. 6. The New Meter Operator Party expressly consents to be bound by the provisions of paragraphs 2.2 and 2.3 of Schedule 21 to the Pooling and Settlement Agreement. 7. This Agreement and the Pooling and Settlement Agreement shall be read and construed as one document and references in the Pooling and Settlement Agreement to the Pooling and Settlement Agreement (howsoever expressed) shall be read and construed as references to the Pooling and Settlement Agreement and this Agreement. 8. This Agreement shall be governed by and construed in all respects in accordance with English law and the provisions of Clauses 83 and 84 of the Pooling and Settlement Agreement as incorporated into Schedule 21 thereto by paragraph 24 thereof shall apply hereto mutatis mutandis. AS WITNESS the hands of the duly authorised representatives of the parties hereto the date and year first above written. [New Meter Operator Party] By: Notice details (Clause 75 of the Pooling and Settlement Agreement as incorporated into Schedule 21 thereto by paragraph 24 thereof) Address: Telex number: Facsimile number: Attention: [Nominee] (for and on behalf of each of the parties (including Meter Operator Parties) to the Pooling and Settlement Agreement) By: ANNEX 4 List of Existing Meter Operator Parties Qualifying under the Transitional Arrangements Derwent Cogeneration Limited Eastern Group plc East Midlands Electricity plc Elm Energy & Recycling (UK) Limited Humber Power Limited Joseph Crosfield & Sons, Limited London Electricity plc Manweb plc Marc Rich & Co. AG Medway Power Limited Meter Operators Limited Midlands Electricity plc The National Grid Company plc National Power PLC Northern Electric plc NORWEB plc Nuclear Electric plc PowerGen plc Schlumberger Industries Limited Scottish Hydro-Electric PLC SEEBOARD plc Southern Electric plc South Wales Electricity plc South Western Electricity plc Teesside Power Limited Yorkshire Electricity Group plc ANNEX 5 Diagrams ANNEX 6 List of Existing Meter Operator Parties Control Devices and Services Limited Derwent Cogeneration Limited E Squared Limited Eastern Group plc East Midlands Electricity plc Elm Energy & Recycling (UK) Limited Humber Power Limited Joseph Crosfield & Sons, Limited Keadby Generation Limited London Electricity plc Manweb plc Marc Rich & Co. AG Medway Power Limited Meter Operators Limited Midlands Electricity plc Mission Energy Services Limited The National Grid Company plc National Power PLC Northern Electric plc Northern Energy Services Limited NORWEB plc Nuclear Electric plc PowerGen plc Powermet Limited Schlumberger Industries Limited Scottish Hydro-Electric PLC Scottish Power plc SEEBOARD plc Slough Electricity Supplies Limited Southern Electric plc South Wales Electricity plc South Western Electricity plc Teesside Power Limited Yorkshire Electricity Group plc SCHEDULE 22 1998 PROGRAMME FUNDING AND COST RECOVERY 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions: In this Schedule, except where the context otherwise requires: "1998 Programme" means the programme of work undertaken by the Pool to establish the systems and processes (including the EAC/AA System, the ISRA System and the NHH Data Aggregation System) to support the trading and settlement system in England and Wales to facilitate the full introduction of a competitive supply market on 1st April, 1998, as described in the Operational Framework; "1998 Programme Costs" means the development and implementation costs of the 1998 Programme comprising the following (without double-counting):- (a) the costs and expenses of implementing Approved Funding Tranches approved in the period until the Implementation Date; and (b) Accrued Costs, in so far as such costs relate to the 1998 Programme but, for the avoidance of doubt, shall exclude those costs and charges to be paid by the Scottish PESs or Scottish Settlements pursuant to section 9 of Schedule 23; "1998 Sub-Committees" means the sub-committees, the Programme Board and project boards established to develop and implement the 1998 Programme; "Accrued Costs" means the costs accrued in relation to the 1998 Programme prior to 1st April, 1996, which the Pool Members agree amount to (pound)2,878,000 at 1st April, 1996, together with interest calculated at the base rate of Barclays Bank PLC from time to time compounded, with monthly rests, until the date of payment, which costs are repayable in accordance with sub-section 2.4; "Aggregate Charging Limit" or "ACL" means the aggregate amount of 1998 Programme Costs recoverable by the Public Electricity Suppliers pursuant to Section 8; "Approved Funding Tranches" means the Funding Tranches approved by the Steering Group in accordance with sub-section 3.4 or by Public Electricity Suppliers in accordance with sub-section 7.2; "EAC/AA System" means the estimation of annual consumption and annualised advance software and systems which are to be developed for the benefit of Pool Members pursuant to the 1998 Programme; "EPFAL" means Energy Pool Funds Administration Limited (registered number 2444187) whose registered office is situate at 185 Park Street, London SE1 9DY or such other person as may be appointed as its successor from time to time as Pool Funds Administrator pursuant to Schedule 15; "Financing Costs" or "FC" means the amount of costs to be incurred and recovered by the Public Electricity Suppliers in respect of their financing of 1998 Programme Costs, such amount being equal to interest upon 1998 Programme Costs at the base rate of Barclays Bank PLC from time to time compounded, with monthly rests, accruing from the date of payment by the Public Electricity Suppliers of such 1998 Programme Costs, until the date the Public Electricity Suppliers are reimbursed in accordance with Section 8; "Funder" means a person for the time being being party to this Agreement who is a Public Electricity Supplier or a Scottish PES; "Funding Tranches" means individual and groups of work packages submitted for approval by the Steering Group or Public Electricity Suppliers in accordance with sub-section 3.4 or, as the case may be, Section 7; "Implementation Date" means the date on which the first of the following occurs: (a) a competitive supply market begins to operate in respect of customers below 100kW; (b) the Executive Committee requires work on the 1998 Programme to cease as agreed or sanctioned by the Secretary of State or the Director; and (c) the systems and processes developed by the Pool required to facilitate the beginning of the competitive supply market in respect of customers below 100kW would be able to operate, as determined by an independent expert jointly appointed by the Public Electricity Suppliers, the Chief Executive and the Director, but are not capable of operating because of other circumstances, but in any event no earlier than 1st April, 1998; "ISRA System" means the initial settlement and reconciliation software and systems for electricity trading in England and Wales which are to be developed for the benefit of Pool Members pursuant to the 1998 Programme; "NHH Data Aggregation System" means the non half hour data aggregation software and systems which are to be developed for the benefit of Pool Members pursuant to the 1998 Programme; "Non-paying Funder" has the meaning ascribed to that term in paragraph 2.3.3; "Operational Framework" means the 1998 Operational Framework of the Pool (Release 4.2) submitted to the Director as of 31st March, 1996; "Other Pool Members" has the meaning ascribed to that term in Schedule 23; "PES Votes" means, in relation to a Public Electricity Supplier, the number of votes to which such Public Electricity Supplier is entitled from time to time, determined in accordance with Section 6; "Pool" means the Electricity Pool of England and Wales; "Programme Board" means the 1998 Programme Management Board established by the Executive Committee to monitor, review and oversee implementation of the 1998 Programme; "Programme Budget" means an estimate of the overall cost of implementing the 1998 Programme, including detailed cost estimates for each element of the 1998 Programme required to be incurred, each element to be broken down into all identified Funding Tranches with each Funding Tranche to contain the details of the timing of the work, the scope of work and the likely costs and expenses to be incurred in its performance, approved in accordance with Section 5; "Programme Share" means, in relation to a Public Electricity Supplier or a Scottish PES, the share of 1998 Programme Costs of such Public Electricity Supplier or (as the case may be) such Scottish PES, determined in accordance with Section 6; "Requisite Proportion" means, in the case of the approval by Public Electricity Suppliers in writing or in separate meeting of the matters referred to: (a) in paragraphs 7.2(a) and 7.2(c), 65 per cent.; and (b) in paragraph 7.2(b), 50 per cent., in the case of written consent, of the total PES Votes of all Public Electricity Suppliers and, in the case of a separate general meeting, of the total PES Votes of those Public Electricity Suppliers as (being entitled to do so) vote in person or by proxy at the relevant separate general meeting of which notice specifying the intention to propose the resolution has been duly given; "Scottish PES" means Scottish Hydro-Electric PLC and Scottish Power plc; "Scottish Settlements" means Scottish Electricity Settlements Limited (registered in Scotland number SC169212); "Steering Group" means the 1998 Programme Steering Group established pursuant to Section 3, save that if the Executive Committee so determines, such Steering Group may be disbanded, in which case the Executive Committee shall act as and have the same rights and obligations as the Steering Group for the purposes of this Schedule, as such rights and obligations are set out in Section 3, and in that event references in this Schedule to a member of the Steering Group appointed by a member of the Executive Committee appointed by Public Electricity Suppliers shall be read as references to any member of the Executive Committee appointed by Public Electricity Suppliers; and "Total 1998 Programme Costs" has the meaning given to it in Section 8.1.3. 1.2 Interpretation: In the event of any inconsistency or conflict between the provisions of this Schedule and the other provisions of the Agreement in relation to the 1998 Programme Costs or the Operational Framework, the provisions of this Schedule shall, unless otherwise expressly provided, prevail. 2. PROGRAMME FUNDING 2.1 Programme Costs: All 1998 Programme Costs shall be paid or reimbursed by Public Electricity Suppliers and the Scottish PESs or by a person or persons on their behalf in accordance with this Schedule. 2.2 Allocation of 1998 Programme Costs after 1st April, 1996: In respect of each month from (and including) April 1996, the 1998 Programme Costs incurred in such month shall be allocated amongst Public Electricity Suppliers and the Scottish PESs according to their respective Programme Shares. 2.3 Payment and collection: 2.3.1 EPFAL shall collect from Public Electricity Suppliers and the Scottish PESs the amounts which they are obliged to pay towards the 1998 Programme Costs and each Public Electricity Supplier and each Scottish PES will be obliged to pay its proportionate share of the 1998 Programme Costs (together with Value Added Tax thereon, if applicable) against receipt of any invoice therefor issued by EPFAL. 2.3.2 EPFAL shall arrange for collection from each Public Electricity Supplier and each Scottish PES of its proportionate share of the 1998 Programme Costs in such manner as may be agreed by EPFAL with the Public Electricity Suppliers from time to time (which may include collection in advance) and Public Electricity Suppliers and the Scottish PESs shall comply with such collection procedures and, in particular, shall make payment within the time period prescribed by such procedures. 2.3.3 If any Public Electricity Supplier or Scottish PES fails to pay an amount properly due under this Schedule within fifteen (15) days of the due date for such payment (such Public Electricity Supplier or Scottish PES being a "Non-paying Funder") each ----------------- Pool Member (other than the Non-paying Funder) shall be severally liable for its Contributory Share (calculated on the basis that the Points allocated to the defaulting Non-paying Funder are disregarded) and EPFAL shall accordingly be entitled to recover the due proportion of that amount from each Pool Member (other than the Non-paying Funder). In that event, EPFAL shall advise each Pool Member of the amount payable by invoice despatched to each Pool Member and each Pool Member shall pay the amount advised in the relevant invoice within fifteen (15) days after the invoice date. 2.3.4 A Non-paying Funder shall indemnify and keep indemnified each Pool Member on demand against all sums properly paid by such Pool Member pursuant to this sub-section 2.3. 2.3.5 Each Pool Member shall give notice to the Pool Funds Administrator before instituting any action or proceedings in any court to enforce payments due to it pursuant to this Schedule. Upon receipt of any notice under this paragraph 2.3.5, the Pool Funds Administrator will as soon as practicable notify the Executive Committee, all Pool Members and the Director. The provisions of sub-section 24.4 of Schedule 11 shall apply mutatis mutandis in respect of any payment due from a Non-paying Funder pursuant to this Schedule. 2.3.6 Upon EPFAL becoming aware of a Public Electricity Supplier or a Scottish PES becoming a Non-paying Funder, it shall notify the Executive Committee, the remaining Pool Members and the Director, and the Executive Committee shall convene and cause to be convened a general meeting of Pool Members as soon as possible thereafter, which meeting will determine whether any further 1998 Programme Costs shall be incurred. 2.3.7 The provisions of paragraphs 15.2.3, 15.2.4 and sub-section 15.3 of Schedule 15 shall in any event apply mutatis mutandis in respect of all payments required to be made pursuant to this Section 2. 2.4 Accrued Costs: As soon as reasonably practicable, but in any event no later than 1st April, 1997, the Pool Members will pay each other such sums as will ensure that all Accrued Costs have effectively been paid for or reimbursed only by Public Electricity Suppliers and Scottish PESs and, as between Public Electricity Suppliers and Scottish PESs, according to their respective Programme Shares. 3. PROGRAMME EXPENDITURE AND THE STEERING GROUP 3.1 Authority to incur expenditure: No 1998 Programme Costs shall be incurred by 1998 Sub-Committees other than pursuant to Approved Funding Tranches. 3.2 Establishment: Pool Members hereby establish the Steering Group as a sub-committee of the Executive Committee upon the terms and subject to the conditions of this Schedule 22. 3.3 Steering Group Members: Each member of the Executive Committee shall have the right to appoint a member of the Steering Group. 3.4 Approval of programme expenditure: 3.4.1 The Steering Group will notify each 1998 Sub-Committee and such persons as may be nominated by each Public Electricity Supplier in writing to the Steering Group from time to time ("PES Nominees"), no later than 10 working days prior to holding any meeting of the date that meeting will be held, save that, if at least 5 members of the Steering Group (including at least 3 appointed by members of the Executive Committee appointed by Public Electricity Suppliers) consent, a meeting of the Steering Group may be held on 48 hours' notice. 3.4.2 Prior to approving any further work packages after 15th July, 1996, undertaking or commissioning any work in respect of the 1998 Programme, the Programme Board or any member of the Steering Group shall submit one or more Funding Tranches to the Steering Group (with a copy to all PES Nominees) at least 5 working days in advance of any meeting of the teering Group, for approval. Each Funding Tranche shall contain details of the scope of the work proposed to be undertaken and a budget of all costs associated with that work, together with a comparison of all its elements against the Programme Budget(or, if the Programme Budget shall not then have been agreed, against the planned budget). Any amount to be reimbursed in respect of costs incurred in relation to work packages approved in the period between 31st March, 1996 and 15th July, 1996 shall also be the subject of a Funding Tranche or Funding Tranches to be submitted to the Steering Group (with a copy to all PES Nominees) by the Programme Board or any member of the Steering Group at least five working days in advance of a meeting of the Steering Group. Each such Funding Tranche shall contain details of the scope of the work undertaken and details of the costs associated with it. 3.4.3At each meeting of the Steering Group, the Steering Group shall resolve whether to approve Funding Tranches duly submitted to it in accordance with paragraph 3.4.2, and, subject to any appeal to Public Electricity Suppliers, any Funding Tranche so approved will become an Approved Funding Tranche. Notwithstanding the decision taken, any Public Electricity Supplier or any member of the Steering Group appointed by a member of the Executive Committee appointed by Public Electricity Suppliers may, within 5 working days of the resolution of the Steering Group, by notice in writing to the Steering Group, appeal the matter to be considered by Public Electricity Suppliers under sub-section 7.2. If the Public Electricity Suppliers then resolve to approve the Funding Tranche, it shall become an Approved Funding Tranche. If the matter has been appealed and Public Electricity Suppliers do not so approve it, the Funding Tranche shall not be an Approved Funding Tranche. 3.4.4As soon as the Programme Board becomes aware that the cost of any work carried out pursuant to any Approved Funding Tranche is likely to exceed the budget considered by the Steering Group in paragraph 3.4.2 above, it shall forthwith prepare a revised budget and deliver it to the Steering Group, at which point the Steering Group and, if necessary, the Public Electricity Suppliers, will follow the procedure set out in paragraphs 3.4.2 and 3.4.3 in considering whether to authorise the continuation of work under the Approved Funding Tranche, in accordance with such revised budget. If (a) the Steering Group does not resolve to approve the revised budget, in accordance with paragraph 3.4.2 or (b) after referral to Public Electricity Suppliers in accordance with sub-section 7.2 they resolve not to approve the revised budget, then the relevant 1998 Sub-Committee shall undertake no work to implement the Approved Funding Tranche which would lead to the cost of implementing the Approved Funding Tranche exceeding the original budget. If the revised budget is approved in accordance with paragraph 4.3.2 or, as the case may be, sub-section 7.2, the cost of that Approved Funding Tranche will be adjusted accordingly. 3.4.5 Any Steering Group member may by reasonable notice request such information of the Chief Executive or the Programme Board as may be reasonably required to assess the performance of the 1998 Programme against the Programme Budget and Approved Funding Tranches, it being understood that the Chief Executive and the Programme Board shall not be required to comply with any such information request unless it is made by 3 or more members of the Steering Group. 3.5 Voting: Any question or matter considered by the Steering Group shall be resolved by a simple majority of votes of members of the Steering Group. 4. THE OPERATIONAL FRAMEWORK 4.1 Changes to Operational Framework: Subject to sub-section 4.2, any addition to, deletion from or other change to the Operational Framework by or on behalf of Pool Members shall be made only with the prior approval of Pool Members in general meeting. 4.2 Effect on 1998 Programme Costs: If any addition to, deletion from or other change to the Operational Framework may lead to an increase in the 1998 Programme Costs then, unless such addition, deletion or other change has been approved by the Public Electricity Suppliers in writing or in separate general meeting, the proposed addition, deletion or other change shall not take effect unless Pool Members so resolve (in which case any costs incurred as a result of the addition, deletion or other change in question shall not be 1998 Programme Costs). 5. PROGRAMME BOARD AND PROGRAMME BUDGET 5.1 Constitution of the Programme Board: At all times, the Programme Board shall comprise three senior users, one senior technical user (together the "Senior Users") and the Chief Executive. One of the Senior Users shall be an appointee of all Pool Members other than Public Electricity Suppliers, and the other three shall be appointees of the Public Electricity Suppliers. 5.2 Voting: It is the intention of Pool Members that the Programme Board shall resolve matters by way of consensus. 5.3 Preparation of the Programme Budget: The Programme Board shall prepare and submit a draft programme budget by no later than 15th July, 1996 for approval by the Steering Group. The procedure for approval of the draft programme budget shall follow that for approval of Funding Tranches in paragraphs 3.4.2 and 3.4.3, save that if either the Steering Group or Public Electricity Suppliers do not approve the draft programme budget, they shall notify the Programme Board of any areas requiring revision and the Programme Board shall, as soon as reasonably practicable after such notification, re-submit the draft programme budget to the Steering Group. Once the draft programme budget is approved it shall be the Programme Budget. 6. PROGRAMME SHARES AND PES VOTES 6.1 Programme Shares : The Programme Share of each Public Electricity Supplier and each Scottish PES shall be that set opposite its name in column 2 of the table in sub-section 6.3. 6.2 PES Votes: The PES Vote of each Public Electricity Supplier shall be that set opposite its name in column 3 of the table in sub-section 6.3. 6.3 Table: Column 1 Column 2 Column 3 Name of Funder rogramme Shares PES Votes Eastern Group plc 12.64% 13.82% East Midlands Electricity plc 8.79% 9.61% London Electricity plc 7.76% 8.50% Manweb plc 5.19% 5.71% Midlands Electricity plc 8.81% 9.64% Northern Electric plc 4.97% 5.44% NORWEB Plc 8.21% 8.99% Scottish Hydro-Electric PLC 2.66% Not applicable Scottish Power plc 5.97% Not applicable SEEBOARD PLC 8.14% 8.91% Southern Electric plc 10.74% 11.75% South Wales Electricity plc 3.34% 3.64% South Western Electricity plc 5.67% 6.21% Yorkshire Electricity Group plc 7.11% 7.78% 6.4 Reopener: If the aggregate amount of the 1998 Programme Costs as projected under the 1998 Programme at 31st December, 1997 exceeds the budgeted figure for the 1998 Programme Costs as at 1st January, 1997 (which is agreed only for these purposes to be(pound)58,000,000), the Programme Shares of the Funders shall promptly be recalculated by or on behalf of the Funders in accordance with the principles set out in the document entitled "Costing Estimates for Scottish Contribution to Pool Programme" dated 13th December, 1996 (a copy of which has been initialled by the Chief Executive for the purposes of identification only), and column 2 of the table in sub-section 6.3 shall be amended accordingly. 6.5 Merger and adjustment: In the event of any merger between one or more Funders any successor company shall have the aggregate Programme Shares and PES Votes of its predecessors. Any successor to part only of the authorised area (as such term is defined in its PES Licence) of a Public Electricity Supplier and the Public Electricity Supplier retaining the other part shall have such PES Votes and Programme Shares as the Director shall determine. Any successor to part only of the authorised supply area (as such term is defined in the PES Licence of the relevant Scottish PES) of a Scottish PES and the Scottish PES retaining the other part shall have such Programme Shares as the Director shall determine. 7. PES MEETINGS 7.1 PES Meetings: The following provisions of this Section 7 shall apply to separate general meetings of Public Electricity Suppliers. 7.2 Requirements for PES Approval: The following matters shall require Public Electricity Suppliers to give their approval by the Requisite Proportion in separate general meeting, or by the Requisite Proportion of Public Electricity Suppliers giving their approval in writing to take effect: (a) the approval of Funding Tranches by way of appeal under sub-section 3.4; (b) the approval of any addition to, deletion from or other change to the Operational Framework which may lead to an increase in the 1998 Programme Costs; and (c) any addition to, deletion from or other change to this Schedule 22 (other than, for the avoidance of doubt, the adoption of detailed drafting of the provisions relating to the recovery of 1998 Programme Costs in accordance with paragraph 8.2.3). 7.3 General Provisions: The provisions of Part III of the Agreement relating to general meetings of Pool Members shall apply mutatis mutandis to separate general meetings of Public Electricity Suppliers, but so that:- (a) the necessary requirement for notice in writing to be given of any such separate general meeting shall be 5 working days rather than the period in Clause 9.3; (b) Clause 10.9 shall not apply although the Pool Auditor and the Director or its or his duly authorised representative shall have the right to attend and speak (but not vote) at such separate general meetings; (c) such separate general meetings shall be convened by the Secretary upon receipt of a request from a Public Electricity Supplier or a member of the Steering Group appointed by an Executive Committee Member appointed by Public Electricity Suppliers; (d) the necessary quorum shall be 6 or more Public Electricity Suppliers present in person together representing 50 per cent. or more of the aggregate number of PES Votes of all Public Electricity Suppliers and if no quorum is present within half an hour from the time appointed for the separate general meeting, the separate general meeting shall be adjourned until the following working day; (e) references to Total Weighted Votes shall be substituted by references to PES Votes; and (f) notice of any such separate general meeting need to be given only to those entitled to attend the same, and any resolution put to any such separate general meeting shall, to be passed, require the Requisite Proportion of votes in favour. 8. RECOVERY OF 1998 PROGRAMME COSTS 8.1 Calculation of Aggregate Charging Limit: The Aggregate Charging Limit shall be calculated in the following manner:- 8.1.1 if Total 1998 Programme Costs are less than the Lower Limit then: [OBJECT OMITTED] 8.1.2 if Total 1998 Programme Costs are equal to or greater than the Lower Limit and less than or equal to the Upper Limit then: ACL = T1998 PC + FC; and 8.1.3 if Total 1998 Programme Costs are greater than the Upper Limit then: [OBJECT OMITTED] in each case, where, subject to the provisions set out below: the Lower Limit ("LL") = (pound)43,500,000; the Upper Limit ("UL") = (pound)53,500,000; and the Total 1998 Programme Costs ("T1998 PC") = the aggregate amount of 1998 Programme Costs allocated to Public Electricity Suppliers in England and Wales according to their respective Programme Shares, save that if, as a result of any addition to, deletion from or other change to the Operational Framework and/or the adoption of Approved Funding Tranches pursuant to sub-section 3.4 or Section 7 outside the scope of the Operational Framework, the Total 1998 Programme Costs are changed by any amount in excess of (pound)50,000 then, subject to prior approval by the Director, both the Lower Limit and the Upper Limit shall be adjusted by the amount of such change. 8.2 Recovery by Public Electricity Suppliers from under 100kW customers: 8.2.1The ACL is to be recovered, with allowance being made for Financing Costs, over a maximum period of 5 years from the Implementation Date from all suppliers of customers below 100kW on the basis of a charge per megawatt hour supplied. The Public Electricity Suppliers shall be entitled to recover the ACL in proportion to the 1998 Programme Costs contributed by them (the Public Electricity Suppliers' proportions being grossed up for this purpose to aggregate 100 per cent.). If, for reasons other than force majeure (as defined in paragraph 8.2.2 below), the Implementation Date is later than 1st April, 1998, the Public Electricity Suppliers or their agents will be able to recover a proportionately lesser amount. 8.2.2 If, by reason of force majeure (which for these purposes means any delay as a result of the requirements of the Director or the Secretary of State or any exceptional circumstances outside the control of the Pool), the 1998 Programme is delayed or not implemented, full cost recovery of the ACL shall be made. 8.2.3 The principles for recovery set out in this sub-section 8.2 require further detailed drafting. Pool Members undertake to use their reasonable endeavours to agree the detailed drafting by 1st June, 1997. 8.3 Recovery by Scottish PESs: Scottish PESs shall be entitled to recover from third parties their respective contributions towards the 1998 Programme Costs in accordance with the terms of their agreement with the Director (if any). 9. SCHEDULE 22 CEASING TO HAVE EFFECT Without prejudice to any accrued rights or liabilities, the provisions of this Schedule 22 shall cease to have effect on the date following that on which the final payment has been made to the last Public Electricity Supplier to be reimbursed its due proportion in respect of 1998 Programme Costs and Financing Costs pursuant to Section 8. SCHEDULE 23 SCOTTISH SETTLEMENTS DEFINITIONS AND INTERPRETATION 1.1 Definitions: In this Schedule and the Scots Subsidiary Documents, except where the context otherwise requires: "1998 Contractor" means for the time being and from time to time a contractor employed or retained by or on behalf of or on the instructions of Pool Members to undertake work or to provide services in relation to the design, development, testing, implementation, operation or maintenance of the 1998 Systems (and includes any sub-contractor of such a contractor); "1998 Deliverables" means the work product of a 1998 Contractor under its contract or arrangement with Pool Members (or their agent) in relation to the 1998 Programme; "1998 Documentation" means the documentation prepared for the benefit of Pool Members in connection with the 1998 Programme relating to the design, development, testing, implementation, operation and/or maintenance of the Relevant 1998 Systems and for the time being and from time to time listed or referred to in Part B of Scots Subsidiary Document 1; "1998 Programme" has the meaning given to that term in Schedule 22; "1998 Systems" means the systems and processes (including the ISRA System) supporting the central electricity trading and settlement system in England and Wales which are to be developed for the benefit of Pool Members pursuant to the 1998 Programme; "Analysis" has the meaning given to that term in Scots Subsidiary Document 3; "Combined Members" means the members of the Chief Executive's Office, the Executive Committee, the Committee Members and the Other Pool Members; "Developed Material" has the meaning given to that term in paragraph 4.5(B); "EAC/AA System" has the meaning given to that term in Schedule 22; "Existing Pool Documentation" means the documentation relating to the rules and procedures for the operation of the central electricity trading and settlement system in England and Wales and for the time being and from time to time listed or referred to in Part A of Scots Subsidiary Document 1; "IAR System" means the control system and processes that are necessary to facilitate initial allocation to suppliers in the authorised supply areas of the Scottish PESs (as defined in the PES Licence of the relevant Scottish PES) and reconciliation of all the electricity consumed in those authorised supply areas within a bulk supply point group; "ISRA Documentation" means the documentation prepared for the benefit of Pool Members relating either to the engagement of a 1998 Contractor for the initial settlement and reconciliation function contemplated by the 1998 Programme or to the design, development, testing and trialing of the ISRA System, and in each case for the time being and from time to time listed or referred to in Part C of Scots Subsidiary Document 1; "ISRA System" has the meaning given to that term in Schedule 22; "Logica" means Logica UK Limited (registered number: 947968); "Logica Contract" means the agreement dated 11th September, 1996 and made between Logica and Energy Pool Funds Administration Limited; "NHH Data Aggregation System" means the non half hour data aggregation software and systems which are to be developed for the benefit of Pool Members pursuant to the 1998 Programme; "Other Pool Members" means all the Pool Members other than the Scottish PESs (and, where the context so admits, includes any person acting on their behalf for the purposes of this Schedule and the Scots Subsidiary Documents); "Pool 1998 Software" means the software for the Relevant 1998 Systems (excluding all operating system software for all of the 1998 Systems) for the time being and from time to time listed or referred to in Scots Subsidiary Document 2; "Programme Board" has the meaning given to that term in Schedule 22; "Programme Liaison Officer" means the 1998 Programme's liaison officer nominated for the time being and from time to time by or on behalf of the Other Pool Members in accordance with Scots Subsidiary Document 4; "Relevant 1998 Systems" means the 1998 Systems other than the EAC/AA System and the NHH Data Aggregation System and excluding all Support Services and all hardware; "Required Documentation" means the 1998 Documentation, the Existing Pool Documentation, the ISRA Documentation and the Support Documentation; "Responsible Officers" has the meaning given to that term in Scots Subsidiary Document 4; "Scots 1998 Licence" has the meaning given to that term in sub-section 4.2; "Scots Contract" has the meaning given to that term in sub-section 6.1; "Scots Contractor" has the meaning given to that term in paragraph 4.5(B); "Scots Due Date" has the meaning given to that term in sub-section 9.3; "Scots Licence-Back" has the meaning given to that term in paragraph 4.5(H); "Scots Licensee" has the meaning given to that term in sub-section 4.2; "Scots Subsidiary Documents" means each of the documents identified and agreed to be treated as a Scots Subsidiary Document for the purposes of this Schedule by the Scottish PESs and the Executive Committee (or a nominated sub-committee of the Executive Committee), as the same may be amended or substituted from time to time with their prior written consent. Each Scots Subsidiary Document shall be numbered and references in this Schedule to "Scots Subsidiary Document `n'" shall be to the relevant numbered Scots Subsidiary Document; "Scottish PESs" has the meaning given to that term in Schedule 22; "Scottish Settlements" means Scottish Electricity Settlements Limited, a private limited liability company incorporated in Scotland with registered number SC169212 jointly owned by the Scottish PESs for the purposes of managing and implementing the Scottish Settlements Arrangements (and includes any successor company); "Scottish Settlements Arrangements" means the business of developing, operating and maintaining systems, processes and arrangements in the authorised supply areas (as defined in the PES Licence of the relevant Scottish PES) of the Scottish PESs pursuant to their obligations as holders of PES Licences, and includes the Scottish Settlements Project; "Scottish Settlements Project" means the project established and managed by Scottish Settlements that will develop systems, processes and arrangements within the scope and as part of the Scottish Settlement Arrangements; "SSP Liaison Officer" means the liaison officer of the Scottish PESs (or, as the case may be, Scottish Settlements) nominated for the time being and from time to time by them in accordance with Scots Subsidiary Document 4; "Support Documentation" means any documentation provided by the Programme Liaison Officer as clarification to any of the 1998 Documentation, the Existing Pool Documentation or the ISRA Documentation in response to a request from the SSP Liaison Officer pursuant to Scots Subsidiary Document 4; "Support Services" means:- (A) support services for systems tests, integration tests and trialing; (B) services for maintenance, error correction, change implementation and new system releases; and (C) training services; "Systems Requirement Request" has the meaning given to that term in Scots Subsidiary Document 3; and "Systems Requirement Response" has the meaning given to that term in Scots Subsidiary Document 3. 1.2 Interpretation: In the event of any inconsistency or conflict between the provisions of this Schedule and the other provisions of the Agreement (other than Schedule 22) insofar as concerns the relationship of the Scottish Settlements Arrangements to the 1998 Programme or the Operational Framework, the provisions of this Schedule shall, unless otherwise expressly stated, prevail. In the event of any other inconsistency or conflict between the provisions of this Schedule and the other provisions of the Agreement, such other provisions shall prevail. 1.3 Scots Subsidiary Documents: Each of the Parties undertakes to comply with the Scots Subsidiary Documents insofar as applicable to such Party. The Executive Committee shall provide copies of the Scots Subsidiary Documents to a Party upon request and at such Party's cost. 1.4 Trusteeship: The Other Pool Members hold the benefit of this Schedule for themselves and as trustee and agent for the Executive Committee, the Committee Members and the members of the Chief Executive's Office. 1.5 Other Pool Members: Subject to sub-section 5.3, the provisions of Part III of the Agreement shall apply mutatis mutandis to meetings of and decisions taken by the Other Pool Members save that neither of the Scottish PESs nor Scottish Settlements (if it is a Pool Member) shall be entitled to attend, speak or vote at the relevant meeting or otherwise to participate in the decision taking processes and the voting procedures shall be adjusted in such manner as the Pool Chairman in his sole discretion shall see fit to make allowance for the prohibition on the Scottish PESs and Scottish Settlements from voting. PURPOSE 2.1 Purpose: This Schedule, when read with Schedule 22 and the Scots Subsidiary Documents, sets out the terms and conditions upon and subject to which the Scottish PESs will be entitled to have made available to them or Scottish Settlements for the purposes of the Scottish Settlements Arrangements certain documentation and systems written or developed for or provided to Pool Members in connection with the 1998 Programme and to propose changes thereto or undertake customisation thereof solely for the purposes of the Scottish Settlements Arrangements. 2.2 Scottish PESs as Pool Members: Save as varied or amended by or pursuant to this Schedule, the Scottish PESs shall continue to have their respective rights, responsibilities, obligations and liabilities as Pool Members in addition to their rights, responsibilities, obligations and liabilities under this Schedule, Schedule 22 and the Scots Subsidiary Documents in their capacity as Scottish PESs. JOINT VENTURE AND GUARANTEE 3.1 Scottish Settlements: The Scottish PESs shall be entitled to act for the purpose of the Scottish Settlements Arrangements and this Schedule through Scottish Settlements. If required by the Executive Committee, the Scottish PESs shall procure that Scottish Settlements becomes a party to the Agreement, appoints an agent for service of process in England and undertakes directly in form and content reasonably satisfactory to the Executive Committee the obligations on its part contained in this Schedule and the Scots Subsidiary Documents. 3.2 Information on Scottish Settlements: Each of the Scottish PESs and Scottish Settlements shall promptly give the Other Pool Members such information about the shareholdings in and capital structure of Scottish Settlements and its business, operations, assets and financial condition as the Executive Committee may from time to time reasonably require and the Other Pool Members shall keep all such information confidential on and subject to the terms and conditions of Clause 70 of the Agreement. 3.3 Guarantee: The Scottish PESs hereby jointly and severally and irrevocably and unconditionally: (A) guarantee to each of the Combined Members the due and punctual observance and performance of all the terms, conditions and covenants on the part of Scottish Settlements contained in this Schedule and the Scots Subsidiary Documents and agree to pay to each of the Combined Members from time to time on demand any and every sum or sums of money which Scottish Settlements shall at any time be liable to pay to such Combined Member under or pursuant to this Schedule or any of the Scots Subsidiary Documents and which shall not have been paid at the time such demand is made; and (B) agree as a primary obligation to indemnify each of the Combined Members from time to time on demand by the relevant Combined Member from and against any loss directly incurred by such Combined Member as a result of any of the obligations of Scottish Settlements under or pursuant to this Schedule or any of the Scots Subsidiary Documents being or becoming void, voidable, unenforceable or ineffective as against such Combined Member for any reason whatsoever, whether or not known to such Combined Member or any other person. 3.4 Preservation of Rights: 3.4.1 The obligations of the Scottish PESs contained in this Section 3 shall be in addition to and independent of every other security which any of the Combined Members may at any time hold in respect of any obligations of Scottish Settlements under the Agreement. 3.4.2The obligations of the Scottish PESs contained in this Section 3 shall constitute and be continuing obligations notwithstanding any settlement of account or other matter or thing whatsoever, and in particular but without limitation shall not be considered satisfied by any intermediate payment or satisfaction of all or any of the obligations of Scottish Settlements under this Schedule or the Scots Subsidiary Documents and shall continue in full force and effect until final payment in full of all amounts owing by Scottish Settlements under this Schedule and each of the Scots Subsidiary Documents and satisfaction of all actual and contingent obligations of Scottish Settlements under this Schedule and each of the Scots Subsidiary Documents. 3.4.3 Neither the obligations of the Scottish PESs herein contained nor the rights, powers and remedies conferred in respect of the Scottish PESs upon the Combined Members by this Schedule or any of the Scots Subsidiary Documents or by law shall be discharged, impaired or otherwise affected by: (A) the winding-up, dissolution, administration or re-organisation of Scottish Settlements or any other person or any change in its status, function, control or ownership; (B) any of the obligations of Scottish Settlements or any other person hereunder or under any other security taken in respect of any of its obligations under this Schedule or any of the Scots Subsidiary Documents being or becoming illegal, invalid, unenforceable or ineffective in any respect; (C) time or other indulgence being granted to Scottish Settlements in respect of its obligations under this Schedule or any of the Scots Subsidiary Documents or under any such other security; (D) any amendment to, or any variation, waiver or release of, any obligation of Scottish Settlements under this Schedule or any of the Scots Subsidiary Documents or under any such other security; (E) any failure to take, or fully to take, any security contemplated hereby or otherwise agreed to be taken in respect of the obligations of Scottish Settlements under this Schedule or any of the Scots Subsidiary Documents; (F) any failure to realise or fully to realise the value of, or any release, discharge, exchange or substitution of, any security taken in respect of the obligations of Scottish Settlements under this Schedule or any of the Scots Subsidiary Documents; or (G) any other act, event or omission which, but for this paragraph 3.4.3, might operate to discharge, impair or otherwise affect any of the obligations of either of the Scottish PESs herein contained or any of the rights, powers or remedies conferred upon the Combined Members by this Schedule or any of the Scots Subsidiary Documents or by law. 3.4.4Any settlement or discharge between the Scottish PESs and Scottish Settlements shall be conditional upon no security or payment to the Combined Members or any of them by the Scottish PESs or either of them or Scottish Settlements or any other person on behalf of the Scottish PESs or, as the case may be, Scottish Settlements being avoided or reduced by virtue of any provisions or enactments relating to bankruptcy, insolvency, liquidation or similar laws of general application for the time being in force and, if any such security or payment is so avoided or reduced, the Combined Members or the relevant one of them shall be entitled to recover the value or amount of such security or payment from the Scottish PESs subsequently as if such settlement or discharge had not occurred. 3.4.5 None of the Combined Members shall be obliged before exercising any of the rights, powers or remedies conferred upon it in respect of the Scottish PESs by this Schedule or any of the Scots Subsidiary Documents or by law: (A) to make any demand of Scottish Settlements; (B) to take any action or obtain judgment in any court against Scottish Settlements; (C) to make or file any claim or proof in a winding-up or dissolution of Scottish Settlements; or (D) to enforce or seek to enforce any other security taken in respect of any of the obligations of Scottish Settlements under this Schedule or any of the Scots Subsidiary Documents. 3.4.6 The Scottish PESs agree that, until all amounts which may be or become payable by Scottish Settlements under or in connection with this Schedule and the Scots Subsidiary Documents have been irrevocably paid in full, neither of the Scottish PESs shall, after a claim has been made or by virtue of any payment or performance by it under this Clause 3: (A) be subrogated to any rights, security or moneys held, received or receivable by any of the Combined Members (or any trustee or agent on its behalf) or be entitled to any right of contribution or indemnity in respect of any payment made or moneys received on account of the liability of such Scottish PES under this Clause 3; (B) claim, rank, prove or vote as a creditor of Scottish Settlements or its estate in competition with any of the Combined Members (or any trustee or agent on its behalf); or (C) receive, claim or have the benefit of any payment, distribution or security from or on account of Scottish Settlements, or exercise any right of set-off as against Scottish Settlements. SCOTS 1998 LICENCE 4.1 Provision of Required Documentation: Subject to and conditional upon payment and receipt of the sums set out or referred to in sub-section 9.1(A) and to the terms and conditions of the Scots 1998 Licence: (A) the Scottish PESs and Scottish Settlements shall be entitled to receive copies of the Required Documentation; and (B) Pool Members shall procure that such copies are made available to the Scottish PESs (or, as the case may be, Scottish Settlements) promptly upon request. 4.2 Grant of Scots 1998 Licence: (A) Subject to and conditional upon payment and receipt of the sum(s) set out or referred to in sub-section 9.1(B) and to the extent that Pool Members have the right so to do, Pool Members grant the Scottish PESs and Scottish Settlements (in this Section 4, each a "Scots Licensee"), or shall procure the grant to the Scots Licensee of, a perpetual, non-exclusive and non-transferable licence (the "Scots 1998 Licence") to use the Required Documentation and the Pool 1998 Software on the terms and conditions set out in the following provisions of this Section 4. (B) Pool Members confirm that they have full right to grant the Scots Licensee or procure the grant to the Scots Licensee of a perpetual, non-exclusive and non-transferable licence to use (i) such of the Required Documentation and Pool 1998 Software as is made available to Pool Members under the Logica Contract, excluding any software notified by or on behalf of the Other Pool Members to the Scots Licensee from time to time as being subject to a requirement for a licence from a third party, and (ii) the Existing Pool Documentation. Pool Members confirm that Logica only has the right under the Logica Contract to incorporate such third party software where the Pool Members have agreed the terms upon which a licence will be available from the relevant third party. In respect of any other Required Documentation or Pool 1998 Software, the Pool Members confirm that they shall use reasonable endeavours (but without being obliged to incur any material additional cost unless all such additional cost is paid or reimbursed on demand by the Scottish PESs or Scottish Settlements) to acquire in a timely manner ownership of, or a right to grant a licence to the Scots Licensee in respect of, the intellectual property rights thereto. 4.3 Term of Scots 1998 Licence: The Scots 1998 Licence will commence as of 1st January, 1997 and will continue until terminated in accordance with sub-section 4.4. 4.4 Termination of Scots 1998 Licence: (A) The Executive Committee shall have the right (without prejudice to any other rights or remedies that the Executive Committee or the Other Pool Members may have) to terminate the Scots 1998 Licence immediately by notice in writing to the Scots Licensee if:- (i) the Scots Licensee is in material breach of any of the provisions of Clauses 4.2, 4.5, 4.6, 4.7 and 4.8 and either such breach is incapable of remedy or the breach continues for fourteen days after notice in writing specifying the breach and requiring it to be remedied; or (ii) an order is made or a resolution is passed for the winding-up of the Scots Licensee, or if a provisional liquidator is appointed in respect of the Scots an administrative receiver) is appointed in respect of the Scots Licensee or all or any of its assets or if the Scots Licensee is unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986, or if any voluntary arrangement is proposed under section 1 of the Insolvency Act 1986 in respect of the Scots Licensee; or (iii anything analogous to any of the events in paragraph (ii) above occurs with respect to the Scots Licensee or its assets in any jurisdiction. (B) If the Scots 1998 Licence is terminated under this sub-section 4.4: (i) the Scots Licensees will cease to have the right to use the Required Documentation and the Pool 1998 Software; (ii) the Scots Licensees shall within 30 days of termination deliver to the Executive Committee all the Required Documentation and the Pool 1998 Software together with all copies of them in the Scots Licensees' possession or control and (if any Scots Licensee fails to do so) the Executive Committee or its agent shall have the right to enter such Scots Licensee's premises and repossess the Required Documentation and the Pool 1998 Software and any copies of them; and (iii) the Scots Licensees will destroy any programme or other series of instructions contained in any memory device which is derived from the Required Documentation and/or the Pool 1998 Software and is in their possession or control. (C) Termination of the Scots 1998 Licence will not release any of the Scots Licensees from any obligations arising prior to termination or which expressly or by implication become effective or continue to be effective on or after the termination of the Scots 1998 Licence. 4.5 Scope of Scots 1998 Licence: (A) The Scots Licensee shall have the right to use the Required Documentation and the Pool 1998 Software only for the purposes of the Scottish Settlements Arrangements and shall not use the Required Documentation or the Pool 1998 Software in any other way. (B) The Scots Licensee is licensed to copy, develop, alter or modify the whole or any part of the Required Documentation or Pool 1998 Software or combine it with any other materials, in any such case only for the purposes of the Scottish Settlements Arrangements (the "Developed Material"), but will not permit any other person to do ------------------ so except for a person at any time under contract to the Scots Licensee to do so (the "Scots Contractor"). The Scots Contractor will not have any more extensive ---------------- right to use the Required Documentation or the Pool 1998 Software than the Scots Licensee has under this Section 4. (C) The Scots Licensee shall ensure the proper use, supervision, management and control of the Required Documentation and Pool 1998 Software and that the same are properly protected at all times from unauthorised access or use by any person. (D) The Scots Licensee shall keep the Required Documentation and Pool 1998 Software confidential and shall only authorise access or disclosure to those persons or categories of person for the time being and from time to time listed or referred to in Scots Subsidiary Document 6 and to whom access or disclosure is strictly necessary to enable the Required accordance with this Section 4. The Scots Licensee shall ensure that each such person is aware of the confidential nature of the Required Documentation and Pool 1998 Software and keeps them confidential. This paragraph shall not apply to any part of the equired Documentation and Pool 1998 Software which has entered the public domain other than as a result of any breach of agreement or duty. (E) The following obligations apply in relation to the use of source code: (i) all copies of any source code which is part of the Required Documentation or Pool 1998 Software will be individually numbered and the existence and location of each such copy shall be notified by the Scots Licensee to the Executive Committee; and (ii) the Scots Licensee shall notify the Executive Committee of details of each of its employees and those of any Scots Contractor who will have access to the source code and, unless otherwise agreed by the Executive Committee, shall ensure that each such employee will (before access) enter into an individual confidentiality agreement in a form approved by the Executive Committee. The Scots Licensee shall provide the Executive Committee with an original copy of each such agreement and will ensure that, unless otherwise agreed by the Executive Committee, no employee of the Scots Licensee or any Scots Contractor has access to the source code except for those employees whose details have been notified to the Executive Committee and are bound by such agreements. (F) The Scots Licensee shall immediately bring to the attention of the Executive Committee any infringement or suspected infringement by any third party of any rights in the Required Documentation or the Pool 1998 Software of which it becomes aware and shall, at the Executive Committee's request and against payment of its reasonable costs and expenses, take or join Pool Members in taking such action as they may require for the purpose of protecting such rights. (G) Pool Members are not obliged under the Scots 1998 Licence to develop, maintain or enhance the Required Documentation or the Pool 1998 Software. (H) The Scots Licensees agree to grant Pool Members a perpetual, royalty-free, non-exclusive licence to use and exploit the Developed Material mutatis mutandis on the same terms as the Scots Licence (the "Scots Licence-Back") provided that: (i) the Scots Licensees shall be entitled by notice to the Executive Committee to designate particular parts of the Developed Material as having commercial value where the Scots Licensees decide reasonably and in good faith that a material cost has been incurred in developing the same. In any such case the Scots Licence-Back shall be subject to the agreement between the Scottish Licensees on the one hand and the Other Pool Members on the other hand of a reasonable royalty reflecting an appropriate proportion of such cost (such agreement not to be unreasonably withheld or delayed); and (ii) the Scots Licensees shall not be obliged to license any part of the Developed Material where the Scots Licensees believe reasonably and in good faith that the same would confer a significant competitive benefit on the Other Pool Members and for that reason should not be licensed to them. (I) The Scots Licensees shall notify the Executive Committee at least once every six months of all Developed Material that has been produced during the preceding six month period. 4.6 Reporting requirement: The Scots Licensee shall supply the Executive Committee from time to time on request with a statement signed by a director of the Scots Licensee which certifies that the Required Documentation and Pool 1998 Software is being used only in accordance with this Section 4. 4.7 Access: The Scots Licensee shall grant the Executive Committee or its nominee access upon reasonable prior notice to the Scots Licensee's premises in order to audit the use of the Required Documentation and Pool 1998 Software. 4.8 Indemnity: The Scottish PESs and Scottish Settlements shall jointly and severally indemnify and keep indemnified the Combined Members and each of them on demand against all direct losses, costs, damages, expenses, liabilities and claims suffered or incurred by any of the Combined Members arising out of or in relation to any Scots Licensee's breach of any of its obligations under this Section 4. 4.9 Further licences: Pool Members agree that the Scottish PESs and Scottish Settlements shall be entitled to a licence to use the EAC/AA System and the NHH Data Aggregation System on terms and conditions comparable to those on which a licence to use the same is offered to Public Electricity Suppliers generally. SCOTTISH REQUIREMENTS AND THE RELEVANT 1998 SYSTEMS 5.1 Change to the Operational Framework: The provisions of Schedule 22 shall govern any addition to, deletion from or other change to the Operational Framework. 5.2 Change control: Subject to sub-section 5.1, the provisions of Scots Subsidiary Document 3 shall govern the control of a change (which shall include any request by the Scottish PESs or Scottish Settlements for an additional requirement) to the Relevant 1998 Systems insofar as the change concerns a change to the Relevant 1998 Systems requested by the Scottish PESs or Scottish Settlements for the purposes of the Scottish Settlements Project. 5.3 Disputes over change control: If pursuant to any Scots Subsidiary Document this sub-section is stated to apply and the relevant Systems Requirement Request relates to changes in the functionality of the Relevant 1998 Systems then, notwithstanding the provisions of Part III of the Agreement, the determination of the Executive Committee in relation to the matter shall be final, conclusive and binding and there shall be no right of referral to Pool Members in general meeting nor any right of appeal to the Director and each Party expressly, irrevocably and unconditionally waives all such rights of referral and appeal. 5.4 Other changes to the 1998 Programme: Pool Members acknowledge that, in respect of any change to the 1998 Programme required by the Scottish PESs (or, as the case may be, Scottish Settlements) for the purposes of the Scottish Settlements Arrangements which does not fall to be dealt with by sub-section 5.1 or 5.2, the Scottish PESs (or, as the case may be, Scottish Settlements) shall have the right, and shall be obliged, to use the change control procedure established under the 1998 Programme and the costs of any such change and the change control charges shall be borne by the Scottish PESs (or, as the case may be, Scottish Settlements) as if they were charges under sub-section 9.1 or, as the case may be, 9.2. 1998 CONTRACTORS' SERVICES 6.1 Retaining 1998 Contractors: (A) If the Scottish PESs (or either of them) or Scottish Settlements wish to employ or retain any 1998 Contractor to undertake work or provide services in relation to the Scottish Settlements Project which is or are broadly equivalent to the work or services which any 1998 Contractor is or are performing in relation to the 1998 Programme for the benefit of all Pool Members (including, for the avoidance of doubt, the development of the EAC/AA System), the Scottish PESs or (as the case may be, Scottish Settlements) shall procure that, before they or it enter into a contract or arrangement with such 1998 Contractor for such work or services (the "Scots Contract"), the 1998 Contractor (or, where the 1998 Contractor is a sub-contractor, the principal 1998 Contractor) shall, unless the Executive Committee otherwise resolves upon application made by the Scottish PESs (or, as the case may be, Scottish Settlements), confirm in writing to Pool Members (or a nominee on their behalf) in the terms set out in paragraph 6.1(B). (B) The terms referred to in paragraph 6.1(A) are that the entry into and performance of the Scots Contract, either in itself or in conjunction with the other contracts and arrangements of the relevant 1998 Contractor (including any contacts or arrangements relating to the 1998 Programme), will not affect adversely the performance of such 1998 Contractor's obligations to Pool Members under its contract or arrangement with them (or their nominee) or cause or otherwise result in such 1998 Contractor being in breach of any of its obligations to Pool Members under its contract or arrangement with them (or their nominee), to the intent that such confirmation shall constitute a legally binding obligation of such 1998 Contractor under such contract or arrangement with Pool Members (or their nominee). 6.2 List of 1998 Contractors: The Executive Committee shall provide the Scottish PESs from time to time with an up-to-date list of all the 1998 Contractors and a summary of the work or services that they have been retained to perform. 6.3 No restriction: Nothing in this Section 6 shall preclude or restrict the Scottish PESs or Scottish Settlements from employing or retaining any person who is not a 1998 Contractor to perform the work or services referred to in sub-section 6.1 or from employing or retaining any person who is a 1998 Contractor to perform work or services in the period after completion of the 1998 Programme. 6.4 Liaison: The Scottish PESs (or, as the case may be, Scottish Settlements) and the Other Pool Members (in each case through their appointed representatives) shall liaise on a regular basis (usually monthly) on the planning and manpower requirements for the work and services referred to in sub-section 6.1. RELATIONSHIPS 7.1 Expert Groups: The Scottish PESs (or, as the case may be, Scottish Settlements) shall have the right on the terms and subject to the conditions set out in Scots Subsidiary Document 5 to attend meetings of those expert and systems delivery user groups established under the 1998 Programme which are of direct relevance to the Scottish Settlements Project. 7.2 1998 Contractor relationship: (A) The Scottish PESs and Scottish Settlements shall not contact or communicate directly with, or place any order with or give any instruction to, any 1998 Contractor with respect to any matter concerning the 1998 Programme, the 1998 Systems, the Required Documentation or the Pool 1998 Software but shall address all such communications to the Programme Liaison Officer (in the form, where appropriate, of a Systems Requirement Request) provided that the Scottish PESs and Scottish Settlements shall have the right to contact or communicate directly with (and in the case of (ii) and (iii) below, to place orders with or give instructions to) a 1998 Contractor with respect to any such matter (but subject to Section 4):- (i) in the case and for the purposes of an inspection approved by the Programme Board (or otherwise determined to be made on appeal from the decision of the Programme Board) in accordance with paragraph (C) below; (ii) in the circumstances and for the purposes described in sub-section 6.1; and (iii) in the case of a determination of the Executive Committee that, in the reasonable opinion of the Scottish PESs, is unfavourable to the Scottish PESs (or, as the case may be, Scottish Settlements) in a significant respect where, pursuant to sub-section 5.3, the determination of the Executive Committee is final (but then only in relation to those matters which were the subject of that determination and on the terms set out in sub-section 6.1), provided that nothing in this paragraph (A) shall prevent or restrict either of the Scottish PESs or Scottish Settlements from contacting or communicating directly with any 1998 Contractor with respect to work or services required for the production of Developed Material. (B) The Scottish PESs and Scottish Settlements shall not interfere with the performance by any 1998 Contractor of any of its obligations in connection with the 1998 Programme. (C) (i) If the Scottish PESs or Scottish Settlements have a material concern that the progress of work on the 1998 Programme is such as to cause the date for completion of the Scottish Settlements Project to be delayed, the Scottish PESs and Scottish Settlements shall have the right to request inspection of work on the 1998 Programme in accordance with paragraphs (C)(ii) and (iii) below. (ii) An application for inspection by the Scottish PESs or Scottish Settlements referred to in paragraph (C)(i) shall be made to the Programme Board with reasons in support and details of the form of inspection required (it being understood that any such inspection will normally be conducted under the supervision of the Programme Board). The Programme Board will give due consideration to any such application and will notify the Scottish PESs (or, as the case may be, Scottish Settlements) of its determination whether the case for such an inspection has been made and, if a case for an inspection has been made, the form that such inspection is to take. (iii) If the Programme Board determines that a case for an inspection has been made, Pool Members shall use all reasonable endeavours to facilitate the carrying out of such inspection in accordance with the determination of the Programme Board. (iv) If the Programme Board determines that a case for an inspection has not been made, the Scottish PESs in their capacity as Pool Members shall have the right to refer the matter to the Executive Committee for determination and to appeal such determination pursuant to the terms of this Agreement. (D) The Pool Members shall arrange for the Scottish PESs (or, as the case may be, Scottish Settlements) to receive copies of each 1998 Contractor's periodic progress reports to the Programme Board or the 1998 Programme project boards on matters concerning the 1998 Programme after deletion of any information in or accompanying any such report which is reasonably considered by those administering the 1998 Programme to be commercially sensitive . (E) The Scottish PESs (or, as the case may be, Scottish Settlements) shall be entitled at their own cost and expense to attend and witness acceptance testing of the ISRA System and to receive copies of the related test logs as may be reasonably required by the Scottish PESs (or, as the case may be, Scottish Settlements). NO REPRESENTATION OR LIABILITY 8.1 No representation or warranty: With the exception of the confirmations given by the Pool Members in sub-section 4.2(B), none of the Combined Members makes or gives any representation or warranty as to the suitability or fitness of the Required Documentation or the Pool 1998 Software for any particular purpose and all conditions, warranties and representations whether express or implied as to the Required Documentation or the Pool 1998 Software (including as to its quality, fitness, operation or use) are excluded to the fullest extent permitted by law. 8.2 No reliance: Each of the Scottish PESs (for itself and on behalf of Scottish Settlements) hereby acknowledges that it has not been induced to enter into the arrangements set out in this Schedule and the Scots Subsidiary Documents by, nor has it placed reliance on any prior representation or statement (whether oral or in writing) made by, any of the Combined Members or the 1998 Contractors. 8.3 Exclusion of certain types of loss: Each of the Scottish PESs (for itself and on behalf of Scottish Settlements) hereby acknowledges and agrees that, save as provided in sub-section 8.4, in no circumstances will any of the Combined Members be liable to either of the Scottish PESs or Scottish Settlements under this Schedule or the Scots Subsidiary Documents in contract, tort (including negligence or breach of statutory duty) or otherwise for loss (whether direct or indirect) of profit, loss of revenue, loss of use, loss of contract or loss of goodwill or for any indirect or consequential loss or damage whatsoever. 8.4 No exclusion for death or personal injury: Nothing in this Schedule shall exclude liability for death or personal injury resulting from the negligence of a Party or any of its officers, employees or agents. 8.5 Reasonableness of exclusion: Each of the Scottish PESs (for itself and on behalf of Scottish Settlements) acknowledges that it is aware of and understands the provisions in relation to liability set out in this Section and in particular that, given the level of charges made for the provision and use of the Required Documentation and Pool 1998 Software, it is reasonable for the Combined Members to exclude their liability as provided for in this Section. PAYMENTS 9.1 Charges: The Scottish PESs and Scottish Settlements shall be jointly and severally liable to pay to the Other Pool Members in accordance with sub-section 9.3:- (A) in respect of the provision of the Required Documentation identified within Part A of Subsidiary Document 1, (pound)200,000; (B) in respect of the grant of the Scots 1998 Licence, (pound)1 (receipt of which is hereby acknowledged); (C) (without prejudice to paragraph 4.5(H)), in respect of any maintenance, development or enhancement of the materials which are the subject of the Scots 1998 Licence, such amount (if any) as may be agreed from time to time by the Scottish PESs with the Executive Committee; and (D) against presentation of invoices or such other types of supporting evidence as Pool Members generally receive in respect of Pool costs:- (i) the agreed costs (including legal costs and expenses) of the working group in preparing and negotiating this Schedule; (ii) all other costs incurred in relation to the 1998 Programme in establishing and operating the arrangements set out or referred to in this Schedule or the Scots Subsidiary Documents which would not otherwise have been incurred by them including, without prejudice to the generality of the foregoing, the costs of any additional staffing for the 1998 Programme and the costs of the Programme Liaison Officer and the Responsible Officers; and (iii) the costs of giving effect to any change to (which shall include any additional requirement for) the Relevant 1998 Systems requested by the Scottish PESs or Scottish Settlements. 9.2 Change control charges: Without prejudice to paragraph 9.1(D):- (A) the Scottish PESs and Scottish Settlements shall be jointly and severally liable to pay all sums incurred in the preparation of a Systems Requirement Request. (B) the Scottish PESs and Scottish Settlements shall be jointly and severally liable to reimburse the Other Pool Members all sums payable to the relevant 1998 Contractor in respect of the preparation of any Analysis and all sums incurred in the preparation of a Systems Requirement Response. 9.3 Due date for payment: Scottish PESs shall pay all sums payable under sub-sections 9.1 and 9.2 within 30 days of receiving an invoice for the same from the Other Pool Members or from EPFAL or another nominated agent on their behalf (the "Scots Due Date"). 9.4 Charges exclusive of VAT: All sums payable under sub-sections 9.1 and 9.2 are exclusive of Value Added Tax which shall be paid by the Scottish PESs (or, as the case may be, Scottish Settlements) at the rate and in the manner prescribed by law from time to time. 9.5 Default Interest: If the Scottish PESs (or, as the case may be, Scottish Settlements) fail to make payment of any sum payable under sub-section 9.1 or 9.2 by the Scots Due Date therefor, interest shall accrue on the unpaid amount from the Scots Due Date to (and including) the date of payment, at the rate (as well after as before any judgement) of four per cent. above the Pool Banker's base lending rate from time to time. THIS SUPPLEMENTAL DEED is made on , 1997 BETWEEN:- (1) THE PERSONS whose names, registered numbers and registered or principal offices are set out in Part I of Schedule 1; (2) THE PERSONS whose names, registered numbers and registered or principal offices are set out in Part II of Schedule 1; (3) ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED (registered number 2444282) whose registered office is situate at Fairham House, Green Lane, Clifton, Nottingham NG11 9LN as Settlement System Administrator; (4) ENERGY POOL FUNDS ADMINISTRATION LIMITED (registered number 2444187) whose registered office is situate at 185 Park Street, London SE1 9DY as Pool Funds Administrator; (5) THE NATIONAL GRID COMPANY plc (registered number 2366977) whose registered office is situate at National Grid House, Kirby Corner Road, Coventry CV4 8JY as Grid Operator and Ancillary Services Provider; (6) SCOTTISH POWER plc (registered number 117120) whose principal office is situate at 1 Atlantic Quay, Glasgow G2 8SP, Scotland as an Externally Interconnected Party; (7) ELECTRICITE DE FRANCE, SERVICE NATIONAL whose principal office is situate at Departement Relations avec l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384 Paris, Cedex 08, France as an Externally Interconnected Party; (8) THE OTHER PARTIES whose names, registered numbers and registered or principal offices are set out in Schedule 2; and (9) THE METER OPERATOR PARTIES whose names, registered numbers and registered or principal offices are set out in Schedule 3. WHEREAS:- (A) by a Pooling and Settlement Agreement for the Electricity Industry in England and Wales dated 30th March, 1990 (the "Pooling and Settlement Agreement") the parties thereto agreed to give effect to and be bound by certain rules and procedures for the operation of an electricity trading pool and the operation of a settlement system; (B) the Pooling and Settlement Agreement has been amended and/or restated by nineteen supplemental agreements, and hereinafter references to the Pooling and Settlement Agreement are to that agreement as most recently amended and restated; and (C) the parties to this Deed (being (i) all the Parties at the date hereof and (ii) all the Meter Operator Parties at the date hereof) have agreed to amend the Pooling and Settlement Agreement on the terms and subject to the conditions set out below. NOW THIS DEED WITNESSES as follows:- 12 INTERPRETATION Except where defined herein or where the context otherwise requires, words and expressions defined in the Pooling and Settlement Agreement shall have the same respective meanings when used in this Deed. 11.2 The table of contents and the headings to each of the Clauses are inserted for convenience only and shall be ignored in construing this Deed. AMENDMENTS The parties hereby agree that with effect on and from midnight on 31st July, 1997, the Pooling and Settlement Agreement shall be amended as set out in Schedule 4. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT The Pooling and Settlement Agreement shall remain in full force and effect and this Deed and the Pooling and Settlement Agreement shall be treated as one document so that, upon the Pooling and Settlement Agreement being amended pursuant to Clause 2, all references to the Pooling and Settlement Agreement shall be treated as references to that agreement as amended by this Deed. MISCELLANEOUS The provisions of Clauses 75 to 79 (inclusive) and 81 to 84 (inclusive) of the Pooling and Settlement Agreement shall be deemed to be incorporated herein mutatis mutandis. ENTIRE AGREEMENT Each party acknowledges that in entering into this Deed on the terms set out herein it is not relying upon any representation, warranty, promise or assurance made or given by any other party or any other person, whether or not in writing, at any time prior to the execution of this Deed which is not expressly set out herein. 15.2 None of the parties shall have any right of action against any other party arising out of or in connection with any representation, warranty, promise or assurance referred to in sub-clause 5.1 (except in the case of fraud). GOVERNING LAW This Deed shall be governed by, and construed in all respects in accordance with, English law. IN WITNESS whereof this document has been duly executed and delivered as a deed the day and year first above written SCHEDULE 1: Part I: The Generators Name Registered Registered or Number Principal Office Anglian Power Generators Limited 2488955 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ Barking Power Limited 2354681 Devonshire House Mayfair House London W1X 5FH British Nuclear Fuels plc 1002607 Risley Warrington Cheshire WA3 6AS Celtpower Limited 2656561 13 Charles II Street London SW1Y 4QT Citigen (London) Limited 2427823 100 Thames Valley Park Drive Reading Berkshire RG6 1PT Corby Power Limited 2329494 Mitchell Road Phoenix Parkway Corby Northamptonshire NN17 5QT Derwent Cogeneration Limited 2703635 Landsdowne House Berkeley Square London W1X 5DH Eastern Merchant Generation Limited 3116225 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ Electricite de France, Service - Department Relations avec National I'Etranger Echanges d'Energie 2 Rue Louis Murat 5eme etage 75384 Paris Cedex 08 France Elm Energy & Recycling (UK) Limited 2516685 Elm Energy House Ettingshall Road Wolverhampton West Midlands WV2 2LA Fellside Heat and Power Limited 2614535 Fellside Lodge Seascale Cumbria CA20 1PG Fibrogen Limited 2547498 Astley House 33 Notting Hill Gate London W11 3JQ Fibropower Limited 2234141 Astley House 33 Notting Hill Gate London W11 3JQ First Hydro Company 2444277 Bala House Lakeside Business Village St. David's Park Deeside Flintshire CH5 3XJ Humber Power Limited 2571241 18 Savile Row London W1X 1AE Indian Queens Power Company Limited 2928100 1 Northumberland Avenue London WC2N 5BW Independent Energy UK Limited 3033406 2nd Floor, Park House Park Street Maidenhead Berkshire SL6 1SL Keadby Generation Limited 2729513 P O Box 89, Keadby Scunthorpe, North Lincolnshire DN17 3AZ Lakeland Power Limited 2355290 Roosecote Power Station Roosecote Marsh Barrow-in-Furness Cumbria LA13 OPQ Magnox Electric plc 2264251 Berkeley Centre Berkeley Gloucestershire GL13 9PB Medway Power Limited 2537903 Boston House The Little Green Richmond TW9 1QE Midlands Power (UK) Limited 2251099 Mucklow Hill Halesowen West Midlands B62 8BP National Power plc 2366963 Windmill Hill Business Park Whitehill Way Swindon Wiltshire SN5 6PB Nuclear Electric Limited 3076445 Barnett Way Barnwood Gloucester GL4 3RS Peterborough Power Limited 2353599 Storeys Bar Road Peterborough PE1 5NT PowerGen plc 2366970 53 New Broad Street London EC2M 1JJ Regional Power Generators Limited 2352390 Wetherby Road Scarcroft, Leeds LS14 3HS Rocksavage Power Company Limited 18868 20 St. James's Street London SW10 4UJ Scottish Hydro-Electric plc 117119 10 Dunkeld Road Perth PH1 5WA Scottish Power plc 117120 1 Atlantic Quay Glasgow G2 8SP Slough Energy Supplies Limited 2474514 234 Bath Road Slough SL1 4EE Teesside Power Limited 2464040 4 Millbank London SW1P 3ET Winterton Power Limited 3001798 800 Park Avenue Aztec West Almondsbury Bristol BS12 4SE Part II: The Suppliers Name Registered Registered or Number Principal Office British Gas Trading Ltd 3078711 Charter Court 50 Windsor Road Slough Berkshire SL1 2HA British Nuclear Fuels plc 1002607 Risley Warrington Cheshire WA3 6AS Candecca Resources Limited 953066 Welton Gathering Centre Barfield Lane Off Wragby Road Sudbrooke Lincoln LN2 2QU Citigen (London) Limited 2427823 100 Thames Valley Park Drive Reading Berkshire RG6 1PT Crosfield Limited 48745 Bank Quay PO Box 26 Warrington Cheshire WA5 1AB Eastern Electricity plc 2366906 Wherstead Park PO Box 40 Wherstead Ipswich Suffolk IP9 2AQ East Midlands Electricity plc 2366923 PO Box 444 Woodyard Lane Wollaton Nottingham NG8 1EZ Electricite de France, Service - Department Relations avec National l'Etranger Echanges d'Energie 2 Rue Louis Murat 5eme etage 75384 Paris Cedex 08 Energy Supply Contracts Limited 172268 The Havens Ransomes Europark Ipswich Suffolk IP3 9SJ Enron Capital and Trade Resources 3003823 4 Millbank Limited London SW1P 3ET Impkemix Energy Limited 2076043 The Heath Runcorn Cheshire WA7 4QF Independent Energy UK Limited 3033406 2nd Floor Park House Park Street Maidenhead Berkshire SL6 1SL London Electricity plc 2366852 Templar House 81-87 High Holborn London WC1V 6NU Magnox Electric plc 2264251 Berkeley Centre Berkeley Gloucestershire GL13 9PB Manweb plc 2366937 Manweb House Chester Business Park Chester CH4 9RF Midlands Electricity plc 2366928 Mucklow Hill Halesowen West Midlands B62 8BP National Power plc 2366963 Windmill Hill Business Park Whitehill Way Swindon Wiltshire SN5 6PB Norsk Hydro (UK) Limited 841421 Bridge House 69 London Road Twickenham Middlesex TW1 3RH Northern Electric plc 2366942 Carliol House Market Street Newcastle upon Tyne NE1 6NE NORWEB plc 2366949 PO Box 14 410 Birchwood Boulevard Birchwood Warrington WA3 7GA Nuclear Electric Limited 3076445 Barnett Way Barnwood Gloucester GL4 3RS PowerGen plc 2366970 53 New Broad Street London EC2M 1JJ Scottish Hydro-Electric plc 117119 10 Dunkeld Road Perth PH1 5WA Scottish Power plc 117120 1 Atlantic Quay Glasgow G2 8SP SEEBOARD plc 2366867 Forest Gate Brighton Road Crawley West Sussex RH11 9BH Shell Power Limited 2559630 Rowlands Way Withenshawe Manchester M22 5SB Slough Energy Supplies Limited 2474514 234 Bath Road Slough SL1 4EE Southern Electric plc 2366879 Westacott Way Littlewick Green Maidenhead Berkshire SL6 3QB South Wales Electricity plc 2366985 Newport Road St. Mellons Cardiff CF3 9XW South Western Electricity plc 2366894 800 Park Avenue Aztec West Almondsbury Bristol BS12 4SE The Renewable Energy Company Limited 3043412 Stroud House Russell Street Stroud Gloucestershire GL5 3AN UK Electric Power Limited 2844010 21 St. Thomas Street Bristol BS1 6US UML Limited 661900 PO Box 115 Port Sunlight Wirral Merseyside L62 4ZL Yorkshire Electricity Group plc 2366995 Wetherby Road Scarcroft Leeds LS14 3HS SCHEDULE 2: The Other Parties Name Registered Registered or Number Principal Office Accord Energy Limited 2877398 Rivermill House 152 Grosvenor Road London SW1V 3JL AES Barry Limited 3135522 Burleigh House 17-19 Worpe Way Richmond Surrey TW10 6AG Alcan Aluminium UK Limited 750143 Chalfont Park Gerrards Cross Buckinghamshire SL9 0QB BG plc 2006000 100 Thames Valley Park Drive Reading Berkshire RG6 1PT Cabah Energy Limited 2759706 190 Strand London WC2R 1JN Electricity Direct (UK) Limited 3174056 78 High Street Lewes East Sussex BN7 1XF Enfield Energy Centre Limited 2796628 Concorde House Concorde Way Stockton on Tees Cleveland TS18 3RB Fibrowatt Thetford Limited 3057688 Astley House 33 Notting Hill Gate London W11 3JQ Hydro Electric Energy Limited 2487475 Royex House Aldermanbury Square London EC2V 7LD Keadby Power Limited 2548042 PO Box 89 Keadby Scunthorpe North Lincolnshire DN17 3AZ Kingsnorth Power Limited 2656343 Chancery House 53-64 Chancery Lane London WC2A 1QU Meter Operators Limited 2841018 Lynton House 7-12 Tavistock Square London WC1H 9BQ Pentex (East Midlands) Limited 2275006 Union Buildings 15 Union Street Aberdeen AB1 2BU Seabank Power Limited 2591188 Severn Road Hallen Bristol BS10 7SP Spalding Energy Company Limited 19668 20 St. James's Street London SW1A 1ES SCHEDULE 3: The Meter Operator Parties who are not Parties Name Registered Registered or Number Principal Office Control Devices and Systems Limited 1242585 PO Box 56 101 Mill Lane Newbury Berkshire RG14 5RE Datum Solutions Limited 2815238 185 Park Street London SE1 9DY DrakMarn O&M Ltd 3124701 53 New Broad Street London EC2M 1JJ E. Squared Limited 2674129 Almac House Church Lane Bisley Surrey GU24 9DR Northern Energy Services Limited 2868141 5 Derwent Place Spotborough Doncaster DN5 7PN PowerMet Limited 2877912 3 Park Place London SW1A 1LP Schlumberger Industries Limited 534821 1 Kingsway London WC2B 6XH Stanor National Contracts Limited 2769170 7-12 Tavistock Square London WC1H 9BQ The Challenge Group - 22 Tally Road Oxted Surrey RH8 0TG 17 SCHEDULE 4: Amendments to the Pooling and Settlement Agreement The Pooling and Settlement Agreement shall be amended as follows:- Operative Provisions By the deletion of existing Clause 1.7 and by the insertion of the following new Clause in substitution therefor:- "1.7 1998: The provisions of Schedules 22, 23, 24 and 25 shall have effect.". By the deletion of the word "and" at the end of paragraph (j) of Clause 15.6.4 and by the insertion of the following new paragraph immediately after paragraph (k) of Clause 15.6.4:- "(l) if (where applicable, after the provisions of paragraph (k) above have been followed) only two RS Nominees appear on the SG Preference List or (as the case may be) the IS Preference List and the Weighted Votes cast in favour of both such RS Nominees are equal then the selection of the SG Committee Member or (as the case may be) the IS Committee Member shall be decided by the drawing of lots in a manner to be determined by the Pool Chairman; and". By the deletion of the word "and" at the end of Clause 24.2.29, by the deletion of the full stop at the end of Clause 24.2.30 and the subsitution therefor of the text "; and", and by the insertion of the following Clause immediately after Clause 24.2.30:- "24.2.31 Acting as, and performing the functions of, the Accreditation Authority (as defined in Schedule 25) on the terms and subject to the conditions of that Schedule.". By the deletion of the heading of Clause 47.3 and the substitution therefor of the following:- "47.3 Terms of engagement - scope of work:". By the renumbering of Clause 47.3.1 as Clause 47.3.1(a) and by the insertion of the following paragraphs immediately after such Clause 47.3.1(a):- "(b) The exclusions from and limitations of liability of the Pool Auditor shall be as set out in its terms of engagement and shall apply to this Agreement as if the same were set out in full herein. (c) Each Pool Member shall comply with any arrangements made from time to time by the Executive Committee relating to the making of claims against the Pool Auditor and to the sharing of any recoveries from the Pool Auditor the amount of which may be affected by any limitations of liability of the Pool Auditor as referred to in paragraph (b) above. In particular, each Pool Member shall notify the Executive Committee of any claim brought by it against the Pool Auditor where it is not practicable for the claim to be conducted by the Executive Committee on its behalf and shall keep the Executive Committee fully informed as to the conduct of such a claim.". By the insertion of the following new Clause immediately after Clause 48.10:- "48.11 Certification Agent: 48.11.1 If, and for so long as, the Pool Auditor is also appointed as the Certification Agent, the Executive Committee may agree with the Accreditation Authority that the terms of engagement of the Certification Agent shall be incorporated in the terms of engagement and scope of work to be carried out by the Pool Auditor, in which event the terms of engagement of the Certification Agent shall be agreed, amended and substituted by the Executive Committee instead of the Accreditation Authority. 48.11.2 In its capacity as Certification Agent, the Pool Auditor shall not be required to comply with the provisions of Clauses 48.2 or 48.3 and the provisions of Clause 48.7 shall not apply. 48.11.3 In this Clause 48.11, terms defined in Schedule 25 shall have the same meaning.". Schedule 4 By the insertion, in Part A of the Appendix to Schedule 4, of the following definitions in the correct alphabetical order:- ""Ad Hoc Consultancy Services" means those Consultancy Services described in sub-section 3.2 of Part B;"; and ""Ad Hoc Development Services" means those Development Services described in sub-section 4.2 of Part B;". By the deletion of the existing Section 3 of Part B of the Appendix to Schedule 4 and by the insertion of the following new Section in substitution therefor:- "3. CONSULTANCY SERVICES 3.1 Consultancy Services: Consultancy Services are those Services described as Consultancy Services in the Service Lines set out in the Menu of Consultancy Services Prices. 3.2 Ad Hoc Consultancy Services: Ad Hoc Consultancy Services are those Consultancy Services which the Settlement System Administrator is to provide on an ad hoc basis as described in the relevant Service Line.". By the deletion of the existing Section 4 of Part B of the Appendix to Schedule 4 and by the insertion of the following new Section in substitution therefor:- "4. DEVELOPMENT SERVICES 4.1 Development Services: Development Services are those Services described as Development Services in the Service Lines set out in the Menu of Development Services Prices. 4.2 Ad Hoc Development Services: Ad Hoc Development Services are those Development Services which the Settlement System Administrator is to provide on an ad hoc basis as described in the relevant Service Line.". By the insertion of the following new sub-section immediately after sub-section 2.3 of Part F of the Appendix to Schedule 4:- "2.4 Ad Hoc Consultancy Services: the Contract Manager shall have the right to Order Ad Hoc Consultancy Services in accordance with the Menu of Consultancy Services Prices.". By the insertion of the following new sub-section immediately after sub-section 3.5 of Part F of the Appendix to Schedule 4:- "3.6 Ad Hoc Development Services: the Contract Manager shall have the right to Order Ad Hoc Development Services in accordance with the Menu of Development Services Prices.". By the insertion of the following new sub-section immediately after sub-section 4.3 of Part G of the Appendix to Schedule 4:- "4.4 Ad Hoc Consultancy Services: The charge for each Ad Hoc Consultancy Services shall be the corresponding price set out in the Menu of Consultancy Services Prices.". By the insertion of the following new sub-section immediately after sub-section 5.5 of Part G of the Appendix to Schedule 4:- "5.6 Ad Hoc Development Services: The charge for each Ad Hoc Development Service shall be the corresponding price set out in the Menu of Development Services Prices.". By the deletion of paragraph (b) from Section 9 of Part G of the Appendix to Schedule 4 and the substitution therefor of the following new paragraph:- "(b) charges for all Ad Hoc Production Services, Ad Hoc Consultancy Services and Ad Hoc Development Services provided or to be provided during such month, determined as provided in sub-sections 2.2, 4.4 or 5.6 above (as the case may be);". By the deletion of paragraph (b) from sub-section 2.4 of Part J of the Appendix to Schedule 4 and the substitution therefor of the following new paragraph:- "(b) the charge for Ad Hoc Production Services, Ad Hoc Consultancy Services and Ad Hoc Development Services;". By the deletion from sub-paragraphs (c)(i)(A)(1), (A)(2) and (B) of sub-section 1.2 of Part K of the Appendix to Schedule 4 of all references to "50MW" and by the substitution therefor of references to "100MW". Schedule 22 By the deletion from the last sentence of paragraph 3.4.4 of Schedule 22 of the reference to "paragraph 4.3.2" and by the substitution therefor of the reference to "paragraph 3.4.2". New Schedule 24 By the insertion of the following new Schedule 24:- "SCHEDULE 24 [Not used.]" New Schedule 25 By the insertion of the following new Schedule 25:- "SCHEDULE 25 Accreditation PART 1 : INTERPRETATION 1.1 Defnitions: In this Schedule, unless the context otherwise requires: "1998 Programme" has the meaning given to that term in Schedule 22; "Accreditation" means, subject to sub-section 5.7, written confirmation by the Accreditation Authority that an Applicant has, in the opinion of the Accreditation Authority, satisfied the relevant Accreditation Requirements, and "Accredited" shall be construed accordingly; "Accreditation Administrator" means the person (if any) for the time being and from time to time appointed pursuant to Part 3 as the Accreditation Administrator for the purposes of this Schedule; "Accreditation Authority" means the person for the time being and from time to time appointed pursuant to Part 2 as the Accreditation Authority for the purposes of this Schedule; "Accreditation Process" means the process set out in this Schedule and Agreed Procedure 531 whereby an Applicant is assessed to determine whether it satisfies the Accreditation Requirements; "Accreditation Requirements" means, in relation to an Applicant, the requirements which that Applicant is required to satisfy in order to perform the specific function or functions for which it is applying to be Accredited (being one or more of the functions associated with the categories referred to in paragraphs (a) to (j) (inclusive) of sub-section 2.3), as determined for the time being and from time to time by the Accreditation Authority; "Agency System" means, in relation to an Applicant, the particular systems and procedures of that Applicant (or for which that Applicant is responsible) relevant to the specific function for which it is applying to be Accredited; "Applicant" means a person who falls within one or more of the categories referred to in paragraphs (a) to (j) (inclusive) of sub-section 2.3 and who, in accordance with this Schedule, applies for one or more of its Agency Systems to be Certified and/or for itself to be Accredited and, where the context so admits, shall include a person applying for re-Certification of any of its Agency Systems in accordance with this Schedule; "Certification" means written confirmation by the Accreditation Authority that a particular Agency System of an Applicant has, in the opinion of the Accreditation Authority, satisfied the Certification Requirements and, where the context so admits, shall include re-Certification of Agency Systems, and "Certify" and "Certified" shall be construed accordingly; "Certification Agent" means the person for the time being and from time to time appointed pursuant to Part 4 as the Certification Agent for the purposes of this Schedule; "Certification Documentation" has the meaning given to that term in paragraph 4.3.1; "Certification Process" means the process set out in this Schedule and Agreed Procedure 531 whereby a particular Agency System of an Applicant is assessed to determine whether it satisfies the Certification Requirements; "Certification Requirements" means, in relation to any of the Agency Systems of an Applicant, the requirements which such Agency System is required to satisfy in order to perform the specific function or functions for which the Applicant is applying to have such Agency System Certified (being one or more of the functions associated with the categories referred to in paragraphs (a) to (j) (inclusive) of sub-section 2.3), as determined for the time being and from time to time by the Accreditation Authority; "Interested Person" has the meaning given to that term in section 7; "Menu of Certification Fees" means the scale of fees to be charged to Applicants in connection with the Certification Process, as set out in Agreed Procedure 531; and "Pool" has the meaning given to that term in Schedule 22. 1.2 Interpretation: In this Schedule, except where the context otherwise requires: 1.2.1 references to any Agency System of an Applicant include any Agency System for which that Applicant is responsible; and 1.2.2 references to a particular Part, Section, sub-section or paragraph or to any Annex shall be a reference to that Part, Section, sub-section or paragraph of, or Annex to, this Schedule. PART 2 : THE ACCREDITATION AUTHORITY 2.1 Appointment and removal of Accreditation Authority: 2.1.1 The Executive Committee shall act as, and shall perform the functions of, the Accreditation Authority pursuant to Clause 24.2.31 (and Pool Members shall procure that the Executive Committee so acts and performs) until such time as Pool Members in general meeting otherwise resolve. 2.1.2 Pool Members in general meeting shall have the right to appoint and remove the Accreditation Authority from time to time and (subject to sub-section 2.4) to agree, amend and substitute the terms of engagement of the Accreditation Authority. 2.1.3 Unless otherwise determined by Pool Members in general meeting, the costs, fees, expenses, liabilities and losses of, and all other amounts incurred or paid by, the Accreditation Authority shall be dealt with in accordance with the PFA Accounting Procedure. 2.2 Accreditation Authority's functions: The functions of the Accreditation Authority shall be confined to the operational requirements of Pool Members collectively in their capacity as such and (subject as aforesaid) shall be as set out in this Schedule and Agreed Procedure 531 and shall include such powers and authorities as may be necessary or incidental to the performance of such functions. 2.3 Categories of Applicant: On the terms and subject to the conditions of this Schedule, the Accreditation Authority shall be responsible for the Certification of each of the Agency Systems of, and the Accreditation of, Applicants falling within the following categories: (a) PES registration service providers; (b) non half hourly data collectors; (c) non half hourly data aggregators; (d) non half hourly meter operators; (e) half hourly data collectors; (f) half hourly data aggregators; (g) half hourly meter operators; (h) teleswitch operators; (i) meter administrators; and (j) such other categories of person, if any, as the Executive Committee, with the prior written consent of the Director, may determine. 2.4 Executive Committee as Accreditation Authority: The provisions of Clauses 16.9, 17.4, 18, 19, 20.4 and 22 to 24 (inclusive) shall apply in relation to the Executive Committee, the Committee Members, the Pool Chairman, the Chief Executive, the personnel referred to in Clause 17.2.1 and the Secretary when the Executive Committee is acting as, and performing the functions of, the Accreditation Authority provided that: 2.4.1 notice of meetings of the Accreditation Authority need be given only to the Committee Members, the Pool Chairman, the Chief Executive (if any), the Pool Auditor, the Certification Agent and the Accreditation Administrator and, insofar as concerns the Certification of the Agency System of an Applicant or the Accreditation of an Applicant, that Applicant. Clause 18.1.2 shall be modified accordingly; 2.4.2 if any Committee Member or the Certification Agent or the Accreditation Administrator wishes to advise additional matters which he or it wishes to be considered at a meeting of the Accreditation Authority he or it shall give notice to all other persons entitled to attend that meeting no later than three working days before the date of the meeting (or such lesser period as the Accreditation Authority may from time to time determine). Clause 18.1.4 shall be modified accordingly; 2.4.3 minutes of meetings of the Accreditation Authority shall be confidential and copies shall be required to be provided only to those persons who were entitled to attend the relevant meeting and, insofar as concerns the Certification of the Agency System of an Applicant or the Accreditation of an Applicant, that Applicant. Clause 18.1.6 shall be modified accordingly; 2.4.4 each of the Pool Chairman, the Chief Executive, the Pool Auditor, the Certification Agent and the Accreditation Administrator (or its or his respective duly appointed representative) shall have the right to attend and speak (but not to vote) at meetings of the Accreditation Authority. The Chief Executive (or his duly appointed representative) shall be obliged so to attend. With the exception of the final sentence of Clause 19.4, that Clause shall not apply; 2.4.5 save for Clause 20.4, Clause 20 shall not apply; 2.4.6 any question or matter arising at a meeting of the Accreditation Authority shall be decided by a 75 per cent. majority of the votes cast at the meeting by Committee Members entitled to vote in accordance with Section 2.4.10. On any such question or matter each Committee Member shall be entitled to one vote. Clause 22.2 shall not apply; 2.4.7 a decision duly made at a meeting of the Accreditation Authority shall (unless otherwise determined by the Accreditation Authority or otherwise provided by the terms of the decision) have immediate effect. Clause 22.4 shall not apply; 2.4.8 Clauses 22.3 and 22.5 to 22.11 (inclusive) shall not apply: in particular, but without prejudice to the generality of the foregoing, no decision of the Accreditation Authority shall be referred to Pool Members in general meeting; 2.4.9 Clauses 23.1, 23.2, 23.6 and 23.7 shall not apply; 2.4.10 a Committee Member in his capacity as a member of the Accreditation Authority shall be required to act independently of the interests of his employer and of those Pool Members whose interests he represents when acting as a member of the Executive Committee. In particular, but without prejudice to the generality of the foregoing: (a) a Committee Member shall not: (i) participate as a member of the Accreditation Authority in the consideration of whether his employer's Agency Systems should be Certified or whether his employer should be Accredited; (ii) be counted in ascertaining whether a quorum is present at a meeting of the Accreditation Authority convened to consider whether his employer's Agency Systems should be Certified or whether his employer should be Accredited; or (iii) be entitled to receive any working papers, opinions, reports or other documentation which have been prepared for the Accreditation Authority in connection with the Certification Process or Accreditation Process of his employer; (b) a Committee Member shall not disclose to his employer confidential information which he has received in his capacity as a member of the Accreditation Authority unless: (i) required to do so by any Competent Authority or by law; (ii) in order for his employer to comply with the conditions of any Licence with which his employer is required to comply; (iii)required to do so by any stock exchange or regulatory authority or the Panel on Take-overs and Mergers; or (iv) pursuant to the arbitration rules of the Electricity Arbitration Association or pursuant to any judicial or other arbitral process or tribunal having jurisdiction in relation to him or his employer, in any of which events the Committee Member shall first be required to give written notice of the required disclosure to the Accreditation Authority; and 2.4.11 references to a Committee Member shall for the purposes of this Schedule include a reference to a Committee Member in his capacity as a member of the Accreditation Authority. 2.5 Delegation: 2.5.1 The Accreditation Authority shall have the right at any time and from time to time to delegate or procure the delegation of all or any part of the day-to-day administration of the Accreditation Process to the Accreditation Administrator. For the avoidance of doubt, this shall not include the taking of any decision as to whether the Agency Systems of an Applicant (or any of them) should be Certified or the Applicant should be Accredited. 2.5.2 The Accreditation Authority shall be responsible for every act, breach, omission, neglect and failure of the Accreditation Administrator. 2.6 Responsibilities owed to Pool Members alone: In acting as the Accreditation Authority, the Executive Committee shall have due regard to the collective interests of Pool Members. The responsibilities of the Accreditation Authority under this Schedule are owed exclusively to Pool Members collectively, and to no other person. In particular, but without prejudice to the generality of the foregoing, Suppliers shall be required to satisfy themselves as to the financial condition and prospects and the management and operational ability of any Accredited person and shall not rely on the fact of Accreditation (or the lack of Accreditation) as, or infer therefrom, any representation, warranty or other statement or indication on the part of the Accreditation Authority, the Accreditation Administrator or the Certification Agent that the Accredited person has any or any particular financial condition or prospects or level of management or operational ability. PART 3 : THE ACCREDITATION ADMINISTRATOR 3.1 Appointment and removal of Accreditation Administrator: The Accreditation Administrator shall be appointed and removed from time to time by the Accreditation Authority acting on behalf of all Pool Members. The Accreditation Authority shall have the right on behalf of all Pool Members to agree, amend and substitute the terms of engagement of the Accreditation Administrator. 3.2 Pool Members' authorisation: Pool Members hereby irrevocably and unconditionally authorise the Accreditation Authority to appoint and remove, and to agree, amend and substitute the terms of engagement of, the Accreditation Administrator on their behalf and undertake not to withdraw or change that authority. 3.3 Functions of Accreditation Administrator: 3.3.1 The Accreditation Administrator shall perform such functions associated with the day-to-day administration of the Accreditation Process as are delegated to it from time to time by the Accreditation Authority. A copy of any such delegated functions will be made available by the Accreditation Authority to Pool Members on request. 3.3.2 The Accreditation Administrator shall keep confidential information that it receives in its capacity as Accreditation Administrator on terms agreed from time to time by it with the Accreditation Authority. PART 4 : THE CERTIFICATION AGENT 4.1 Appointment and removal of Certification Agent: The Accreditation Authority shall, from time to time, appoint and remove a Certification Agent on behalf of all Pool Members. The first Certification Agent shall be Coopers & Lybrand. Subject to Clause 48.11, the Accreditation Authority shall have the right on behalf of all Pool Members to agree, amend and substitute the terms of engagement of the Certification Agent. 4.2 Pool Members' authorisation: Pool Members hereby irrevocably and unconditionally authorise the Accreditation Authority to appoint and remove, and to agree, amend and substitute the terms of engagement of, the Certification Agent on their behalf and undertake not to withdraw or change that authority. 4.3 Functions of Certification Agent: The functions of the Certification Agent shall be: 4.3.1 to prepare the self-assessment certification returns to be completed by each Applicant and the supporting Pool documentation (including guidance notes) to be used by the Certification Agent in the Certification Process (together the "Certification Documentation"), to submit the Certification Documentation to the Accreditation Authority for approval and to revise (and resubmit for approval) the Certification Documentation in accordance with the instructions of the Accreditation Authority from time to time; 4.3.2 to carry out the Certification Process in accordance with applicable English law, the terms set out in this Schedule and Agreed Procedure 531 and the approved Certification Documentation; 4.3.3 to exercise the skill, care and diligence in the preparation and revision of the Certification Documentation (recognising that the Certification Agent is required to give effect to the instructions of the Accreditation Authority under paragraph 4.3.1) and in the performance of the Certification Process reasonably to be expected of a firm of accountants of internationally recognised standing (or to such other standard of skill, care and diligence as may be agreed by the Accreditation Authority with the Certification Agent from time to time); and 4.3.4 in respect of each application for Certification, to deliver an opinion of the Certification Agent addressed to the Accreditation Authority (for itself and on behalf of all Pool Members) as to whether the Applicant's Agency System has met the Certification Requirements. 4.4 Responsibilities owed to Accreditation Authority: The responsibilities of the Certification Agent under this Schedule are owed exclusively to the Accreditation Authority for itself and Pool Members collectively and to no other person provided that the Pool Auditor shall be entitled to rely on all opinions of the Certification Agent delivered pursuant to paragraph 4.3.4. 4.5 Confidentiality undertaking: Before commencing the Certification Process with respect to the Agency Systems of any Applicant, the Certification Agent shall execute a confidentiality undertaking in favour of such Applicant in such form as may from time to time be agreed by the Accreditation Authority with the Certification Agent. PART 5 : THE CERTIFICATION PROCESS AND ACCREDITATION PROCESS 5.1 The Certification Process and Accreditation Process: 5.1.1 The Certification Process and the Accreditation Process shall be conducted in accordance with Agreed Procedure 531. 5.1.2 Agreed Procedure 531 shall not conflict with the provisions of this Schedule and, to the extent of any conflict or inconsistency between the two, the provisions of this Schedule shall prevail. 5.1.3 The Accreditation Authority shall provide copies of the latest version of this Schedule and Agreed Procedure 531 to Applicants. 5.1.4 The Accreditation Authority shall, subject to sub-section 6.2, provide each Applicant with a copy of all opinions (whether preliminary or final) of the Certification Agent in relation to the Agency System(s) of that Applicant delivered pursuant to paragraph 4.3.4 at the same time as the Accreditation Authority notifies such Applicant whether its Agency System(s) has (have) been Certified and/or (as the case may be) such Applicant has been Accredited. The Accreditation Authority shall be under no obligation to provide an Applicant with a copy of any such opinion at any time before it gives such notification. 5.2 No Certification: The Accreditation Authority shall not Certify the Agency System of any Applicant unless the Certification Agent has provided an opinion (not being a disclaimer of opinion, howsoever called) in the terms of paragraph 4.3.4 in relation to that Agency System. 5.3 Loss of Certified or Accredited status: The Accreditation Authority shall have the right at any time and from time to time in accordance with Agreed Procedure 531: 5.3.1 to remove the Certification of all or any of the Agency Systems of any person, whereupon such Agency System(s) shall cease to be Certified; and/or 5.3.2 to remove the Accreditation of any person, whereupon such person shall cease to be Accredited. 5.4 Re-certification: Each person who has been Accredited shall be required to have some or all of its Agency Systems re-Certified in accordance with Agreed Procedure 531. If any such Agency System is not so re-Certified, such person's Accreditation shall automatically lapse. 5.5 Fees and expenses: 5.5.1 The Accreditation Authority shall determine and publish to Applicants and to those persons who have been Accredited a Menu of Certification Fees which shall be charged directly to Applicants for the purposes of Certification, and the Accreditation Authority shall have the right to revise such fees from time to time. 5.5.2 Each Applicant shall pay its own costs and expenses incurred in connection with the Certification Process and the Accreditation Process. 5.6 Applicants bound by this Schedule: Applicants shall agree to be bound by the Certification Process, the Accreditation Process, the provisions of this Schedule and Agreed Procedure 531 by the execution of a letter agreement in form and content satisfactory to the Accreditation Authority. 5.7 Appeal procedure: If an Applicant is dissatisfied for any reason (including on the grounds that the Applicant disagrees with the final opinion of the Certification Agent in relation to one or more of its Agency Systems) with the decision of the Accreditation Authority as to whether such Applicant shall be Accredited, the sole and exclusive remedy of the Applicant shall be to refer the matter for determination to the Director in accordance with Agreed Procedure 531. The determination of the Director shall be final, conclusive and binding on the Applicant, the Accreditation Authority and all Pool Members. 5.8 Exclusion of other appeals: 5.8.1 For the avoidance of doubt, neither Clause 83 nor Clause 84 shall apply in the case where an Applicant is dissatisfied for any reason with the decision of the Accreditation Authority as to whether such Applicant shall be Accredited. Sub-section 5.7 provides the sole and exclusive remedy of the Applicant. 5.8.2 Save for any reference to the Director in accordance with sub-section 5.7, in respect of any matter concerning the Certification of any Agency Systems or the Accreditation of any person or the Certification Process or the Accreditation Process generally all reference or appeal procedures in this Agreement to or involving the Director are expressly excluded. PART 6 : APPLICANT'S RESPONSIBILITIES 6.1 Applicant's warranty and undertakings: Each Applicant represents, warrants and undertakes to each of the Pool Members (for itself and as trustee and agent for the Accreditation Authority, the Accreditation Administrator and the Certification Agent) that: 6.1.1 all information supplied by or on behalf of the Applicant to the Accreditation Authority, the Accreditation Administrator or the Certification Agent in connection with the Certification Process or the Accreditation Process is true, complete and accurate and not misleading because of any omission or ambiguity or for any other reason, subject to disclosure, if any, acceptable to the Accreditation Authority being made in advance of the provision of the relevant information to the Accreditation Authority, the Accreditation Administrator or (as the case may be) the Certification Agent; 6.1.2 (a) completion of all documentation by or on behalf of the Applicant in connection with the Certification Process or the Accreditation Process is and will remain the sole responsibility of the Applicant; (b) the Applicant will duly complete all such documentation and provide all the information required thereunder within the time periods prescribed by Agreed Procedure 531; and (c) the Applicant has had the opportunity to take its own legal and other professional advice regarding the Certification Process and the Accreditation Process; 6.1.3 it will confirm in writing to the Accreditation Authority (for itself and on behalf of all Pool Members, Accreditation Authority and the Certification Agent) in accordance with Agreed Procedure 531 that each of the other representations, warranties and undertakings in this sub-section 6.1 are true and have been complied with as at the date on which it has been notified that its application(s) for Certification and/or Accreditation will be considered by the Accreditation Authority; and 6.1.4 the Applicant will co-operate fully with the Accreditation Authority, the Accreditation Administrator and the Certification Agent in the Certification Process and the Accreditation Process and, without prejudice to the generality of the foregoing, shall permit each of them reasonable access to the Applicant's business records, working papers and employees for the purposes of each such process upon not less than three working days' advance notice. 6.2 No reliance by Applicant: The Applicant acknowledges and agrees that: 6.2.1 it shall not, and shall not be entitled to, place any reliance on any working papers, opinion, report or other documentation prepared by or for (or any oral or written interpretation of, or any oral or written advice given in relation to, any such working papers, opinion, report or other documentation by) the Accreditation Authority, the Accreditation Administrator or the Certification Agent in connection with the Certification Process or the Accreditation Process unless such working papers, opinion, report or other documentation is expressly addressed to such Applicant; and 6.2.2 it shall keep confidential on the terms set out in Clause 70 any working papers, opinions, report or other documentation referred to in paragraph 6.2.1 unless such working papers, opinion, report or other documentation is expressly addressed to such Applicant. PART 7 : LIMITATION OF LIABILITY 7.1 Limitation of liability: Each Applicant, each person who has (or whose Agency Systems have) been Certified or Accredited (or whose Certification or Accreditation has been removed) and each Pool Member (each an "Interested Person") agrees that: 7.1.1 the total aggregate liability of the Accreditation Authority and the Accreditation Administrator to any Interested Person whether in contract, tort (including negligence or breach of statutory duty) or otherwise arising directly or indirectly for or in connection with the Certification Process or the Accreditation Process (including the contents of any opinion or report prepared by the Accreditation Authority or the Accreditation Administrator) shall in no circumstances exceed (pound)5,000,000; 7.1.2 neither the Accreditation Authority nor the Accreditation Administrator shall be liable to any Interested Person for any loss of profit, loss of revenue, loss of contract, loss of goodwill or any indirect or consequential loss arising from or in connection with the Certification Process or the Accreditation Process; 7.1.3sub-sections 7.1 and 7.2 shall not exclude the liability of the Accreditation Authority or the Accreditation Administrator for fraud; 7.1.4 the exclusions from and limitations of liability of the Accreditation Authority and the Accreditation Administrator under this section shall not apply to death or personal injury caused by the negligence of the relevant one of the Accreditation Authority or the Accreditation Administrator; 7.1.5 the exclusions from and limitations of liability of the Accreditation Authority and the Accreditation Administrator under this Section 7 are reasonable because of (amongst other matters) the likelihood that the amount of damages awardable to the Interested Person from the Accreditation Authority or the Accreditation Administrator would otherwise be disproportionate to the charges which it makes in connection with the Certification Process or the Accreditation Process and because of the limited resources and expertise of the Accreditation Authority and the Accreditation Administrator; 7.1.6 the exclusions from and limitations of liability of the Accreditation Authority and the Accreditation Administrator under this Section 7 shall be considered severally and the invalidity or unenforceability of any one sub-section shall not affect the validity or enforceability of any other sub-section; and 7.1.7 the exclusions from and limitations of liability of the Certification Agent are set out in the terms of its engagement referred to in sub-section 4.1 and shall apply to this Schedule as if the same were set out in full herein. PART 8 : DISAPPLICATION PROVISIONS 8.1 Disapplication: 8.1.1 Parts III and V of this Agreement shall not apply in or to this Schedule except, in the case of Part III, in respect of any action under this Schedule which Pool Members in general meeting are entitled or required by the terms of this Schedule to take. 8.1.2 If, and for long as, the Pool Auditor is also appointed as the Certification Agent, the provisions of Clause 48.11 shall apply.". SIGNATORIES THE GENERATORS Anglian Power Generators Limited Address: Kings Lynn Power Station, Willows Business Park, Saddlebow, Kings Lynn, Norfolk PE34 3RD Facsimile no: 01733 8e94164 Attention: W. Burrough By: Barking Power Limited Address: Barking Power Station, Chequers Lane, Dagenham, Essex RM9 6PF Facsimile no: 0181 984 5174 Attention: M.D. Jones By: British Nuclear Fuels plc Address: F13, Sellafield, Seascale, Cumbria CA20 1PG Facsimile no: 019467 27132 Attention: P.L. O'Neill, Business Manager, Electricity Generation By: CeltPower Limited Address: Plas Yn Dre Broad Street, Newtown, Powys SY16 2NA Facsimile no: 01686 629887 Attention: J. Matthew By: Citigen (London) Limited Address: 47-53 Charterhouse Street, London EC1M 6HA Facsimile no: 0171 253 9319 Attention: S.P. Chandler By: Corby Power Limited Address: Mitchell Road, Phoenix Parkway, Corby, Northamptonshire NN17 5QT Facsimile no: 01536 402619 Attention: General Manager By: Derwent Cogeneration Limited Address: P.O. Box 489, Spondon, Derby DE21 7ZS Facsimile no: 01332 669829 Attention: J. Unwin By: Eastern Merchant Generation Limited Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ Facsimile no: 01473 552941 Attention: Coral Woodard By: Electricite de France, Service National Address: EDF Production Transport, Department Relations avec l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384, Paris Cedex 08 Facsimile no: (00 331) 40 42 63 41 Attention: P. Gaillet (copy to: Associated Electricity Supplies Limited Address: 53 St George's Road, Wimbledon, London SW19 4EA Facsimile no: 0181 944 0750 Attention: P. Clubb) By: Elm Energy & Recycling (UK) Limited Address: Elm Energy House, Ettingshall Road, Wolverhampton, West Midlands WV2 2LA Facsimile no: 01902 408517 Attention: M.D. Wyckoff By: Fellside Heat and Power Limited Address: Fellside Lodge, Seascale, Cumbria CA20 1PG Facsimile no: 01946 721130 Attention: J.A. Bartlett By: Fibrogen Limited Address: Astley House, 33 Notting Hill Gate, London W11 3JQ Facsimile no: 0171 221 8671 Attention: R. Fraser By: Fibropower Limited Address: Astley House, 33 Notting Hill Gate, London W11 3JQ Facsimile no: 0171 221 8671 Attention: R. Fraser By: First Hydro Company Address: Bala House, Lakeside Business Village, St. Davids Park, Deeside, Flintshire CH5 3XJ Facsimile no: 01244 520697 Attention: B. Stalker By: Humber Power Limited Address: South Humber Bank Power Station, South Marsh Road, Stallingborough N.E. Lincs. DN37 8BZ Facsimile no: 01469 573030 Attention: P. Evans By: Independent Energy UK Limited Address: St John's Court, 70 St John's Close, Knowle, Solihull, West Midlands B93 ONN Facsimile no: 01564 770010 Attention: J. Sulley By: Indian Queens Power Limited Address: The Old Chapel Business Centre, Suite 7, Greenbottom, Truro TR4 8QP Facsimile no: 01872 561050 Attention: M. Miller By: Keadby Generation Limited Address: c/o Scottish Hydro Electric, Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ Facsimile no: 01738 456227 Attention: I. Morgan By: Lakeland Power Limited Address: Roosecote Power Station, Roosecote Marsh, Barrow-in-Furness, Cumbria LA13 0PQ Facsimile no: 01229 870919 Attention: Jackie Mahon By: Magnox Electric plc Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB Facsimile no: 01453 810451 Attention: Company Secretary By: Medway Power Limited Address: Medway Power Station, Isle of Grain, Rochester, Kent ME3 0AG Facsimile no: 01634 271666 Attention: J. McLaren By: Midlands Power (UK) Limited Address: Headquarters, Mucklow Hill, Halesowen, West Midlands Facsimile no: 0121 423 0261 Attention: Company Secretary By: National Power plc Address: Windmill Hill Business Park, Whitehill Way, Swindon, Wiltshire SN5 6PB Facsimile no: 01793 892061 Attention: M. Bowden By: Nuclear Electric Limited Address: Barnett Way, Barnwood, Gloucester GL4 3RS Facsimile no: 01452 653375 Attention: Company Secretary By: Peterborough Power Limited Address: Storeys Bar Road, Peterborough PE1 5NT Facsimile no: 01553 667166 Attention: W. Burrough By: PowerGen plc Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG Facsimile no: 01203 425366 Attention: S. Skillings By: Regional Power Generators Limited Address: Glanford Brigg Generating Station, Scawby Brook, Brigg, North Lincolnshire DN20 9LT Facsimile no: 01482 495916 Attention: P. Knight By: Rocksavage Power Company Limited Address: Cow Hay Lane, Runcorn, Cheshire WA7 4FZ Facsimile no: 01928 565514 Attention: B. Stewart By: Scottish Hydro-Electric plc Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ Facsimile no: 01738 456190 Attention: R. Hackland By: Scottish Power plc Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN Facsimile no: 0141 636 4706 Attention: B.J.H. Paget By: Slough Energy Supplies Limited Address: 342 Edinburgh Avenue, Slough SL1 4TU Facsimile no: 01753 790038 Attention: P.N. Jackson By: Teesside Power Limited Address: Four Millbank, London SW1P 3ET Facsimile no: 0171 316 5322 Attention: D. Lewis By: Winterton Power Limited Address: 800 Park Avenue, Aztec West, Bristol BS12 4SE Facsimile no: 01454 616675 Attention: T. Masood By: THE SUPPLIERS British Gas Trading Ltd Address: 1st Floor, 31 The Causeway, Staines, Middlesex TW18 3BL Facsimile no: 01784 413242 Attention: T. Brookshaw By: British Nuclear Fuels plc Address: F13, Sellafield, Seascale, Cumbria CA20 1PG Facsimile no: 019467 27132 Attention: P.L. O'Neill, Business Manager, Electricity Generation By: Candecca Resources Limited Address: Welton Gathering Centre, Barfield Lane, off Wragby Road, Sudbrooke, Lincoln LN2 2QU Facsimile no: 01522 754255 Attention: D. Wood By: Citigen (London) Limited Address: 47-53 Charterhouse Street, London EC1M 6HA Facsimile no: 0171 253 9319 Attention: S.P. Chandler By: Crosfield Limited Address: Bank Quay, PO Box 26, Warrington, Cheshire WA5 1AB Facsimile no: 01925 59828 Attention: K. Sowley By: Eastern Electricity plc Address: Wherstead Park, PO Box 40, Wherstead, Ipswich, Suffolk IP9 2AQ Facsimile no: 01473 554393 Attention: J. Whelan By: East Midlands Electricity plc Address: Phoenix Centre Nuthall, Nottingham NG8 6AT Facsimile no: 0115 995 5953 Attention: A. Musto By: Electricite de France, Service National Address: EDF Production Transport, Department Relations avec l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384, Paris, Cedex 08 Facsimile no: (010 331) 40 42 6341 Attention: P. Gaillet (copy to: Associated Electricity Supplies Limited Address: 53 St. George's Road, Wimbledon, London SW19 4EA Facsimile no: 0181 944 0750 Attention: P. Clubb) By: Energy Supply Contracts Limited Address: The Havens, Ransomes Europark, Ipswich, Suffolk IP3 9SJ Facsimile no: 01473 273871 Attention: E.C. Cumberland By: Enron Capital and Trade Resources Address: Four Millbank, London SW1P 3ET Facsimile no: 0171 873 0140 Attention: D. Gosling By: Impkemix Energy Limited Address: PO Box 90, Wilton Centre, Middlesborough, Cleveland TS90 8JE Facsimile no: 01642 437838 Attention: K.J. Green By: Independent Energy UK Limited Address: St. John's Court, St. John's Close, Knowle, West Midlands B93 0NN Facsimile no: 01564 770010 Attention: J. Sulley By: London Electricity plc Address: Templar House, 81-87 High Holborn, London WC1V 6NU Facsimile no: 0171 430 2903 Attention: M. Holmes By: Magnox Electric plc Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB Facsimile no: 01453 810451 Attention: Company Secretary By: Manweb plc Address: Manweb House, Kingsfield Court, Chester Business Park, Chester CH4 9QH Facsimile no: 0141 568 3393 Attention: P. Brown, Energy Supply, Cathcart Business Park, Spean Street, Glasgow G44 4BE By: Midlands Electricity plc Address: Mucklow Hill, Halesowen, West Midlands B62 8BP Facsimile no: 0121 423 2777 Attention: R. Murray By: National Power plc Address: Windmill Hill Business Park, Whitehill Way, Swindon, Wiltshire SN5 6PB Facsimile no: 01793 892061 Attention: M. Bowden By: Norsk Hydro (UK) Limited Address: Bridge House, 69 London Road, Twickenham, Middlesex TW1 3RH Facsimile no: 0181 892 1686 Attention: M. Turner By: Northern Electric plc Address: Carliol House, Market Street, Newcastle upon Tyne NE1 6NE Facsimile no: 0191 210 2295 Attention: M. Chandler By: NORWEB plc Address: Talbot Road, Manchester M16 0HQ Facsimile no: 0161 875 7089 Attention: K. Lee By: Nuclear Electric Limited Address: Barnett Way, Barnwood, Gloucester GL4 3RS Facsimile no: 01452 653375 Attention: Company Secretary By: PowerGen plc Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG Facsimile no: 01203 425366 Attention: S. Skillings By: Scottish Hydro-Electric plc Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ Facsimile no: 01738 456190 Attention: R. Hackland By: Scottish Power plc Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN Facsimile no: 0141 636 4706 Attention: B.J.H. Paget By: SEEBOARD plc Address: PO Box 639, 329 Portland Road, Hove, East Sussex BN3 3SY Facsimile no: 01273 428404 Attention: R.A. Page By: Shell Power Limited Address: Delta House, Wavell Road, Wythenshawe, Manchester M22 5SB Facsimile no: 0161 499 8387 Attention: John Tucker By: Slough Energy Supplies Limited Address: 342 Edinburgh Avenue, Slough SL1 4TU Facsimile no: 01753 790038 Attention: P.N. Jackson By: Southern Electric plc Address: Westacott Way, Littlewick Green, Maidenhead, Berkshire SL6 3QB Facsimile no: 01628 584469 Attention: J. Sykes By: South Wales Electricity plc Address: Newport Road, St. Mellons, Cardiff CF3 9XW Facsimile no: 01222 790971 Attention: M. Mackey By: South Western Electricity plc Address: 800 Park Avenue, Aztec West, Almondsbury, Bristol BS12 4SE Facsimile no: 01454 616675 Attention: D.G. Harris By: The Renewable Energy Company Limited Address: Stroud House, Russell Street, Stroud, Glos GL5 3AN Facsimile no: 01453 756222 Attention: M. Alder By: UK Electric Power Limited Address: Overdale, Synchant Pass Road, Conwy, Gwynedd LL32 8RE Facsimile no: 01492 592077 Attention: N.Bryson By: UML Limited Address: PO Box 115, Port Sunlight, Wirral, Merseyside L62 4ZL Facsimile no: 0151 643 6299 Attention: A.R. Stubbs By: Yorkshire Electricity Group plc Address: Wetherby Road, Scarcroft, Leeds LS14 3HS Facsimile no: 01132 895926 Attention: Company Secretary By: THE OTHER PARTIES Accord Energy Ltd Address: Charter Court, 50 Windsor Road, Slough, Berkshire SL1 2HA Facsimile no: 01753 758010 Attention: E.F. Pethybridge By: AES Barry Limited Address: Sully Moors Road, Sully, S. Glamorgan CF64 5YU Facsimile no: 01446 722587 Attention: P. Norgeot By: Alcan Aluminium UK Limited Address: Lynemouth Power Station, Ashington, Northumberland NE63 9YH Facsimile no: 01670 393970 Attention: W.E. Jones By: BG plc Address: 100 Thames Valley Park, Reading, Berkshire, RG6 1PT Facsimile no: 0118 929 3651 Attention: C. Alexander By: Cabah Energy Limited Address: c/o ABB ForStar Developments Limited, Tilford House, Farnham Business Park, Weydon Lane, Farnham, Surrey GU9 8QT Facsimile no: 01252 732110 Attention: Paul Abbott By: Electricity Direct (UK) Limited Address: 1 Livingstone Road, Hobe, Sussex BN3 3RS Facsimile no: 01273 701050 Attention: G. Mackay By: Enfield Energy Centre Limited Address: Cam Lea Offices, Mollison Avenue, Enfield EN3 7NN Facsimile no: 01642 678123 Attention: K. Clarke By: Fibrowatt Thetford Limited Address: Astley House, 33 Notting Hill Gate, London W11 3JQ Facsimile no: 0171 221 8671 Attention: Rupert Fraser By: Hydro Electric Energy Limited Address: c/o Scottish Hydro Electric PLC, Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ Facsimile no: 01738 455281 Attention: Company Secretary By: Keadby Power Limited Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolnshire DN17 3AZ Facsimile no: 01724 784270 Attention: Dr. C.K. Stanley By: Kingsnorth Power Limited Address: c/o Budd Martin & Co, Industria House, Red Houses, St. Brelade, Jersey JE3 8LD Facsimile no: 01534 44777 Attention: R. Martin By: Meter Operators Limited Address: Ryden Lane, Charton, Nr. Pershore, Worscester WR10 3LQ Facsimile no: 01386 861113 Attention: R. Edmed By: Pentex (East Midlands) Limited Address: Union Buildings, 15 Union Street, Aberdeen AB1 2BU Facsimile no: 01244 211444 Attention: H. Jamieson By: Seabank Power Limited Address: Severn Road, Hallen, Bristol BS10 7SP Facsimile no: 0117 982 0351 Attention: J.P. Baldry, General Manager By: Spalding Energy Company Limited Address: 20 St. James's Street, London SW1A 1ES Facsimile no: 0171 839 0905 Attention: G. Grant THE METER OPERATOR PARTIES WHO ARE NOT PARTIES Control Devices and Systems Limited Address: P.O. Box 56, 101 Mill Lane, Newbury, Berkshire RG14 5RE Telex no: 849811 Facsimile no: 01635 528224 Attention: J.W. Dowse By: Datum Solutions Limited Address: Littlebrook Business Centre, Littlebrook Manor Way, Dartford, Kent DA1 5PS Facsimile no: 01322 295178 Attention: G. Babbs By: DrakMarn O&M Ltd Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG Facsimile no: 01203 425431 Contact: Company Secretary By: E. Squared Limited Address: 52-54 Southwark Street, London SE1 1UN Facsimile no: 0171 378 0012 Attention: Graham Nicholls By: Northern Energy Services Limited Address: 208 Askern Road, Bentley, Doncaster DN5 OEU Facsimile no: 01302 820790 Attention: W. Tuczemzkyi By: PowerMet Limited Address: 13 Wimpole Street, London W1M 7AB Facsimile no: 0171 493 7151 Attention: M. Rugman By: Schlumberger Industries Limited Address: Langer Road, Felixstowe, Suffolk IP11 8ER Facsimile no: 01394 276030 Attention: M. Jones, Marketing Manager By: Stanor National Contracts Address: 71A Mafeking Avenue, Brentford, Middlesex TW8 0NL Facsimile no: 0181 560 4651 Attention: A. Yardley By: The Challenge Group Address: 22 Tally Road, Oxted, Surrey RH8 0TG Facsimile no: 01883 730543 Attention: J. Glover By: EXTERNAL POOL MEMBERS British Nuclear Fuels plc Address: F13, Sellafield, Seascale, Cumbria CA20 1PG Facsimile no: 019467 27132 Attention: P.L. O'Neil, Business Manager, Electricity Generation By: Electricite de France, Service National Address: EDF Production Transport, Departement Relations avec l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384 Paris, Cedex 08 Telex no: 280098 FRANCE Facsimile no: (00 331) 40 42 63 41 Attention: P. Gaillet (copy to: Associated Electricity Supplies Limited Address: 53 St. George's Road, Wimbledon, London SW19 4EA Facsimile no: 0181 944 0750 Attention: P. Clubb) By: Scottish Hydro-Electric plc Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ Facsimile no: 01738 456190 Attention: R. Hackland By: Scottish Power plc Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN Facsimile no: 0141 636 4706 Attention: B.J.H. Paget By: SETTLEMENT SYSTEM ADMINISTRATOR Energy Settlements and Information Services Limited Address: Fairham House, Green Lane, Clifton, Nottingham NG11 9LN Facsimile no: 0115 945 6728 Attention: G.K. James, General Manager By: POOL FUNDS ADMINISTRATOR Energy Pool Funds Administration Limited Address: 3rd Floor, 185 Park Street, London SE1 9DY Facsimile no: 01203 423558 Attention: A. Marks, Director (National Grid House, 2nd Floor, Kirby Corner Road, Coventry CV4 8JY) By: GRID OPERATOR EXECUTED AS A DEED by ) The National Grid ) Company plc by the ) affixing of its ) common seal in the ) presence of:- ) MEMBER OF BOARD SEALING COMMITTEE Authorised Signatory Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY Telex no: - Facsimile no: 01203 423577 Attention: Company Secretary (copy to:J. Irgin, c/o M.J. Metcalfe, The National Grid Company plc, National Grid House, Kirby Corner Road, Coventry CV4 8JY ANCILLARY SERVICES PROVIDER EXECUTED AS A DEED by ) The National Grid ) Company plc by the ) affixing of its ) common seal in the ) presence of:- ) MEMBER OF BOARD SEALING COMMITTEE Authorised Signatory Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY Facsimile no: 01203 423577 Attention: Company Secretary (copy to Mr. Carlton) EXTERNALLY INTERCONNECTED PARTIES Scottish Power plc Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN Telex No: - Facsimile No: 0141 636 4706 Attention: B.J.H. Paget By: Electricite de France, Service National Address: EDF Department Transport, Departement Relations avec l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384 Paris, Cedex 08 Telex no: 280098 FRANCE Facsimile no: (00 331) 40 42 63 41 Attention: P. Gaillet (copy to: Associated Electricity Supplies Limited Address: 53 St. George's Road, Wimbledon, London SW19 4EA Telex no: - Facsimile no: 0181 944 0750 Attention: P. Clubb) By: DATED , 1997 THE GENERATORS named herein - and - THE SUPPLIERS named herein - and - ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED as Settlement System Administrator - and - ENERGY POOL FUNDS ADMINISTRATION LIMITED as Pool Funds Administrator - and - THE NATIONAL GRID COMPANY plc as Grid Operator and Ancillary Services Provider - and - SCOTTISH POWER plc and ELECTRICITE DE FRANCE, SERVICE NATIONAL as Externally Interconnected Parties - and - THE OTHER PARTIES named herein - and - THE METER OPERATOR PARTIES named herein --------------------------------------- TWENTIETH SUPPLEMENTAL DEED relating to the Pooling and Settlement Agreement for the Electricity Industry in England and Wales --------------------------------------- 2 CONTENTS Page 1. INTERPRETATION 2 2. AMENDMENTS 2 3. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT 2 4. MISCELLANEOUS 2 5. ENTIRE AGREEMENT 2 6. GOVERNING LAW 3 SCHEDULE 1: Part I: The Generators 4 Part II: The Suppliers 8 SCHEDULE 2: The Other Parties 12 SCHEDULE 3: The Meter Operator Parties who are not Parties 14 SCHEDULE 4: Amendments to the Pooling and Settlement Agreement 15 SIGNATORIES 31 THIS SUPPLEMENTAL DEED is made on , 1998 BETWEEN:- (1) THE PERSONS whose names, registered numbers and registered or principal offices are set out in Part I of Schedule 1; (2) THE PERSONS whose names, registered numbers and registered or principal offices are set out in Part II of Schedule 1; (3) ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED (registered number 2444282) whose registered office is situate at Fairham House, Green Lane, Clifton, Nottingham NG11 9LN as Settlement System Administrator; (4) ENERGY POOL FUNDS ADMINISTRATION LIMITED (registered number 2444187) whose registered office is situate at 185 Park Street, London SE1 9DY as Pool Funds Administrator; (5) THE NATIONAL GRID COMPANY plc (registered number 2366977) whose registered office is situate at National Grid House, Kirby Corner Road, Coventry CV4 8JY as Grid Operator and Ancillary Services Provider; (6) SCOTTISH POWER plc (registered number 117120) whose principal office is situate at 1 Atlantic Quay, Glasgow G2 8SP, Scotland as an Externally Interconnected Party; (7) ELECTRICITE DE FRANCE, SERVICE NATIONAL whose principal office is situate at Departement Relations avec l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384 Paris, Cedex 08, France as an Externally Interconnected Party; (8) THE OTHER PARTIES whose names, registered numbers and registered or principal offices are set out in Schedule 2; and (9) THE METER OPERATOR PARTIES whose names, registered numbers and registered or principal offices are set out in Schedule 3. WHEREAS:- (A) by a Pooling and Settlement Agreement for the Electricity Industry in England and Wales dated 30th March, 1990 (the "Pooling and Settlement Agreement") the parties thereto agreed to give effect to and be bound by certain rules and procedures for the operation of an electricity trading pool and the operation of a settlement system; (B) the Pooling and Settlement Agreement has been amended and/or restated by twenty supplemental agreements, and hereinafter references to the Pooling and Settlement Agreement are to that agreement as most recently amended and restated; and (C) the parties to this Deed (being (i) all the Parties at the date hereof and (ii) all the Meter Operator Parties at the date hereof) have agreed to amend the Pooling and Settlement Agreement on the terms and subject to the conditions set out below. NOW THIS DEED WITNESSES as follows:- INTERPRETATION Except where defined herein or where the context otherwise requires, words and expressions defined in the Pooling and Settlement Agreement shall have the same respective meanings when used in this Deed. 29.2 The table of contents and the headings to each of the Clauses are inserted for convenience only and shall be ignored in construing this Deed. AMENDMENTS The parties hereby agree that with effect on and from midnight on , 1998 the Pooling and Settlement Agreement shall be amended as set out in Schedule 4. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT The Pooling and Settlement Agreement shall remain in full force and effect and this Deed and the Pooling and Settlement Agreement shall be treated as one document so that, upon the Pooling and Settlement Agreement being amended pursuant to Clause 2, all references to the Pooling and Settlement Agreement shall be treated as references to that agreement as amended by this Deed. MISCELLANEOUS The provisions of Clauses 75 to 79 (inclusive) and 81 to 84 (inclusive) of the Pooling and Settlement Agreement shall be deemed to be incorporated herein mutatis mutandis. ENTIRE AGREEMENT Each party acknowledges that in entering into this Deed on the terms set out herein it is not relying upon any representation, warranty, promise or assurance made or given by any other party or any other person, whether or not in writing, at any time prior to the execution of this Deed which is not expressly set out herein. 33.2 None of the parties shall have any right of action against any other party arising out of or in connection with any representation, warranty, promise or assurance referred to in sub-clause 5.1 (except in the case of fraud). GOVERNING LAW This Deed shall be governed by, and construed in all respects in accordance with, English law. IN WITNESS whereof this document has been duly executed and delivered as a deed the day and year first above written SCHEDULE 1: Part I: The Generators Name Registered Registered or Number Principal Office AES Barry Limited 3135522 AES Barry Power Station Sully Moors Road Sully Vale of Glamorgan CF64 5YU Anglian Power Generators Limited 2488955 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ Barking Power Limited 2354681 Devonshire House Mayfair House London W1X 5FH British Nuclear Fuels plc 1002607 Risley Warrington Cheshire WA3 6AS Celtpower Limited 2656561 13 Charles II Street London SW1Y 4QT Citigen (London) Limited 2427823 100 Thames Valley Park Drive Reading Berkshire RG6 1PT Corby Power Limited 2329494 Mitchell Road Phoenix Parkway Corby Northamptonshire NN17 5QT Derwent Cogeneration Limited 2703635 Landsdowne House Berkeley Square London W1X 5DH Eastern Merchant Generation Limited 3116225 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ Electricite de France, Service - Department Relations avec National I'Etranger Echanges d'Energie 2 Rue Louis Murat 5eme etage 75384 Paris Cedex 08 France Elm Energy & Recycling (UK) Limited 2516685 Elm Energy House Ettingshall Road Wolverhampton West Midlands WV2 2LA Fellside Heat and Power Limited 2614535 Fellside Lodge Seascale Cumbria CA20 1PG Fibrogen Limited 2547498 Astley House 33 Notting Hill Gate London W11 3JQ Fibropower Limited 2234141 Astley House 33 Notting Hill Gate London W11 3JQ Fibrothetford Limited 3057688 Astley House 33 Notting Hill Gate London W11 3JQ First Hydro Company 2444277 Bala House Lakeside Business Village St. David's Park Deeside Flintshire CH5 3XJ Humber Power Limited 2571241 18 Savile Row London W1X 1AE Indian Queens Power Company Limited 2928100 1 Northumberland Avenue London WC2N 5BW Independent Energy UK Limited 3033406 2nd Floor, Park House Park Street Maidenhead Berkshire SL6 1SL Keadby Generation Limited 2729513 P O Box 89, Keadby Scunthorpe, North Lincolnshire DN17 3AZ Lakeland Power Limited 2355290 Roosecote Power Station Roosecote Marsh Barrow-in-Furness Cumbria LA13 OPQ Magnox Electric plc 2264251 Berkeley Centre Berkeley Gloucestershire GL13 9PB Medway Power Limited 2537903 Boston House The Little Green Richmond TW9 1QE Midlands Power (UK) Limited 2251099 Mucklow Hill Halesowen West Midlands B62 8BP National Power plc 2366963 Windmill Hill Business Park Whitehill Way Swindon Wiltshire SN5 6PB Nuclear Electric Limited 3076445 Barnett Way Barnwood Gloucester GL4 3RS Peterborough Power Limited 2353599 Storeys Bar Road Peterborough PE1 5NT PowerGen plc 2366970 53 New Broad Street London EC2M 1JJ Regional Power Generators Limited 2352390 Wetherby Road Scarcroft, Leeds LS14 3HS Rocksavage Power Company Limited 18868 20 St. James's Street London SW10 4UJ Scottish Hydro-Electric plc 117119 10 Dunkeld Road Perth PH1 5WA Scottish Power plc 117120 1 Atlantic Quay Glasgow G2 8SP Seabank Power Limited 2591188 Severn Road Hallen Bristol BS10 7SP Slough Energy Supplies Limited 2474514 234 Bath Road Slough SL1 4EE Teesside Power Limited 2464040 4 Millbank London SW1P 3ET Winterton Power Limited 3001798 800 Park Avenue Aztec West Almondsbury Bristol BS12 4SE Part II: The Suppliers Name Registered Registered or Number Principal Office British Gas Trading Ltd 3078711 Charter Court 50 Windsor Road Slough Berkshire SL1 2HA British Nuclear Fuels plc 1002607 Risley Warrington Cheshire WA3 6AS Candecca Resources Limited 953066 Welton Gathering Centre Barfield Lane Off Wragby Road Sudbrooke Lincoln LN2 2QU Citigen (London) Limited 2427823 100 Thames Valley Park Drive Reading Berkshire RG6 1PT Crosfield Limited 48745 Bank Quay PO Box 26 Warrington Cheshire WA5 1AB Eastern Electricity plc 2366906 Wherstead Park PO Box 40 Wherstead Ipswich Suffolk IP9 2AQ East Midlands Electricity plc 2366923 PO Box 444 Woodyard Lane Wollaton Nottingham NG8 1EZ Electricite de France, Service - Department Relations avec National l'Etranger Echanges d'Energie 2 Rue Louis Murat 5eme etage 75384 Paris Cedex 08 Electricity Direct (UK) Limited 3174056 1 Livingstone Road Hove East Sussex BN3 3WP Energy Supply Contracts Limited 172268 The Havens Ransomes Europark Ipswich Suffolk IP3 9SJ Enron Gas and Petrochemicals Trading 3003823 4 Millbank Limited London SW1P 3ET Impkemix Energy Limited 2076043 The Heath Runcorn Cheshire WA7 4QF Independent Energy UK Limited 3033406 2nd Floor Park House Park Street Maidenhead Berkshire SL6 1SL London Electricity plc 2366852 Templar House 81-87 High Holborn London WC1V 6NU Magnox Electric plc 2264251 Berkeley Centre Berkeley Gloucestershire GL13 9PB Manweb plc 2366937 Manweb House Chester Business Park Chester CH4 9RF Midlands Electricity plc 2366928 Mucklow Hill Halesowen West Midlands B62 8BP National Power plc 2366963 Windmill Hill Business Park Whitehill Way Swindon Wiltshire SN5 6PB Norsk Hydro (UK) Limited 841421 Bridge House 69 London Road Twickenham Middlesex TW1 3RH Northern Electric plc 2366942 Carliol House Market Street Newcastle upon Tyne NE1 6NE NORWEB plc 2366949 PO Box 14 410 Birchwood Boulevard Birchwood Warrington WA3 7GA Nuclear Electric Limited 3076445 Barnett Way Barnwood Gloucester GL4 3RS PowerGen plc 2366970 53 New Broad Street London EC2M 1JJ Scottish Hydro-Electric plc 117119 10 Dunkeld Road Perth PH1 5WA Scottish Power plc 117120 1 Atlantic Quay Glasgow G2 8SP SEEBOARD plc 2366867 Forest Gate Brighton Road Crawley West Sussex RH11 9BH Shell Power Limited 2559630 Rowlands Way Withenshawe Manchester M22 5SB Slough Energy Supplies Limited 2474514 234 Bath Road Slough SL1 4EE Southern Electric plc 2366879 Westacott Way Littlewick Green Maidenhead Berkshire SL6 3QB South Wales Electricity plc 2366985 Newport Road St. Mellons Cardiff CF3 9XW South Western Electricity plc 2366894 800 Park Avenue Aztec West Almondsbury Bristol BS12 4SE The Renewable Energy Company Limited 3043412 Stroud House Russell Street Stroud Gloucestershire GL5 3AN UK Electric Power Limited 2844010 21 St. Thomas Street Bristol BS1 6US UML Limited 661900 PO Box 115 Port Sunlight Wirral Merseyside L62 4ZL Yorkshire Electricity Group plc 2366995 Wetherby Road Scarcroft Leeds LS14 3HS SCHEDULE 2: The Other Parties Name Registered Registered or Number Principal Office Accord Energy Limited 2877398 Rivermill House 152 Grosvenor Road London SW1V 3JL AES Partington Limited 3210149 Burleigh House 17-19 Worple Way Richmond Surrey TW10 6AG Alcan Aluminium UK Limited 750143 Chalfont Park Gerrards Cross Buckinghamshire SL9 0QB BP Chemicals Limited 194971 Baglan Bay Works Port Talbot West Glamorgan SA12 7BP BG plc 2006000 100 Thames Valley Park Drive Reading Berkshire RG6 1PT Cabah Energy Limited 2759706 190 Strand London WC2R 1JN Cottam Development Centre Limited 3273552 c/o PowerGen plc Westwood Way Westwood Business Park Coventry CV4 8LG Enfield Energy Centre Limited 2796628 Concorde House Concorde Way Stockton on Tees Cleveland TS18 3RB Hydro Electric Energy Limited 2487475 Royex House Aldermanbury Square London EC2V 7LD Keadby Power Limited 2548042 PO Box 89 Keadby Scunthorpe North Lincolnshire DN17 3AZ Kingsnorth Power Limited 2656343 Chancery House 53-64 Chancery Lane London WC2A 1QU Meter Operators Limited 2841018 Lynton House 7-12 Tavistock Square London WC1H 9BQ Pentex (East Midlands) Limited 2275006 Union Buildings 15 Union Street Aberdeen AB1 2BU Saltend Cogeneration Company Limited 3274929 Britannic House 1 Finsbury Circus London EC2M 7BA Spalding Energy Company Limited 19668 20 St. James's Street London SW1A 1ES SCHEDULE 3: The Meter Operator Parties who are not Parties Name Registered Registered or Number Principal Office Control Devices and Systems Limited 1242585 PO Box 56 101 Mill Lane Newbury Berkshire RG14 5RE Datum Solutions Limited 2815238 185 Park Street London SE1 9DY DrakMarn O&M Ltd 3124701 53 New Broad Street London EC2M 1JJ E. Squared Limited 2674129 Almac House Church Lane Bisley Surrey GU24 9DR Northern Energy Services Limited 2868141 5 Derwent Place Spotborough Doncaster DN5 7PN PowerMet Limited 2877912 3 Park Place London SW1A 1LP Schlumberger Industries Limited 534821 1 Kingsway London WC2B 6XH Stanor National Contracts Limited 2769170 7-12 Tavistock Square London WC1H 9BQ The Challenge Group - 22 Tally Road Oxted Surrey RH8 0TG 18 SCHEDULE 4: Amendments to the Pooling and Settlement Agreement The Pooling and Settlement Agreement shall be amended: (i) by: (a) the deletion of "and" in Clause 6.2.1(b); (b) the addition of "and" after the semi-colon in Clause 6.2.1 (c); and (c) the insertion of the following new Clause 6.2.1(d): "(d) sub-section 5.7 of Schedule 25;"; and (ii) by the deletion of existing Schedule 25 and by the insertion in its place of the following new Schedule 25: "SCHEDULE 25 Accreditation PART 1 : INTERPRETATION Definitions: In this Schedule, unless the context otherwise requires: "1998 Programme" has the meaning given to that term in Schedule 22; "Accreditation" means, subject to sub-section 5.7, written confirmation by the Accreditation Authority that an Applicant has, in the opinion of the Accreditation Authority, satisfied the relevant Accreditation Requirements, and "Accredited" shall be construed accordingly; "Accreditation Administrator" means the person (if any) for the time being and from time to time appointed pursuant to Part 3 as the Accreditation Administrator for the purposes of this Schedule; "Accreditation Authority" means the person for the time being and from time to time appointed pursuant to Part 2 as the Accreditation Authority for the purposes of this Schedule; "Accreditation Process" means the process set out in this Schedule and Agreed Procedure 531 whereby an Applicant is assessed to determine whether it satisfies the Accreditation Requirements; "Accreditation Requirements" means, in relation to an Applicant, the requirements which that Applicant is required to satisfy in order to perform the specific function or functions for which it is applying to be Accredited (being one or more of the functions associated with the categories referred to in paragraphs (a) to (k) (inclusive) of sub-section 2.3), as determined for the time being and from time to time by Pool Members in general meeting; "Agency System" means, in relation to an Applicant, the particular systems and procedures of that Applicant (or for which that Applicant is responsible) relevant to the specific function for which it is applying to be Accredited; "Applicant" means a person who falls within one or more of the categories referred to in paragraphs (a) to (k) (inclusive) of sub-section 2.3 and who, in accordance with this Schedule, applies for one or more of its Agency Systems to be Certified and/or for itself to be Accredited and, where the context so admits, shall include a person applying for re-Certification of any of its Agency Systems in accordance with this Schedule; "Certification" means written confirmation by the Accreditation Authority that a particular Agency System of an Applicant has, in the opinion of the Accreditation Authority, satisfied the Certification Requirements and, where the context so admits, shall include re-Certification of Agency Systems, and "Certify" and "Certified" shall be construed accordingly; "Certification Agent" means the person for the time being and from time to time appointed pursuant to Part 4 as the Certification Agent for the purposes of this Schedule; "Certification Documentation" has the meaning given to that term in paragraph 4.3.1; "Certification Process" means the process set out in this Schedule and Agreed Procedure 531 whereby a particular Agency System of an Applicant is assessed to determine whether it satisfies the Certification Requirements; "Certification Requirements" means, in relation to any of the Agency Systems of an Applicant, the requirements which such Agency System is required to satisfy in order to perform the specific function or functions for which the Applicant is applying to have such Agency System Certified (being one or more of the functions associated with the categories referred to in paragraphs (a) to (k) (inclusive) of sub-section 2.3), as determined for the time being and from time to time by Pool Members in general meeting; "Dissatisfied Applicant" has the meaning given to that term in paragraph 5.7.1; "Interested Person" has the meaning given to that term in section 7; "Menu of Certification Fees" means the scale of fees to be charged to Applicants in connection with the Certification Process, as set out in Agreed Procedure 531; and "Pool" has the meaning given to that term in Schedule 22. Interpretation: In this Schedule, except where the context otherwise requires: 1.2.1 references to any Agency System of an Applicant include any Agency System for which that Applicant is responsible; and 1.2.2 references to a particular Part, Section, sub-section or paragraph or to any Annex shall be a reference to that Part, Section, sub-section or paragraph of, or Annex to, this Schedule. PART 2 : THE ACCREDITATION AUTHORITY Appointment, removal and indemnification of Accreditation Authority: 2.1.1 The Executive Committee shall act as, and shall perform the functions of, the Accreditation Authority pursuant to Clause 24.2.31 (and Pool Members shall procure that the Executive Committee so acts and performs) until such time as Pool Members in general meeting otherwise resolve. 2.1.2 Pool Members in general meeting shall have the right to appoint and remove the Accreditation Authority from time to time and (subject to sub-section 2.4) to agree, amend and substitute the terms of engagement of the Accreditation Authority. 2.1.3 Unless otherwise determined by Pool Members in general meeting, the costs, fees, expenses, liabilities and losses of, and all other amounts incurred or paid by, the Accreditation Authority shall be dealt with in accordance with the PFA Accounting Procedure. 2.1.4 In addition and without prejudice to paragraph 2.1.3, all Pool Members shall jointly and severally indemnify and keep indemnified: (a) the Executive Committee and each of the Committee Members from and against any and all costs (including legal costs), charges, expenses, damages or liabilities incurred or suffered by it or him in acting as, and in performing the functions of, the Accreditation Authority or (as the case may be) a member of the Accreditation Authority; and (b) any sub-committee or sub-group of the Executive Committee which provides advice to the Accreditation Authority or the Accreditation Administrator or undertakes work at the request of the Accreditation Authority in connection with the Accreditation Process and/or the Certification Process and each member thereof from and against any and all costs (including legal costs), charges, expenses, damages or liabilities incurred or suffered by it or him in providing such advice or (as the case may be) undertaking such work, and, as between the Pool Members, according to their respective Contributory Shares at the time of receipt of the request for indemnification. The Pool Members shall, upon request, provide the members of the Accreditation Authority and the members of any such sub-committee or sub-group with a written deed of indemnity to that effect. Accreditation Authority's functions: The functions of the Accreditation Authority shall be confined to the operational requirements of Pool Members collectively in their capacity as such and (subject as aforesaid) shall be as set out in this Schedule and Agreed Procedure 531 and shall include such powers and authorities as may be necessary or incidental to the performance of such functions. 35.3 Categories of Applicant: On the terms and subject to the conditions of this Schedule, the Accreditation Authority shall be responsible for the Certification of each of the Agency Systems of, and the Accreditation of, Applicants falling within the following categories: (a) PES registration service providers; (b) non half hourly data collectors; (c) non half hourly data aggregators; (d) non half hourly meter operators; (e) half hourly data collectors; (f) half hourly data aggregators; (g) half hourly meter operators; (h) teleswitch operators; (i) meter administrators; (j) data transfer service providers; and (k) such other categories of person, if any, as the Executive Committee, with the prior written consent of the Director, may determine. ExecutiveCommittee as Accreditation Authority: The provisions of Clauses 15.13, 16.9, 17.4, 18, 19, 20.4 and 22 to 24 (inclusive) shall apply in relation to the Executive Committee, the Committee Members, the Pool Chairman, the Chief Executive, the personnel referred to in Clause 17.2.1 and the Secretary when the Executive Committee is acting as, and performing the functions of, the Accreditation Authority provided that: 2.4.1 notice of meetings of the Accreditation Authority need be given only to the Committee Members, the Pool Chairman, the Chief Executive (if any), the Pool Auditor, the Certification Agent and the Accreditation Administrator and, insofar as concerns the Certification of the Agency System of an Applicant or the Accreditation of an Applicant, that Applicant. Clause 18.1.2 shall be modified accordingly; 2.4.2 if any Committee Member or the Certification Agent or the Accreditation Administrator wishes to advise additional matters which he or it wishes to be considered at a meeting of the Accreditation Authority he or it shall give notice to all other persons entitled to attend that meeting no later than three working days before the date of the meeting (or such lesser period as the Accreditation Authority may from time to time determine). Clause 18.1.4 shall be modified accordingly; 2.4.3 minutes of meetings of the Accreditation Authority shall be confidential and copies shall be required to be provided only to those persons who were entitled to attend the relevant meeting and, insofar as concerns the Certification of the Agency System of an Applicant or the Accreditation of an Applicant, that Applicant. Clause 18.1.6 shall be modified accordingly; 2.4.4 each of the Pool Chairman, the Chief Executive, the Pool Auditor, the Certification Agent and the Accreditation Administrator (or its or his respective duly appointed representative) shall have the right to attend and speak (but not to vote) at meetings of the Accreditation Authority. The Chief Executive (or his duly appointed representative) shall be obliged so to attend. With the exception of the final sentence of Clause 19.4, that Clause shall not apply; 2.4.5 save for Clause 20.4, Clause 20 shall not apply; 2.4.6 any question or matter arising at a meeting of the Accreditation Authority shall be decided by a 75 per cent. majority of the votes cast at the meeting by Committee Members entitled to vote in accordance with Section 2.4.10. On any such question or matter each Committee Member shall be entitled to one vote. Clause 22.2 shall not apply; 2.4.7 a decision duly made at a meeting of the Accreditation Authority shall (unless otherwise determined by the Accreditation Authority or otherwise provided by the terms of the decision) have immediate effect. Clause 22.4 shall not apply; 2.4.8 Clauses 22.3 and 22.5 to 22.11 (inclusive) shall not apply: in particular, but without prejudice to the generality of the foregoing, no decision of the Accreditation Authority shall be referred to Pool Members in general meeting; 2.4.9 Clauses 23.1, 23.2, 23.3.4, 23.6 and 23.7 shall not apply; 2.4.10 a Committee Member in his capacity as a member of the Accreditation Authority shall be required to act independently of the interests of his employer and of those Pool Members whose interests he represents when acting as a member of the Executive Committee. In particular, but without prejudice to the generality of the foregoing: (a) a Committee Member shall not: (i) participate as a member of the Accreditation Authority in the consideration of whether his employer's Agency Systems should be Certified or whether his employer should be Accredited; (ii) be counted in ascertaining whether a quorum is present at a meeting of the Accreditation Authority convened to consider whether his employer's Agency Systems should be Certified or whether his employer should be Accredited; or (iii) be entitled to receive any working papers, opinions, reports or other documentation which have been prepared for the Accreditation Authority in connection with the Certification Process or Accreditation Process of his employer; (b) a Committee Member shall not disclose to his employer confidential information which he has received in his capacity as a member of the Accreditation Authority unless: (i) required to do so by any Competent Authority or by law; (ii) in order for his employer to comply with the conditions of any Licence with which his employer is required to comply; (iii)required to do so by any stock exchange or regulatory authority or the Panel on Take-overs and Mergers; or (iv) pursuant to the arbitration rules of the Electricity Arbitration Association or pursuant to any judicial or other arbitral process or tribunal having jurisdiction in relation to him or his employer, in any of which events the Committee Member shall first be required to give written notice of the required disclosure to the Accreditation Authority; and 2.4.11 references to a Committee Member shall for the purposes of this Schedule include a reference to a Committee Member in his capacity as a member of the Accreditation Authority. 2.5 Delegation: 2.5.1 The Accreditation Authority shall have the right at any time and from time to time to delegate or procure the delegation of all or any part of the day-to-day administration of the Accreditation Process to the Accreditation Administrator. For the avoidance of doubt, this shall not include the taking of any decision as to whether the Agency Systems of an Applicant (or any of them) should be Certified or the Applicant should be Accredited. 2.5.2 The Accreditation Authority shall be responsible for every act, breach, omission, neglect and failure of the Accreditation Administrator. 2.6 Responsibilities owed to Pool Members alone: In acting as the Accreditation Authority, the Executive Committee shall have due regard to the collective interests of Pool Members. The responsibilities of the Accreditation Authority under this Schedule are owed exclusively to Pool Members collectively, and to no other person. In particular, but without prejudice to the generality of the foregoing, Suppliers shall be required to satisfy themselves as to the financial condition and prospects and the management and operational ability of any Accredited person and shall not rely on the fact of Accreditation (or the lack of Accreditation) as, or infer therefrom, any representation, warranty or other statement or indication on the part of the Accreditation Authority, the Accreditation Administrator or the Certification Agent that the Accredited person has any or any particular financial condition or prospects or level of management or operational ability. PART 3 : THE ACCREDITATION ADMINISTRATOR Appointment and removal of Accreditation Administrator: The Accreditation Administrator shall be appointed and removed from time to time by the Accreditation Authority acting on behalf of all Pool Members. The Accreditation Authority shall have the right on behalf of all Pool Members to agree, amend and substitute the terms of engagement of the Accreditation Administrator. 36.2 Pool Members' authorisation: Pool Members hereby irrevocably and unconditionally authorise the Accreditation Authority to appoint and remove, and to agree, amend and substitute the terms of engagement of, the Accreditation Administrator on their behalf and undertake not to withdraw or change that authority. 36.3 Functions of Accreditation Administrator: 3.3.1 The Accreditation Administrator shall perform such functions associated with the day-to-day administration of the Accreditation Process as are delegated to it from time to time by the Accreditation Authority. A copy of any such delegated functions will be made available by the Accreditation Authority to Pool Members on request. 3.3.2 The Accreditation Administrator shall keep confidential information that it receives in its capacity as Accreditation Administrator on terms agreed from time to time by it with the Accreditation Authority. PART 4 : THE CERTIFICATION AGENT Appointment and removal of Certification Agent: The Accreditation Authority shall, from time to time, appoint and remove a Certification Agent on behalf of all Pool Members. The first Certification Agent shall be Coopers & Lybrand. Subject to Clause 48.11, the Accreditation Authority shall have the right on behalf of all Pool Members to agree, amend and substitute the terms of engagement of the Certification Agent. 37.2 Pool Members' authorisation: Pool Members hereby irrevocably and unconditionally authorise the Accreditation Authority to appoint and remove, and to agree, amend and substitute the terms of engagement of, the Certification Agent on their behalf and undertake not to withdraw or change that authority. 37.3 Functions of Certification Agent: The functions of the Certification Agent shall be: 4.3.1 to prepare the self-assessment certification returns to be completed by each Applicant and the supporting Pool documentation (including guidance notes) to be used by the Certification Agent in the Certification Process (together the "Certification Documentation"), to submit the Certification Documentation to the Accreditation Authority for approval and to revise (and resubmit for approval) the Certification Documentation in accordance with the instructions of the Accreditation Authority from time to time; 4.3.2 to carry out the Certification Process in accordance with applicable English law, the terms set out in this Schedule and Agreed Procedure 531 and the approved Certification Documentation; 4.3.3 to exercise the skill, care and diligence in the preparation and revision of the Certification Documentation (recognising that the Certification Agent is required to give effect to the instructions of the Accreditation Authority under paragraph 4.3.1) and in the performance of the Certification Process reasonably to be expected of a firm of accountants of internationally recognised standing (or to such other standard of skill, care and diligence as may be agreed by the Accreditation Authority with the Certification Agent from time to time); and 4.3.4 in respect of each application for Certification, to deliver an opinion of the Certification Agent addressed to the Accreditation Authority (for itself and on behalf of all Pool Members) as to whether the Applicant's Agency System has met the Certification Requirements. Responsibilities owed to Accreditation Authority: The responsibilities of the Certification Agent under this Schedule are owed exclusively to the Accreditation Authority for itself and Pool Members collectively and to no other person provided that the Pool Auditor shall be entitled to rely on all opinions of the Certification Agent delivered pursuant to paragraph 4.3.4. 37.5 Confidentiality undertaking: Before commencing the Certification Process with respect to the Agency Systems of any Applicant, the Certification Agent shall execute a confidentiality undertaking in favour of such Applicant in such form as may from time to time be agreed by the Accreditation Authority with the Certification Agent. PART 5 : THE CERTIFICATION PROCESS AND ACCREDITATION PROCESS The Certification Process and Accreditation Process: 5.1.1 The Certification Process and the Accreditation Process shall be conducted in accordance with Agreed Procedure 531. 5.1.2 Notwithstanding paragraph 5.1.1, in reaching its decision as to whether the Agency Systems of an Applicant (or any of them) should be certified or an Applicant should be Accredited, the Accreditation Authority shall be required to give effect to any instruction given to it by Pool Members in general meeting (whether of general application to the Certification Process or the Accreditation Process or specific to one or more Agency Systems or Applicants) and to any determination made by Pool Members in general meeting with respect to the Accreditation Requirements or the Certification Requirements. 5.1.3 Agreed Procedure 531 shall not conflict with the provisions of this Schedule and, to the extent of any conflict or inconsistency between the two, the provisions of this Schedule shall prevail. 5.1.4 The Accreditation Authority shall provide copies of the latest version of this Schedule and Agreed Procedure 531 to Applicants. 5.1.5 The Accreditation Authority shall, subject to sub-section 6.2, provide each Applicant with a copy of all opinions of the Certification Agent in relation to the Agency System(s) of that Applicant delivered pursuant to paragraph 4.3.4 at the same time as the Accreditation Authority notifies such Applicant whether its Agency System(s) has (have) been Certified and/or (as the case may be) such Applicant has been Accredited. The Accreditation Authority shall be under no obligation to provide an Applicant with a copy of any such opinion at any time before it gives such notification. 5.1.6 The Accreditation Authority shall make available to the Director all information held by the Accreditation Authority which the Director reasonably requires for the purposes of making any determination pursuant to sub-section 5.7. No Certification: The Accreditation Authority shall not Certify the Agency System of any Applicant unless the Certification Agent has provided an opinion (not being a disclaimer of opinion, howsoever called) in the terms of paragraph 4.3.4 in relation to that Agency System. 38.3 Loss of Certified or Accredited status: The Accreditation Authority shall have the right at any time and from time to time in accordance with Agreed Procedure 531: 5.3.1 to remove the Certification of all or any of the Agency Systems of any person, whereupon such Agency System(s) shall cease to be Certified; and/or 5.3.2 to remove the Accreditation of any person, whereupon such person shall cease to be Accredited. Re-certification: Each person who has been Accredited shall be required to have some or all of its Agency Systems re-Certified in accordance with Agreed Procedure 531. If any such Agency System is not so re-Certified, such person's Accreditation shall automatically lapse. 38.5 Fees and expenses: 5.5.1 The Accreditation Authority shall determine and publish to Applicants and to those persons who have been Accredited a Menu of Certification Fees which shall be charged directly to Applicants for the purposes of Certification, and the Accreditation Authority shall have the right to revise such fees from time to time. 5.5.2 Each Applicant shall pay its own costs and expenses incurred in connection with the Certification Process and the Accreditation Process. Applicants bound by this Schedule: Applicants shall agree to be bound by the Certification Process, the Accreditation Process, the provisions of this Schedule and Agreed Procedure 531 by the execution of a letter agreement in form and content satisfactory to the Accreditation Authority. 38.7 Referral to the Director: 5.7.1 The sole and exclusive remedy of an Applicant who is dissatisfied with the decision of the Accreditation Authority to refuse to Accredit such Applicant (the "Dissatisfied Applicant") shall be to refer the matter to the Director in accordance with this sub-section 5.7 for determination. 5.7.2 To be a valid referral pursuant to paragraph 5.7.1, the Dissatisfied Applicant must: (a) refer the matter for determination to the Director in writing (with a copy to the Accreditation Authority) no later than 14 days after receipt by the Dissatisfied Applicant of the decision of the Accreditation Authority refusing to Accredit it; and (b) set out in its referral to the Director (with reasons in support) the ground or grounds on which the Dissatisfied Applicant is making its application to the Director which shall be one or more of the following (and no other): (i) that the Accreditation Authority has not followed the procedures set out in this Schedule and Agreed Procedure 531 in considering whether the Dissatisfied Applicant should be Accredited; or (ii) that the Accreditation Authority has given undue weight to particular evidence submitted or to the lack of particular evidence in connection with the Dissatisfied Applicant's application for Accreditation; or (iii) that the Accreditation Authority has misinterpreted all or some of the evidence submitted in connection with such application; or (iv) that, notwithstanding any restrictions that Pool Members may place on the Accreditation Authority as to how it is to assess and decide Applications, the Accreditation Authority should not have taken into account the failure by the Dissatisfied Applicant to satisfy one or more specified Accreditation Requirements. 5.7.3 On a valid referral pursuant to paragraph 5.7.1 the Director may either determine the matter himself or, if he thinks fit, refer the matter for determination by an arbitrator appointed by him and, subject to paragraph 5.7.4, the practice and procedure to be followed in connection with any such determination shall be such as the Director may consider appropriate. 5.7.4 In connection with any referral pursuant to paragraph 5.7.1 which the Director determines himself, the Director shall have: (a) the right to engage an independent consultant selected by the Director and to take and rely on the advice of such independent consultant; and (b) the discretion to make a determination that the Dissatisfied Applicant should be Accredited notwithstanding that the ground on which the Dissatisfied Applicant has applied to the Director is either the wrong ground or has not been proven. 5.7.5 The determination of the Director or, as the case may be, the arbitrator pursuant to paragraph 5.7.3 shall be final, conclusive and binding on the Dissatisfied Applicant, the Accreditation Authority and all Pool Members and may include a provision as to the payment in respect of the costs and expenses incurred by the person making the determination. The Dissatisfied Applicant, the Accreditation Authority and all Pool Members shall promptly give effect to any such determination. 5.7.6 For the avoidance of doubt, neither Clause 83 nor Clause 84 shall apply in the case where an Applicant is dissatisfied with the decision of the Accreditation Authority to refuse to Accredit such Applicant. This sub-section 5.7 provides the sole and exclusive remedy of a Dissatisfied Applicant. Parties and Applicants shall not use, or seek to use, those Clauses or any other provisions of this Agreement to thwart or challenge referrals to the Director pursuant to paragraph 5.7.1. Exclusionof other appeals: Save for any reference to the Director in accordance with sub-section 5.7, in respect of any matter concerning the Certification of any particular Agency Systems or the Accreditation of any person all reference or appeal procedures in this Agreement to or involving the Director are expressly excluded. PART 6 : APPLICANT'S RESPONSIBILITIES Applicant's warranty and undertakings: Each Applicant represents, warrants and undertakes to each of the Pool Members (for itself and as trustee and agent for the Accreditation Authority, the Accreditation Administrator and the Certification Agent) that: 6.1.1 all information supplied by or on behalf of the Applicant to the Accreditation Authority, the Accreditation Administrator or the Certification Agent in connection with the Certification Process or the Accreditation Process is true, complete and accurate and not misleading because of any omission or ambiguity or for any other reason, subject to disclosure, if any, acceptable to the Accreditation Authority being made in advance of the provision of the relevant information to the Accreditation Authority, the Accreditation Administrator or (as the case may be) the Certification Agent; 6.1.2 (a) completion of all documentation by or on behalf of the Applicant in connection with the Certification Process or the Accreditation Process is and will remain the sole responsibility of the Applicant; (b) the Applicant will duly complete all such documentation and provide all the information required thereunder within the time periods prescribed by Agreed Procedure 531; and (c) the Applicant has had the opportunity to take its own legal and other professional advice regarding the Certification Process and the Accreditation Process; 6.1.3 it will confirm in writing to the Accreditation Authority (for itself and on behalf of all Pool Members, Accreditation Authority and the Certification Agent) in accordance with Agreed Procedure 531 that each of the other representations, warranties and undertakings in this sub-section 6.1 are true and have been complied with as at the date on which it has been notified that its application(s) for Certification and/or Accreditation will be considered by the Accreditation Authority; and 6.1.4 the Applicant will co-operate fully with the Accreditation Authority, the Accreditation Administrator and the Certification Agent in the Certification Process and the Accreditation Process and, without prejudice to the generality of the foregoing, shall permit each of them reasonable access to the Applicant's business records, working papers and employees for the purposes of each such process upon not less than three working days' advance notice. No reliance by Applicant: The Applicant acknowledges and agrees that: 6.2.1 it shall not, and shall not be entitled to, place any reliance on any working papers, opinion, report or other documentation prepared by or for (or any oral or written interpretation of, or any oral or written advice given in relation to, any such working papers, opinion, report or other documentation by) the Accreditation Authority, the Accreditation Administrator or the Certification Agent in connection with the Certification Process or the Accreditation Process unless such working papers, opinion, report or other documentation is expressly addressed to such Applicant; and 6.2.2 it shall keep confidential on the terms set out in Clause 70 any working papers, opinions, report or other documentation referred to in paragraph 6.2.1 unless such working papers, opinion, report or other documentation is expressly addressed to such Applicant. PART 7 : LIMITATION OF LIABILITY Limitation of liability: Each Applicant, each person who has (or whose Agency Systems have) been Certified or Accredited (or whose Certification or Accreditation has been removed) and each Pool Member (each an "Interested Person") agrees that: 7.1 the total aggregate liability of the Accreditation Authority and the Accreditation Administrator to any Interested Person whether in contract, tort (including negligence or breach of statutory duty) or otherwise arising directly or indirectly for or in connection with the Certification Process or the Accreditation Process (including the contents of any opinion or report prepared by the Accreditation Authority or the Accreditation Administrator) shall in no circumstances exceed (pound)5,000,000; 7.2 neither the Accreditation Authority nor the Accreditation Administrator shall be liable to any Interested Person for any loss of profit, loss of revenue, loss of contract, loss of goodwill or any indirect or consequential loss arising from or in connection with the Certification Process or the Accreditation Process; 7.3 sub-sections 7.1 and 7.2 shall not exclude the liability of the Accreditation Authority or the Accreditation Administrator for fraud; 7.4 the exclusions from and limitations of liability of the Accreditation Authority and the Accreditation Administrator under this section shall not apply to death or personal injury caused by the negligence of the relevant one of the Accreditation Authority or the Accreditation Administrator; 7.5 the exclusions from and limitations of liability of the Accreditation Authority and the Accreditation Administrator under this Section 7 are reasonable because of (amongst other matters) the likelihood that the amount of damages awardable to the Interested Person from the Accreditation Authority or the Accreditation Administrator would otherwise be disproportionate to the charges which it makes in connection with the Certification Process or the Accreditation Process and because of the limited resources and expertise of the Accreditation Authority and the Accreditation Administrator; 7.6 the exclusions from and limitations of liability of the Accreditation Authority and the Accreditation Administrator under this Section 7 shall be considered severally and the invalidity or unenforceability of any one sub-section shall not affect the validity or enforceability of any other sub-section; and 7.7 the exclusions from and limitations of liability of the Certification Agent are set out in the terms of its engagement referred to in sub-section 4.1 and shall apply to this Schedule as if the same were set out in full herein. PART 8 : DISAPPLICATION PROVISIONS Disapplication: 8.1 Parts III and V of this Agreement shall not apply in or to this Schedule except, in the case of Part III, in respect of any action under this Schedule which Pool Members in general meeting are entitled or required by the terms of this Schedule to take. 8.2 If, and for long as, the Pool Auditor is also appointed as the Certification Agent, the provisions of Clause 48.11 shall apply.". SIGNATORIES THE GENERATORS AES Barry Limited Address: AES Barry Power Station, Sully Moors Road, Sully, Vale of Glamorgan, CF64 5YU Facsimile no: 01222 531714 Attention: Scott Miller By: Anglian Power Generators Limited Address: Kings Lynn Power Station, Willows Business Park, Saddlebow, Kings Lynn, Norfolk PE34 3RD Facsimile no: 01733 894164 Attention: W. Burrough By: Barking Power Limited Address: Barking Power Station, Chequers Lane, Dagenham, Essex RM9 6PF Facsimile no: 0181 984 5174 Attention: M.D. Jones By: British Nuclear Fuels plc Address: F13, Sellafield, Seascale, Cumbria CA20 1PG Facsimile no: 019467 27132 Attention: P.L. O'Neill, Business Manager, Electricity Generation By: CeltPower Limited Address: Plas Yn Dre Broad Street, Newtown, Powys SY16 2NA Facsimile no: 01686 629887 Attention: J. Matthew By: Citigen (London) Limited Address: 47-53 Charterhouse Street, London EC1M 6HA Facsimile no: 0171 253 9319 Attention: S.P. Chandler By: Corby Power Limited Address: Mitchell Road, Phoenix Parkway, Corby, Northamptonshire NN17 5QT Facsimile no: 01536 402619 Attention: General Manager By: Derwent Cogeneration Limited Address: P.O. Box 489, Spondon, Derby DE21 7ZS Facsimile no: 01332 669829 Attention: J. Unwin By: Eastern Merchant Generation Limited Address: Wherstead Park, Wherstead, Ipswich, Suffolk IP9 2AQ Facsimile no: 01473 552941 Attention: Coral Woodard By: Electricite de France, Service National Address: EDF Production Transport, Department Relations avec l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384, Paris Cedex 08 Facsimile no: (00 331) 40 42 63 41 Attention: P. Gaillet (copy to: Associated Electricity Supplies Limited Address: 53 St George's Road, Wimbledon, London SW19 4EA Facsimile no: 0181 944 0750 Attention: P. Clubb) By: Elm Energy & Recycling (UK) Limited Address: Elm Energy House, Ettingshall Road, Wolverhampton, West Midlands WV2 2LA Facsimile no: 01902 408517 Attention: M.D. Wyckoff By: Fellside Heat and Power Limited Address: Fellside Lodge, Seascale, Cumbria CA20 1PG Facsimile no: 01946 721130 Attention: J.A. Bartlett By: Fibrogen Limited Address: Astley House, 33 Notting Hill Gate, London W11 3JQ Facsimile no: 0171 221 8671 Attention: R. Fraser By: Fibropower Limited Address: Astley House, 33 Notting Hill Gate, London W11 3JQ Facsimile no: 0171 221 8671 Attention: R. Fraser By: Fibrothetford Limited Address: Astley House, 33 Notting Hill Gate, London W11 3JQ Facsimile no: 0171 221 8671 Attention: Rupert Fraser By: First Hydro Company Address: Bala House, Lakeside Business Village, St. Davids Park, Deeside, Flintshire CH5 3XJ Facsimile no: 01244 520697 Attention: B. Stalker By: Humber Power Limited Address: South Humber Bank Power Station, South Marsh Road, Stallingborough N.E. Lincs. DN37 8BZ Facsimile no: 01469 573030 Attention: P. Evans By: Independent Energy UK Limited Address: St John's Court, 70 St John's Close, Knowle, Solihull, West Midlands B93 ONN Facsimile no: 01564 770010 Attention: J. Sulley By: Indian Queens Power Limited Address: The Old Chapel Business Centre, Suite 7, Greenbottom, Truro TR4 8QP Facsimile no: 01872 561050 Attention: M. Miller By: Keadby Generation Limited Address: c/o Scottish Hydro Electric, Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ Facsimile no: 01738 456227 Attention: I. Morgan By: Lakeland Power Limited Address: Roosecote Power Station, Roosecote Marsh, Barrow-in-Furness, Cumbria LA13 0PQ Facsimile no: 01229 870919 Attention: Jackie Mahon By: Magnox Electric plc Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB Facsimile no: 01453 810451 Attention: Company Secretary By: Medway Power Limited Address: Medway Power Station, Isle of Grain, Rochester, Kent ME3 0AG Facsimile no: 01634 271666 Attention: J. McLaren By: Midlands Power (UK) Limited Address: Headquarters, Mucklow Hill, Halesowen, West Midlands Facsimile no: 0121 423 0261 Attention: Company Secretary By: National Power plc Address: Windmill Hill Business Park, Whitehill Way, Swindon, Wiltshire SN5 6PB Facsimile no: 01793 892061 Attention: M. Bowden By: Nuclear Electric Limited Address: Barnett Way, Barnwood, Gloucester GL4 3RS Facsimile no: 01452 653375 Attention: Company Secretary By: Peterborough Power Limited Address: Storeys Bar Road, Peterborough PE1 5NT Facsimile no: 01553 667166 Attention: W. Burrough By: PowerGen plc Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG Facsimile no: 01203 425366 Attention: S. Skillings By: Regional Power Generators Limited Address: Glanford Brigg Generating Station, Scawby Brook, Brigg, North Lincolnshire DN20 9LT Facsimile no: 01482 495916 Attention: P. Knight By: Rocksavage Power Company Limited Address: Cow Hay Lane, Runcorn, Cheshire WA7 4FZ Facsimile no: 01928 565514 Attention: B. Stewart By: Scottish Hydro-Electric plc Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ Facsimile no: 01738 456190 Attention: R. Hackland By: Scottish Power plc Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN Facsimile no: 0141 636 4706 Attention: B.J.H. Paget By: Seabank Power Limited Address: Severn Road, Hallen, Bristol BS10 7SP Facsimile no: 0117 982 0351 Attention: J.P. Baldry, General Manager By: Slough Energy Supplies Limited Address: 342 Edinburgh Avenue, Slough SL1 4TU Facsimile no: 01753 790038 Attention: P.N. Jackson By: Teesside Power Limited Address: Four Millbank, London SW1P 3ET Facsimile no: 0171 316 5322 Attention: D. Lewis By: Winterton Power Limited Address: 800 Park Avenue, Aztec West, Bristol BS12 4SE Facsimile no: 01454 616675 Attention: T. Masood By: THE SUPPLIERS British Gas Trading Ltd Address: 1st Floor, 31 The Causeway, Staines, Middlesex TW18 3BL Facsimile no: 01784 413242 Attention: T. Brookshaw By: British Nuclear Fuels plc Address: F13, Sellafield, Seascale, Cumbria CA20 1PG Facsimile no: 019467 27132 Attention: P.L. O'Neill, Business Manager, Electricity Generation By: Candecca Resources Limited Address: Welton Gathering Centre, Barfield Lane, off Wragby Road, Sudbrooke, Lincoln LN2 2QU Facsimile no: 01522 754255 Attention: D. Wood By: Citigen (London) Limited Address: 47-53 Charterhouse Street, London EC1M 6HA Facsimile no: 0171 253 9319 Attention: S.P. Chandler By: Crosfield Limited Address: Bank Quay, PO Box 26, Warrington, Cheshire WA5 1AB Facsimile no: 01925 59828 Attention: K. Sowley By: Eastern Electricity plc Address: Wherstead Park, PO Box 40, Wherstead, Ipswich, Suffolk IP9 2AQ Facsimile no: 01473 554393 Attention: J. Whelan By: East Midlands Electricity plc Address: Phoenix Centre Nuthall, Nottingham NG8 6AT Facsimile no: 0115 995 5953 Attention: A. Musto By: Electricite de France, Service National Address: EDF Production Transport, Department Relations avec l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384, Paris, Cedex 08 Facsimile no: (010 331) 40 42 6341 Attention: P. Gaillet (copy to: Associated Electricity Supplies Limited Address: 53 St. George's Road, Wimbledon, London SW19 4EA Facsimile no: 0181 944 0750 Attention: P. Clubb) By: Electricity Direct (UK) Limited Address: 1 Livingstone Road, Hove, East Sussex BN3 3WP Facsimile no: 01273 233002/3 Attention: Glenn Mackay By: Energy Supply Contracts Limited Address: The Havens, Ransomes Europark, Ipswich, Suffolk IP3 9SJ Facsimile no: 01473 273871 Attention: E.C. Cumberland By: Enron Gas and Petrochemicals Trading Limited Address: Four Millbank, London SW1P 3ET Facsimile no: 0171 873 0140 Attention: D. Gosling By: Impkemix Energy Limited Address: PO Box 90, Wilton Centre, Middlesborough, Cleveland TS90 8JE Facsimile no: 01642 437838 Attention: K.J. Green By: Independent Energy UK Limited Address: St. John's Court, St. John's Close, Knowle, West Midlands B93 0NN Facsimile no: 01564 770010 Attention: J. Sulley By: London Electricity plc Address: Templar House, 81-87 High Holborn, London WC1V 6NU Facsimile no: 0171 430 2903 Attention: M. Holmes By: Magnox Electric plc Address: Berkeley Centre, Berkeley, Gloucestershire GL13 9PB Facsimile no: 01453 810451 Attention: Company Secretary By: Manweb plc Address: Manweb House, Kingsfield Court, Chester Business Park, Chester CH4 9QH Facsimile no: 0141 568 3393 Attention: P. Brown, Energy Supply, Cathcart Business Park, Spean Street, Glasgow G44 4BE By: Midlands Electricity plc Address: Mucklow Hill, Halesowen, West Midlands B62 8BP Facsimile no: 0121 423 2777 Attention: R. Murray By: National Power plc Address: Windmill Hill Business Park, Whitehill Way, Swindon, Wiltshire SN5 6PB Facsimile no: 01793 892061 Attention: M. Bowden By: Norsk Hydro (UK) Limited Address: Bridge House, 69 London Road, Twickenham, Middlesex TW1 3RH Facsimile no: 0181 892 1686 Attention: M. Turner By: Northern Electric plc Address: Carliol House, Market Street, Newcastle upon Tyne NE1 6NE Facsimile no: 0191 210 2295 Attention: M. Chandler By: NORWEB plc Address: Talbot Road, Manchester M16 0HQ Facsimile no: 0161 875 7089 Attention: K. Lee By: Nuclear Electric Limited Address: Barnett Way, Barnwood, Gloucester GL4 3RS Facsimile no: 01452 653375 Attention: Company Secretary By: PowerGen plc Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG Facsimile no: 01203 425366 Attention: S. Skillings By: Scottish Hydro-Electric plc Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ Facsimile no: 01738 456190 Attention: R. Hackland By: Scottish Power plc Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN Facsimile no: 0141 636 4706 Attention: B.J.H. Paget By: SEEBOARD plc Address: PO Box 639, 329 Portland Road, Hove, East Sussex BN3 3SY Facsimile no: 01273 428404 Attention: R.A. Page By: Shell Power Limited Address: Delta House, Wavell Road, Wythenshawe, Manchester M22 5SB Facsimile no: 0161 499 8387 Attention: John Tucker By: Slough Energy Supplies Limited Address: 342 Edinburgh Avenue, Slough SL1 4TU Facsimile no: 01753 790038 Attention: P.N. Jackson By: Southern Electric plc Address: Westacott Way, Littlewick Green, Maidenhead, Berkshire SL6 3QB Facsimile no: 01628 584469 Attention: J. Sykes By: South Wales Electricity plc Address: Newport Road, St. Mellons, Cardiff CF3 9XW Facsimile no: 01222 790971 Attention: M. Mackey By: South Western Electricity plc Address: 800 Park Avenue, Aztec West, Almondsbury, Bristol BS12 4SE Facsimile no: 01454 616675 Attention: D.G. Harris By: The Renewable Energy Company Limited Address: Stroud House, Russell Street, Stroud, Glos GL5 3AN Facsimile no: 01453 756222 Attention: M. Alder By: UK Electric Power Limited Address: Overdale, Synchant Pass Road, Conwy, Gwynedd LL32 8RE Facsimile no: 01492 592077 Attention: N.Bryson By: UML Limited Address: PO Box 115, Port Sunlight, Wirral, Merseyside L62 4ZL Facsimile no: 0151 643 6299 Attention: A.R. Stubbs By: Yorkshire Electricity Group plc Address: Wetherby Road, Scarcroft, Leeds LS14 3HS Facsimile no: 01132 895926 Attention: Company Secretary By: THE OTHER PARTIES Accord Energy Ltd Address: Charter Court, 50 Windsor Road, Slough, Berkshire SL1 2HA Facsimile no: 01753 758010 Attention: E.F. Pethybridge By: AES Partington Limited Address: Burleigh House, 17-19 Worple Way, Richmond, Surrey TW10 6AG Facsimile no: 0181 332 1849 Attention: Michael Armstrong By: Alcan Aluminium UK Limited Address: Lynemouth Power Station, Ashington, Northumberland NE63 9YH Facsimile no: 01670 393970 Attention: W.E. Jones By: BG plc Address: 100 Thames Valley Park, Reading, Berkshire, RG6 1PT Facsimile no: 0118 929 3651 Attention: C. Alexander By: BP Chemicals Limited Address: Baglan Bay Works, Port Talbot, West Glamorgan SA12 7BP Facsimile no: 01639 823 272 Attention: Mr. W.G. James By: Cabah Energy Limited Address: c/o ABB ForStar Developments Limited, Tilford House, Farnham Business Park, Weydon Lane, Farnham, Surrey GU9 8QT Facsimile no: 01252 732110 Attention: Paul Abbott By: Cottam Development Centre Limited Address: c/o PowerGen plc, Westwood Way, Westwood Business Park, Coventry CV4 8LG Facsimile no: 01203 425 484 Attention: Mr. P. Stanton By: Enfield Energy Centre Limited Address: Cam Lea Offices, Mollison Avenue, Enfield EN3 7NN Facsimile no: 01642 678123 Attention: K. Clarke By: Hydro Electric Energy Limited Address: c/o Scottish Hydro Electric PLC, Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ Facsimile no: 01738 455281 Attention: Company Secretary By: Keadby Power Limited Address: P.O. Box 89, Keadby, Scunthorpe, North Lincolnshire DN17 3AZ Facsimile no: 01724 784270 Attention: Dr. C.K. Stanley By: Kingsnorth Power Limited Address: c/o Budd Martin & Co, Industria House, Red Houses, St. Brelade, Jersey JE3 8LD Facsimile no: 01534 44777 Attention: R. Martin By: Meter Operators Limited Address: Ryden Lane, Charton, Nr. Pershore, Worscester WR10 3LQ Facsimile no: 01386 861113 Attention: R. Edmed By: Pentex (East Midlands) Limited Address: Union Buildings, 15 Union Street, Aberdeen AB1 2BU Facsimile no: 01244 211444 Attention: H. Jamieson By: Saltend Cogeneration Company Limited Address: Britannic House, 1 Finsbury Circus, London EC2M 7BA Facsimile no: 0171 496 5863 Attention: Mr. M. Stageman By: Spalding Energy Company Limited Address: 20 St. James's Street, London SW1A 1ES Facsimile no: 0171 839 0905 Attention: G. Grant By: THE METER OPERATOR PARTIES WHO ARE NOT PARTIES Control Devices and Systems Limited Address: P.O. Box 56, 101 Mill Lane, Newbury, Berkshire RG14 5RE Telex no: 849811 Facsimile no: 01635 528224 Attention: J.W. Dowse By: Datum Solutions Limited Address: Littlebrook Business Centre, Littlebrook Manor Way, Dartford, Kent DA1 5PS Facsimile no: 01322 295178 Attention: G. Babbs By: DrakMarn O&M Ltd Address: Westwood Way, Westwood Business Park, Coventry CV4 8LG Facsimile no: 01203 425431 Contact: Company Secretary By: E. Squared Limited Address: 52-54 Southwark Street, London SE1 1UN Facsimile no: 0171 378 0012 Attention: Graham Nicholls By: Northern Energy Services Limited Address: 208 Askern Road, Bentley, Doncaster DN5 OEU Facsimile no: 01302 820790 Attention: W. Tuczemzkyi By: PowerMet Limited Address: 13 Wimpole Street, London W1M 7AB Facsimile no: 0171 493 7151 Attention: M. Rugman By: Schlumberger Industries Limited Address: Langer Road, Felixstowe, Suffolk IP11 8ER Facsimile no: 01394 276030 Attention: M. Jones, Marketing Manager By: Stanor National Contracts Address: 71A Mafeking Avenue, Brentford, Middlesex TW8 0NL Facsimile no: 0181 560 4651 Attention: A. Yardley By: The Challenge Group Address: 22 Tally Road, Oxted, Surrey RH8 0TG Facsimile no: 01883 730543 Attention: J. Glover By: EXTERNAL POOL MEMBERS British Nuclear Fuels plc Address: F13, Sellafield, Seascale, Cumbria CA20 1PG Facsimile no: 019467 27132 Attention: P.L. O'Neil, Business Manager, Electricity Generation By: Electricite de France, Service National Address: EDF Production Transport, Departement Relations avec l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384 Paris, Cedex 08 Telex no: 280098 FRANCE Facsimile no: (00 331) 40 42 63 41 Attention: P. Gaillet (copy to: Associated Electricity Supplies Limited Address: 53 St. George's Road, Wimbledon, London SW19 4EA Facsimile no: 0181 944 0750 Attention: P. Clubb) By: Scottish Hydro-Electric plc Address: Inveralmond House, 200 Dunkeld Road, Perth PH1 3AQ Facsimile no: 01738 456190 Attention: R. Hackland By: Scottish Power plc Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN Facsimile no: 0141 636 4706 Attention: B.J.H. Paget By: SETTLEMENT SYSTEM ADMINISTRATOR Energy Settlements and Information Services Limited Address: Fairham House, Green Lane, Clifton, Nottingham NG11 9LN Facsimile no: 0115 945 6728 Attention: G.K. James, General Manager By: POOL FUNDS ADMINISTRATOR Energy Pool Funds Administration Limited Address: 3rd Floor, 185 Park Street, London SE1 9DY Facsimile no: 01203 423558 Attention: A. Marks, Director (National Grid House, 2nd Floor, Kirby Corner Road, Coventry CV4 8JY) By: GRID OPERATOR EXECUTED AS A DEED by ) The National Grid ) Company plc by the ) affixing of its ) common seal in the ) presence of:- ) MEMBER OF BOARD SEALING COMMITTEE Authorised Signatory Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY Telex no: - Facsimile no: 01203 423577 Attention: Company Secretary (copy to:J. Irgin, c/o M.J. Metcalfe, The National Grid Company plc, National Grid House, Kirb Corner Road, Coventry CV4 8JY ANCILLARY SERVICES PROVIDER EXECUTED AS A DEED by ) The National Grid ) Company plc by the ) affixing of its ) common seal in the ) presence of:- ) MEMBER OF BOARD SEALING COMMITTEE Authorised Signatory Address: National Grid House, Kirby Corner Road, Coventry CV4 8JY Facsimile no: 01203 423577 Attention: Company Secretary (copy to Mr. Carlton) EXTERNALLY INTERCONNECTED PARTIES Scottish Power plc Address: Strathkelvin House, Kirkintilloch, Glasgow G66 1RN Telex No: - Facsimile No: 0141 636 4706 Attention: B.J.H. Paget By: Electricite de France, Service National Address: EDF Department Transport, Departement Relations avec l'Etranger, Echanges d'Energie, 2 Rue Louis Murat, 5eme etage, 75384 Paris, Cedex 08 Telex no: 280098 FRANCE Facsimile no: (00 331) 40 42 63 41 Attention: P. Gaillet (copy to: Associated Electricity Supplies Limited Address: 53 St. George's Road, Wimbledon, London SW19 4EA Telex no: - Facsimile no: 0181 944 0750 Attention: P. Clubb) By: DATED , 1998 THE GENERATORS named herein - and - THE SUPPLIERS named herein - and - ENERGY SETTLEMENTS AND INFORMATION SERVICES LIMITED as Settlement System Administrator - and - ENERGY POOL FUNDS ADMINISTRATION LIMITED as Pool Funds Administrator - and - THE NATIONAL GRID COMPANY plc as Grid Operator and Ancillary Services Provider - and - SCOTTISH POWER plc and ELECTRICITE DE FRANCE, SERVICE NATIONAL as Externally Interconnected Parties - and - THE OTHER PARTIES named herein - and - THE METER OPERATOR PARTIES named herein --------------------------------------- TWENTY-FIRST SUPPLEMENTAL DEED relating to the Pooling and Settlement Agreement for the Electricity Industry in England and Wales --------------------------------------- 253 CONTENTS Page 1. INTERPRETATION 2 2. AMENDMENTS 2 3. CONTINUATION OF THE POOLING AND SETTLEMENT AGREEMENT 2 4. MISCELLANEOUS 2 5. ENTIRE AGREEMENT 2 6. GOVERNING LAW 3 SCHEDULE 1: Part I: The Generators 4 Part II: The Suppliers 8 SCHEDULE 2: The Other Parties 13 SCHEDULE 3: The Meter Operator Parties who are not Parties 15 SCHEDULE 4: Amendments to the Pooling and Settlement Agreement 16 SIGNATORIES 31
EX-10 4 EX 10.6 MASTER AGREEMENT Exhibit 10.6 Dated 1 APRIL 1998 THE NATIONAL GRID COMPANY plc and SOUTH WESTERN ELECTRICITY plc --------------------------------------- AGREEMENT TO VARY Certain Type 1, Type 2, Type 3, Type 4, Type 5 and Type 6 Supplemental Agreements ---------------------------------------- CONTENTS Page 1. Interpretation 2 2. Amendments 2 3. Continuation of the Agreements 2 4. Miscellaneous 3 5. Entire Agreement 3 6. Governing Law 3 7. Restrictive Trade Practices Act 3 Schedule 1: Amendments to the Type 1 Supplemental Agreements 5 Schedule 2: Amendments to the Type 2 Supplemental Agreements 7 Schedule 3: Amendments to the Type 3 Supplemental Agreements 9 Schedule 4: Amendments to the Type 4 Supplemental Agreements 10 Schedule 5: Amendments to the Type 5 Supplemental Agreements 12 Schedule 6: Amendments to the Type 6 Supplemental Agreements 13 Schedule 7: Appendix E Charging Rules 15 Schedule 8: Appendix EE Reactive Power 32 Schedule 9: The Supplemental Agreements 33 THIS AGREEMENT is made on 1 April 1998 BETWEEN (1) THE NATIONAL GRID COMPANY plc (registered number 2366977) whose registered office is at National Grid House, Kirby Corner Road, Coventry CV4 8JY ('NGC'); (2) SOUTH WESTERN ELECTRICITY plc (registered number 2366894) whose registered office is at 800 Park Avenue, Aztec West, Almondsbury, Bristol B512 4SE (the 'User") which expression shall include its successors and assigns. WHEREAS (A) by the Master Connection and Use of System Agreement dated 30th March 1990 (the "Master Agreement") the Parties thereto agreed to give effect to and be bound by certain rules and procedures for establishing a contractual framework between the parties pursuant to which Supplemental Agreements will from time to time be made, for connection of Plant and Apparatus to the NGC Transmission System, for the use by the Parties of the NGC Transmission System and the payment of charges to NGC; and pursuant to the terms of the Master Agreement NGC and the User entered into:- (a) the Type 1 Supplemental Agreements listed in Columns 1 and 2 in Part 1 of Schedule 9 in respect of the Connection Sites listed in Column 3 in Part I of Schedule 9 (the "Type I Agreements"); (b) the Type 2 Supplemental Agreements listed in Columns 1 and 2 in Part 2 of Schedule 9 in respect of the Connection Sites listed in Column 3 in Part 2 of Schedule 9 (the "Type 2 Agreements"); (c) the Type 3 Supplemental Agreements listed in Columns 1 and 2 in Part 3 of Schedule 9 in respect of the sites of connection in Column 3 in Part 3 of Schedule 9 (the "Type 3 Agreements"); (d) the Type 4 Supplemental Agreements listed in Columns 1 and 2 in Part 4 of Schedule 9 in respect of the sites of connection in Column 3 in Part 4 of Schedule 9 (the "Type 4 Agreements"); (e) the Type 5 Supplemental Agreements listed in Columns 1 and 2 in Part 5 of Schedule 9 in respect of the sites of connection in Column 3 in Part 5 of Schedule 9 (the "Type 5 Agreements"); and (f) the Type 6 Supplemental Agreements listed in Columns 1 and 2 in Part 6 of Schedule 9 in respect of the sites of connection in Column 3 in Part 6 of Schedule 9 (the "Type 6 Agreements"); (B) the parties to this Agreement have agreed to amend the Agreements on the terms and subject to the conditions set out below. NOW THIS AGREEMENT WITNESSES as follows:- 1. INTERPRETATION l.1 Except where defined herein or where the context otherwise requires, words and expressions defined in the Master Agreement and the Agreements shall have the same respective meanings when used in this Agreement. 1.2 The table of contents and the headings to each of the Clauses are inserted for convenience only and shall be ignored in construing this Agreement. 2. AMENDMENTS The parties hereby agree that with effect from 1st April 1998:- (a) the Type 1 Agreements shall be amended as set out in Schedule 1; (b) the Type 2 Agreements shall be amended as set out in Schedule 2; (c) the Type 3 Agreements shall be amended as set out in Schedule 3; (d) the Type 4 Agreements shall be amended as set out in Schedule 4; (e) the Type 5 Agreements shall be amended as set out in Schedule 5; and (f) the Type 6 Agreements shall be amended as set out in Schedule 6. 3. CONTINUATION OF THE AGREEMENTS Each of the Agreements shall remain in force and effect and this Agreement and each of the Agreements shall be treated as one document so that, upon each of the Agreements being amended pursuant to Clause 2, all references to each of the Agreements shall be treated as references to that agreement as amended by this Agreement. 4. MISCELLANEOUS The provisions of Clauses 22 to 27 (inclusive) and 29 to 30 (inclusive) of the Master Agreement shall be deemed to be incorporated herein mutatis mutandis. 5. ENTIRE AGREEMENT 5.1 Each party acknowledges that in entering into this Agreement on the terms set out herein it is not relying upon any representation, warranty, promise or assurance made or given by any other party or any other person, whether or not in writing, at any time prior to the execution of this Agreement which is not expressly set out herein. 5.2 None of the parties shall have any right of action against any other party arising out of or in connection with any representation, warranty, promise or assurance referred to in Sub-Clause 5.1 (except in the case of fraud). 6. GOVERNING LAW This Agreement shall be governed by, and construed in all respects in accordance with, English Law. 7. RESTRICTIVE TRADE PRACTICES ACT Any restriction or information provision (as each of those terms are defined or construed in Section 43(1) of The Restrictive Trade Practices Act 1976) contained in this Agreement, or any provision contained in this Agreement adding to or extending any restriction or information provision contained in any of the Agreements shall not take effect or shall cease to have affect:- (a) if a copy of this Agreement is not provided to the Department of Trade and Industry ("DTI") within 28 days of the date of this Agreement; or (b) if within 28 days of the provision of that copy to the DTI, the DTI gives notice of objection to the party providing it. IN WITNESS whereof the hands of the duly authorised representatives of the parties hereto at the date first above written THE NATIONAL GRID COMPANY plc ) ) by ) SCHEDULE 1 In each of the Type I Supplemental Agreements listed at Schedule 9 Part 1:- (a) At Clause 1.1 the definition of Qualifying Guarantee shall be deleted and replaced with the following definition: "means a guarantee in favour of NGC in a form proposed by the User and agreed by NGC (whose agreement shall not be unreasonably withheld or delayed) and which is provided by an entity which holds an Approved Credit Rating." (b) Clause 8 shall be deleted and replaced with the following clause: "REACTIVE POWER With regard to the Obligatory Reactive Power Service and all Enhanced Reactive Power Services the provisions of Appendix EE to this Supplemental Agreement shall apply". (c) Clause 17.6A.3.2(b) shall be deleted and replaced with the following Clause: "Deenergise the User's Equipment at any Connection Site which serves only the User or a customer of the User." (d) Clause 17.7.2 shall be deleted and replaced with the following Clause: "NGC may terminate this Supplemental Agreement and all others to which the User is a party forthwith by notice to the User if:- (a) NGC has given a valid notice of default pursuant to Sub-Clause 17-6A.2 and (b) such event of default remains unremedied at the expiry of the later of (i) the period of 6 months from the date of such notice; and (ii) where the User disputes bona fide the event of default and has promptly brought and is actively pursuing proceedings against NGC to determine the dispute, the date on which the dispute is resolved or determined. Upon termination pursuant to this Sub-Clause the User shall pay to NGC the Termination Amount due under the terms of the Charging Rules and the provisions of Clause 17.7.1(i) shall apply mutatis mutandis". (e) Appendix E Charging Rules shall be deleted and replaced with the Appendix E Charging Rules in Schedule 7 to this Agreement. (f) A new Appendix EE shall be inserted in the form set out in Schedule 8 to this Agreement. (g) The Contents page shall be amended to reflect the amendments at (b) and (f) above. SCHEDULE 2 In each of the Type 2 Supplemental Agreements listed at Schedule 9 Part 2:- (a) At Clause 1.1 the definition of Qualifying Guarantee shall be deleted and replaced with the following definition: "means a guarantee in favour of NGC in a form proposed by the User and agreed by NGC (whose agreement shall not be unreasonably withheld or delayed) and which is provided by an entity which holds an Approved Credit Rating." (b) A new clause 12A shall be added immediately after Clause 12 as follows:- "12A REACTIVE POWER With regard to the Obligatory Reactive Power Service and all Enhanced Reactive Power Services the provisions of Appendix EE to this Supplemental Agreement shall apply". (c) Clause 22.6A.3.2(b) shall be deleted and replaced with the following clause: "Deenergise the User's Equipment at any Connection Site which serves only the User or a customer of the User." (d) Clause 22.7.2 shall be deleted and replaced with the following clause: "NGC may terminate this Supplemental Agreement and all others to which the User is a party forthwith by notice to the User if:- (a) NGC has given a valid notice of default pursuant to Sub-Clause 22.6A.2 and (b) such event of default remains unremedied at the expiry of the later of (i) the period of 6 mouths from the date of such notice; and (ii) where the User disputes bona fide the event of default and has promptly brought and is actively pursuing proceedings against NGC to determine the dispute, the date on which the dispute is resolved or determined. Upon termination pursuant to this Sub-Clause the User shall pay to NGC the Termination Amount due under the terms of the Charging Rules and the provisions of Sub-Clause 22.7.1(i) shall apply mutatis mutandis". (e) Appendix E Charging Rules shall be deleted and replaced with the Appendix E Charging Rules in Schedule 7 to this Agreement. (f) A new Appendix EE shall be inserted in the form set out in Schedule 8 to this Agreement. (g) The Contents page shall be amended to reflect the amendments at (b) and (f) above. SCHEDULE 3 In each of the Type 3 Supplemental Agreements listed at Schedule 9 Part 3:- (a) At Clause 1.1 the definition of Qualifying Guarantee shall be deleted and replaced with the following definition: "means a guarantee in favour of NGC in a form proposed by the User and agreed by NGC (whose agreement shall not be unreasonably withheld or delayed) and which is provided by an entity which holds an Approved Credit Rating." (b) Clause 7 shall be deleted and replaced with the following clause: "REACTIVE POWER With regard to the Obligatory Reactive Power Service and all Enhanced Reactive Power Services the provisions of Appendix EE to this Supplemental Agreement shall apply:- (c) Clause 13.6A.3.2(b) shall be deleted and replaced with the following clause: "Deenergise the User's Equipment at any Connection Site which serves only the User or a customer of the User." (d) Clause 13.7.2 shall be deleted and replaced with the following clause: "NGC may terminate this Supplemental Agreement and all others to which the User is a party forthwith by notice to the User if:- (a) NGC has given a valid notice of default pursuant to Sub-Clause 13.6A.2 and (b) such event of default remains unremedied at the expiry of the later of (i) the period of 6 months from the date of such notice; and (ii) where the User disputes bona fide the event of default and has promptly brought and is actively pursuing proceedings against NGC to determine the dispute, the date on which the dispute is resolved or determined. Upon termination pursuant to this Sub-Clause the provisions of Clause 13.7.1 shall apply mutatis mutandis". (e) Appendix E Charging Rules shall be deleted and replaced with the Appendix E Charging Rules in Schedule 7 to this Agreement. (f) A new Appendix EE shall be inserted in the form set out in Schedule 8 to this Agreement. (g) The Contents page shall be amended to reflect the amendments at (b) and (f) above. SCHEDULE 4 In each of the Type 4 Supplemental Agreements listed at Schedule 9 Part 4:- (a) At Clause 1.1 the definition of Qualifying Guarantee shall be deleted and replaced with the following definition: "means a guarantee in favour of NGC in a form proposed by the User and agreed by NGC (whose agreement shall not be unreasonably withheld or delayed) and which is provided by an entity which holds an Approved Credit Rating." (b) Clause 9 shall be deleted and replaced with the following clause: "REACTIVE POWER With regard to the Obligatory Reactive Power Service and all Enhanced Reactive Power Services the provisions of Appendix EE to this Supplemental Agreement shall apply". (c) Clause 15.6A.3.2(h) shall be deleted and replaced with the following clause: "Deenergise the User's Equipment at any Connection Site which serves only the User or a customer of the User." (d) Clause 15.7.2 shall be deleted and replaced with the following clause: "NGC may terminate this Supplemental Agreement and all others to which the User is a party forthwith by notice to the User if:- (a) NGC has given a valid notice of default pursuant to Sub-Clause 15.6A.2 and (b) such event of default remains unremedied at the expiry of the later of (i) the period of 6 months from the date of such notice; and (ii) where the User disputes bona fide the event of default and has promptly brought and is actively pursuing proceedings against NGC to determine the dispute, the date on which the dispute is resolved or determined. Upon termination pursuant to this Sub-Clause the provisions of Clause 15.7.1 shall apply mutatis mutandis". (e) Appendix E Charging Rules shall be deleted and replaced with the Appendix E Charging Rules in Schedule 7 to this Agreement. (f) A new Appendix EE shall be inserted in the form set out in Schedule 8 to this Agreement. (g) The Contents page shall be amended to reflect the amendments at (b) and (f) above. SCHEDULE 5 In each of the Type 5 Supplemental Agreements listed at Schedule 9 Part 5:- (a) At Clause 1.1 the definition of Qualifying Guarantee shall be deleted and replaced with the following definition: "means a guarantee in favour of NGC in a form proposed by the User and agreed by NGC (whose agreement shall not be unreasonably withheld or delayed) and which is provided by an entity which holds an Approved Credit Rating." (b) A new Clause 5A shall be added immediately after Clause 5 as follows: "5A REACTIVE POWER With regard to the Obligatory Reactive Power Service and all Enhanced Reactive Power Services the provisions of Appendix EE to this Supplemental Agreement shall apply". (c) Clause 8.5A.3.2(b) shall be deleted and replaced with the following clause: "Deenergise the User's Equipment at any Connection Site which serves only the User or a customer of the User." (d) Clause 8.6.2 shall be deleted and replaced with the following clause: "NGC may terminate this Supplemental Agreement and all others to which the User is a party forthwith by notice to the User if:- (a) NGC has given a valid notice of default pursuant to Sub-Clause 8.5A.2 and (b) such event of default remains unremedied at the expiry of the later of (i) the period of 6 months from the date of such notice; and (ii) where the User disputes bona fide the event of default and has promptly brought and is actively pursuing proceedings against NGC to determine the dispute, the date on which the dispute is resolved or determined. Upon termination pursuant to this Sub-Clause the provisions of Clause 8.6.1 shall apply mutatis mutandis". (e) Appendix E Charging Rules shall be deleted and replaced with the Appendix E Charging Rules in Schedule 7 to this Agreement. (f) A new Appendix EE shall be inserted in the form set out in Schedule 8 to this Agreement. (g) The Contents page shall be amended to reflect the amendments at (b) and (f) above. SCHEDULE 6 In each of the Type 6 Supplemental Agreements listed at Schedule 9 Part 6:- (a) At Clause 1.1 the definition of Qualifying Guarantee shall be deleted and replaced with the following definition: "means a guarantee in favour of NGC in a form proposed by the User and agreed by NGC (whose agreement shall not be unreasonably withheld or delayed) and which is provided by an entity which holds an Approved Credit Rating." (b) A new Clause 8A shall be added immediately after clause 8 as follows: "8A REACTIVE POWER With regard to the Obligatory Reactive Power Service and all Enhanced Reactive Power Services the provisions of Appendix EE to this Supplemental Agreement shall apply". (c) Clause 11.5A.3.2(b) shall be deleted and replaced with the following clause: "Deenergise the User's Equipment at any Connection Site which serves only the User or a customer of the User." (d) Clause 11.6.2 shall be deleted and replaced with the following clause: "NGC may terminate this Supplemental Agreement and all others to which the User is a party forthwith by notice to the User if: (a) NGC has given a valid notice of default pursuant to Sub-Clause 11.5A-2 and (b) such event of default remains unremedied at the expiry of the later of (i) the period of 6 months from the date of such notice; and (ii) where the User disputes bona fide the event of default and has promptly brought and is actively pursuing proceedings against NGC to determine the dispute, the date on which the dispute is resolved or determined. Upon termination pursuant to this Sub-Clause the provisions of Clause 11.6.1 shall apply mutatis mutandis". (e) Appendix E Charging Rules shall be deleted and replaced with the Appendix E Charging Rules in Schedule 7 to this Agreement. (f) A new Appendix EE shall be inserted in the form set out in Schedule 8 to this Agreement. (g) The Contents page shall be amended to reflect the amendments at (b) and (f) above. SCHEDULE 7 APPENDIX E CHARGING RULES Part 1 - Transmission Network Use of System Charges and Connection Charges Introduction Under the terms of this Supplemental Agreement the User is liable to pay Transmission Network Use of System Charges based upon the Registered Capacity of Generating Units passing Active Power on to and/or the Demand taken from the NGC Transmission System and Connection Charges. The basis upon which Transmission Network Use of System Charges and Connection Charges are levied according to a User's particular circumstances are set out in the statement issued by NGC under paragraphs 1, 2 and 3 of Condition 10 to the Transmission Licence. 1.1 Data Requirements 1.1.1 On or before a date not later than 10 Business Days after the confirmation of the basis of calculation of charges pursuant to paragraph 2.1 in each Financial Year the User shall supply NGC with such data as NGC may from time to time reasonably request pursuant to paragraph 2.1 to enable NGC to calculate, the Connection Charges and/or Transmission Network Use of System Charges due from the User to NGC or from NGC to the User (as the case may be) in respect of the Connection Site including the data specified in Appendix C; 1.1.2 On or before a date not later than 10 Business Days after the confirmation of the basis of calculation of charges pursuant to paragraph 2.1 in each Financial Year, Users: (a) who are owners or operators of a User System shall provide to NGC a forecast for the following Financial Year of the Natural Demand attributable to each Grid Supply Point equal to the forecasts of Natural Demand under both Annual Average Cold Spell (ACS) Conditions and a forecast of the average metered Demand attributable to such Grid Supply Point (or such other forecast as may be notified by NGC to the User pursuant to paragraph 2.1) for each of a number of peak half-hours as notified by NGC to the User under paragraph 2.1: (b) who are Suppliers shall provide to NGC a forecast for the following Financial Year of its metered Demand attributable to each Transmission Network Use of System Demand Zone equal to the average of the forecasts of Demand attributable to such Transmission Network Use of System Demand Zone (or such other forecast as may be notified by NGC to the User pursuant to paragraph 2.1) for each of a number of peak half-hours notified by NGC to the User under paragraph 2.1; (c) who are Generators shall provide to NGC a forecast for the following Financial Year of: (i) the metered Station Demand (Active Power) attributable to the Power Station for the Generating Units comprised therein equal to the average of the forecasts of such Station Demand (Active Power) (or such other forecast as may be notified by NGC to the User pursuant to paragraph 2.1) attributable to the sum of the Generating Units for each of a number of peak half-hours as notified by NGC to the User under paragraph 2.1; (ii) the highest Registered Capacity to be declared pursuant to the terms of the Pooling and Settlement Agreement of each Generating Unit comprised within a Power Station for the period as notified by NGC to the User under paragraph 2.1; (d) who are Generators and whose Equipment is comprised within a Trading Site (as such term is defined in the Pooling and Settlement Agreement) shall supply to NGC a forecast for the following Financial Year of:- (i) the highest Registered Capacity declared pursuant to the terms of the Pooling and Settlement Agreement of each Generating Unit comprised within a Power Station which forms part of such Trading Site; and (ii) the average Demand within the Trading Site (other than Station Demand) to be supplied by the Power Station in (i) above for each of the number of peak half hours notified by the User to NGC pursuant to paragraph 2.1; (iii) the Station Demand for the Power Station within the Trading Site, determined in accordance with paragraph 1.1.2(c)(i); for the period as notified by NGC to the User under paragraph 2.1 and NGC shall use such forecasts as the basis of Transmission Network Use of System Charges for such Financial Year. 1.1.3 Variation of Charges by NGC during the Financial Year The User shall notify NGC of any revision to the forecast Demand submitted by the User under paragraph 1.1 of this Appendix E at least quarterly or at such other intervals as may be agreed between NGC and the User from time to time. NGC shall revise the Transmission Network Use of System Charges payable by the User to take account of any such revised forecast provided in accordance with this paragraph 1.1.3. NGC shall commence charging the varied Transmission Network Use of System Charges from the first day of the month following the month in which such revised forecast was received provided always that such forecast is provided before 15th day of such month. 1.2 Reconciliation Statements Initial Reconciliation Statements 1.2.1On or before 1 March in each Financial Year NGC shall promptly calculate on the basis set out in the statement published by NGC in accordance with Licence Condition 10 of the Transmission Licence the Demand related or Generation related Transmission Network Use of System Charges (as the case may be) that would have been Payable by the User during each month during that Financial Year if those charges had been calculated on the basis of the actual Demand data or the User's highest declared Registered Capacity recorded during the Financial Year in respect of the forecasts which had previously been provided by the User in accordance with paragraph 1.1 (the "Actual Amount"'). NGC shall then compare the Actual Amount with the amount of Demand related or Generation related Transmission Network Use of System Charges (as the case may be) paid during each month during that Financial Year by the User (the "Notional Amount"). 1.2.2 As soon as reasonably practicable and in any event by 1st March in each Financial Year NGC shall then prepare an initial reconciliation statement and send it to the User. Such statement shall specify the Actual Amount and the Notional Amount for each month during the relevant Financial Year and, in reasonable detail, the information from which such amounts were derived and the manner in which they were calculated. 1.2.3 Together with the initial reconciliation statement NGC shall issue a credit note in relation to any sum shown by the reconciliation statement to be due to the User or an invoice in respect of sums due to NGc and in each case interest thereon calculated pursuant to paragraph 1.2.5 below. 1.2.4 Invoices issued under paragraph 1.2.3 above and 1.2.5 below shall be payable on or before 3lst March in the Financial Year to which they relate. 1.2.5 In respect of the Financial Year:- (a) the user shall, following receipt of an appropriate invoice, pay to NGC an amount equal to the amount (if any) by which the aggregate Actual Amount exceeds the aggregate Notional Amount; and (b) NGC shall issue the User with a credit note for an amount equal to the amount (if any) by which the aggregate Notional Amount exceeds the aggregate Actual Amount. Interest shall be payable by the paying Party to the other on such amounts from the date of payment applicable to the month concerned until the date, of actual payment of such amounts and such interest shall be calculated on a daily basis at a rate equal to the Base Rate during such period. Final Reconciliation Statements 1.2.6 (a) NGC shall as soon as reasonably practicable after the end of each Financial Year issue a further reconciliation statement in respect of Transmission Network Use of System Charges payable in respect of each month of that Financial Year showing:- (i) any change in the Transmission Network Use of System Charges from those specified in the initial reconciliation statement provided in accordance with paragraph 1.2.1 above; (ii) whether the change represents a reconciliation payment owing by NGC to a user or by a User to NGC; (iii) the amount of interest determined in accordance with 1.2.5 above; (iv) the information from which the amounts in (i) above are derived and the manner of calculation. (b) The provisions of paragraphs 1.2.3 and 1.2.5 shall apply mutatis mutandis to sums specified in the Final Reconciliation Statement. 2. Revision of Charges 2.1 To the extent permitted by the Transmission Licence and this Agreement NGC may revise its Connection Charges and Transmission Network Use of System Charges or the basis of their calculation including issuing revisions to Appendices A, B, C and D (or D1 if appropriate) hereto. On or before 31st October in each Financial Year NGC shall notify the User in writing of the intended basis of calculation to be used by NGC in the following Financial Year together with time periods over which the data required to be provided pursuant to paragraph 1 of this Appendix E is required and shall consult with the User concerning the same. On or before 30th November in each Financial Year NGC shall confirm to the User the basis of calculation to be used in the following Financial Year. 2.2 NGC shall give the User not less than 2 months prior written notice of any revised charges, including revisions to Appendices A, B, C and D (or D1 if appropriate) hereto, which notice shall specify the date upon which such revisions become effective (which may be at any time). The User shall pay any such revised charges and Appendix A, B, C, D (and/or Dl as appropriate) shall be amended automatically (and a copy sent to the User) to reflect any changes to such Appendices with effect from the date specified in such notice 2.3 Subject to the provisions of paragraph 3.2 below if in the reasonable opinion of NGC any development, replacement, renovation, alteration, construction or other work to the NGC Transmission System or termination of a Supplemental Agreement by another User or an alteration to the requirements of the User or any other User means that to ensure that NGC is charging in accordance with the provisions of the Statement pursuant to Condition 10 of the Transmission Licence NGC needs to vary the Connection Charges payable by the User in relation to the Connection Site then NGC shall have the right to vary such charges accordingly upon giving to the User not less than 2 months priors written notice. Such notice shall be deemed to be a revised Connection Offer and before any such variation becomes effective the provisions of Sub-Clauses 11.3 to 11.4 of the Master Agreement shall apply mutatis mutandis following any such variation the provisions of Appendices A and B shall be amended automatically (and a copy sent to the User) to reflect such variation with effect from the date such variation comes into effect. 3. Replacement of NGC Assets 3.1 Appendix A specifies the age of each of the NGC Assets at the Connection Site at the date of this Supplemental Agreement NGC Connection Charges are calculated on the assumption that NGC Assets will not require replacement until the expiry of the Replacement Period applicable to each NGC Asset concerned and such period has been agreed between NGC and the User. 3.2 Where in NGC's reasonable opinion an NGC Asset requires replacement before the expiry of its Replacement Period NGC shall, with the prior written approval of the User (except where in NGC's reasonable opinion such replacement is necessary in which case such approval shall not be required but in such case the User shall have the right to Disconnect) have the right to replace the NGC Asset at no additional cost to the User until expiry of its original Replacement Period. Upon expiry of such original Replacement Period NGC shall be entitled to vary the Connection Charge sin respect of the replaced NGC Asset so that they are calculated on the basis of the then Net Asset Value of such NGC Assets. NGC shall give the User not less than 2 months prior written notice of such varied charges which notice shall specify the date upon which such increase or reduction (as the case may be) becomes effective. The User shall pay such varied charges and Appendices A and B shall be amended automatically (and a copy sent to the User) to reflect such revised charges with effect from the date specified in such notice. 3.3 Upon the expiry of the Replacement Period of any NGC Asset:- (a) (i) if in NGC's reasonable opinion to enable NGC to comply with its licence and statutory obligations it is necessary to replace such NGC Asset; or (ii) if such NGC Asset is to be left in service then NGC shall give written notice of this and that it will, unless within 3 months of the receipt of such notice the User objects in writing to the proposal, replace or retain (as the case may be) such NGC Asset. (b) the User may request that NGC replaces the Asset. 3.4 Where the User serves a counter notice pursuant to paragraph 3.3 above then NGC shall:- (a) keep the NGC Asset in service; and (b) negotiate with the User in good faith with regard to the Connection Charges applicable to such NGC Asset. In the event that NGC and the User fail to agree the level of such Connection Charges in accordance with paragraph 3.4(b) above then the User shall pay Connection Charges to NGC in respect of such NGC Asset equal to the Connection Charges payable by the User in respect of the NGC Asset in the last Financial Year of the Replacement Period (the "Deemed Charge") and the matter shall be referred to the Director for determination. If the Director determines that the Connection Charges payable in respect of such NGC Asset should be:- (i) less than the Deemed Charge then NGC shall repay to the User the difference between the Deemed Charge and the amount so determined by the Director together with interest at the Base Rate, for the period from when the User started to pay the Deemed Charge until the date of payment; (ii) greater than the Deemed Charge then the User shall pay the difference to NGC together with interest at the Base Rate for the period from when the User started to pay the Deemed Charge until the date of payment. 3.5 When the Connection Charges are payable in respect of NGC Assets:- (a) replaced in accordance with paragraph 3.3 above; or (b) retained in accordance with paragraph 3.3 above; then NGC shall except in the circumstances in paragraph 3.4(b) give the User not less than 2 months prior written notice of such varied charges and specify the date upon which such charges become effective. The User shall pay such varied charges and Appendices A and B shall be amended automatically (and a copy sent to the User) to reflect such revised charges with effect from the dates notified to the User by NGC. Where NGC is in negotiation with the User in accordance with paragraph 3.4(b) then it s hall give such notice as is reasonably practicable in the circumstances. 4. Termination Amounts 4.1 The expressions set out below shall have the meanings shown:- "Termination Amount" shall be the sum calculated to be equal to the aggregate of the following:- (a) in respect of NGC Assets:- (i) shown in Appendix A to the Supplemental Agreement and which, in NGC's reasonable opinion are no longer required by NGC to enable NGC to comply with its Licence Standards, and can therefore be removed ("Type A Assets"); (aa) the Net Asset Value of such NGC Asset as at the end of the Financial Year in which termination occurs (on the assumption that the sums specified in paragraph 4.1(b) will be paid), plus (bb) a sum equal to the reasonable costs of removing such NGC Assets and of making good the remaining Plant and Apparatus at the Connection Site following the removal of any Type A Assets; (ii) in Appendix A to the Supplemental Agreement and which in NGC's reasonable opinion cannot be removed ("Type B Assets") as a result of the termination, a sum equal to the product of the Asset Allocation Factor multiplied by the Net Asset Value of t hat NGC Asset as at the end of the Financial Year in which termination occurs; and in relation to NGC Assets: (aa) which NGC has determined to replace upon the expiry of the relevant Replacement Period in accordance with paragraph 3.3; and (bb) in respect of which no counter notice has been served by the User pursuant to paragraph 3.3; and (cc) the User has served in accordance with the provisions of this Supplemental Agreement a notice to Disconnect in respect of the Connection Site at which the NGC Assets were located; and (dd) due to the timing of the replacement of such NGC Assets, no Connection Charges will have become payable in respect of such NGC Assets by the User by the date of Termination; the reasonable costs incurred by NGC in connection with the installation of such NGC Assets. (b) the Connection Charges and Use of System Charges for the Financial Year in which termination occurs. "Asset Allocation Factor" means in respect of each NGC Asset specified in Appendix A to this Supplemental Agreement the figure expressed as a percentage appearing in the column headed Allocation and immediately adjacent to the description of the NGC Asset to which it relates. 4.2 In the event that a Termination Amount specified in paragraph 4.1(a)((i) is paid, in respect of Type A Assets, and subsequently NGC re-uses such NGC Assets in respect of which such payment has been made at the same or another Connection Site then NGC shall pay to the User a sum equal to the lower of:- (i) the Termination Amount paid in respect of such NGC Asset; or (ii) the Net Asset Value attributed to such NGC Asset for charging purposes upon its re-use; less any reasonable costs incurred by NGC in respect of storage. NGC shall use its reasonable endeavours to re-use such NGC Assets. 4.3 In the event that a Termination Amount specified in paragraph 4.1(a)(ii) above is paid in respect of Type B Assets and these are subsequently re-used then NGC shall pay to the User a sum equal to the lower of:- (i) the Termination Amount paid in respect of such NGC Assets; or (ii) the Net Asset Value attributed to such NGC Asset for charging purposes upon its re-use. 4.4 For the purposes of paragraphs 4.2 and 4.3 re-use shall not occur where any NGC Asset remains connected for the purpose of providing a continuing connection for other Users connected to the NGC Transmission System at the Connection Site at the date of termination. However in the event of any User requiring a continued connection modifying its requirements or another User connecting at the Connection Site and the NGC Assets in respect of which a payment has been made are required for this modification this shall constitute re-use. 4.5 NGC shall be under no obligation to rebate any of the Termination Amounts described in paragraph 4.1(b) except to the extent that connection and/or Transmission Network Use of System Charges are subsequently received in respect of NGC Assets in relation to which such Termination Amounts have been paid to NGC during the Financial Year in which termination has occurred. 4.6 Upon request in writing, and at the cost of the User NGC shall issue a certificate no more frequently than one each calendar year indicating whether or not such assets have or have not been re-used. If NGC at any time decide that it is not economic to retain any Plant and Apparatus constituting any NGC Asset in respect of which Termination Amounts have been paid it may at its reasonable discretion dispose of the said Plant and Apparatus. Where NGC decides to so dispose of such Plant and Apparatus it shall where the Plant and/or Apparatus is disposed of in a state where it is capable of re-use pay to the User an appropriate proportion of any sale proceeds received in respect thereof. 5. Deductions In respect of any NGC Engineering Charges which have been paid by the User in connection with a Connection Application or under Sub-Clause 2.4 of the Supplemental Agreement Type 2 NGC shall reduce the amount of Connection Charges payable by the User in relation to the respective Connection Site on 1 April in each of the first 3 years (or such other period as may be agreed between NGC and the User) of the payment of such Connection Charges by an amount equal on each occasion to one third of such NGC Engineering Charges. Part 2 - Transmission Services Use of System Charges Introduction Under the terms of this Supplemental Agreement the User is liable to pay Transmission Services Use of System Charges. The basis upon which Transmission Services Use of System Charges are levied and the calculation methodology and rules which will be used to quantify those charges are set out in the statement issued by NGC under paragraphs 1 and 2 of Condition 10 to the Transmission Licence. 1. Reconciliation 1.1 At any time after the Payment Date, NGC may submit to the User, and shall submit to the User at the written request of the User a Statement (which may form part of an invoice or other document) in respect of any Settlement Day (a "Reconciliation Statement") showing:- (a) each Settlement Day in respect of which there has been a change (for any reason) in the value of any parameter originally used in the calculation of the Transmission Services Use of System Charges in respect of such Settlement Day, together with details of the value of the old and new parameter; (b) the amount of any reconciliation payments (if any) required to make the Transmission Services Use of System Charges paid in respect of that Settlement Day equal to the payment which would have been payable had the invoice prepared pursuant to Clause 5.4.1 of this Supplemental Agreement been prepared on the basis of the changed parameter; (c) whether the reconciliation payment represents an amount owing by NGC to the User or by the User to NGC; (d) the amount of interest accruing on such reconciliation payment calculated in accordance with this paragraph 1.1 below. Interest payable in respect of each reconciliation payment shall accrue from and including the relevant Payment Date up to but excluding the date upon which the amounts specified in the Reconciliation Statement are paid, and shall be at a rate equal to the Base Rate for the time being and from time to time. Interest shall accrue from day to day. 1.2 Together with the Reconciliation Statement in the case of sums due:- (a) from the User to NGC, NGC shall:- (i) send the User an invoice in relation to any sums shown by the Reconciliation Statement to be due to NGC and interest thereon calculated in accordance with paragraph 1.1; or (ii) include those sums due in another invoice; and (b) from NGC to the User, forthwith following the issue of any Reconciliation Statement, NGC shall:- (i) issue a credit note in relation to any sum shown by the Reconciliation Statement to be due to the User and interest thereon calculated in accordance with paragraph 1.1; or (ii) include those sums due to the User as a credit in an invoice from NGC to the User. 1.3 The right to submit a Reconciliation Statement and consequential invoices and/or credit notes shall survive the termination of this Supplemental Agreement and the parties agree that the provisions of this Appendix E Part 2 shall remain in full force and effect and shall continue to bind them after such termination (the version in existence as at the date of termination being the applicable version, in the case of any amendments). 2. Reconciliation Payments The User, or as the case may be, NGC, shall pay the amounts set out in the relevant invoice or credit note, either in accordance with the applicable requirements for payment of other sums due under that invoice in the case of sums shown in an invoice also dealing with other payments, or in other cases within 5 Business Days of the date of the Reconciliation Statement. 3. Revision of Charges On or before 31 October in each Financial Year NGC shall notify the User in writing of the intended basis of calculation to be used by NGC in calculating Transmission Services Use of System Charges for the following Financial Year and shall consult the User concerning the same. On or before 30 November in each Financial Year NGC shall confirm to the User the basis of calculation to be used in calculating those charges for the following Financial Year. Part 3 1. Transmission Services Use of System Charges Security Cover 1.1 Provision of Security Cover The User shall provide Security Cover from time to time in accordance with the following provisions:- 1.1.1 the User shall not later than the date of its accession to the Master Agreement or 1st April 1997 (whichever is later) deliver to NGC evidence reasonably satisfactory to it that:- (i) it presently hold an Approved Credit Rating; or (ii) it has provided and is not in default under the Security Cover referred to in paragraph 1.1.2 below; 1.1.2 if the User does not hold or ceases to hold an Approved Credit Rating it shall, not later than the date of:- (i) the date of its accession to the Master Agreement; (ii) the 1st April 1997; or (iii) the date upon which it ceases to have an Approved Credit Rating:- (a) deliver to NGC a Qualifying Guarantee in such amount as shall be notified by NGC to the User in accordance with paragraph 2; or (b) deliver to NGC a Letter of Credit (available for an initial period of not less than 6 months) in such amount as shall be notified by NGC to the User in accordance with paragraph 2; and/or (c) deliver to NGC cash for credit to the Escrow Account in such amount as shall be notified by NGC in accordance with paragraph 2. 1.1.3 The provision of security in respect of Transmission Services Use of System Charges by the User in accordance with the terms of : (a) this Supplemental Agreement shall relieve it of its obligations to provide such security under the terms of any other Supplemental Agreement to which the User is a party; and (b) any other Supplemental Agreement to which the User is a party shall relieve it of its obligations to provide such security under the terms of this Supplemental Agreement; in each case, to the extent of the security provided to NGC pursuant to this Appendix or the same provision under the terms of any other Supplemental Agreement made between NGC and the User. 1.1.4 The provisions of this Part 3 of Appendix E shall be in addition to any other requirements to provide security in respect of any other sums due under the terms of this Supplemental Agreement. 1.2 Maintenance of Security Cover Where the user is required to provide security cover in accordance with the terms of paragraph 1.1 it shall at all times thereafter maintain a Security Amount equal to or more than the Security Cover applicable to it. Immediately upon any reduction occurring in the Security Amount provided by the User or any Letter of Credit or Qualifying Guarantee being for any reason drawn down or demanded respectively, the User will procure that new Letters of Credit or Qualifying Guarantees are issued or existing Letters of Credit or Qualifying Guarantees are reinstated (to the satisfaction of NGC) to their full value or cash is placed to the credit of the Escrow Account in an amount required to restore the Security Amount to an amount at least equal to the Security Cover applicable to the User, and in such proportions of Letters of Credit, Qualifying Guarantees and/or cash as the User may determine. Not later than 10 Business Days before any outstanding Letter of Credit and/or Qualifying Guarantee is due to expire, the User shall procure to the satisfaction of NGC that its required Security Amount will be available for a further period of not less than 6 months which may be done in one of the following ways:- 1.2.1 subject to the issuing bank continuing to have an Approved Credit Rating provide NGC with confirmation from the issuing bank that the validity of the Letter of Credit has been extended for a period of not less than 6 months on the same terms and otherwise for such amount as is required by this Part 3; or 1.2.2 provide NGC with a new Letter of Credit issued by an issuing bank with an Approved Credit Rating for an amount at least equal to the required Security Amount applicable to it (less its balance on the Escrow Account) which Letter of Credit shall be available for a period of not less than 6 months; or 1.2.3 subject to the entity issuing the Qualifying Guarantee continuing to have an Approved Credit Rating provide NGC with confirmation from the issuing entity that the validity of the Qualifying Guarantee has been extended for a period of not less than 6 months on the sane terms and otherwise for such amount as is required by this Part 3; or 1.2.4 provide NGC with a new Qualifying Guarantee for an amount at least equal to the required Security Amount applicable to it (less its balance on the Escrow Account) which Qualifying Guarantee shall be available for a period of not less than 6 months; or 1.2.5 procure such transfer to NGC for credit to the Escrow Account of an amount as shall ensure that the credit balance applicable to the User and standing to the credit of the Escrow Account shall be at least equal to the required Security Amount. 1.3 Failure to supply or maintain Security Cover -------------------------------------------- If the User fails at any time to provide or maintain Security Cover to the satisfaction of NGC in accordance with the provisions of this Part 3, NGC may at any tie while such default continues, and if at such time any Letter of Credit and/or Qualifying Guarantee forming part of the Security Cover is due to expire within nine Business Days immediately, and without notice to the User, demand payment of the entire amount of any outstanding Letter of Credit and/or Qualifying Guarantee and shall credit the proceeds of the Letter of Credit and/or Qualifying Guarantee to the Escrow Account. 1.4 Substitute Letter of Credit or Qualifying Guarantee 1.4.1 If the bank issuing the User's Letter of Credit ceases to have the credit rating set out in the definition of Letter of Credit in Clause 1.1 of this Supplemental Agreement such User shall forthwith procure the issue of a substitute Letter of Credit by a bank that has such a credit rating or a Qualifying Guarantee or transfer to NGC cash to be credited to the Escrow Account. 1.4.2 If the entity providing the User's Qualifying Guarantee ceases to have an Approved Credit Rating the User shall forthwith procure a replacement Qualifying Guarantee from an entity with such a credit rating or a Letter of Credit or transfer to NGC cash to be credited to the Escrow Account. 2. Credit Monitoring 2.1 Determination of Security Cover The amount of Security Cover which the User shall be required to maintain s hall be determined from time to time by NGC in accordance with this Part 3 on the basis of the criteria set out in paragraph 2.2, and shall be notified to the User. 2.2 Criteria for provision of Security Cover If paragraph 1.1.2 applies, the amount of Security Cover required to be provided by the User in respect of this and any other Supplemental Agreement to which the User is a party shall be provided in an amount to be reasonably assessed by NGC as the aggregate amount reasonably anticipated by NGC as being payable by the User pursuant to all Supplemental Agreements to which the User is a party in respect of the Transmission Services Use of System Charges referred to in Part 2 of Appendix D over a 28 day period. 2.3 Six Monthly Variation In respect of paragraph 2.2 NGC shall calculate the amount for the two six-month periods commencing 1st April and 1st October in each year and shall advise the User accordingly. 2.4 Review of Security Cover NGC shall keep under review the Security Cover relating to the User and shall promptly advise the User whenever the Security Amount maintained by the User is more or less than the amount required to be maintained pursuant to paragraph 2 of this Part 3. 2.5 Increase or Decrease of Security Cover If, after considering any representations which may be made by the User, NGC reasonably determines that the User's Security Cover should be increased or decreased, it shall so notify the User. If NGC so determines that such Security Cover should be decreased and the User consents then that reduction shall take place. NGC shall consent to an appropriate reduction in the available amount of any outstanding Qualifying Guarantee or Letter of Credit and/or shall repay to the User such part of the deposit held in the Escrow Account for the account of the User (together with all accrued interest on the part to be repaid) sufficient to reduce the User's Security Amount to the level of Security Cover applicable to it. If NGC so determines that the User's Security Cover should be increased, the User s hall, within five Business Days of notice as aforesaid, procure an additional or replacement Qualifying Guarantee or Letter of Credit or transfer to NGC cash to be credited to the Escrow Account in an amount sufficient to increase its Security Amount so as to be at least equal to the level of Security Cover applicable to it. 2.6 Notification in respect of Security Cover NGC shall notify the User promptly if:- 2.6.1 the User fails to provide, maintain, extend or renew a Qualifying Guarantee or a Letter of Credit which it is required to provide, maintain, extend or renew pursuant to paragraphs 1 or 2; 2.6.2 NGC shall make a demand under any such Qualifying Guarantee or a call under a Letter of Credit; or 2.6.3 NGC becomes aware that the User (a) s hall cease to have an Approved Credit Rating, or (b) shall be placed on credit watch by the relevant credit rating agency (or becomes subject to an equivalent procedure) which in any case casts doubt on the User retaining an Approved Credit Rating, or (c) shall be in default under the additional or alternative security required to be provided pursuant to this Part 3; or 2.6.4 NGC becomes aware that any bank that has issued a Letter or Credit which has not expired shall cease to have the credit rating required by this Appendix; or 2.6.5 NGC becomes aware that any entity providing a Qualifying Guarantee which has not expired shall cease to have an Approved Credit Rating. Provided always that the failure by NGC to notify the User pursuant to this paragraph 2.6 s hall not relieve the User of its obligations under and in accordance with the terms of this Appendix. 2.7 Release from Security Cover Obligations Upon the User ceasing to be a party to the Master Agreement and provided that all amounts owed by the User in respect of the Transmission Services Use of System Charges have been duly and finally paid and that it is not otherwise in default in any respect of any Transmission Services Use of System Charges (including interest) payable under the terms of any Supplemental Agreement, the User shall be released from the obligation to maintain Security Cover and NGC shall consent to the revocation of any outstanding Qualifying Guarantee or Letter of Credit and shall repay to the User the balance (including interest credited thereto) standing to the credit of the User on the Escrow Account at that date. 3. Payment Default If, by 1230 hours on any Payment Date, NGC has been notified by the User or it otherwise has reason to believe that the User will to have remitted to it by close of banking business on the Payment Date all or any part ("the amount in default") of any amount which has been notified by NGC to the User as being payable by the user by way of the Transmission Services Use of System Charges on the relevant Payment Date, then NGC s hall be entitled to act in accordance with the following provisions (or whichever of them shall apply) in the order in which they appear until NGC is satisfied that the User has discharged its obligations in respect of the Transmission Services Use of System Charges under this Supplemental Agreement and/or any other Supplemental Agreement to which the User is a party which are payable in respect of the relevant Settlement Day:- (a) NGC may to the extent that the User is entitled to receive payment from NGC pursuant to this Supplemental Agreement and/or any other Supplemental Agreement to which the User is a party (unless it reasonably believes that such set-off shall be unlawful) set off the amount of such entitlement against the amount in default; (b) NGC shall be entitled to set off the amount of funds then standing to the credit of the Escrow Account to the extent that it represents Security Cover provided by the User in accordance with paragraph 2.1.2 against the Transmission Services Use of System Charges unpaid by the User and for that purpose NGC shall be entitled to transfer any such amount from the Escrow Account to any other accounts of NGC at its absolute discretion and shall notify the User accordingly; (c) NGC may demand payment under any outstanding Letter of Credit supplied by the User in a sum not exceeding the available amount of all such Letters of Credit; (d) NGC may demand payment under any outstanding Qualifying Guarantee provided for the benefit of the User pursuant to paragraph 1.1.2(a). 4. Utilisation of Funds In addition to the provisions of paragraph 3 above if NGC serves a notice of default under the terms of Clause 17.6A of a Type 1 Supplemental Agreement and/or notice of termination under Clause 17.7 of a Type 1 Supplemental Agreement (or the equivalent Clauses in a Supplemental Agreement other than a Type 1 Supplemental Agreement) then NGC shall be entitled to demand payment of any of the Transmission Services Use of System Charges which are outstanding whether or not the Payment Date in respect of them shall have passed and:- (i) make demand under any outstanding Qualifying Guarantee or a call under any outstanding Letter of Credit supplied by the User; and (ii) to set off the funds in the Escrow Account to the extent that they represent Security Cover provided by the User against the Transmission Services Use of System Charges unpaid by the User and for that purpose NGC shall be entitled to transfer any such amount from the Escrow Account to any other account of NGC as it shall in its sole discretion think fit. 5. User's Right to Withdraw Funds 5.1 If the User is not in default in respect of any amount owed to NGC in respect of the Transmission Services Use of System Charges under the terms of any Supplemental Agreement to which the User is a p arty:- 5.1.1 NGC shall transfer to the User quarterly interest credited to the Escrow Account; and 5.1.2 NGC shall transfer to such User within a reasonable time after such User's written request therefor any amount of cash provided by the User by way of Security Cover which exceeds the amount which such User is required to provide by way of security in accordance with paragraph 1 of this Part 3. Part 4 Definitions and Interpretations In this Appendix the following expression shall have the meaning set out below: "Base Rate" in respect of any day the rate per annum which is equal to the base lending rate of Barclays Bank PLC as at close of business on that day; Interpretation Where this Appendix makes reference to the word "paragraph" then it shall be a reference to a paragraph in this Appendix unless the contrary is stated. SCHEDULE 8 APPENDIX EE Reactive Power Market and Default Payment Arrangements For the purposes only of paragraph 2 thereof, the contents of Schedule 5 to the Master Agreement and the Appendices thereto as varied from time to time shall be deemed to be incorporated herein as if the same were set out in full. Accordingly, NGC and the user hereby agree and undertake with each other ( so that such obligation of the user to NGC hereby created is held by NGC as trustee for the benefit of all other users now and in the future) that this Appendix shall not be capable of variation except as provided in paragraph 2 of Schedule 5 to the Master Agreement (as amended from time to time), and in respect of this Appendix the Clause headed "VARIATIONS" in this Supplemental Agreement shall have no effect. For the avoidance of doubt, the trust referred to above and hereby created shall apply only to the obligation on the User created by the above mentioned agreement and undertaking to NGC expressly set out in this Appendix and shall not prevent or restrict any agreement which may be entered into between NGC and the User amending or varying any part or parts of this Supplemental Agreement not being this Appendix. SCHEDULE 9 Part 1 - Type 1 Supplemental Agreements Date Ref Connection Site - ---- --- --------------- 27 March 1997 A/SWE/90/14-1EX Abham 27 March 1997 A/SWE/90/14-2EX Alverdiscott 27 March 1997 A/SWE/90/14-3EX Axminster 27 March 1997 A/SWE/90/14-4EX Bridgwater 27 March 1997 A/SWE/90/14-5EX Exeter 27 March 1997 A/SWE/90/14-6EX Indian Queens 27 March 1997 A/SWE/90/14-7EX Iron Acton 27 March 1997 A/SWE/90/14-8EX Landulph 27 March 1997 A/SWE/90/14-9EX Melksham 27 March 1997 A/SWE/90/14-10EX Taunton Part 2 - Type 2 Supplemental Agreements FD2\X - 1 - Date Ref Connection Site N/A N/A N/A Part 3 - Type 3 Supplemental Agreements FD2\X - 1 - Date Ref Sites of Connection N/A N/A N/A Part 4 - Type 4 Supplemental Agreements FD2\X - 1 - Date Ref Sites of Connection N/A N/A N/A Part 5 - Type 5 Supplemental Agreements Date Ref Sites of Connection 27 March 1997 A/SW/90/14-11D Various Part 6 - Type 6 Supplemental Agreements FD2\V - 1 - Date Ref Sites of Connection N/A N/A N/A Dated 31 MARCH 1998 THE NATIONAL GRID COMPANY plc and OTHERS --------------------------------------- AGREEMENT TO VARY the Master Connection and Use of System Agreement ---------------------------------------- TABLE OF CONTENTS Clause Page 1. Interpretation 2. Amendments 3. Continuation of the Master Agreement 4. Miscellaneous 5. Entire Agreement 6. RTPA Schedules 1. Users 2. Transmission Users Group Appendix 1 - Form of Deed of Accession Appendix 2 - Form of TUG Constitution and Rules THIS AGREEMENT TO VARY is made on the 31 day of March 1998 BETWEEN: (1) THE NATIONAL GRID COMPANY plc a company registered in England with number 2366977 and whose registered office is at National Grid House, Kirby Corner Road, Coventry CV4 8JY ("NGC"); and (2) THE PERSONS whose names, registered numbers and registered offices are set out in Schedule 1 (each a "User"). WHEREAS: (A) This Agreement is supplemental to and varies the Master Connection and Use of System Agreement dated 30th March 1990 made between NGC and the Users (the "Master Agreement'); and (B) NGC and the Users have agreed to amend the Master Agreement on the terms and subject to the conditions set out below. IT IS HEREBY AGREED: 1. Interpretation 1.1 Except where defined herein or where the context otherwise requires, words and expressions defined in the Master Agreement shall have the same respective meanings when used in this Agreement. 1.2 The table of contents and the headings to each of the Clauses are inserted for convenience only and shall be ignored in construing or interpreting this Agreement. 2. Amendments 2.1 The parties to this Agreement hereby agree that with effect from the date of this Agreement the Master Agreement shall be amended: 2.1.1 by the insertion of the following new definition in alphabetical order in Schedule 2 of the Master Agreement: "TUG Party" means each person admitted in the capacity as such and for the time being and from time to time party to Schedule 4 only in accordance with the provisions thereof, and shall include any successor(s) in title to, or permitted assigns(s) of, such person: 2.1.2 by the deletion of the definition of "Party" and by substitution with the following: "Party " each person for the time being and from time to time party to the Master Agreement other than TUG Parties, and shall include any successor(s) in title to, or permitted assign(s) of, such person; 2.1.3 by the deletion of the expression "Electricity Supply Industry Arbitration Association" in Clauses 19.2.3(e), 19.11.3(e) and 26.1 of the Master Agreement and by substitution with the expression "Electricity Arbitration Association"; 2.1.4 by the addition of a new Schedule 4 in the form set out in Schedule 2. 3. Continuation of the Master Agreement The Master Agreement shall remain in full force and effect and this Agreement and the Master Agreement shall be treated as one document so that, upon the Master Agreement being amended pursuant to Clause 2, all references to the Master Agreement shall be treated as references to that agreement as amended by this Agreement. 4. Miscellaneous The provisions of Clauses 22, 23, 24 and 26 to 30 inclusive of the Master Agreement shall be deemed to be incorporated herein mutatis mutandis. 5. Entire Agreement 5.1 Each party to this Agreement acknowledges that in entering into this Agreement on the terms set out herein it is not relying upon any representation, warranty, promise or assurance made or given by any other party or any other person, whether or not in writing, at any time prior to the execution of this Agreement which is not expressly set out herein. 5.2 None of the parties to this Agreement shall have any right of action against any other party arising out of or in connection with any representation, warranty, promise or assurance referred to in Clause 5.1 (except in the case of fraud). 6. RTPA Any restriction or information provision (each of those terms having the same meaning in this Clause as in the Restrictive Trade Practices Act 1976) contained in this Agreement or any provision contained in this Agreement adding to or extending any restriction or information provision contained in any agreement which is varied or amended by this Agreement, shall not take effect or shall cease to have effect: (a) if a copy of this Agreement is not provided to the Department of Trade and Industry ("DTI") within twenty-eight days of the date on which this Agreement is made, or (b) if, within twenty-eight days of the provision of that copy to the DTI, the DTI gives notices of objection to the party providing it. IN WITNESS whereof the hands of the duly authorised representatives of the parties hereto the day and year first above written FD2\V SCHEDULE 1 Users ABB Energy Development Company Limited 2688994 Carmelite 50 Victoria Embankment Blackfriars London EC4Y ODX Accord Electric Limited 2869629 152 Grosvenor Road London SW1V 3JL AES Barry Limited 3135522 Burleigh House 17/19 Worple Way Richmond TW10 6AG AES Tyneside Limited 3135543 Burleigh House 17/19 Worple Way Richmond TW10 6AG AES Partington Limited 3210149 Burleigh House 17/19 Worple Way Richmond TW10 6AG Amoco Power Resource (Europe) Ltd 3042173 Amoco House West Gate London W5 1XL Anglian Power Generators Limited 2488955 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ Barking Power Limited 2354681 Devonshire House Mayfair Place London W1X 5FH British Gas Trading Ltd 3078711 Charter Court 50 Windsor Road Slough Berkshire SL1 2HA British Nuclear Fuels plc 1002607 Risley Warrington Cheshire WA3 6AS BOC Limited 337663 Chertsey Road Windlesham Surrey GU20 6HJ BP Chemicals Limited 194971 Britannic House 1 Finsbury Circus London EC2M 7BA Canatxx Energy Ventures Limited 2673604 Hillhouse International PO Box 4 Thornton Cleveleys Lancs FY5 4QD Candecca Resources Limited 953066 Welton Gathering Centre Barfield Lane Wragby Road Sudbrooke Lincolnshire LN2 2QU CeltPower Limited 2656561 Tomen House 13 Charles II Street London SWIY 4QT Citigen (London) Limited 2427823 100 Thames Valley Park Drive Reading Berkshire RG6 1PT Corby Power Limited 2329494 Five Chancery Lane Clifford's Inn London EC4A 1BY Coryton Energy Company FC20597 20 St. James Street 4th Floor London SW1A 1EJ Cottam Development Centre Limited 3273552 53 New Broad Street London EC2M 1JJ Crosfield Limited 00048745 Bank Quay Warrington Cheshire WA5 1AB Derwent CoGeneration Limited 2650621 Lansdowne House Berkeley Square London W1X 5DB Eastern Electricity plc 2366906 Wherstead Park Wherstead Ipswich Suffolk 1P9 2AQ Eastern Merchant Generation Ltd 3116225 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ East Midlands Electricity plc 2366923 PO Box 444 Woodyard Lane Wollaton Nottingham Nottinghamshire NG8 1EZ Electricity Direct (UK) Limited 3174056 78, High Street Lewes East Sussex BN7 1XF Elm Energy and Recycling (UK) Limited 2516685 Elm Energy House Ettingshall Road Wolverhampton West Midlands WV2 2LA Energy Supply Contracts Limited 172268 One Great Tower Street London EC3R 5AH Enfield Energy Centre Limited 2796628 Concorde House Concorde Way Preston Farm Industrial Estate Stockton-on-Tees Cleveland TS18 3RB Enron Gas and Petrochemicals Trading Limited 3003823 4 Millbank London SW1P 3ET Fellside Heat and Power Limited 2614535 Fellside Lodge Seascale Cumbria CA20 1PG Fibrogen Limited 2547498 38 Clarendon Road London W11 3AD Fibropower Limited 2234141 38 Clarendon Road London W11 3AD First Hydro Company 2444277 Bala House Lakeside Business Village St Davids Park Deeside Clwyd CH5 3XJ Flotilla Power (UK) Limited 2880635 4 Millbank London SW1P 3ET Grovehurst Energy Limited 2197516 UK Paper House Kemsley Sittingboume Kent ME10 3ET Humber Power Limited 2571241 South Humber Bank Power Station South Marsh Road Stallingborough North East Lincolnshire DN37 8BZ Impkemix Energy Limited 2076043 The Heath Runcom Cheshire WA7 4QF Independent Energy UK Limited 3033406 30 Aylesbury Street London EC1R 0ER Indian Queens Power Limited 2928100 Burleigh House 17/19 Worple Way Richmond TW10 6AG International Generating Company Limited 3039100 Springside House Tinwell Stamford PE9 3UQ Joint European Torus (JET), Joint Undertaking (a Joint Undertaking within the meaning of Chapter V of the Treaty establishing the European Atomic Energy Committee) Culham Abingdon Oxfordshire OX14 3EA Keadby Developments Limited 2691516 Keadby Power Station PO Box 89 Keadby Scunthorpe North Lincolnshire DN17 3AZ Keadby Generation Limited 2729513 Keadby Power Station PO Box 89 Keadby Scunthorpe North Lincolnshire DN17 3AZ Kent Power Limited 2723303 100 Thames Valley Park Drive Reading Berkshire RG6 1PT Kingsnorth Power Limited 2675504 Chancery House 53164 Chancery Lane London WC2A 1QU Lakeland Power Limited 2355290 Roosecote Power Station Roosecote Marsh Barrow in Furness Cumbria LA13 0PQ London Electricity plc 2366852 Templar House 81-87 High Holborn London WC1V 6NU Magnox Electric plc 2264251 Berkeley Centre Berkeley Gloucestershire GL13 9PB Manweb plc 2366937 Manweb House Chester Business Park Wrexham Road Chester CH4 9RF Manweb Services Limited 2631510 Manweb House Kingsfield Court Chester Business Park Chester CH4 9RF Medway Power Limited 2537903 Burleigh House 17/19 Worple Way Richmond Surrey TW10 6AG Midlands Electricity plc 2366928 Mucklow Hill Halesowen West Midlands B62 8BP Midlands Power (LTK) Limited 2251099 Mucklow Hill Halesowen West Midlands B62 8BP National Power PLC 2366963 Windmill Hill Business Park Whitehill Way Swindon Wiltshire SN5 6PB National Power (Cogeneration Trading) Limited 2745602 Windmill Hill Business Park Whitehill Way Swindon Wiltshire SN5 6PB Norsk Hydro (U.K.) Limited 841421 Bridge House 69 London Road Twickenham Middlesex TW1 1RH Northern Electric plc 2366942 Carliol House Market Street Newcastle upon Tyne Tyne & Wear NE1 6NE NORWEB plc 2366949 PO Box 14 410 Birchwood Boulevard Warrington Cheshire WA3 7GA Nuclear Electric Limited 3076445 Barnett Way Barnwood Gloucester GL4 3RS Peterborough Power Limited 2353599 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ PowerGen plc 2366970 53 New Broad Street London EC2M 1JJ Railtrack plc 2904587 Railtrack House Euston Square London NW1 2EE Regional Power Generators Limited 2352390 Wetherby Road Scarcroft Leeds LS14 3HS Rocksavage Power Company, Ltd. FC 18868 Maples & Calder, Ugland House PO Box 309 George Town Grand Cayman Cayman Islands British West Ind. SaltEnd Cogeneration Company 3274949 Britannic House I Finsbury Circus London EC2M 7BA Savage Land Limited 3145444 20 St James's Street London SW1A 1ES Scottish Hydro-Electric plc SC117119 10 Dunkeld Road Perth PH1 5WA Scottish Power plc Sc117120 1 Atlantic Quay Glasgow G2 8SP Seabank Power Limited 2591188 Severn Road Hallen Bristol BS10 7SP SEEBOARD plc 2366867 Forest Gate Brighton Road Crawley West Sussex RH11 9BH Shell Power Limited 2559630 Shell Mex House Strand London WC2R ODX Siemens plc 727817 Siemens House Oldbury Bracknell Berkshire RG12 8FZ Slough Energy Supplies Limited 2474514 234 Bath Road Slough Berkshire SL1 4EE South East London Combined Heat and Power Limited 2489384 37-41 Old Queen Street London SW1H 9JA Southern Electric plc 2366879 Southern Electric House Westacott Way Littlewick Green Maidenhead Berkshire SL6 3QB Southern Energy (UK) Generation Limited 3321733 200 Aldersgate Street London EC1A 4JJ South Wales Electricity plc 2366985 Newport Road St Mellons Cardiff South Glamorgan CF3 9XW South Western Electricity plc 2366894 800 Park Avenue Aztec West Almondsbury Bristol BS12 4SE Sutton Bridge Power 2586357 4. Millbank London SW1P 3ET Teesside Power Limited 2464040 4 Millbank London SW1P 3ET The Renewable Energy Company Limited 3043412 Stroud House Russell Street Stroud Gloucestershire GL5 3AN Tyne Property Development Limited 1194995 Siemens House Oldbury Bracknell Berkshire RG12 8FZ UK Electric Power Limited 2844010 Williams Denton Jones Glamaber Bangor Gwynedd LL57 2DY FD2\W - 1 - UML Limited 661900 Thermal Road Bromborough Wirral Merseyside L62 4XG Wainstones Power Limited 3462783 Pickfords Wharf Clink Street London SE1 9DF Yorkshire Electricity Group plc 2366995 Wetherby Road Scarcroft Leeds LS14 3HS SCHEDULE 2 New Schedule 4 to the Master Agreement Transmission Users Group 1. Introduction 1.1 In this Schedule the following expressions shall bear the following meanings: "Industry Party" has the meaning given to that expression in the TUG Constitution; "New TUG Party" means any person who applies to be admitted in the capacity of TUG Party and who is an Industry Party and who is not already a Party at the time of application; "Representative" has the meaning given to that expression in the TUG Constitution; "Transmission Users Group" or "TUG" means the group established pursuant to paragraph 4 of this Schedule; "TUG Confidential Information" means all data and other information supplied to a Party or a TUG Party by another Party or TUG Party under the provisions of this Schedule; "TUG Deed of Accession" means a deed in, or substantially in, the form set out in Appendix 1 to this Schedule as amended from time to time in accordance with the terms of this Agreement; and "TUG Constitution" means the constitution and rules of the Transmission Users Group in the form set out in Appendix 2 to this Schedule as amended from time to time in accordance with the term of this Agreement and the TUG Constitution. 1.2 Without prejudice to the terms of paragraph 8 the Parties and the TUG Parties expressly agree and acknowledge that the expression "TUG Party" shall not be capable of amendment without the consent of TUG Parties, but that any word or expression which is not defined in paragraph 1.1 but which is a definition for the purposes of this Agreement and is used primarily for parts of this Agreement other than this Schedule shall, subject to paragraph2.3 and without prejudice to paragraph 2.5, be capable of being amended without such consent notwithstanding that it may also be used in this Schedule. 2. Amendments and Modifications 2.1 Obligations 2.1.1 The Parties and TUG Parties expressly acknowledge and agree that each TUG Party is bound only to the extent of the obligations which are expressly set out or referred to in this Schedule (including those provisions incorporated herein by reference in paragraph 5) and not by any other provision of this Agreement. 2.1.2 Each TUG Party agrees to comply with the provisions of this Schedule (including those provisions of this Agreement incorporated herein by reference in paragraph 5). 2.1.3 The Parties and TUG Parties further expressly agree that any TUG Party shall be conferred only with such rights in respect of this Agreement as are expressed to be conferred on it as TUG Party pursuant to provisions which are expressly set out in this Schedule (including those provisions incorporated herein by reference in paragraph 5). 2.1.4 References in this paragraph 2.1 to this Schedule shall include references to this Schedule as varied, modified or supplemented from time to time in accordance with the terms of this Agreement. 2.2 Consent The consent or agreement of any TUG Party shall not be required to any modification, abrogation, amendment or suspension of any provision of this Agreement which is not expressly set out in this Schedule (and for this purpose the provisions of this Agreement incorporated herein by reference in paragraph 5 shall be deemed to be not set out in this Schedule). Each TUG Party hereby irrevocably waives any rights which it might be considered or held to have to consent or agree to any such modification, abrogation, amendment or suspension. 2.3 Authorisation to amend Without prejudice to paragraphs 2.1, 2.2 and 2.5 each TUG Party hereby unconditionally and irrevocably authorises and instructs NGC to sign on its behalf amending agreements to this Agreement, to execute any agreement which modifies, abrogates, amends or suspends any provision of this Agreement in circumstances where such TUG Party's consent or approval is not required, and undertakes not to withdraw, qualify or revoke such authority and instruction at any time. 2.4 Notification NGC shall notify each TUG Party forthwith of all amendments, modifications, abrogations and suspensions which are made to this Agreement for which the consent or agreement of such TUG Party is not required. 2.5 Appeal to Director 2.5.1 Where any TUG Party considers that any modification, abrogation, amendment or suspension proposed to be made to any provisions of the Agreement in respect of which the consent or approval of a TUG Party is not required (pursuant to paragraph 2.2) would have a material adverse effect on its rights and liabilities as a TUG Party as set out in this Schedule (the "proposed change"), it shall have the right in the prescribed time limits to refer the matter in writing to the Director (such referral to be copied to NGC, each Party and each TUG Party) who shall determine, taking into account the views of Parties, whether such proposed change has a material adverse effect on the basis of TUG Parties as a group. The Director shall not have locus standi to consider any perceived or actual prejudice to an individual TUG Party. The Director's determination shall be final and binding for all purposes. 2.5.2 For the purposes of enabling a TUG Party to appeal to the Director in accordance with the terms of paragraph 2.5.1, NGC shall give all TUG Parties and the Director notice of the proposed change at least 14 clear days prior to the implementation of the proposed change in accordance with the provisions of this Agreement. 2.5.3 If an appeal to the Director against a proposed change is made within 14 days after notification by NGC pursuant to paragraph 2.5.2, the change shall not come into effect until the determination of the Director has been made in accordance with the terms of paragraph 2.5.4 or paragraph 2.5.5 applies. If no appeal is made within the said 14 days, the change shall come into effect on the expiry of that period. 2.5.4 The Director shall within 28 days of receipt of a referral pursuant to paragraph 2.5.1, or such longer period as shall be agreed in writing by the Director and NGC, make the determination referred to therein giving supporting reasons and: (a) if the determination of the Director is that the proposed change does not have a material adverse effect upon the rights and liabilities as set out in this Schedule of the TUG Parties as a group, then the proposed change shall come into effect in accordance with the provisions of this Agreement; (b) if the determination of the Director is that the proposed change does have a material adverse effect upon the rights and liabilities as set out in this Schedule of the TUG Parties as a group, the Director shall require that the proposed change does not come into effect and in which case such proposed change shall not come into effect; and (c) if the Director determines that a proposed change is not to come into effect pursuant to paragraph 2.5.4(b), the Director shall have no authority to require any modifications to the proposed change to obviate or mitigate such material adverse effect or to require any other change. 2.5.5 If the Director does not make his determination within 28 days of receipt of a referral or, such other period as shall have been agreed in writing by the Director and NGC, in accordance with the terms of paragraph 2.5.4, the proposed change shall come into effect in accordance with the provision of this Agreement. 3. TUG Parties 3.1 The Parties and TUG Parties shall admit a New TUG Party as an additional party for the purposes of this Schedule only, on the terms set out in paragraph 2. Such admission shall take effect by way of a TUG Deed of Accession prepared by NGC at the expense and cost of the New TUG Party and to be executed by NGC for itself and on behalf of all other Parties and TUG Parties. Upon execution and delivery of the TUG Deed of Accession by NGC and the New TUG Party and subject to the terms and conditions of that TUG Deed of Accession, the New TUG Party shall. for the purposes of this Schedule only, on the terms set out in paragraph 2, become a TUG Party. 3.2 Each Party and each TUG Party hereby authorises and instructs NGC to execute any such TUG Deed of Accession on its behalf and undertakes not to withdraw, qualify or revoke any such authority or instruction at any time. 3.3 NGC shall promptly notify all Parties and all TUG Parties in writing that the New TUG Party has become a TUG Party . 3.4 In addition to the provisions of paragraph 6, a TUG Party shall cease to be a TUG when it accedes to this Agreement as a Party. 4. Establishment of the Transmission Users Group 4.1 Each Party and each TUG Party hereby agrees to the establishment of the Transmission Users Group upon the terms and subject to the conditions of this Agreement and the TUG Constitution and agrees to comply with the provisions of the TUG Construction. 5. Incorporation by reference 5.1 The provisions of Clauses 1, 15, 20 to 24 inclusive and 26 to 30 inclusive of this Agreement shall be deemed to be incorporated into this Schedule 4 mutatis mutandis as if each reference therein to the word "Party" were a reference to the words "Party and TUG Party" and each reference therein to the word "Parties" were to the words "Parties and TUG Parties". 5.2 For the avoidance of doubt, the provisions of Clauses 2 to 14 inclusive, 16 to 19 inclusive and 25 shall not be regarded as incorporated into this Schedule and shall not apply to this Schedule. 6. Duration and Termination 6.1 A TUG Party shall automatically cease to be a TUG Party upon ceasing to be an Industry Party. 6.2 A Party (other than NGC) which is not an Industry Party shall not be bound by this Schedule and shall have no rights or obligations in relation to this Schedule. A Party which ceases to be an Industry Party shall automatically cease to be bound by this Schedule and shall have no rights or obligations in relation to this Schedule. 6.3 A person ceasing to be a TUG Party (including under paragraph 3.4) shall not affect any rights or obligations of such TUG Party which may have accrued to the date of termination or expiry and shall not affect any continuing obligations of any TUG Party under this Agreement. 6.4 A Party ceasing to be bound by the provisions of this Schedule in accordance with paragraph 6.2 shall not affect any rights or obligations of such Party which may have accrued to the date on which it ceased to be an Industry Party and shall not affect any continuing obligations of any Party under this Agreement. 6.5 Following termination of this Agreement paragraph 7 shall remain in full force and effect. 7. Confidentiality 7.1 Each Party and each TUG Party (each an "Obligor") hereby undertakes with each other Party and each other TUG Party that it shall preserve the confidentiality of. and not directly or indirectly reveal, report, publish, disclose, transfer or use for its own purposes. TUG Confidential information except: 7.1.1 in the circumstances set out in paragraph 7.2: or 7.1.2 to the extent otherwise expressly permitted by this Schedule; or 7.1.3 with the prior consent in writing of the other Parties and TUG Parties to whose affairs such TUG Confidential Information relates. 7.2 The circumstances referred to in paragraph 7.1 are: 7.2.1 where the TUG Confidential Information is in the public domain before it is furnished to the Obligor; or 7.2.2 where the TUG Confidential Information after it is furnished to the Obligor: (a) is acquired by the Obligor in circumstances to which this paragraph 7 does not apply; (b) is acquired by the Obligor in circumstances to which this paragraph 7 does apply but then ceases to be subject to the restrictions imposed by paragraph 7; or (c) enters the public domain. and in any case otherwise than as a result of (i) a breach by the Obligor of its obligations in this paragraph 7 or (ii) a breach by the person who disclosed that TUG Confidential Information of that person's confidentiality obligation and the Obligor is aware of such breach; or 7.2.3 if the Obligor is required or permitted to make disclosure of the TUG Confidential Information to any person: (a) in compliance with the duties of the Obligor under the Act or any other requirements of a Competent Authority; or (b) in compliance with the conditions of any Licence or any document referred to in any Licence with which the Obligor is required to comply; or (c) in compliance with any other requirement or law; or (d) in response to a requirement of any stock exchange or regulatory authority or the Panel on Take-overs and Mergers; or (e) pursuant to the Arbitration Rules for the Electricity Arbitration Association or pursuant to any judicial or other arbitral process or tribunal having jurisdiction in relation to the Obligor; or (f) in compliance with the requirements of Section 35 of the Act and with the provisions of the Fuel Security Code; or 7.2.4 if the Obligor makes disclosure of the TUG Confidential Information to its employees, directors, agents, consultants and professional advisers in each case on the basis set out in paragraph 7.3; or 7.2.5 if the Obligor makes disclosure of the TUG Confidential Information in circumstances where it is expressly permitted or required to disclose that information under the terms of any agreement or arrangement (including this Agreement) with the party to whose affairs such TUG Confidential Information relates. 7.3 The Obligor shall adopt procedures within its organisation (applicable to (without limitation) its employees and directors) for ensuring the confidentiality of TUG Confidential Information which it is obliged to preserve as confidential under paragraph 7. 1. These procedures shall include, but shall not necessarily be limited to: 7.3.1 TUG Confidential Information will be disseminated within the Obligor only on a "need to know" basis. 7.3.2 agents, consultants and professional advisers of the Obligor in receipt of TUG Confidential Information will be made fully aware of the Obligor's obligations of confidence in relation thereto and enter into similar confidentiality undertakings as are given by the Obligor under this paragraph 7; and 7.3.3 any copies of the TUG Confidential Information whether in hard copy or computerised form will clearly identify the TUG Confidential Information as confidential. 7.4 The provisions of this paragraph 7 shall continue to bind a person after its cessation as a Party or a TUG Party (as the case may be) for whatever reason. 8. Variations 8.1 Subject to the terms of paragraphs 8.2 and 8.3, no variations to this Schedule (including, without limitation, this paragraph 8) shall be effective unless made in writing and signed by and on behalf of all Parties and all TUG Parties. The Parties and the TUG Parties shall effect any amendment required to be made to this Schedule by the Director as a result of a change in the Transmission Licence or an order or direction made pursuant to the Act or a Licence and each Party and each TUG Party hereby authorises and instructs NGC to make any such amendment on its behalf and undertakes not to withdraw, qualify or revoke such authority or instruction at any time. 8.2 Subject to the terms of paragraph 8.4, all variations to the TUG Constitution shall be made in accordance with the terms of paragraph 14.8 of the TUG Constitution or any other relevant provision of the TUG Constitution from time to time providing for amendments of the TUG Construction. Each Party and each TUG Party hereby authorises and instructs NGC to make and to sign any amendment on its behalf which are approved pursuant to the terms of the TUG Constitution and undertakes not to withdraw, qualify or revoke such authority or instruction at any time. 8.3 Notwithstanding. the term of paragraph 1.2 the meanings of the expressions "Industry Party" and "Representative" which are primarily defined in the TUG Constitution shall only be amended in accordance with the provisions of the TUG Constitution. 8.4 In the event of any inconsistency between the provisions of the TUG Constitution and the Agreement, the provisions of the Agreement shall prevail. 9. Ratification Each of the Parties and the TUG Parties hereby ratifies the appointment of those individuals listed in Appendix 1 of the TUG Construction (in its form when first brought into effect) as the first officers and Representatives of the Transmission Users Group and expressly acknowledge and agree that those individuals are Representatives and officers of the Transmission Users Group duly appointed in accordance with the terms of the TUG Constitution. 10. Indemnities 10.1 Subject to the terms of paragraphs 10.2 and 10.3, each Party and each TUG Party (in their respective capacities as Industry Parties) expressly acknowledges and agrees that it shall indemnify and keep indemnified the Representative by whom it is represented as provided in paragraph 6.1 of the TUG Constitution (and, if more than one, as between the relevant Parties and TUG Parties rateably in proportion to their weighted voting rights as provided in paragraph 14.6 of the TUG Constitution) from and against any and all costs (including legal costs), charges, expenses, damages, or other liabilities properly incurred or suffered by the Representative in relation to the Transmission Users Group or his office as a Representative or the due exercise by him of his powers, duties and responsibilities as a Representative under this Agreement and the TUG Constitution and all claims, demands or proceedings arising out of or in connection with the same except any such costs, charges, expenses, damages or other liabilities which are suffered or incurred or occasioned by the wilful default or bad faith of, or breach of obligation, duty or trust by such a Representative. 10.2 Where a Representative represents more than one Industry Party, each Party and each TUG Party (in their respective capacities as Industry Parties) who is represented by such Representative agrees to indemnify such Representative on a joint and several basis in accordance with the terms of paragraph 10. l. 10.3 Each Party and each TUG Party shall upon the request of any Representative by whom the Party or TUG Party is represented. provide to such Representative a written deed of indemnity reflecting the terms of this paragraph 10. Appendix 1 Form of Deed of Accession THIS DEED OF ACCESSION is made on [ ] BETWEEN: (1) [ ], a company incorporated [with limited liability] under the laws of [ ] (registered number) and having its registered [principal] office at [ ] (the "New TUG Party"); and (2) The National Grid Company plc ("NGC") on behalf of all the parties to the Master Agreement referred to below. WHEREAS: (A) By an agreement dated 30th March 1990 (the "Master Agreement") made between The National Grid Company plc and the Users (as named therein) (as amended, varied, supplemented and modified) the parties thereto agreed to establish a contractual framework between NGC and the Users pursuant to which supplemental agreements would be entered into providing for (inter alia) connection to NGC's Transmission System and the payment of certain charges. (B) By paragraph 3 of Schedule 4 to the Master Agreement additional parties may be admitted to that Agreement for the purposes of, and only to be bound by and conferred rights in accordance with, Schedule 4 thereto in the capacity of TUG Party; and (C) The New TUG Party is not a Party or a TUG Party and has requested that it be admitted as a TUG Party pursuant to paragraph 3 of Schedule 4 to the Master Agreement and each of the Parties and TUG Parties hereby agrees to such admission. NOW IT IS HEREBY AGREED as follows: 1 . Unless the context otherwise requires, words and expressions defined in the Master Agreement used for the purposes of Schedule 4 to the Master Agreement shall bear the same meanings respectively when used herein. 2. NGC (acting on behalf of each of the Parties and TUG Parties) hereby admits the New TUG Party as an additional TUG Party under Schedule 4 to the Master Agreement on the terms and conditions hereof and with effect from [insert effective date of admission]. 3. The New TUG Party hereby accepts its admission as a TUG Party and undertakes with NGC (acting on behalf of each of the Parties and TUG Parties) to perform and to be bound by the terms and conditions of Schedule 4 to the Master Agreement as a TUG Party as from the [insert effective date of admission]. 4. For all purposes in connection with the Master Agreement the New TUG Party shall as from the [insert effective date of admission] be treated including for the purposes of paragraph 2 of Schedule 4 to the Master Agreement as if it had been a signatory of the Master Agreement as a TUG Party and as if this Agreement were part of the Master Agreement. and the rights and obligations of the Parties and TUG Parties shall be construed accordingly. IN WITNESS whereof this document has been duly executed and delivered as deed the day and year first above written. EXECUTED as a DEED by [NEW TUG PARTY] ............................................. Director ............................................. Director/Secretary Notice details (Clause 23 of the Master Agreement as incorporated into Schedule 4 thereto by paragraph 5 thereof). Address: Telex number: Facsimile number: Attention: EXECUTED as a DEED by THE NATIONAL GRID COMPANY PLC for and on behalf of each of the Parties (including TUG Parties) to the Master Agreement ............................................... Director ............................................... Director/Secretary Appendix 2 Form of TUG Constitution and Rules THE TRANSMISSION USERS GROUP CONSTITUTION AND RULES TABLE OF CONTENTS Paragraph Page 1. Name of the Group 2. Definitions and Interpretation 3. Constitution 4. Objects and Powers 5. Membership 6. Appointment of Representatives 7. Chairman 8. Secretary 9. Alternates 10. Vacation of Office 11. Meetings 12. Notice of Meetings 13. Proceedings at Meetings and Quorum 14. Representation, Voting and Resolutions 15. Minutes 16. Sub Committees and Working Groups Appendices 1. List of first Chairman, Secretary and Representatives of the Transmission Users Group 2. Part 1 - Industry Party Representatives Election Procedure Part 2 - Appointment of Consumer Party Representatives 3. Calculation of Industry Party Votes 4. Form of Consumer Party Representatives Confidentiality Letter of Undertaking The Transmission Users Group 1. Name of the Group The Group shall be called the "Transmission Users Group". 2. Definitions and Interpretation 2.1 The following words and expressions shall have the following meanings in this Constitution and Rules: "Ancillary Service" has the meaning given to that phrase in the Grid Code; "Chairman" means the person appointed to be Chairman from time to time pursuant to paragraph 7. 1 the Vice Chairman when acting as Chairman, and a Representative appointed to be Chairman of a Meeting of the Group pursuant to paragraph 7.2; "Constitution" means the constitution and rules of the Group as set out herein, as may be amended from time to time in accordance with the terms of the Master Agreement; 'Consumer Party" means any body which. from time to time is included on the list drawn up by the Chairman pursuant to Part 2 of Appendix 2; "Consumer Party Representative" means a representative appointed in accordance with paragraph 6.3 and who has entered into a Letter of Undertaking; "Domestic Consumer" means a customer supplied or to be supplied at premises used by him wholly or mainly for domestic purposes; "Externally Interconnected Party " has the meaning given to that phrase in the Grid Code; "External Pool Members" has the meaning given to that phrase in the Grid Code; "Generator" has the meaning given to that phrase in the Grid Code; "Grid Code Review Panel" has the meaning given to that phrase in the Grid Code; "Group" means the Transmission Users Group; "lndustry Party" means each person who is one or more of the following:- (a) Generator; (b) Public Electricity Supplier; (c) Second Tier Supplier; (d) Non Embedded Customer; (e) Externally Interconnected Party; (f) External Pool Member; (g) Provider of Ancillary Services not otherwise included in the above list; and who: has had votes allocated to it on 1st April of the applicable TUG Year as a result of the vote allocation procedure carried out in accordance with paragraph 6 of the Constitution; continues to be within one or more of the categories within the list in (a) to (g) above during the applicable TUG Year; and has agreed to be bound by the provisions relating to the Group contained in Schedule 4 of the Master Agreement or when admitted as a Party or TUG Party will become bound by the provisions relating to the Group contained in Schedule 4 of the Master Agreement without having to satisfy any further conditions; "Industry Party Group" means in relation to any Industry Party that Industry Party and any affiliate (as defused in the Pooling and Settlement Agreement) and related undertaking (as defined in the Pooling and Settlement Agreement) of that Industry Party which is itself an Industry Party; "Industry Party Representative" means a representative appointed in accordance with paragraph 6.1; "Interested Party" means both Consumer Parties and Industry Parties; 'Interested Parties' Meeting" means the annual meeting referred to in paragraph 11.3 to which Interested Parties, NGC and Non-Voting Representatives may attend; "Letter of Undertaking" means a letter of undertaking to be signed by each Consumer Representative in the form set out in Appendix 4; "Master Agreement" means the Master Connection and Use of System Agreement dated 30 March 1990 as amended from time to time; "NGC Representative" means a representative appointed in accordance with paragraph 6.4; "Nomination Form" means the form of that name referred to in paragraph 4 of Part 1 of Appendix 2; "Non-Embedded Customer" has the meaning given to that phrase in the Grid Code; "Non-Voting Representative" means a representative referred to in paragraph 5.1.3; "Representative" means either an Industry Party Representative, a Consumer Party Representative,, the NGC Representative or a Non-Voting Representative, or all or some as the context requires; "Second Tier Suppliers" has the meaning given to that phrase in the Grid Code; " Secretary " means the person duly appointed from time to time pursuant to paragraph 8; "TUG Issues" means the objects of the Group as set out in paragraph 4; "TUG Year" means a year beginning on I April each year; "Vice Chairman" means the person appointed to be Vice Chairman from time to time pursuant to paragraph 7.3; "Voting Paper" means the paper of that name referred to in paragraph 8 of Part 1 of Appendix 2; and "Voting Representative" means a representative referred to in paragraph 5.1.2. 2.2 Except as otherwise provided herein and unless the context otherwise admits, words and expressions used herein shall have the same meaning as defined in the Pooling and Settlement Agreement or the Master Agreement. In the event of conflict the definition used in the Master Agreement will prevail. 2.3 Words importing the singular only also include the plural and vice versa where the context requires. Words importing the masculine only also include the feminine. 2.4 Headings and titles shall not be taken into consideration in the interpretation or construction of the words and expressions used herein. 2.5 Unless the context otherwise requires. references in this Constitution to a particular paragraph or Appendix shall be a reference to that paragraph or Appendix in this Constitution. 3. Constitution The Group is a standing body established pursuant to the Master Agreement to deal with TUG Issues. 4. Objects and Powers 4.1 The object of the Group shall be to meet to consider and/or discuss electricity transmission related issues. 4.2 The Group shall also have the following powers: 4.2.1 to consider the adoption of issues which other bodies (including the Executive Committee (PEC) and the Grid Code Review Panel) may offer to it, or agree to pass to it, and the mechanics of such adoption; 4.2.2 to amend the Constitution of the Group from time to time; and 4.2.3 to consider whether the Group should request other bodies to adopt TUG Issues which it would like to refer to such other bodies. 5. Membership 5.1 The Group shall consist of: 5.1.1 officers (a) a Chairman; and (b) a Secretary. 5.1.2 Voting Representatives (a) not more than 15 Industry Party Representatives appointed in accordance with paragraph 6.1; and (b) not more than 3 Consumer Party Representatives appointed in accordance with paragraph 6.3. 5.1.3 Non-Voting (a) 1 observer nominated by the Executive Committee (PEC); (b) 1 observer nominated by the Director; and (c) 1 observer nominated by the Grid Code Review Panel. 5.1.4 NGC Representative Not more than 1 NGC Representative. 5.2 Experts may also attend meetings of the Group in accordance with the provisions of paragraph 14.3. -------- 5.3 A list of the first Representatives, the Chairman and the Secretary of the Group i@@ set out in Appendix 1. A revised copy of Appendix 1 will be circulated to Representatives and to the Chairman as soon as reasonably practicable following any change. and the revised Appendix 1 will replace the then existing Appendix 1. Any revision of Appendix I to reflect changes to Representatives or the Chairman will be deemed not to be an amendment to the Constitution pursuant to paragraph 14. 5.4 No person other than an individual shall be appointed a Representative (or alternate) or the Chairman. An individual shall not be appointed as a Voting Representative if he is an employee or officer of or a person acting exclusively for a company or other entity (whether or not a corporate body) which already has a Voting Representative on the Group or if his appointment as a Voting Representative would result in the Group consisting of two or more Voting Representatives from she same Industry Party Group. 6. Appointment of Representatives 6.1 Industry Part,,, Representatives Industry Party Representatives will be elected in accordance with the election procedure set out in Part I of Appendix 2. which election shall be conducted by NGC. The Group will review and amend as necessary from time to time the election procedure set out in Part I of Appendix 2 in relation to Industry Parry Representatives and will in any event carry out such a review not earlier than 12 months but no later than 24 months of the Group being established. 6.2 Representative's Constituents 6.2.1 An Industry Party Representative shall:- 6.2.1.1 in the case of Industry Party Representatives who have been elected pursuant to Part 1 of Appendix 2. represent the interests of: (a) all the Industry Parties on whose Voting Paper he was the highest placed preference amongst those elected in accordance with paragraph 8 of Part I of Appendix 2; and (b) in the case of those Industry Parties who did not express a preference for any elected Representative, those who have subsequently selected such Representative as their choice pursuant to paragraph 6.2.2. 6.2.1.1 in the case of Industry Party Representatives who (as a result of there being 15 or fewer than 15 nominations received) have been appointed pursuant to paragraph 7.1 of Part 1 of Appendix 2. represent the interests of:- (a) all the industry Parties who nominated him in accordance with paragraph 6 of Part 1 of Appendix 2; and (b) in the case of those Industry Parties who did not make a nomination. those who have subsequently selected such representative as their choice pursuant to paragraph 6.2.2. 6.2.2 In the event that an Industry Party did not: 6.2.2.1 express a preference for any elected Industry Party Representative, or 6.2.2.2 nominate an industry Party Representative appointed pursuant to paragraph 7.1 of Part 1 of Appendix 2 (as the case may be), that Industry Party may choose subsequently to select one of the elected or appointed (as the case may be) Industry Party Representatives to be its Representative in accordance with paragraph 7.3 or 10 (as the case may be) of Part I of Appendix 2. If it does not so select one of the elected or appointed (as the case may be) Industry Party Representatives, then it shall not be represented. 6.2.3 An Industry Party Representative cannot refuse to represent an Industry Party who selects him under paragraphs 6.2.1 and 6.2.2. 6.3 Consumer Party Representatives Consumer Party Representatives (one of whom must represent the interests of Domestic Consumers and no more than 2 may represent the. interests of other consumers) will be appointed in accordance with Part 2 of Appendix 2, which procedure shall be conducted by the Chairman. No person (including, for the avoidance of doubt, Industry Parties and Representatives) shall be entitled to make any claim for compensation or damages or any other relief whatsoever against NGC as a result of NGC performing its obligations in accordance with paragraph 1 of Part 2 of Appendix 2. The Group will review and amend as necessary from time to time the selection procedure set but in Part 2 of Appendix 2 in relation to Consumer Party Representatives and will in any event carry out such a review not earlier than 12 months but no later than 24 months of the Group being established. 6.4 NGC Representative NGC will. from time to time. appoint a person to act as the NGC Representative and shall have the power to remove such person so appointed. Any appointment or removal of the NGC Representative shall be effected by notice in writing and delivered to the Secretary or tendered at a meeting of the Group. 6.5 Non-Voting Representatives Non-Voting Representatives are those listed in paragraph 5.1.3. Each Non-Voting Representative may attend meetings of the Group, and may speak, but cannot vote. 6.6 Appeal/Audit of election/selection procedure for Representatives If any Interested Party believes that the procedures set out in Parts I or 2 (as the case may be) of Appendix 2 have not been followed correctly to a significant extent it may ask the Chairman appointed pursuant to paragraph 7.1 to investigate. If. following, investigation (which shall take such form as the Chairman decides) the Chainnan believes there are grounds for further investigation, the Chairman shall appoint a suitable external person or body to carry out further investigation. The Chairman shall carry out such investigation as expeditiously as is reasonably practicable. In any event, the Chairman shall report on the progress of such investigation at the next meeting of the Group following a request by any Interested Party to investigate and subsequent meetings of the Group if necessary. 6.7 Findings of A1212eal/Audit of Election/Selection Procedure for Representatives If, as a result of an investigation carried out under paragraph 6.6 above it is found:- 6.7.1 that the number of votes allocated to Industry Parties is incorrect: or 6.7.2 that as a result of an incorrect allocation of votes between Industry Parties or a miscalculation of votes. an Industry Party Representative would have not been elected had the votes been allocated or calculated correctly; or 6.7.3 that the procedure for the selection of Consumer Party Representatives had not been followed correctly to a significant extent, then the Representatives elected or selected (as the case may be) shall remain Representatives of the Group until the next election or selection procedure (as the case may be). In the event of the votes allocated between Industry Parties being incorrect then NGC shall re-allocate the votes appropriately between Industry Parties. 7. Chairman 7.1 Upon the retirement or removal by NGC of the first and each successive Chairman. NGC shall appoint a person to act as Chairman. The Chairman shall be an executive director of NGC except for the first Chairman who shall be the "Director. Commercial and System Strategy" as at 1 April 1997. 7.2 The Chairman shall preside at every meeting of the Group at which he is present. If the Chairman is unable to be present at a meeting, the Vice-Chairman appointed pursuant to paragraph 7.3 shall act as Chairman. If neither the Chairman nor the Vice Chairman is present within half an hour after the time appointed for holding the meeting, the Representatives present may appoint a Representative to be Chairman of the meeting provided that such meeting is quorate in accordance with paragraph 13.2. 7.3 At the first meeting of the Group (and from time to time thereafter) the Representatives present at such meeting shall elect. by a simple majority on a show of hands, one of the Representatives to be Vice-Chairman. Representatives present shall each have one vote. For the avoidance of doubt Industry Party Representatives will not be required to vote in accordance with the wishes of those Interested Parties whom he represents and Non-Voting Representatives and the NGC Representative present shall each have one vote on the election of a Vice-Chairman. 7.4 The Chairman shall have and carry out only such duties and responsibilities and exercise such powers as are expressly provided in this Constitution. The Chairman shall exercise impartially all such duties, responsibilities and powers. 7.5 If the Chairman does not carry out his duties and responsibilities in accordance with Paragraph 7.4, the Group may pass a resolution which shall be recorded in the minutes of the Group expressing its concern at that failure. 8. Secretary 8.1 NGC shall, unless the Group decides otherwise, perform the secretarial role in relation to the Group and shall provide a Secretary together with such other staff as it shall deem necessary. NGC shall notify each Representative of the identity and address for correspondence of the Secretary as soon as reasonably practicable after his appointment. 8.2 The Secretary shall not be a Representative of the Group and shall not be entitled to cast a vote at any meeting although he shall have the right to speak at a meeting. 8.3 The Secretary's duties shall be to attend to the day to day operation of the Group and in particular to: 8.3.1attend to the requisition of meetings and to serve all requisite notices; 8.3.2maintain a register of names and addresses of Representatives and the Chairman and alternates as appointed from time to time; and 8.3.3 keep minutes of all meetings. 9. Alternates 9.1 Each Representative shall have the power to appoint any individual to be his alternate and may at the Representative's discretion remove an alternate so appointed. 9.2 Any appointment or removal of an alternate shall (unless the Chairman otherwise agrees) be effected by notice in writing executed by the Representative appointing the alternate and delivered to the Secretary or tendered at a meeting of the Group. 9.3 If the Representative appointing the alternate so requests, an alternate shall be entitled to receive notice of all meetings of the Group or of meetings of sub-committees or working groups of which the Representative who appointed him is a member, and for the purpose of the proceedings at the meeting, the provisions of this Constitution shall apply as if the alternate were a Representative. Every person acting as an alternate shall have the votes of each Representative for whom that person acts as alternate, in addition to that person's own votes if he is also a Representative. 9.4 An alternate Representative shall cease to be an alternate if the Representative who appointed him ceases for any reason to be a Representative. 9.5 References in this Constitution to a Representative shall, unless the context otherwise requires, include his duly appointed alternate. 10. Vacation of Office 10.1 The office of a Representative shall be vacated if: 10.1.1 the Representative resigns his office by notice delivered to the Secretary; or 10.1.2 three consecutive meetings of the Group have been held at which neither that Representative nor his alternate has been present. neither having submitted to the Chairman an explanation for absence which is acceptable in the reasonable opinion of the Chairman appointed pursuant to paragraph 7.1; or 10.1.3 the Representative conducts himself in a manner which in the reasonable opinion of the Chairman appointed pursuant to paragraph 7.1 is unbecoming to the office of a Representative. 10.2 In the event that the office of an Industry Party Representative is vacated pursuant to paragraph 10.1 or such Industry Party Representative dies or ceases to be employed or exclusively retained by the company or other entity (whether or not a corporate body) which employed him at the time he was elected or (as the case may be) nominated then: 10.2.1 those Industry Parties whom such Industry Party Representative represents (as identified on the list published by NGC pursuant to paragraph 11 of Part 1 of Appendix 2) may select a new Industry Party Representative; 10.2.2 in the event that an Industry Party does not wish the newly selected Industry Party Representative to be its Representative it may select one of the other elected Industry Party Representatives to be its Representative; 10.2.3 if it does not wish the newly elected lndustry Party Representative to be its Representative and it does not so select one of the other elected Industry Party Representatives, then it shall cease to be represented. In any event such Industry Party shall notify the Secretary of its selection or non-selection as the case may be. 10.3 In the event that the office of a Consumer Party Representative is vacated pursuant to paragraph 10.1 or such Consumer Party Representative dies, the Electricity Consumers' Committees Chairman's Group shall be invited to select a new Consumer Party Representative. 10.4 In the event that the office of a Non-Voting Representative or the NGC Representative is vacated pursuant to paragraph 10.1 or such Representative dies then the Executive Committee (PEC) or the Director or the Grid Code Review Panel or NGC (as the case may) will appoint a new Representative. 10.5 Any Representative elected or appointed pursuant to paragraphs 10.2 or 10.3 above shall remain in office until such time as new elections take place pursuant to Part 1 of Appendix 2. 11. Meetings 11.1 The Group shall call meetings at such regular scheduled times as it may decide, but in any event meetings shall be called no more than 8 weeks apart. 11.2 The Chairman or any Representative may request the Secretary to requisition further meetings by giving 21 days notice to the Secretary. The notice shall be: 11.2.1 in writing; and 11.2.2 contain a summary of the business that it is proposed will be conducted and the Secretary shall proceed to convene a meeting of the Group within 7 days of the date of expiry of such notice in accordance with the provisions of paragraph 12. 11.3 In March of each year an Interested Parties Meeting will be held. The following matters will be included on the agenda for the Interested Parties Meeting: 11.3.1 a report from the Chairman on the business conducted by the Group over the preceding twelve months; and 11.3.2 the appropriate elements of the election or appointment (as the case may be) of paragraphs 6.1 and 6.3. 12. Notice of Meetings 12.1 All meetings shall be called by the Secretary on at least 14 days written notice (exclusive of the day on which it is served and of the day for which it is given), or by shorter notice if so agreed by all Representatives and the Chairman. 12.2 If at any time a person has not been appointed as Secretary, or the Secretary is for any reason unable to act. the Chairman shall make alternative arrangements to convene meetings. 12.3 The notice of each meeting shall be given to all Representatives and to the Chairman and shall contain the time. date and venue of the meeting, an agenda and a summary of the business to be conducted. 12.4 The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by person entitled to receive notice shall not invalidate the proceedings at that meeting. 12.5 By notice to the Secretary, any Representative can request additional matters to be considered at the meeting and provided such notice is given at least 10 days (exclusive of the day on which is is served and of the day for which it is given) before the date of the meeting, those matters will be included in a revised agenda for the meeting. The Secretary shall circulate the revised agenda to the Chairman and to each Representative as soon as practicable. 12.6 Each Representative and the Chairman shall from time to time communicate his address to the Secretary and all notices sent to such address shall be considered as having been duly given. 13. Proceedings at Meetings and Quorum 13.1 Subject to paragraphs 11 and 12 the Group may meet for the transaction of business and adjourn and otherwise regulate its meetings as it thinks fit. 13.2 8 Voting Representatives and the NGC Representative present in person or by their alternates shall constitute a quorum for a meeting. of the Group. 13.3 Subject to the provisions of paragraph 13.5, the Chairman may, after a reasonable period of time from the time appointed for holding any meeting of the Group decide that because a quorum is not present, the meeting shall be adjourned. The meeting shall be adjourned to such day, time and place as the Secretary may notify to Representatives and to the Chainnan within 3 days of the adjournment. Alternatively, the Chairman may with the consent of all Representatives present decide that the meeting of the Group should proceed. In the case of a meeting which. at any time, ceases to be quorate the Chairman may also with the consent of all Representatives remaining decide that such meeting should continue. 13.4 A meeting adjourned in accordance with paragraph 13.3 shall not be called to take place within one week of the adjournment but may be called on less than 14 days notice. If at such adjourned meeting a quorum is not present within a reasonable period of time (as the Chairman may decide) from the time appointed for holding the meeting, the meeting shall not take place. 13.5 Only matters identified in the agenda referred to in paragraph 12.3 (or a revised agenda submitted pursuant to paragraph 12.5), and which have been discussed as an agenda item at a meeting of the Group which met the requirements of paragraph 13.2 at least 4 weeks prior. shall be resolved upon at a meeting (but this shall not prevent matters raised under the heading "Any Other Business" being discussed), provided that the meeting at which a matter is to be resolved upon is itself quorate or (in the case of a meeting which is not quorate throughout) the matter is resolved upon in that part of the meeting which was quorate. 13.6 In the event that: 13.6.1 there was some defect in the appointment of either a Representative or the Chairman; 13.6.2 the election procedure has not been properly followed; 13.6.3 the votes cast by a Voting Representative did not reflect the views of those he represents; or 13.6.4 the minutes are not approved. any decision taken by any meeting of the Group or of a sub-committee or working group shall be valid as if such person had been duly appointed, the election procedure had been duly followed, or the votes were fully reflective, or (as the case may be) the minutes had been duly approved provided that none of the events set out in paragraphs 13.6.1 to 13.6.4 above has occurred as a result of a failure by either an Interested Party or a Representative to act in good faith. 13.7 In the exercise of its powers and the performance of its duties and responsibilities, the Group shall have due regard for the need to promote the attainment of the objects of the Group set out in paragraph 4.1. 13.8 The Group, each Representative, the Chairman and the Secretary shall be entitled to rely upon any communication or document reasonably believed by it or him to be genuine and correct and to have been communicated or signed by the person by whom it purports to be communicated or signed. 14. Representation, Voting and Resolutions 14.1 The Chairman. each Representative and the Secretary shall be entitled to attend and speak at every meeting of the Group. 14.2 Subject to an Industry Party Representative's overriding obligation as a Representative of the Group set out in paragraph 13.7, in the exercise of his powers and the performance of his duties and responsibilities as a Representative. an Industry Party Representative shall represent the interests of the Industry Party or Parties as the case may be whom he represents pursuant to paragraph 6.2 above (including representing different views). An Industry Party Representative shall cast the votes of the Industry Party or Parties as the case may be whom he represents as directed by such Industry Parties. 14.3 Experts shall (at the discretion of the Chairman. due notice having been given to him prior to the meeting) be entitled to attend any meeting of the Group with a Representative and shall be entitled to speak at any meeting but shall not be entitled to vote on any issue. 14.4 Industry Parties shall between them have a maximum of 135,000.000 votes and Consumer Party Representatives shall between them have a maximum of 15.000,000 votes. Each Industry Party shall exercise its votes through the Representative who represents it. In respect of any vote by Representatives of the Group no resolution shall be passed without the agreement of the NGC Representative. 14.5 The votes allocated pursuant to Appendix 3 to Industry Parties who, as a result of failing to select one of the elected industry Party Representatives pursuant to paragraphs 6.2.2 or 10.2.2 are not represented on the Group shall not be re-allocated between those Industry Parties who are represented on the Group. 14.6 Industry Parties and Consumer Party Representatives shall have votes calculated as set out in ill review and amend as necessary Appendix 3, such votes to be calculated by NGC. The Group will from time to time the provisions set out in Appendix 3 in relation to the calculation of votes for Industry Parties and Consumer Party Representatives and will in any event carry out such a review not earlier than 12 months but no later than 24 months of the Group being established. 14.7 Appeal on a vote to change Constitution and Rules If any lndustry Party does not agree with any proposed change to the Constitution it may (in circumstances where the provisions of Licence Condition IOC(3) of NGC's Transmission Licence apply) request the Director to make a determination pursuant to Licence Condition IOC(3) of NGC's Transmission Licence. 14.8 This Constitution shall not be changed other dm by a majority vote of 65 % of votes cast by Voting Representatives at a meeting of the Group which is quorate pursuant to paragraph 13.2 and endorsed by NGC pursuant to paragraph 14.4. 15. Minutes 15.1 The Secretary shall circulate copies of the minutes of each meeting of the Group and of Group decisions to each Representative and to the Chairman as soon as practicable and in any event within 14 days after the relevant meeting has been held. 15.2 If the Secretary receives any comments on the minutes, he shall then include those aspects of the minutes upon which there is disagreement into the agenda for the next following meeting of the Group as the first item for resolution. The minutes shall be formally approved at the next following meeting. 16. Sub Committees and Working Groups 16.1 The Group may establish sub-committees from time to time. Each sub-committee: 16.1.1 shall be composed of such persons (whether or not Representatives) and shall discharge such rights, powers, duties and responsibility as the Group may determine; 16.1.2 shall be given and shall be subject to written terms of reference and to such procedures as the Group may determine; 16.1.3 shall, in the exercise of its rights and powers and the performance of its duties and responsibilities delegated to it by the Group, at all times conduct itself and its affairs in a manner which it considers best designed to give effect to the object set out in paragraph 4.1. 16.2 The meetings of sub-committees shall so far as possible be arranged so that the minutes of such meetings can if appropriate be presented to the Representatives in sufficient time for consideration before the next following meeting of the Group. 16.3 The Group may further establish working groups to advise it on any matter from time to time. Such working groups may consist of Representatives and/or others as the Group may determine for the purpose. 16.4 Resolutions of sub-committees and working groups shall not have binding effect unless approved by resolution of the Group. 17. Dispute Resolution 17.1 Subject to the terms of paragraph 17.2 the provisions of Clause 26 of the Master Agreement shall apply to this Constitution. 17.2 Notwithstanding the terms of paragraph 5. 1 of Schedule 4 of the Master Agreement, where circumstances contemplated by paragraph 6.6 or paragraph 3 of Part 1 of Appendix 2 arise, the procedures provided for in paragraph 6.6 or paragraph 3 of Part 1 of Appendix 2 (as the case may be) shall be the sole remedy available and, for the avoidance of doubt, the provisions of Clause 26 of the Master Agreement shall not apply. Appendix 1 List of first Chairman, Secretary and Representatives of the Transmission Users Group Chairman Name of Individual Name of Company/Organisation of Individual Roger Urwin NGC Secretary Name of Individual Name of Company/Organisation of Individual Richard Dunn NGC Industry Party Representatives Name of Individual Name of Company/Organisation of Individual David Tolley National Power PLC Tony Dicicco PowerGen plc David Tilstone Eastern Group plc John Tucker SEEBOARD Willie Maclean Scottish Power plc Ian Moran Southern Electric plc John Capener Nuclear Electric Limited Malcom Chandler Northern Electric plc Keith Miller Teesside Power Limited Kath Wall Magnox Electric plc Dick Cecil London Electricity plc David Shakespeare South Wales Electricity plc Terry Ballard Midlands Electricity plc Tim Simpson Yorkshire Electricity Group plc David Porter Association of Electricity Producers Consumer Party Representatives Name of Individual Name of Company/Organisation of Individual Aubrey Bourne Major Energy Users' Council (Non-domestic consumers) Robert Spears Utility Buyers Forum (Non-domestic consumers) Bernard Quigg Electricity Consumers' Committees (Domestic Consumers) NGC Representative Name of Individual Name of Company/Organisation of Individual Charles Davies Non Voting Representative Name of Individual Name of Company/Organisation of Individual Brian Saunders Executive Committee (PEC) (nominated by the Executive Committee (PEC)) John Stewart OFFER (nominated by the Director) Mike Metcalfe NGC (nominated by the Grid Code Review Panel) FD2\U - 1 - Appendix 2 Part 1 Industry Party Representatives Election Procedure 1. Notification of Information No later than 21st January each year, NGC shall provide each Industry Party with a notification containing the following information: 1.1 total MWhrs traded within the England and Wales electricity pool; 1.2 total payments made to and/or from NGC; 1.3 such Industry Party's MWhrs traded within the England and Wales electricity pool and such Industry Party's payments made to and/or from NGC, and 1.4 the number of votes allocated to such Industry Party. 2. Raising of Disputes No later than 5th February each year, Industry Parties shall raise any objections to, or queries on, the information contained in the notification received from NGC pursuant to paragraph 1 of this Part 1 of Appendix 2. 3. Resolution of Disputes NGC and any Industry Party who raises an objection or query under paragraph 2 of this Part 1 of Appendix 2, shall attempt to resolve such objection or query by discussion. In the event that the objection or query cannot be resolved, the Chairman appointed pursuant to paragraph 7.1 shall, no later than 19th February, make a determination resolving the objection or query and enabling the election procedure to be completed. The determination of the Chairman shall not preclude an Industry Party from asking the Chairman to carry out an investigation in accordance with paragraph 6.6. 4. Dispatch of Nomination Forms No later than 21st January each Year. NGC will send to each Industry Party a Nomination Form on which to nominate one person who must have agreed to stand as an Industry Party Representative if elected (and who must indicate that by signing the Nomination Form in the relevant place, or indicate in some other manner agreed with the Chairman appointed pursuant to paragraph 7.1), but who need not be an employee of an Industry Party. 5. Principles of Nominations 5.1 Each Industry Party: 5.1.1 may only nominate one person to stand for election as an Industry Party Representative; and 5.1.2 shall ensure that there will only be one person who is connected (employee, consultant or otherwise) with such Industry Party and who has agreed to stand for election as an industry Party Representative. 5.2 Each Industry Party that is a member of an Industry Party Group shall be obliged to: 5.2.1 nominate the same person as the other Industry Party or Industry Parties (as the case may be) who are also members of such Industry Parry Group; and 5.2.2 ensure that there will only be one person who is connected (employee. consultant or otherwise) with such Industry Party Group and who has agreed to stand for election as an Industry Party Representative. 6. Return of Notification Forms No later than 5th February each year. each Industry Party shall return to NGC the Nomination Form. In the event that NGC does not receive a duly completed Nomination Form within that time it shall be presumed that any Industry Party which has not returned a duly completed Nomination Form does not wish to nominate a person to stand as an Industry Party Representative. 7. Receipt of 15 or fewer Nominations 7.1 In the event that 15 or fewer than 15 nominations are received, there will be no election and each of the nominees shall be appointed as an Industry Party Representative. 7.2 No later than 24th February each year NGC shall send to all Industry Parties who did not nominate one of the Industry Party Representative so appointed, a list of the Industry Party Representatives so appointed. 7.3 No later than 4 March each Year. such Industry Parties will notify NGC whether it wishes to select a Representative pursuant to paragraph 6.2.2 and if so the name of the Representative. 8. Receipt of Nominations 8.1 Despatch of Voting Papers In the event that more than 15 nominations are received, NGC shall draw up a complete list of nominations on a Voting Paper which shall then be sent to all Industry Parties by 24th February each year. 8.2 Marking of Voting Papers On receipt, each Industry Party shall mark the Voting Paper to rank the nominees in order of preference until these, are indifferent about the remaining candidates. Each Industry Party that is a member of an Industry Party Group shall when marking the Voting Paper to rank the nominees in order of preference be obliged to rank the same nominees in the same order of preference as the other Industry Party or Industry Parties (as the case may be) who are also members of such Industry Party Group. 8.3 Return of Voting Papers No later than 10th March each year. each Industry Party shall return to NGC its Voting Paper. In the event that NGC does not receive a duly completed Voting Paper within that time it shall be presumed that any Industry Party which has not resumed a duly completed Voting Paper does not wish to express a preference about any of the candidates on the Voting Paper. 8.4 Counting of Votes The votes for first preferences will be totalled by NGC to rank the nominees in order of popularity. 8.5 Elimination of Nominees The nominee with the fewest votes shall be eliminated and shall take no further part in the election process. NGC shall transfer the votes of all those Industry Parties who voted for that nominee to the nominee who is the next highest preference (and who has not already been eliminated) of such Industry Party or Industry Parties (as the case may be). 8.6 Re-ranking of Nominees NGC will then re-rank the nominees and this process will be repeated until there are only 15 nominees left who will become the 15 Industry Party Representatives. 8.7 Equal Votes In the event that there are two or more nominees with equally the fewest votes then each such nominee will be eliminated except in the event when such elimination would result in there being fewer than 15 nominees left. In such circumstance the lowest nominees will be ranked according to the number of first preference votes to determine which shall fill the remaining seat(s) on the Group. If the lowest ranked nominees are also equal on the number of first preference votes then NGC shall rank according to second preference votes and so on until one nominee ranks higher than the other. In the event that there is still no outcome the nominees concerned will draw lots. 9. Voting by an Industry Party Group 9.1 NGC shall not be under any obligation to monitor or to ensure that nominations made by or the voting by (as the case may be) Industry Parties that are members of the same Industry Group as part of the election procedure for Industry Party Representatives is in accordance with the provisions of:- 9.1.1 paragraph 5.4; and 9.1.2 paragraphs 5.2 and 8.2 of this Part 1 of Appendix 2. 9.2 Each Industry Party agrees to ensure that it complies with the provisions relating to Industry Party Groups set out in:- 9.2.1 paragraph 5.4; and 9.2.2 paragraphs 5.2 and 8.2 of this Part 1 of Appendix 2. 10. Selection of Industry Party Representatives No later than 20th March each Year NGC shall send to each Industry Party who did not express a preference for any elected Industry Party Representative a list of the Industry Party Representatives elected. No later than 31st March each year each such Industry Party shall notify NGC whether it wishes to select a Representative pursuant to paragraph 6.2.2 and if so, the name of the Representative. 11. Notification of Industry Party Representatives On completion of the election procedure set out in this Part 1 of Appendix 2 (including selection by those who did not express a preference as provided in paragraph 10 of this Part 1 of Appendix 2), NGC shall publish to Industry Parties: (a) a list of elected Representatives and the Industry Parties whom they each represent. (b) a list of all Industry Parties and the number of votes allocated to each Industry Party pursuant to Appendix 3 Provided that NGC shall not disclose the number of votes allocated to Industry Parties who have notified the Chairman in writing that they elect not to have the number of votes allocated to them disclosed. Industry Parties may only elect not to have the number of votes allocated to them disclosed if they have fewer than 500,000 votes. Part 2 Appointment of Consumer Party Representatives 1. The Chainnan appointed pursuant to paragraph 7.1, in consultation with the Electricity Consumers' Committees Chairmen's Group shall draw up, and update from time to time, a list of Consumer Parties: 2. No later than 21st January each year, the Chairman will invite nominations for the Consumer Party Representative who will represent the interests of Domestic Consumers and the two Consumer Party Representatives who will represent the interests of consumers other than Domestic Consumers from each of the bodies included on the list prepared under paragraph 1 above. Nominations for, Consumer Party Representatives, who must have:- (a) agreed to stand as a Representative if selected (and who must indicate that by signing the nomination form in the relevant places, or indicate in some other manner agreed with the Chairman appointed pursuant to paragraph 7.1); and (b) agreed to sign a Letter of Undertaking, if selected. must be provided by 24th February each year. 3. In the event that no person is nominated to represent the interests of Domestic Consumers there shall be no person appointed to represent the interests of Domestic Consumers but there may be up to (but no more than) 2 Consumer Party Representatives to represent the interests of consumers other than Domestic Consumers. 4. In the event that only one person is nominated to represent the interests of Domestic Consumers there will be no selection as provided in paragraph 6 of this Part 2 of Appendix 2 and such nominee shall be appointed as a Representative. 5. In the event that two or fewer than two persons are nominated to represent the interests of consumers other than Domestic Consumers, there will be no selection as provided in paragraph 6 of this Part 2 of Appendix 1 and each of the nominees shall be appointed as a Representative. 6. In the event that: 6.1 more than one person is nominated to represent the interests of Domestic Consumers; or 6.2 more than two persons are nominated to represent the interests of consumers other than Domestic Consumers, NGC shall. no later than 2nd March each year, notify the Electricity Consumers' Committees Chairmen's Group of the names of the individuals who have been nominated. No later than 20th March each year, the Electricity Consumers' Committees Chairmen's Group (in consultation with OFFER) shall select the candidates that, in their opinion. represent the broadest spectrum of representation for consumers. 7. As soon as reasonably practicable after the completion of the selection procedure NGC shall publish a list of selected Consumer Party Representatives. Appendix 3 Calculation of Industry Party Votes 1. Vote Allocation A minimum of 150,000,000 votes shall be allocated between Industry Parties and Consumer Party Representatives. Industry Parties shall, between them, carry a maximum of 135.000,000 of the votes and Consumer Party Representatives shall, between them, carry a maximum of 15.000.000 of the votes. 2. Industry Party In respect of Industry Parties votes shall be calculated by NGC in accordance with the following:- 2.1 Basis of Data all data used by NGC in calculating the number of votes to be allocated to Industry Parties in respect of each TUG Year will be based on the 12 month period expiring on 30th November immediately prior to the commencement of the election procedure for that TUG Year; 2.2 Supply of Data the Settlement System Administrator will supply actual data for both Genset Metered Generation and Consumer Gross Demand (as those expressions are respectively defused in the Pooling and Settlement Agreement) to NGC broken down on a company by company basis provided always that if the Settlement System Administrator fails to supply such data the Industry Parties will provide such data direct to NGC; 2.3 the data to be utilised is as follows:- (A) total energy traded within England and Wales electricity pool for each Industry Party will be the sum of its Genset Metered Generation and Consumer Gross Demand in MWh; (B) in relation to payments made to and/or from NGC, the following will be included:- (i) the sum of the magnitude of all amounts invoiced under all Supplemental Agreements (or equivalent agreements) with each Industry Party, provided that (a) for the purposes of arriving at such amount. any generation or demand infrastructure charges payable to an Industry Party in respect of any individual Generating Unit or Connection Site shall be deemed to be a payment to NGC; and (b) connection charges invoiced internally by NGC on NGC Interconnections Business shall not (for the avoidance of doubt) be included; and (c) any capital contribution (whether in monetary form or otherwise) made other than annually shall be converted into a deemed annual charge on the basis of the applicable depreciation period; (ii) the sum of the magnitude of amounts invoiced under Ancillary Services Agreements with each Industry Party; and (iii)equivalent amounts invoiced under an Interconnection Agreement; 2.4 Votes Allocation votes will be allocated to Industry Parties on the basis of 50% on energy traded with the England and Wales electricity pool (calculated in accordance with paragraph 2.3 of this Appendix 3) and 50% on payments to/from NGC (calculated in accordance with paragraph 2.3 of this Appendix 3) as follows:- Industry Party's Energy Traded (MWhrs) x 67,500,000 Total Energy Traded (MWhrs) plus Total Payments of Industry Party x 67,500,000 Total Payments 2.5 Rounding Down of Votes votes allocated to each Industry Party shall be rounded down to the nearest whole number. 2.6 Reallocation of Votes the number of votes allocated to each Industry Party will not be changed between elections other than as provided in paragraph 6.7. If an Industry Party starts trading energy or money starts to flow between NGC and such Industry Party between elections of Industry Party Representatives, such Industry Party will not be allocated any votes until the next election. For the avoidance of doubt, Industry Parties ceasing to trade between elections will not have their votes reallocated until the next election of Industry Party Representatives. An Industry Party either acquiring or divesting itself of assets will not result in a reallocation of votes until the next election. 3. Consumer Party Representatives In respect of Consumer Party Representatives votes shall be calculated by NGC in accordance with the following:- 3.1 Vote Allocation each Consumer Party Representative will be allocated 5,000.000 votes; 3.2 Fewer than 3 Consumer Party Representatives in the event that fewer than three Consumer Party Representatives are nominated or fewer than three are appointed pursuant to Part 2 of Appendix 2 then the 5,000,000 votes which would have been allocated to such Consumer Party Representative will not be referred to the Consumer Party Representative or Representatives (as the case may be) who have been selected. For the avoidance of doubt, if a Consumer Party Representative decides not to exercise its voting power such votes will not be transferred to any other Consumer Party Representative selected. Appendix 4 Form of Consumer Party Representatives' Confidentiality Letter of Undertaking To The National Grid Company plc ("NGC') and the Industry Parties (as hereinafter defined) [name of Consumer Representative] as at the date hereof and as from time to time [address] hereafter [date] Dear Sirs Transmission Users Group 1. I refer to the Constitution and Rules of the Transmission Users Group as amended from time to time (the "Constitution"). Words and expressions used in this letter shall have the same meaning as defined in the Constitution. 2. I hereby undertake to the Industry Parties as at the date hereof and from time to time hereafter as follows: 2.1 to comply with the provisions of the Constitution; and 2.2 to preserve the confidentiality of, and not directly or indirectly reveal, report, publish, disclose, transfer or use for my own purpose. TUG Confidential Information (as defined in paragraph 5 of this letter) except with the prior consent in writing of NGC and the Industry Parties or in the circumstances set out in paragraph 3 of this letter. 3. The circumstances referred to in paragraph 2 of this letter are: 3.1 where the TUG Confidential Information is in the public domain before it is furnished to me; or 3.2 where the TUG Confidential Information after it is furnished to me: (a) is acquired by, me in circumstances to which this letter does not apply; (b) is acquired by me in circumstances to which this letter does apply but then ceases to be subject to the restrictions imposed by this letter. or (c) enters the public domain. and in any case otherwise than as a result of (a) a breach by me of my obligations in this letter or (b) a breach by the person who disclosed that TUG Confidential Information of that person's confidentiality obligation and I am aware of such breach; or 3.3 if I am required or permitted to make disclosure of the TUG Confidential Information to any person: (a) in compliance with the requirements of a Competent Authority; or (b) in compliance with any other requirement or law; or (c) in response to a requirement of any stock exchange or regulatory authority or the Panel on Take-overs and Mergers; or (d) pursuant to any judicial or arbitral process or tribunal having jurisdiction in relation to me; or 3.4 if I make disclosure of the TUG Confidential Information to my consultants and professional advisers in each case on the basis set out in paragraph 4; or 3.5 if I make disclosure of the TUG Confidential Information in circumstances where I am expressly permitted or required to disclose that information under the terms of any agreement or arrangement with the party to whose affairs such TUG Confidential Information relates. 4. I hereby agree that I will adopt procedures ensuring the confidentiality of TUG Confidential Information which I am obliged to preserve as confidential under paragraph 2.2 of this letter. These procedures shall include, but shall not necessarily be limited to: 4.1 Consumer Parties, my consultant and professional advisers in receipt of TUG Confidential Information will be made fully aware of my obligations of confidence in relation to the TUG Confidential Information and will enter into similar confidentiality undetakings as are given by me in this letter; and 4.2 any copies of the TUG Confidential Information whether in hard copy or computerised form will clearly identify the TUG Confidential Information as confidential. 5. In this letter TUG Confidential Information means all data and other information supplied to me by another Representative or Industry Party in connection with the Constitution. 6. The obligations relating to confidentiality contained in paragraphs 2 to 6 inclusive of this letter shall continue to be binding on me after I have ceased to be a Representative for whatever reason. 7. The terms of Clause 15 (limitation of liability) of the Master Agreement shall apply to this letter as if set out in full herein. 8. This letter shall be governed by and construed in accordance with English Law. EXECUTED and DELIVERED as a DEED by [name of individual] in the presence of [Witness] Name: Address: Occupation: THE NATIONAL GRID COMPANY plc By ......................... EACH OF THE USERS By ............................. for The National Grid Company plc in exercise of the authority vested in it by Clause 25.1 of the Master Agreement pursuant to and in accordance with a determination of the Director General of Electricity Supply dated 30 March 1998 Dated 31 MARCH 1998 THE NATIONAL GRID COMPANY plc and OTHERS --------------------------------------- AGREEMENT TO VARY the Master Connection and Use of System Agreement ---------------------------------------- Martineau Johnson Solicitors St Philips House St Philips Place Birmingham B3 2PP Tel: 0121 200 3300 Fax: 0121 200 3330 Dated 31 MARCH 1998 THE NATIONAL GRID COMPANY plc and OTHERS --------------------------------------- AGREEMENT TO VARY the Master Connection and Use of System Agreement ---------------------------------------- Martineau Johnson Solicitors St Philips House St Philips Place Birmingham B3 2PP Tel: 0121 200 3300 Fax: 0121 200 3330 TABLE OF CONTENTS Clause Page 1. Interpretation 1 2. Amendments 2 3. Continuation of the Master Agreement 4 4. Miscellaneous 4 5. Entire Agreement 4 6. RTPA 5 Schedules 1. Users 6 2. New Schedule 5 to the Master Agreement - Reactive Power and Default Payment Arrangements 19 THIS AGREEMENT TO VARY is made on the 31 day of March 1998 BETWEEN (1) THE NATIONAL GRID COMPANY PLC a company registered in England with number 2366977 and whose registered office is at National Grid House, Kirby Corner Road, Coventry, CV4 8JY ("NGC"); and (2) THE PERSONS whose names, registered numbers and registered offices are set out in Schedule 1 (each a "User"). WHEREAS: (A) This Agreement is supplemental to and varies the Master Connection and Use of System Agreement dated 30th March 1990 made between NGC and the Users as amended by an Agreement to Vary of today's date (the "Master Agreement"); and (B) NGC and the Users have agreed to further amend the Master Agreement on the terms and subject to the conditions set out below. IT IS HEREBY AGREED: 1. Interpretation 1.1 Except where defined herein or where the context otherwise requires, words and expressions defined in the Master Agreement shall have the same respective meanings when used in this Agreement. 1.2 The table of contents and the headings to each of the Clauses are inserted for convenience only and shall be ignored in construing or interpreting this Agreement. 2. Amendments The parties to this Agreement hereby agree that with effect from the date of this Agreement the Master Agreement shall be amended as follows: 2.1 by the addition of the words "Save in relation to the Obligatory Reactive Power Service and all Enhanced Reactive Power Services," at the beginning of Clause 3.1 thereof, and 2.2 by the addition of the following new Clause 3.2:- "With regard to the Obligatory Reactive Power Service and all Enhanced Reactive Power Services the provisions of Schedule 5 shall apply."; and 2.3 by the deletion of Clause 19.8; and 2.4 by the inclusion of the following new definitions in Schedule 2 thereto:- ""Reactive Power" the product of voltage and current and the sine of the phase angle between them measured in units of voltamperes reactive and standard multiples thereof ie 1000var = 1 kvar 1000kvar = 1 Mvar. "System Ancillary Service" a Part I System Ancillary Service and/or a Part II System Ancillary Service as the case may be."; and 2.5 by the inclusion of the following new definition in Schedule 2 thereto in substitution for the existing definition of Commercial Ancillary Services:- ""Commercial Ancillary Services" Ancillary Services, other than System Ancillary Services, utilised by NGC in operating the Total System if a User (or other person) has agreed to provide them under an Ancillary Services Agreement or under a Supplemental Agreement with payment being dealt with under an Ancillary Services Agreement or in the case of Externally Interconnected Parties or External Pool Members (as defined in the Grid Code) under any other agreement (and in the case of Externally Interconnected Parties and External Pool Members includes ancillary services equivalent to or similar to System Ancillary Services). A non-exhaustive list of Commercial Ancillary Services is set out below:- - Frequency Control by means of Pumped Storage Unit Spinning in Air - Frequency Control by means of adjustment to a Pumped Storage Unit Pumping Programme - Frequency Control by means of Demand Reduction - Reactive Power supplied by means of synchronous or static compensators Hot Standby In addition, there is also the Ancillary Service of cancelled start which arises as part of ordinary operational instruction of Generating Units and therefore needs no separate description. Defined terms used in this definition are defused in the Grid Code."; and 2.6 by the addition of a new Schedule 5 in the form set out in Schedule 2. 3. Continuation of the Master Agreement The Master Agreement shall remain in full force and effect and this Agreement and the Master Agreement shall be treated as one document so that. upon the Master Agreement being amended pursuant to Clause 2, all references to the Master Agreement shall be treated as references to that agreement as amended by this Agreement. 4. Miscellaneous The provisions of Clauses 22. 23. 24 and 26 to 30 inclusive of the Master Agreement shall be deemed to be incorporated herein mutatis mutandis. 5. Entire Agreement 5.1 Each party to this Agreement acknowledges that in entering into this Agreement on the terms set out herein it is not relying upon any representation, warranty, promise or assurance made or given by any other party or any other person, whether or not in writing, at any time prior to the execution of this Agreement which is not expressly set out herein. 5.2 None of the parties to this Agreement shall have any right of action against any other party arising out of or in connection with any representation, warranty, promise or assurance referred to in Clause 5.1 (except in the case of fraud). 6. RTPA Any restriction or information provision (each of those terms having the same meaning in this Clause as in the Restrictive Trade Practices Act 1976) contained in this Agreement or any provision contained in this Agreement adding to or extending any restriction or information provision contained in any agreement which is varied or amended by this Agreement, shall not take effect or shall cease to have effect: (a) if a copy of this Agreement is not provided to the Department of Trade and Industry ("DTI") within twenty-eight days of the date on which this Agreement is made, or (b) if, within twenty-eight days of the provision of that copy to the DTI, the DTI gives notice of objection to the party providing it. IN WITNESS whereof the hands of the duly authorised representatives of the parties hereto the day and year first above written. SCHEDULE 1 Users ABB Energy Development Company Limited 2688994 Carmelite 50 Victoria Embankment Blackfriars London EC4Y ODX Accord Electric Limited 2869629 152 Grosvenor Road London SWIV 3JL AES Barry Limited 3135522 Burleigh House 17/19 Worple Way Richmond TW10 6AG AES Tyneside Limited 3135543 Burleigh House 19/19 Worple Way Richmond TW10 6AG AES Partington Limited 3210149 Burleigh House 17/19 Worple Way Richmond TW10 6AG Amoco Power Resource (Europe) Ltd 3042173 Amoco House West Gate London W5 IXL Anglian Power Generators Limited 2488955 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ Barking Power Limited 2354681 Devonshire House Mayfair Place London W1X 5FH British Gas Trading Ltd 3078711 Charter Court 50 Windsor Road Slough Berkshire SLI 2HA British Nuclear Fuels plc 1002607 Risley Warrington Cheshire WA3 6AS BOC Limited 337663 Chertsey Road Windlesham Surrey GU20 6HJ BP Chemicals Limited 194971 Britannic House I Finsbury Circus London EC2M 7BA Canatxx Energy Ventures Limited 2673604 Hillhouse International PO Box 4 Thornton Cleveleys Lancs FY5 4QD Candecca Resources Limited 953066 Welton Gathering Centre Barfield Lane Wragby Road Sudbrooke Lincolnshire LN2 2QU CeltPower Limited 2656561 Tomen House 13 Charles II Street London SWIY 4QT Citigen (London) Limited 2427823 100 Thames Valley Park Drive Reading Berkshire RG6 1PT Corby Power Limited 2329494 Five Chancery Lane Clifford's Inn London EC4A IBY Coryton Energy Company FC20597 20 St James Street 4th Floor London SW1A 1EJ Cottam Development Centre Limited 3273552 53 New Broad Street London EC2M 1JJ Crosfield Limited 00048745 Bank Quay Warrington Cheshire WA5 1AB Derwent CoGeneration Limited 2650621 Lansdowne House Berkeley Square London W1X 5DB Eastern Electricity plc 2366906 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ Eastern Merchant Generation Ltd 3116225 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ East Midlands Electricity plc 2366923 PO Box 444 Woodyard Lane Wollaton Nottingham Nottinghamshire NG8 1EZ Electricity Direct (UK) Limited 3174056 78, High Street Lewes East Sussex BN7 1XF Elm Energy and Recycling (UK) Limited 2516685 Elm Energy House Ettingshall Road Wolverhampton West Midlands WV2 2LA Energy Supply Contracts Limited 172268 One Great Tower Street London EC3R 5AH Enfield Energy Centre Limited 2796628 Concorde House Concorde Way Preston Farm Industrial Estate Stockton-on-Tees Cleveland TS18 3RB Enron Gas and Petrochemicals Trading Limited 3003823 4 Millbank London SW1P 3ET Fellside Heat and Power Limited 2614535 Fellside Lodge Seascale Cumbria CA20 1PG Fibrogen Limited 2547498 38 Clarendon Road London W11 3AD Fibropower Limited 2234141 38 Clarendon Road London W11 3AD First Hydro Company 2444277 Bala House Lakeside Business Village St Davids Park Deeside Clwyd CH5 3XJ Flotilla Power (UK) Limited 2880635 4 Millbank London SWIP 3ET Grovehurst Energy Limited 2197516 UK Paper House Kemsley Sittingbourne Kent ME10 3ET Humber Power Limited 2571241 South Humber Bank Power Station South Marsh Road Stallingborough North East Lincolnshire DN37 8BZ Impkemix Energy Limited 2076043 The Heath Runcorn Cheshire WA7 4QF Independent Energy UK Limited 3033406 30 Aylesbury Street London EC1R OER Indian Queens Power Limited 2928100 Burleigh House 17119 Worple Way Richmond TW10 6AG International Generating Company Limited 3039100 Springside House Tinwell Stamford PE9 3UQ Joint European Torus (JET), Joint Undertaking (a Joint Undertaking within the meaning of Chapter V of the Treaty establishing the European Atomic Energy Committee) Culham Abingdon Oxfordshire OX14 3EA Keadby Developments Limited 2691516 Keadby Power Station PO Box 89 Keadby Scunthorpe North Lincolnshire DNI7 3AZ Keadby Generation Limited 2729513 Keadby Power Station PO Box 89 Keadby Scunthorpe North Lincolnshire DNI7 3AZ Kent Power Lirnited 2723303 100 Thames Valley Park Drive Reading Berkshire RG6 1PT Kingsnorth Power Limited 2675504 Chancery House 53164 Chancery Lane London WC2A 1QU Lakeland Power Limited 2355290 Roosecote Power Station Roosecote Marsh Barrow in Furness Cumbria LA13 0PQ London Electricity plc 2366852 Templar House 81-87 High Holborn London WC1V 6NU Magnox Electric plc 2264251 Berkeley Centre Berkeley Gloucestershire GLI3 9PB Manweb plc 2366937 Manweb House Chester Business Park Wrexham Road Chester CH4 9PF Manweb Services Limited 2631510 Manweb House Kingsfield Court Chester Business Park Chester CH4 9RF Medway Power Limited 2537903 Burleigh House 17/19 Worple Way Richmond Surrey TW10 6AG Midlands Electricity plc 2366928 Mucklow Hill Halesowen West Midlands B62 5BP Midlands Power (UK) Limited 2251099 Mucklow Hill Halesowen West Midlands B62 8BP National Power PLC 2366963 Windmill Hill Business Park Whitehill Way Swindon Wiltshire SN5 6PB National Power (Cogencration Trading) Limited 2745602 Windmill Hill Business Park Whitehill Way Swindon Wiltshire SN5 6PB Norsk Hydro (U.K.) Limited 841421 Bridge House 69 London Road Twickenham Middlesex TW1 1RH Northern Electric plc 2366942 Carliol House Market Street Newcastle upon Tyne Tyne & Wear NE1 6NE NORWEB plc 2366949 PO Box 14 410 Birchwood Boulevard Warrington Cheshire WA3 7GA Nuclear Electric Limited 3076445 Barnett Way Barnwood Gloucester GL4 3RS Peterborough Power Limited 2353599 Wherstead Park Wherstead Ipswich Suffolk IP9 2AQ PowerGen plc 2366970 53 New Broad Street London EC2M 1JJ Railtrack plc 2904587 Railtrack House Euston Square London NW1 2EE Regional Power Generators Limited 2352390 Wetherby Road Scarcroft Leeds LS14 3HS Rocksavage Power Company, Ltd. FC18868 Maples & Calder, Ugland House PO Box 309 George Town Grand Cayman Cayman Islands British West Ind. SaltEnd Cogeneration Company 3274949 Britannic House 1 Finsbury Circus London EC2M 7BA Savage Land Limited 3145444 20 St James's Street London SW1A 1ES Scottish Hydro-Electric plc SC117119 10 Dunkeld Road Perth PH1 5WA Scottish Power plc Sc117120 1 Atlantic Quay Glasgow G2 8SP Seabank Power Limited 2591188 Severn Road Hallen Bristol BS10 7SP SEEBOARD plc 2366867 Forest Gate Brighton Road Crawley West Sussex PH11 9BH Shell Power Limited 2559630 Shell Mex House Strand London WC2R ODX Siemens plc 727817 Siemens House Oldbury Bracknell Berkshire RG12 8FZ Slough Energy Supplies Limited 2474514 234 Bath Road Slough Berkshire SL1 4EE South East London Combined Heat and Power Limited 2489384 37-41 Old Queen Street London SW1H 9JA Southern Electric plc 2366879 Southern Electric House Westacott Way Littlewick Green Maidenhead Berkshire SL6 3QB Southern Energy (UK) Generation Limited 3321733 200 Aidersgate Street London EC1A 4JJ South Wales Electricity plc 2366985 Newport Road St Mellons Cardiff South Glamorgan CF3 9XW South Western Electricity plc 2366894 800 Park Avenue Aztec West Almondsbury Bristol BS12 4SE Sutton Bridge Power 2586357 4, Millbank London SW1P 3ET Teesside Power Limited 2464040 4 Millbank London SW1P 3ET The Renewable Energy Company Limited 3043412 Stroud House Russell Street Stroud Gloucestershire GL5 3AN Tyne Property Development Limited 1194995 Siemens House Oldbury Bracknell Berkshire RG12 SFZ UK Electric Power Limited 2844010 Williams Denton Jones Glamaber Bangor Gwynedd LL57 2DY UML Limited 661900 Thermal Road Bromborough Wirral Merseyside L62 4XG Wainstones Power Limited 3462783 Pickfords Wharf Clink Street London SE1 9DF Yorkshire Electricity Group plc 2366995 Wetherby Road Scarcroft Leeds LS14 3HS SCHEDULE 2 New Schedule 5 to the Master Agreement Reactive Power Market and Default Payment Arrangements 1. DEFINITIONS AND INTERPRETATIONS 1.1 In this Schedule and the Appendices, except where the context otherwise requires, the following, expressions shall bear the following meanings:- "Base Rate" means, in respect of any day, the rate per annum which is equal to the base lending rate from time to time of Barclays Bank plc as at the close of business on the immediately preceding business day (being a weekday other than a Saturday on which banks are open for domestic business in the City of London); "Commercial Boundary" means (unless otherwise defined in the relevant Ancillary Services Agreement, including a Market Agreement) the commercial boundary between either NGC or a PES (as the case may be) and the User at the higher voltage terminal of the generator step-up transformer. "Contract Test" a test (not being a Reactive Test) described in a Market Agreement; "Excitation System" means the equipment providing the field current of a machine, including all regulating and control elements as well as field discharge or suppression equipment and protection devices; "Genset Registered Capacity" has the meaning attributed to it in the Pool Rules; "Non-Centrally Despatched Generating Unit" means a Generating Unit which is not subject to Central Despatch; "Reactive Despatch Instruction" means a Despatch Instruction relation to Reactive Power given by NGC to a Generator in accordance with Grid Code SDC2; "Reactive Power Zone" means those separate areas of England and Wales identified as zones in the Seven Year Statement for 1997 for the purpose of specifying local Reactive Power capability and need; "Reactive Test" means a test conducted pursuant to Grid Code OC5.5.1; "Relevant Zone" means, in relation to any Despatch Unit, the Reactive Power Zone to which that Despatch Unit is allocated as specified in an Ancillary Services Agreement; "Representative" has the meaning attributed to it in Schedule 4 to this Agreement; "Synchronous Compensation" means the operation of rotating synchronous Apparatus for the specific purpose of either generation or absorption of Reactive Power; "Tendered Capability Breakpoint" has the meaning attributed to it in sub-paragraph 1.4 of Appendix 5; "Trading Site" has the meaning attributed to it in the Pooling and Settlement Agreement; "Transmission Users Group" means the group established pursuant to paragraph 4 of Schedule 4 to this Agreement, "TUG Issue" has the meaning attributed to it in Schedule 4 to this Agreement; "'TUG Party" has the meaning attributed to it in Schedule 4 to this Agreement. 1.2 For the purpose of this Schedule and the Appendices, "Obligatory Reactive Power Service" means the Part I System Ancillary Service referred to in Grid Code CC 8.1 which the relevant User is obliged to provide (for the avoidance of doubt, as determined by any direction in force from time to time and issued by the Director relieving a relevant User from the obligation under its Licence to comply with such part or parts of the Grid Code or any Distribution Code or, in the case of NGC, the Transmission Licence as may be specified in such direction) in respect of the supply of Reactive Power (otherwise than by means of synchronous or static compensation) and in respect of the required Reactive Power capability referred to in Grid Code CC 6.3.2, which shall comprise:- (a) in relation to a Despatch Unit. compliance by the relevant User in all respects with all provisions of the Grid Code relating to that supply of Reactive Power and required Reactive Power capability (including without limitation the Connection Conditions and the Scheduling and Despatch Codes of the Grid Code) together with the provision of metering facilities meeting the requirements of Appendix 4: and (b) in relation to a Non-Centrally Despatched Generating Unit compliance by the relevant User in all respects with all provisions of the Grid Code applicable to it relating to that supply of Reactive Power and required Reactive Power capability, together with the provision of such despatch facilities (including the submission to NGC of all relevant technical, planning and other data in connection therewith) and metering, facilities (meeting the requirements of Appendix 4), and upon such terms, as shall be set out in an Ancillary Services Agreement entered into between NGC and the relevant User. For the avoidance of doubt. "Obligatory Reactive Power Service" when used in this Schedule and the Appendices excludes provision of Reactive Power capability from Synchronous Compensation and from static compensation equipment. and the production of Reactive Power pursuant thereto. 1.3 For the purpose of this Schedule and the Appendices, "Enhanced Reactive Power Service" means the Commercial Ancillary Service of:- (a) the provision of Reactive Power capability of a Generating Unit in excess of that which a User is obliged to provide from that Generating Unit under and in accordance with the Connection Conditions of the Grid Code and the production of Reactive Power pursuant thereto, which a User may agree to provide and which is capable of being made available to, and utilised by, NGC in accordance with the Scheduling, and Despatch Codes of the Grid Code (or as may otherwise be agreed in writing between NGC and a User) for the purposes of voltage support on the NGC Transmission System, upon and subject to such terms as may be agreed in writing between NGC and such User; or (b) the provision of Reactive Power capability from Synchronous Compensation or from static compensation equipment and the production of Reactive Power pursuant thereto, which a User or any other person may agree to provide and which is capable of being made available to, and utilised by, NGC for the purposes of voltage support on the NGC Transmission System. upon and subject to such terms as may be agreed in writing between NGC and such User or other person; or (c) such other provision or enhancement of capability of Plant and/or Apparatus or other equipment to generate or absorb Reactive Power, and the production of Reactive Power pursuant thereto, which a User or any other person may agree to provide and which is capable of being made available to, and utilised by, NGC for the purposes of voltage support on the NGC Transmission System, upon and subject to such terms as may be agreed in writing between NGC and such User or other person. 1.4 Unless otherwise defined in this paragraph 1, terms and expressions found in the Grid Code have the same meanings, interpretations and constructions in this Schedule and the Appendices. 1.5 In this Schedule and the Appendices, except where the context otherwise requires, references to a particular Appendix, Part, Section, sub-section, paragraph or sub-paragraph shall be a reference to a particular Appendix to or part of this Schedule or, as the case may be, that Section, sub-section, paragraph or sub-paragraph in this Schedule. 2. VARIATIONS AND REVIEW 2.1 (a) The Parties hereby agree that governance of this Schedule and the Appendices is an appropriate matter to be passed to the Transmission Users Group but further agree that. unless and until otherwise agreed by the Parties in writing, and notwithstanding and without prejudice to Clause 25.1 of this Agreement, this Schedule and the Appendices (except this paragraph 2) may be varied upon the terms and conditions of sub-paragraphs 2.2 to 2.5 inclusive. (b) Solely for the purposes of enabling this Schedule and the Appendices (except this paragraph 2) to be varied upon the terms and conditions of sub-paragraphs 2.2 to 2.5 inclusive as specified in sub-paragraph 2. 1 (a), the contents of this Schedule and the Appendices as varied from time to time shall be deemed to be incorporated as a separate Appendix into each and every Supplemental Agreement entered into by a User and in force from time to time, and the Parties hereby agree that, notwithstanding any contrary provision, express or implied, in this Agreement or any Supplemental Agreement, each such Appendix to a Supplemental Agreement shall only he capable of variation with the agreement in writing of all Parties or by way of a variation to this Schedule and the Appendices upon the terms and conditions of sub-paragraphs 2.2 to 2.5 inclusive and not otherwise (and Sub-Clause 1.2 of this Agreement shall be read and construed accordingly). Such Appendix is hereafter referred to in this paragraph 2 as "the Supplemental Appendix". 2.2 (a) If NGC and/or any User or Users ("the Proposing Party") considers that any variation should be made to this Schedule and/or the Appendices (except this paragraph 2) with regard to the Reactive Power market and the default payment arrangements (a "Proposed Variation") then, subject as provided below, written details of the Proposed Variation, together with reasons therefor and such other written information as the Proposing Party shall reasonably consider to be relevant ("the Supporting Documentation"), shall be submitted by the Proposing, Party's Representative as a TUG Issue at a meeting of the Transmission Users Group, provided always that:- (i) written details of a Proposed Variation and Supporting Documentation may not be so submitted for the purposes of this paragraph 2 if the effect of the Proposed Variation would in any way conflict with, or otherwise be inconsistent with, the charging principles (as amended from time to time) set out in Appendix 8 (save to the extent the Proposed Variation comprises solely a variation to such charging principles or includes a variation to such charging principles remedying the conflict or inconsistency); and (ii) for the purposes of this paragraph 2, written details of a Proposed Variation shall on y be deemed to have been submitted as a TUG Issue at a meeting of the Transmission Users Group if such details include a statement to the effect that they are being submitted pursuant to and for the purposes of this paragraph 2. (b) If this Schedule and/or the Appendices shall not have been amended in accordance with Clause 25.1 of this Agreement to effect such Proposed Variation, then at any time after expiry of a period of 120 days, but not later than 180 days, following the date on which written details of the Proposed Variation and Supporting Documentation were submitted at a meeting of the Transmission Users Group in accordance with sub-paragraph 2.2(a), the Proposing Party shall be entitled:- (i) where the Proposing Party is a User, to serve written notice on NGC requiring NGC to serve written notice on all other Users of the Proposing Party's intention to require NGC pursuant to sub-paragraph 2.2(c)(i) to refer the Proposed Variation to the Director for determination; or (ii) where the Proposing Party is NGC, to serve written notice on all Users of its intention to refer the Proposed Variation to the Director in accordance with sub-paragraph 2.2(c)(ii), each such notice to be copied to the Director. NGC shall so notify all other Users as referred to in sub-paragraph 2.2(b)(i) within 10 days following receipt of the notice from the Proposing Party. (c) If no such amendments to this Schedule and/or the Appendices to effect such Proposed Variation shall have been made within 30 days following receipt (or issue, as the case may be) by NGC of the notice referred to in sub-paragraph 2.2(b), then the Proposing Party shall be entitled:- (i) where the Proposing Party is a User, within a further 30 day period, to serve written notice on NGC requiring NGC to refer the Proposed Variation to the Director, whereupon NGC shall be obliged within 10 days following receipt thereof by written notice (copied to all other Users) to refer the Proposed Variation to the Director for determination; or (ii) where the Proposing Party is NGC, within a further 30 day period, by written notice (copied to all Users) to refer the Proposed Variation to the Director for determination. 2.3 Each reference by NGC of a Proposed Variation to the Director referred to in sub-paragraph 2.2(c) shall be made in the manner of a variation to each Supplemental Appendix proposed by NGC pursuant to Condition IOC(3) of the Transmission Licence, and shall be accompanied by a request from NGC to the Director to settle any dispute relating thereto. When making each such reference, NGC shall provide the Director with copies of the written details and Supporting Documentation in relation to the Proposed Variation first submitted by the Proposing Party at a meeting of the Transmission Users Group as referred to at sub-paragraph 2.2(a) and. where the Proposing Party is a User, NGC shall invite the Director to raise any questions or queries concerning the Proposed Variation direct with the User concerned. 2.4 If a reference shall have been made by NGC to the Director pursuant to sub-paragraph 2.2(c) and the Director shall have made a determination in accordance with Condition 10C(3) of the Transmission Licence requiring each Supplemental Appendix and/or the provisions of this Schedule and/or the Appendices to be varied, then the Parties shall give effect to any such variation so determined to be made by varying each of their respective Supplemental Appendices and/or the provisions of this Schedule and/or the Appendices accordingly, and each Party hereby authorises and instructs NGC to make all such variations on its behalf and undertakes not to withdraw, qualify or revoke such authority and instruction at any time. In the absence of any such determination by the Director, no such variations shall be made. 2.5 The Parties acknowledge and agree that the Transmission Users Group shall be requested to review each of the matters described in Appendix 7 by the respective date (if any) shown opposite each therein. In carrying out such review, the Transmission Users Group shall be requested to take into account the respective applicable principles (if any) set out therein and to give due and proper consideration to any matter referred to it by the Director. For the avoidance of doubt- following each such review NGC or any User may raise a Proposed Variation with respect thereto in accordance with sub-paragraph 2.2(a). It is further agreed that:- (a) NGC shall consider and, no later than 31st December 1999, report to the Transmission Users Group on the practicalities of establishing a unified mechanism for the provision of voltage support for the NGC Transmission System; and (b) the Transmission Users Group shall be requested, no later than 31st March. 2000, to invite the Grid Code Review Panel to review the provisions of the Grid Code with respect to Reactive Power in light of this Schedule. 2.6 For the avoidance of doubt:- (a) the provisions of sub-paragraphs 2.2 to 2.5 inclusive shall constitute the entirety of the rights of Parties (whether under this Agreement or otherwise) to refer (or to require NGC to refer) to the Director for determination any variation to this Schedule 5 and/or the Appendices. and each of the Parties hereby agrees that, saver in the circumstances provided in sub-paragraph 2.3, no request shall be made to the Director under Condition 10C(3) of the Transmission Licence to settle any dispute relating to any Proposed Variation where NGC is the Proposing Party; and (b) nothing in this paragraph 2 shall confer on any Party any right to refer (or to require NGC to refer) to the Director for determination any variation or proposed variation to any part or parts of this Agreement other than this Schedule 5 and the Appendices; and (c) the provisions of this paragraph 2 may only be varied in the manner provided in Clause 25.1 of this Agreement. 3. DISPUTE RESOLUTION 3.1 Save in relation to any dispute or difference concerning a Proposed Variation (in respect of which paragraph 2 shall apply), and subject always to sub-paragraph 3.2, any dispute or difference of whatever nature howsoever arising under out of or in connection with this Schedule and/or the Appendices (in this paragraph 3 referred to as a "Dispute") shall be and hereby is referred to arbitration pursuant to the arbitration rules of the Electricity Arbitration Association in force from time to time. 3.2 (a) In this sub-paragraph 3.2, each Party which is party to the Dispute in question is referred to as "a Disputing Party" and "Disputing Parties" shall be construed accordingly. (b) Before submitting any notice under the arbitration rules commencing arbitration proceedings in relation to any Dispute, unless a notice shall have been served in respect of that Dispute pursuant to sub-paragraph 3.2(c), a Disputing Party shall first serve written notice on all other Disputing Parties of its intention to commence arbitration proceedings. Arbitration proceedings may not then be commenced until the 30 day period referred to in sub-paragraph 3.2(c)(ii) shall have elapsed without a notice pursuant to that sub-paragraph having been served or, where such notice has been served within such period, except in the circumstances provided in sub-paragraphs 3.2(d) and (e). (c) If a Disputing Party reasonably believes that the subject matter of the Dispute is directly relevant to, or the resolution of the Dispute would have a material effect upon, any one or more other Parties not being Disputing Parties, then that Disputing Party may:- (i) for so long as no notice is served in accordance with sub-paragraph 3.2(b) above, at any time. or (ii) upon receipt of any such notice, within 30 days thereafter, serve written notice on all other Disputing Parties of its intention to raise the Dispute as a TUG Issue at a meeting of the Transmission Users Group. Upon receipt of such notice, no Disputing Party may subsequently commence arbitration proceedings except in the circumstances provided in sub-paragraphs 3.2(d) and (e). (d) Not earlier than 30 days nor later than 90 days after a notice is served pursuant to sub-paragraph 2") 3.2(c) above. the Representative of that and/or any other Disputing Party may submit written details of the Dispute as a TUG Issue at a meeting of the Transmission Users Group. Provided it shall first have been given the opportunity to consult with regard to the nature and scope of confidential information relating to its affairs proposed to be disclosed. each Disputing Party hereby consents to such disclosure of confidential information (but not rates and prices) relating to its affairs to the extent relevant to the Dispute. If such written details are not so submitted prior to expiry of such 90 day period, then any Disputing Party wishing to commence arbitration proceedings in relation to the Dispute in question may thereafter do so. (e) Upon the expiry of the period of 120 days after the date on which written details of the Dispute are submitted at a meeting of the Transmission Users Group in accordance with sub-paragraph 3.2(d), any Disputing Party wishing to commence arbitration proceedings in relation to the Dispute in question may thereafter do so. 3.3 Clause 26.1 of this Agreement shall be read and construed accordingly. 4. OBLIGATORY REACTIVE POWER SERVICE - DEFAULT PAYMENT ARRANGEMENT 4.1 Notwithstanding any other provision of this Agreement, the provisions of this Schedule and the Appendices, together with the Ancillary Services Agreements referred to in sub-paragraph 4.6. shall govern the rights and obligations of the Parties with respect to payments to be made by NGC to Users for the provision of the Obligatory Reactive Power Service. 4.2 Subject always to paragraph 5, and notwithstanding (a) the provisions of the Works Programme for reactive power ancillary services agreed by Pool Members on 1st March 1994, as adopted from 1st August 1994; and (b) the provisions of any Ancillary Services Agreement now or hereafter in effect (but subject always to sub-paragraph 6.2), the payments to be made by NGC to Users for the provision of the Obligatory Reactive Power Service in all Ancillary Services Agreements under which Users are or will be paid for the Obligatory Reactive Power Service shall, subject always to sub-paragraphs 2.5 and 4.7, in respect of all periods from (and including) 1st October, 1997 to (and including) 31st March, 2000 comprise solely payments for capability and utilisation, and thereafter comprise solely payments for utilisation, in each case determined in respect of each Settlement Period in accordance with sub-paragraph 4.3. 4.3 Save to the extent and for the duration of any Market Agreement (as defused in sub-paragraph 5. 1) which may be entered into between NGC and a User as referred to in paragraph S:- (a) the utilisation and capability payments for provision of the Obligatory Reactive Power Service from Despatch Units shall be determined in accordance with the provisions of Appendix 1; and (b) the utilisation and capability payments for provision of the Obligatory Reactive Power Service from Non-Centrally Despatched Generating Units shall be determined on a basis to be agreed between NGC and each relevant User but, so far as reasonably practicable, consistent with the provisions of Appendix I (but so that such payments shall not become due and payable from NGC to any such User with effect from a date earlier than that on which the relevant Ancillary Services Agreement referred to in sub-paragraph 4.6 is so amended or concluded). 4.4 The Parties acknowledge and agree that. as at the date this Schedule comes into effect:- (a) the totality of payments for the provision of the Obligatory Reactive Power Service, determined in accordance with the provisions of this paragraph 4, reflect so far as reasonably practicable the overall variable costs (on the basis of the charging principles set out in Appendix 8) incurred across all relevant Generating Units of the provision of the Obligatory Reactive Power Service (whether or not payments are made in respect of those Generating Units pursuant to this paragraph 4 or pursuant to Market Agreements entered into in accordance with paragraph 5); and (b) without prejudice to the review of the indexation factor specified as item 4 in Appendix 7, such totality of payments will continue to reflect those overall variable costs notwithstanding all and any variations thereto reasonably anticipated at such date. 4.5 It is hereby agreed and acknowledged that nothing in this Schedule and the Appendices shall affect in any way the obligation on each User to comply with the provisions of the Grid Code insofar as they relate to Reactive Power. For the avoidance of doubt. and without limiting the foregoing, it is hereby agreed and acknowledged that, notwithstanding that the payments for the Obligatory Reactive Power Service with effect from 1st April, 2000 shall, subject always to sub-paragraph 2.5. comprise solely payments for utilisation. nothing in this Schedule and the Appendices shall relieve Users from the obligation to comply with the provisions of the Grid Code in relation to Reactive Power by virtue of Sub-Clause 9.3 of this Agreement or otherwise howsoever. 4.6 Ancillary Services Agreements have been and will continue to be entered into bilaterally between NGC and Users but it is intended that, subject as provided below, Ancillary Services Agreements between NGC and Users providing the Obligatory Reactive Power Service will be amended or (if not in existence when this Schedule takes effect) concluded so as to give effect to the provisions of sub-paragraphs 4.2 and 4.3. Subject always to sub-paragraphs 4.8 and 6.2, NGC and each relevant User therefore agree, as soon as reasonably practicable, to amend the existing Ancillary Services Agreement or conclude a new Ancillary Services Agreement in respect of each relevant Generating Unit in order to give effect to the provisions of sub-paragraphs 4.2 and 4.3. 4.7 For the avoidance of doubt, no payments referred to in this paragraph 4 shall be payable by NGC to a User in relation to any Generating Unit unless and until the relevant Ancillary Services Agreement is so amended or concluded as provided in sub-paragraph 4.6. 4.8 Notwithstanding the foregoing provisions of this paragraph 4, and without prejudice to paragraph 7, NGC shall only be obliged to amend or conclude any Ancillary Services Agreement with regard to any Generating Unit if.- (a) the leading or lagging Reactive Power capability required of that Generating Unit in accordance with Grid Code CC 6.3.2 is IS Mvar or more (measured at the Commercial Boundary); and (b) where that Generating Unit is not subject to Central Despatch, NGC and the relevant User shall have agreed terms (to be incorporated into the Ancillary Services Agreement) with regard to despatch facilities, including the ability for NGC to obtain relevant technical, planning and other data in connection therewith; and (c) there exists in relation to that Generating Unit metering facilities meeting the requirements of Appendix 4. 5. OBLIGATORY REACTIVE POWER SERVICE AND ENHANCED REACTIVE POWER SERVICES - MARKET PAYMENT MECHANISM 5.1 Nothing in this Schedule and the Appendices, and nothing in any Ancillary Services Agreement entered into or amended in accordance with sub-paragraph 4.6, shall prevent or restrict:- (a) the entering into or amendment of any Ancillary Services Agreement between NGC and any User to provide for the making of payments by NGC to that User for the provision of the Obligatory Reactive Power Service on an alternative basis to that set out or referred to in paragraph 4; or (b) the entering into or amendment of any Ancillary Services Agreement between NGC and any User (or other person) for the provision of an Enhanced Reactive Power Service. Any such agreement constituting an Ancillary Services Agreement or an amendment thereto and which is entered into in accordance with the principles contained in sub-paragraph 5.3 is referred to in this Schedule and the Appendices as a "Market Agreement". 5.2 The coming into effect of a Market Agreement in relation to any Generating Unit shall, in respect of that Generating Unit, suspend and replace for the duration thereof the provisions for payment for the Obligatory Reactive Power Service (if applicable) set out or referred to in paragraph 4. In such a case, and for the avoidance of doubt, with effect from the expiry or termination of the Market Agreement, the provisions for payment for the Obligatory Reactive Power Service set out or referred to in paragraph 4 shall in relation to that Generating Unit cease to be suspended and shall resume full force and effect. 5.3 The following principles shall govern the entering into of Market Agreements:- (a) Relevant Dates (i) Each Market Agreement will commence on either 1st April or 1st October, whichever next follows the submission by NGC of the package of information as more particularly described in sub-paragraph 5.3(b)(i) ("Contract Start Days"). The first such Contract Start Day will be 1st April 1998. (ii) For the purposes of this sub-paragraph 5.3:- (a) a Market Day shall be a date not earlier than twenty weeks and not later than sixteen weeks prior to a Contract Start Day; and (b) a Tender Period shall be a period of at least eight consecutive weeks commencing on a date nominated by NGC and ending on a Market Day. (b) Submission of Tender information by NGC (i) NGC shall, acting reasonably and having regard to the principles contained in this subparagraph 5.3, compile a package of information for the use of interested parties comprising technical, procedural and contractual requirements, directions and specifications to govern Market Agreements to take effect from the following Contract Start Day. NGC shall ensure that such requirements, directions and specifications do not conflict with any of the principles contained in this sub-paragraph 5.3 and so far as reasonably practicable do not discriminate between Tenderers. (ii) Prior to the commencement of each Tender Period, NGC shall provide to all persons who shall by then have requested the same the package of information as more particularly described in sub-paragraph 5.3(b)(i). (c) Submission of Tenders During the Tender Period, but for the avoidance of doubt not later than the Market Day, an interested party may submit to NGC:- (i) in relation to any Generating Unit providing the Obligatory Reactive Power Service, prices for and Tendered Capability Breakpoints relating to the provision thereof : or (ii) in relation to that Generating Unit, a tender for provision of the Enhanced Reactive Power Service specified in sub-paragraph 1.3(a) and/or (b) and/or (c); and/or (iii)in relation to any other Generating Unit or other Plant and Apparatus (or other equipment), a tender for provision of the Enhanced Reactive Power Service specified in sub-paragraph 1.3(b) and/or (c), in each case in accordance with sub-paragraph 5.3(d). All such submissions are referred to in this Schedule and the Appendices as "Tenders", and "Tenderers" shall be construed accordingly. (d) Form of tenders (i) All Tenders submitted by Users which comprise:- (a) prices for and Tendered Capability Breakpoints relating to the provision of the Obligatory Reactive Power Service from Despatch Units; and (b) terms for the provision of the Enhanced Reactive Power Service specified in sub-paragraph 1.3(a) from Despatch Units, shall be completed on the basis that payment will be determined in respect of each Settlement Period in accordance with the formulae and other provisions set out in Appendix 2 and in the manner set out in Appendix 5. (ii) All other Tenders (including without limitation those in respect of Non-Centrally Despatch Generating Units and those comprising terms for the provision of the Enhanced Reactive Power Service specified in sub-paragraphs 1.3(b) and (c)) shall be submitted in accordance with and on the basis of such (if any) reasonable directions given by NGC in the package of information referred to in sub-paragraph 5.3(b)(i) or otherwise in such manner as may be reasonably specified by NGC from time to time, which directions shall in either case be, so far as reasonably practicable, consistent with the provisions of Appendices 2 and 5. (iii) Each Tender comprising prices for and Tendered Capability Breakpoints relating to the provision of the Obligatory Reactive Power Service shall be submitted on the basis that NGC may only select all (and not some) of the prices and Tendered Capability Breakpoints comprised therein. (iv) Save where expressly provided otherwise in a Tender, each Tender comprising terms for the provision of an Enhanced Reactive Power Service shall be treated as having been submitted on the basis that NGC may select all or part only of the Reactive Power capability comprised therein (which, in the case of the Enhanced Reactive Power Service specified in sub-paragraph 1.3(a), shall mean all or part only of the excess capability comprised therein). (v) All Tenders shall be submitted in respect of periods of whole and consecutive calendar months. to be not less than twelve months and in multiples of six months, to commence on the next following Contract Start Day. Save where expressly provided otherwise in a Tender, a Tender (whether in relation to the Obligatory Reactive Power Service or an Enhanced Reactive Power Service) shall be treated as having been submitted on the basis that NGC may select all or part only of any period so tendered (in multiples of six months), subject to a minimum period of twelve consecutive months, commencing on the next following Contract Start Day. (e) Qualification and Evaluation of Tenders (i) Each Tender must satisfy the mandatory qualification criteria set out in Section A of Appendix 6. (ii) NGC shall evaluate and (without prejudice to sub-paragraphs 5.3(d)(iii),(iv) and (v)) select Tenders (or part(s) thereof) on a basis consistent with its obligations under the Act, the Transmission Licence and this Agreement and, subject thereto, in accordance with the evaluation criteria set out in Section B of Appendix 6. Without limitation, NGC reserves the right to require tests of a Generating Unit or other Plant and Apparatus (or other equipment), on a basis to be agreed with a Tenderer, as part of the evaluation of a Tender. (iii) NGC shall use reasonable endeavours to evaluate Tenders within ten weeks from each Market Day. (f) Entering into of Market Agreements (i) Having selected a Tender (or part(s) thereof) in accordance with sub-paragraph 5.3(e), NGC shall notify the relevant Tenderer that it wishes to enter into a Market Agreement in respect thereof. and that Tenderer and NGC shall each use reasonable endeavours to agree the terms of. and enter into, a Market Agreement in respect thereof as soon as reasonably practicable but in any event not later than 4 weeks prior to the relevant Contract Start Day. Notwithstanding the foregoing, if a Market Agreement has not been entered into by the date being 4 weeks prior to the relevant Contract Start Day, then either NGC or the Tenderer shall be entitled. provided that it shall have used all reasonable endeavours to agree the terms of. and enter into, the Market Agreement as aforesaid, to notify the other that it no longer wishes to enter into the Market Agreement. whereupon the Tender in question shall be deemed to be withdrawn. (ii) In the event of a deemed withdrawal of a Tender in the circumstances set out in subparagraph 5.3(f)(i), NGC shall be entitled to re-evaluate and select all or part of any outstanding Tenders in accordance with sub-paragraphs 5.3(e)(i) and (ii) and to notify one or more Tenderers if. in substitution for the Tender so deemed to be withdrawn, it wishes to enter into a Market Agreement in respect of any other Tender or Tenders (or part(s) thereof). Following such notification, NGC and each Tenderer in question shall use reasonable endeavours to agree the terms of, and enter into, a Market Agreement prior to the relevant Contract Start Day. (iii) If. in respect of any Tender, a Market Agreement is not entered into by the relevant Contract Start Day, that Tender shall be deemed to be withdrawn. (iv) Save where otherwise provided in this paragraph 5. all Market Agreements must be entered into on the basis of the terms set out in the relevant Tender (or relevant part(s) thereof). (g) Legal Status of Tenders For the avoidance of doubt, a Tender shall not constitute an offer open for acceptance by NGC, and in respect of any Tender or part(s) thereof selected by NGC pursuant to sub-paragraph 5.3(e) or (f), neither the Tenderer in question nor NGC shall be obliged to provide or pay for the Obligatory Reactive Power Service and/or an Enhanced Reactive Power Service upon the terms of that Tender (or the relevant part(s) thereof) unless and to the extent that those terms are incorporated in a Market Agreement subsequently entered into. (h) Publication (i) Within the six weeks following each Contract Start Day, NGC shall provide to all persons requesting the same the following information:- (a) in respect of all Market Agreements then subsisting, prices and contracted Reactive Power capability on an individual Tender basis relating to the period from the immediately preceding Contract Start Day until the next following Contract Start Day; (b) in respect of all Ancillary Services Agreements (including Market Agreements) subsisting in respect of the six month period ending on the immediately preceding Contract Start Day (commencing with that ending on 30 September, 1998), details of utilisation of Mvarh provided by individual Despatch Units (or, where relevant, Non-Centrally Despatched Generating Units. other Plant and/or Apparatus or other equipment) pursuant to the Obligatory Reactive Power Service and Enhanced Reactive Power Services; (c) details of the circumstances surrounding any failure by NGC during the preceding six month period to perform any of its duties and responsibilities under this paragraph 5 in the circumstances referred to in paragraph 7; and (d) any other information reasonably considered by NGC to be pertinent to the Tender process, and, to this extent, each Party consents to the disclosure by NGC of the information referred to in sub-sub-paragraphs (a) and (b) above in so far as it relates to the provision of the Obligatory Reactive Power Service and (where applicable) an Enhanced Reactive Power Service from its Generating Units and/or other Plant and Apparatus (or other equipment). (ii) Without prejudice to the provision of information pursuant to sub-paragraph 5.3 (h)(i), NGC further agrees to use all reasonable endeavours to provide to all persons requesting the same, within the six weeks following each Contract Start Day, estimates of the Mvarh absorption and generation by the NGC Transmission System, where used for the purposes of voltage support, during the preceding six month period (commencing with that ending on 30th September, 1998). 6. AMENDMENT AND CONCLUSION OF ANCILLARY SERVICES AGREEMENTS 6.1 NGC and each relevant User shall promptly do all such acts and execute and deliver such agreements and other documentation as may be necessary to amend or conclude the relevant Ancillary Service Agreements so as to give effect to the provisions of this Schedule and the Appendices as amended from time to time. 6.2 Sub-paragraphs 4.6 and 6.1 shall not require NGC or any User to amend or conclude an Ancillary Services Agreement so as to give effect to this Schedule and the Appendices if and to the extent that, in respect of any Generating Unit. NGC and such User shall have expressly agreed in writing, that no payments shall be made by NGC to such User under an Ancillary Services Agreement for the provision of the Obligatory Reactive Power Service from that Generating Unit. 7. STATUTORY AND REGULATORY OBLIGATIONS 7.1 No Party shall be bound to perform any of its duties or responsibilities under this Schedule and the Appendices (including without limitation with regard to the amending or concluding of Ancillary Services Agreements in accordance with sub-paragraph 4.6 and the entering into of Market Agreements in accordance with paragraph 5) if and to the extent that to do so would be likely to involve that Party in breach of its duties and obligations (if any) under the Act or of any condition of a Licence. Accordingly, nothing in this Schedule and the Appendices shall preclude NGC from procuring. the provision of any Enhanced Reactive Power Service in a manner otherwise than in accordance with paragraph 5 in order to comply with its duties and obligations under the Act and/or any condition of the Transmission Licence to the extent such compliance cannot reasonably be assured by the performance of its duties and responsibilities under paragraph 5. Without prejudice to sub-paragraph 7.1, NGC shall not be bound to comply with the provisions of subparagraph 5.3(h) with regard to the disclosure of information to the extent that to do so would be likely to restrict, distort or prevent competition in the provision of the Obligatory Reactive Power Service and/or Enhanced Reactive Power Services. Appendix 1 Payments for the Obligation Reactive Power Service - Default Payment Arrangements The provisions of this Appendix 1, as referred to in sub-paragraph 4.2 of this Schedule, shall apply to the calculation of default payments for provision of the Obligatory Reactive Power Service from Despatch Units. All payments shall be expressed in pounds sterling. 1. Total Payment Total Payment (PT) = PU + PC [(pound) per Settlement Period per Despatch Unit] where, subject always to paragraphs 7 and 8 below: PU = the utilisation payment in respect of a Despatch Unit for a Settlement Period determined in accordance with paragraph 2 below; and PC = the capacity payment in respect of a Despatch Unit for a Settlement Period determined in accordance with paragraph 3 below. 2. Utilisation Payment PU = BPU * U [(pound) per Settlement Period per Despatch Unit] Where BPU = 46,270,000 * 1 * X [(pound)/Mvarh] 42,054,693 Where I = defined in paragraph 5 below; X = a factor which shall be: (i) in respect of any Settlement Period from (and including) 1st October 1997 to (and including) 31st March 1998, 0.2; and (ii) in respect of any Settlement Period from (and including) 1st April, 1998 to (and including) 31st March, 1999, 0.5 (subject as provided below); and (iii) subject always to sub-paragraph 2.5 of this Schedule, in respect of any Settlement Period from (and including) 1st April, 1999 to (and including) 31st March. 2000, 0.75 (subject as provided below); and (iv) subject always to sub-paragraph 2.5 of this Schedule, in respect of all Settlement Periods thereafter, 1.00 (subject as provided below); Provided always that with effect from 1st April 1998. X shall be 0.2 in all Settlement Periods from (and including) that in which:- (a) the relevant Despatch Unit (or, in relation to a Centrally Despatched CCGT Module, any relevant CCGT Unit) fails a Reactive Test until (and including) the Settlement Period in which a subsequent Reactive Test is passed in relation to that Despatch Unit (or CCGT Unit (as the case may be)); or (b) the User fails (other than pursuant to an instruction given by NGC or as permitted by the Grid Code) to set the Automatic Voltage Regulator of the Despatch Unit (or, in relation to a Centrally Despatched CCGT Module, any relevant CCGT Unit) to a voltage following mode until (and including) the Settlement Period in which the User notifies NGC that the Automatic Voltage Regulator is so set; or (c) the Despatch Unit fails to comply with a Reactive Despatch Instruction due to the fact that the Despatch Unit (or, in relation to a Centrally Despatched CCGT Module any relevant CCGT Unit) is unable to increase and/or decrease its Mvar output (other than as a direct result of variations in System voltage) until (and including) the Settlement Period in which the User notifies NGC that the Despatch Unit is so able to comply; or (d) the Despatch Unit fails to have a Mvar range which includes the ability to provide zero Mvar at the Commercial Boundary until (and including) the Settlement Period in which the User notifies NGC that the Despatch Unit has or once more has such range; and U = defined in Section 1 of Appendix 3. 3. Capability Payment PC = [[(BPC * ZWFlead * QClead * QSF lead) + (BPC * ZWFlag * QClag * QSFlag)] * J] [(pound) per Settlement Period per Despatch Unit] Provided always that PC shall be 0 in all Settlement Periods from (and including) that in which:- (i) the User fails (other than pursuant to an instruction given by NGC or as permitted by the Grid Code) to set the Automatic Voltage Regulator of the Despatch Unit (or, in relation to a Centrally Despatched CCGT Module, any relevant CCGT Unit) to a voltage following mode until (and including) the Settlement Period in which the User notifies NGC that the Automatic Voltage Regulator is so set; or (ii) the Despatch Unit fails to comply with a Reactive Despatch Instruction due to the fact that the Despatch Unit (or in relation to a Centrally Despatched CCGT Module any relevant CCGT Unit) is unable to increase and/or decrease its Mvar output (other than as a direct result of variations in System voltage) until (and including) the Settlement Period in which the User notifies NGC that the Despatch Unit is so able to comply; or (iii) the Despatch Unit fails to have a Mvar range which includes the ability to provide zero Mvar at the Commercial Boundary until (and including) the Settlement Period in which the User notifies NGC that the Despatch Unit has or once more has such range; or (iv) a continuous period of unavailability of a Despatch Unit to be Despatched by NGC in accordance with Grid Code SDC extends beyond 75 consecutive days until (and including) the Settlement Period in which the Despatch Unit is subsequently declared available in accordance with Grid Code SDC. Where BP2 = 46,270,000 * 1 * Y [(pound)/Mvar per Settlement Period ------------------------------------------- 0.868178624 * 16,112 * 8,760 * 2 Where I = defined in paragraph 5 below; Y = a factor which shall be:- (i) in respect of any Settlement Period from (and including) 1st October, 1997 to (and including) 31st March. 1998, 0.8; and (ii) in respect of any Settlement Period from (and including) 1st April, 1998 to (and including) 31st March, 1999, 0.5; and (iii)subject always to sub-paragraph 2.5 of this Schedule, in respect of any Settlement Period from (and including) 1st April, 1999 to (and including) 31st March, 2000, 0.25; and (iv) subject always to sub-paragraph 2.5 of this Schedule, in respect of all Settlement Periods thereafter, 0; ZWF = the Provisional Zonal Weighting Factor defined in paragraph 4 below (expressed to apply to both leading and lagging Mvar) subject to reconciliation in accordance with that paragraph. QC = defined in Section 2 of Appendix 3 (expressed to apply to both leading and lagging Mvar); QSF = the shortfall factor relating to the capability payment (expressed as either QSFlead QSFlag to apply respectively to capability leading and capability lagging as applicable), being min ( 1, ( QR) 2 ) -- ( QC ) Where QR = defined in Section 2 of Appendix 3 (expressed to apply to both leading and lagging Mvar); and J = 1 in each Settlement Period in which, in relation to the Despatch Unit in question, Genset Registered Capacity is greater than 2MW, otherwise 0. 4. Zonal Weighting Factors ZWF = the Provisional Zonal Weighting Factor (expressed as either ZWFlead or ZWFlag to apply respectively to the zonal weighting factor leading and the zonal weighting factor lagging) for the Despatch Unit, calculated as follows:, (a) in respect of the period from (and including) 1st October, 1997 to (and including) 31st March, 1998 and in respect of each subsequent twelve month period ending 31st March, provisional zonal weighting factors ("the Provisional Zonal Weighting Factors') shall be calculated by NGC in respect of both leading and lagging Reactive Power by reference to:- (i) the leading or lagging (as the case may be) Mvar "need" for leading for lagging (as the case may be) Reactive Power for that period in each Relevant Zone, divided by (ii) the total leading or lagging (as the case may be) Mvar capability for that period in each Relevant Zone as forecast by NGC ("the Total Forecast Capability"), with the result of that division in each case being multiplied by an adjustment factor being:- 16112 TAN Where TAN = a figure being, for the period from (and including) 1st October, 1997 to (and including) 31st March, 1998, 14,775, and for each subsequent twelve month period ending 31st March, a figure being the sum total of the leading Mvar "need" for leading Reactive Power plus the sum total of the lagging Mvar "need" for lagging, Reactive Power in all Reactive Power Zones for the twelve month period in question, as given each year in the Seven Year Statement, provided that each Provisional Zonal Weighting Factor (both leading and lagging) shall not in any event be greater than 3.000 and provided further that (for the avoidance of doubt) no determination of ZWFlead, ZWFlag, and TAN shall be made in respect of any such twelve month period when Y = 0. (b) The Provisional Zonal Weighting Factors, together with the Total Forecast Capability, will be notified by NGC as soon as reasonably practicable by publication in the first practicable Seven Year Statement (or any update thereof). Reconciliation As soon as reasonably practicable following the expiry of each twelve month period ending 31st March, NGC shall recalculate ZWFlead and ZWFlag, for that twelve month period in accordance with the above provisions for calculation of the Provisional Zonal Weighting. Factors but substituting for the Total Forecast Capability the actual total leading or lagging (as the case may be) Mvar capability for that twelve month period in each Relevant Zone as determined by NGC ("the Total Actual Capability"). Such recalculation of ZWFlead and ZWFlag shall be undertaken by NGC in a manner consistent with the principles and methodologies set out in the document entitled "Methodology Document for the Recalculation of Zonal Weighting Factors" published by NGC for this purpose. Such recalculated figures for ZWFlead and ZWFlag ("the Final Zonal Weighting Factors"), together with the Total Actual Capability, shall be published by NGC in the Seven Year Statement. Each Final Zonal Weighting Factor (both leading and lagging) shall not in any event be greater than 3.000 and (for the avoidance of doubt) no determination of ZWFlead, ZWFlag, and TAN shall be made in respect of any such twelve month period when Y=0. NGC shall derive the Total Actual Capability from the Mvar capability (required under and in accordance with the Connection Conditions of the Grid Code) of Generating Units in respect of which Ancillary Services Agreements have been or will be amended or concluded to give effect to the provisions of sub-paragraphs 42 and 4.3 of this Schedule. In respect of any twelve month period ending 31st March. such Mvar capability shall be reduced pro rata for all Settlement Periods in such twelve month period in respect of which no capability payments referred to in this Appendix I shall fall due:- (a) by virtue of paragraph 7 below (with effect from the commencement of the twelve month period in question); and (b) by virtue of paragraph 8 below (until the end of the twelve month period in question): and (c) by virtue of factor J referred to in paragraph 3 above being set to zero (at any time during the twelve month period in question). As soon as reasonably practicable following publication of the relevant Seven Year Statement, NGC shall pay to each relevant User or be paid by each relevant User such sum as will reconcile:- (i) capability payments made to that User and calculated in accordance with paragraph 3 above by reference to the Provisional Zonal Weighting Factors, with (ii) capability payments due to or from that User and calculated in accordance with paragraph 3 above by reference to the Final Zonal Weighting Factors. For the avoidance of doubt. such reconciliation will include the payment of interest at the Base Rate from the date of payment by NGC to that User of the capability payments referred to at (i) above. For clarification purposes. each reference in this paragraph 4 to "need" does not imply actual Reactive Power need but is used merely to refer to the figure identified as "need" in the Seven Year Statement. Such figure shall be determined each year using the same principles and methodologies as used to determine the zonal weighting factors for the twelve month periods ended on 31st March, 1996 and 31st March, 1997. 5. Indexation The indexation factor I used in the formulae in paragraphs 2 and 3 above shall, with effect from 1st October, 1997 in respect of the period from (and including) that date to (and including) 31st March, 1998, and with effect from 1st April in respect of each subsequent twelve month period ending, 31st March. be determined as follows:- I = RPI2 RPI1, Where For the period from (and including) 1st October, 1997 to (and including) 31st March, 1998 RPI, = 155.4, and thereafter RPI, is the PPI for March of the immediately preceding twelve month period ending 31st March. RPI1 is the RPI for March, 1994 (142.5). The index used is the Retail Prices Index (RPI) with 1987 = 100 base. The source of the RPI index is the monthly Department of Employment "Employment Gazette". In the event that RPI ceases to be published or is not published in respect of any relevant month or it is not practicable to use RPI because of a change in the method of compilation or some other reason, the indexation factor I shall be calculated by NGC using an alternative index nominated by NGC as it thinks fit acting reasonably but with a view to determining the relevant payment after indexation that would be closest to the relevant payment after indexation if RPI had continued to be available. Subject always to sub-paragraph 2.5 of this Schedule, in respect of all periods from (and including) 1st April, 2001 the indexation factor I applicable for the period from (and including) 1st April, 2000 to (and including) 31st March, 2001 shall apply. A 6. Information Unavailable Where any information or data required by NGC for the calculation of payments to be made pursuant to this Schedule for any 12 month period ending 31st March is not available to NGC at the relevant time, NGC shall calculate payments for that 12 month period based upon the amounts payable to Users for the immediately preceding a 12 month period adjusted by NGC to reflect its best estimate of the unavailable information or data. Once such information or data is available, NGC shall accordingly make all consequential adjustments to the payments from itself to Users as soon as reasonably practicable thereafter to reflect any repayment or additional payment so required to be made by one party to the other in respect of the period from 1st April in such year until the date of such repayment or additional payment (including interest thereon at the Base Rate). 7. Commissioning 7.1 Save in relation to Despatch Units operational prior to 1st April, 1997, no utilisation or capability payments referred to in this Appendix I shall fall due and payable to any User in respect of any Despatch Unit until the Settlement Period in which it is demonstrated to the reasonable satisfaction of NGC, having regard to industry practice, that the Despatch Unit (or, in or the case of a Centrally Despatched CCGT Module, but subject always to sub-paragraph 7.4 below, each relevant CCGT Unit) complies with the provisions of Grid Code CC6.3.2 and CC6.3.4 or (where NGC in its sole discretion requires Reactive Power from a Despatch Unit before then for the purposes of security of the NGC Transmission System) such earlier date as NGC may agree with a User in respect of that Despatch Unit. 7.2 Before any demonstration of compliance referred to in sub-paragraph 7.1 above, it shall be necessary for the User to demonstrate to NGC's reasonable satisfaction, having regard to industry practice, that the Despatch Unit's (or, in the case of a Centrally Despatched CCGT Module, each relevant CCGT Unit's) Excitation System, and in particular the Under-excitation Limiter, has been successfully commissioned and complies with the provisions of Grid Code CC6.3.8. 7.3 For the avoidance of doubt, the issue by NGC in relation to a Despatch Unit of a Despatch Instruction to unity power factor or zero Mvar shall neither imply by itself that NGC is reasonably satisfied with compliance as referred to in sub-paragraph 7.1 above nor imply in relation to the Despatch Unit agreement by NGC of an earlier date as also referred to therein. 7.4 Until such time as it shall be demonstrated to the reasonable satisfaction of NGC that, in relation to a Centrally Despatched CCGT Module. all relevant CCGT Units comply with the provisions of Grid Code CC6.3.2 and CC6.3.4 as referred to in sub-paragraph 7.1 above, it is the intention that capability and utilisation payments shall fall due to a User in respect of that Centrally Despatched CCGT Module notwithstanding the provisions of sub-paragraph 7.1 above but on the basis that capability payments will be calculated by reference to the Reactive Power capability of each CCGT Unit in respect of which compliance has been demonstrated. For such period, and in relation to that Centrally Despatched CCGT Module only, this Appendix I and the definitions of QC and QR set out in Appendix 3 shall be read and construed accordingly. 8. De-energisation, Decommissioning and Disconnection Subject to all rights and obligations of NGC and the User accrued at such date, utilisation and capability payments referred to in this Appendix I shall cease to fall due and payable to any User in respect of any Despatch Unit with effect from the date of expiry or termination for whatever reason of the relevant Ancillary Services Agreement in accordance with its terms or (if earlier) with effect from the date of Deenergisation, Decommissioning or Disconnection of that Despatch Unit for any reason pursuant to the relevant Supplemental Agreement or this Agreement. 9. Reconciliation As soon as practicable after this Schedule has taken effect and Ancillary Services Agreements have been amended so as to give effect thereto, NGC will pay to each relevant User or be paid by each relevant User such sum as will reconcile:- (a) payments (if any) made to such User for the provision of the Obligatory Reactive Power Service from Despatch Units in respect of the period from 1st October, 1997 to (and including) the date of such reconciliation by NGC with (b) payments due to or from such User pursuant to any Ancillary Services Agreements giving effect to this Schedule in respect of the period from lst October, 1997 to the date of such reconciliation (both dates inclusive) as if such Ancillary Services Agreements had then been effective. For the avoidance of doubt, such reconciliation will include the payment of interest at Base Rate from the date of the relevant payment by NGC referred to at sub-paragraph 9(a) above. Appendix 2 Payments for the Obligatory Reactive Power Service and Enhanced Reactive Power Services - Market Mechanism The provisions of this Appendix 2, as referred to in sub-paragraph 5.3(dXi) of this Schedule, shall apply to the calculation of payments in respect of Tenders comprising prices for and Tendered Capability Breakpoints relating to the Obligatory Reactive Power Service and in respect of Tenders comprising terms for the provision of the Enhanced Reactive Power Service specified in sub-paragraph 1.3(a) of this Schedule, in each case in respect of Despatch Units. All payments shall be expressed in pounds sterling. All algebraic terms contained in this Appendix 2 shall bear the meanings set out in paragraph I below unless the context otherwise requires. 1. Definitions For the purposes of this Appendix 2, unless the context otherwise requires, the following terms shall have the following meanings:- Aij = Genset Metered Generation (as defined in the Pool Rules) in respect of a Despatch Unit for a Settlement Period; CA1, CA2 and CA3 = the available capability prices (expressed to apply to both leading and lagging)((pound)/Mvar/h) (as more particularly described in paragraph 2 of Appendix 5) as specified in the relevant Market Agreement, CS1, CS2 and CS3 = the synchronised capability prices (expressed to apply to both leading and lagging) ((pound)/Mvar/h) (as more particularly described in paragraph 2 of Appendix 5) as specified in the relevant Market Agreement; CUI, CU2 and CU3 = the utilisation prices (expressed to apply to both leading and lagging)((pound)/Mvarh) (as more particularly described in paragraph 2 of Appendix 5) as specified in the relevant Market Agreement; K = in respect of Centrally Despatched CCGT Modules, the relevant configuration factor as specified in the relevant Market Agreement, otherwise 1; Qlead = defined in Section 2 of Appendix 3; Qlag = defined in Section 2 of Appendix 3; Q1, Q2 and Q3 = the contracted capability breakpoints (expressed to apply to both leading and lagging) in whole Mvar as may be specified in the relevant Marketing Agreement, where: (i) Q1 = TQ1, Q2 = TQ2 and Q3 = QC where TQ2 < QCo TQ3 (ii) Q1 = TQ1 Q2 = null Q3 = null where 0o QSo TQ2 (iii) Q1 = QC Q2 = null Q3 = null where 0o QSo TQ1 SPD = Settlement Period Duration (as defined in the Pool Rules); TQ1, TQ2 and TQ3 = defined in Appendix 5; Ulead = defined in Section 1 of Appendix 3; Ulag = defined in Section 1 of Appendix 3; V = the system voltage range performance factor (expressed to apply to both leading and lagging) as calculated in accordance with the formulae set out in the relevant Market Agreement, otherwise 1; XPij = Genset Actual Availability (as defined in the Pool Rules) in respect of a Despatch Unit for a Settlement Period. the contracted capability breakpoints (expressed to apply to both leading and lagging) in whole Mvar as may be specified in the relevant Market Agreement, where: 2. Total Payment Total Payment (PTM) = PUM + PCA + PCS [(pound) per Settlement Period per Despatch Unit] where, subject always to paragraphs 6, 7 and 8 below: PUM = the utilisation payment in respect of a Despatch Unit for a Settlement Period determined in accordance with paragraph 3 below; PCA = the availability capability payment in respect of a Despatch Unit for a Settlement Period determined in accordance with paragraph 4 below; and PCS = the synchronised capability payment in respect of a Despatch Unit for a Settlement Period determined in accordance with paragraph 5 below. Provided always that PTM shall be 0 in all Settlement Periods from and including that in which:- (a) the relevant Despatch Unit (or, in relation to a Centrally Despatched CCGT Module, any relevant CCGT Unit) fails a Reactive Test or a Contract Test until (and including) the Settlement Period in which a subsequent Reactive Test or Contract Test (as the case may be) is passed in relation to that Despatch Unit (or CCGT Unit (as the case may be)); or (b) the User fails (other than pursuant to an instruction given by NGC or as permitted by the Grid Code) to set the Automatic Voltage Regulator of the Despatch Unit (or, in relation to a Centrally Despatched Module, any relevant CCGT Unit) to a voltage following mode until (and including) the Settlement Period in which the User notified NGC that the Automatic Voltage Regulator is so set; or (c) the Despatch Unit fails to comply with a Reactive Despatch Instruction due to the fact that the Despatch Unit (or, in relation to a Centrally Despatched CCGT Module, any relevant CCGT Unit) is unable to increase and/or decrease its Mvar Output (other than as a direct result of variations in System voltage) until (and including) the Settlement Period in which the User notifies NGC that the Despatch Unit is so able to comply; or (d) the Despatch Unit fails to have a Mvar range which includes the ability to provide zero Mvar at the Commercial Boundary until (and including) the Settlement Period in which the User notifies NGC that the Despatch Unit has or once more has such range. 3. Utilisation Payment 3.1 For each Settlement Period, PUM = PUMlead + PUMlag [(pound)per Settlement Period per Despatch Unit] Where PUMlead = defined in sub-paragraph 3.2 below; PUMlag = defined in sub-paragraph 3.3 below. 3.2 Leading Utilisation (PUMlead) There are four mutually exclusive cases (a), (b), (c) or (d): (a) If Q2lead then PUMlead = SPD * [(CU1lead * Q1lead) + (CU2lead * (Q2lead - Q1lead)) + CU3lead * ((Ulead / SPD) - Q2lead))] (b) If either Q1lead at least two breakpoints) or Q2lead deemed null (ie there are only two breakpoints then PUMlead = SPD * [(CU1lead * Q1lead) + (CU2lead * ((Ulead / SPD) - Q1lead))] (c) If either 0 breakpoints) or Q1lead there is only one breakpoint) then PUMlead = CU1lead * Ulead (d) otherwise PUMlead = 0 [(pound)per Settlement Period per Despatch Unit] 3.3 Lagging Utilisation (PUMlag) There are four mutually exclusive cases (a), (b), (c) or (d): (a) If Q2lag null (ie there are three breakpoints) then PUMlag = SPD * [(CU1lag * Q1lag) + (CU2lag * (Q2lag - Q1lag)) + (CU3lag * ((Ulag / SPD) - Q2lag))] (b) If either Q1lag Q2lag is not deemed null (ie there are at least two breakpoints) or Q2lag deemed null (ie there are only two breakpoints) then PUMlag = SPD * [(CU1lag * Q1lag) + (CU2lag * ((Ulag / SPD) - Q1lag))] (c) If either 0 breakpoints) or Q1lag there is only one breakpoint) then PUMlag = CU1lag * Ulag (d) Otherwise PUMlag = 0 [(pound)per Settlement Period per Despatch Unit] 4. Available Capacity Payment 4.1 For each Settlement Period, where XPij> 5MWh then PCA = K* ((Vlead * PCAlead) + )Vlag * PCAlag)) Otherwise PCA = 0 [(pound)per Settlement Period per Despatch Unit] where PCAlead = defined in sub-paragraph 4.2 below; PCAlag = defined in sub-paragraph 4.3 below. 4.2 Available Leading Capability (PCAlead) There are four mutually exclusive cases (a), (b), (c) or (d): (a) If Q2lead deemed null (ie there are three breakpoints) then PCAlead = SPD * [(CA1lead * Q1lead) +(CA2lead * (Q2lead - Q1lead)) + (CA3lead * (Qlead = Q2lead))] (b) If Q1lead are at least two breakpoints) then PCAlead = SPD * [(CA1lead * Q1lead) + (CA2lead * (Qlead - Q1lead))] (c) If 0 then PCAlead = SPD * CA1lead * Qlead (d) otherwise PCAlead = 0 [(pound)per Settlement Period per Despatch Unit] 4.3 Available Lagging Capability (PCAlag) (a) If Q2lag there are three breakpoints) then PCAlag = SPD * [(CA1lag * Q1lag) + (CA2lag * (Q2lag - Q1lag)) + (CA3lag * (Qlag - Q2lag))] (b) If Q1lag are at least two breakpoints) then PCAlag = SPD * [(CA1lag * Q1lag) + (CA2lag * (Qlag - Q1lag))] (c) If 0 then PCAlag = SPD * CA1lag * Qlag (d) Otherwise PCAlag = 0 [(pound)per Settlement Period per Despatch Unit] 5. Synchronised Capability Payment 5.1 For each Settlement Period where Aij > 5MWh PCS = K* ((Vlead * PCSlead) + (Vlag * PCSlag)) otherwise PCS = 0 [(pound)per Settlement Period per Despatch Unit] where PCSlead = defined in sub-paragraph 5.2 below; PCSlag = defined in sub-paragraph 5.3 below. 5.2 Synchronised Leading Capability (PCSlead) There are four mutually exclusive cases (a), (b), (c) and (d): (a) If Q2lead null (ie there are three breakpoints) then PCSlead = SPD * [(CS1lead * Q1lead) + (CS2lead * (Q2lead Q1lead)) + (CS3lead * (Qlead Q2lead))] (b) If Q1lead are at least two breakpoints) then PCSlead = SPD * [(CS1lead * Q1lead) + (CS2lead * (Qlead - Q1lead))] (c) If 0 then PCSlead = SPD * CS1lead * Qlead (d) otherwise PCSlead = 0 [(pound)per Settlement Period per Despatch Unit] 5.3 Synchronised Lagging Capability (PCSlag) There are four mutually exclusive cases (a), (b), (c) or (d): (a) If Q2lag there are three breakpoints) then PCSlag = SPD * [(CS1lag * Q1lag) + (CS2lag * (Q2lag = Q1lag)) + (CS3lag * (Qlag - Q2lag))] (b) If Q1lag at least two breakpoints) then PCSlag = SPD * [(CS1lag * Q1lag) + (CS2lag * (Qlag - Q1lag))] (c) If 0 then PCSlag = SPD * CS1lag * Qlag (d) Otherwise PCSlag = 0 [(pound)per Settlement Period per Despatch Unit] 6. Testing NGC reserves the right to require to be included in any Market Agreement, on a basis to be agreed with a Tenderer, terms with regard to the carrying out of a Contract Test. The provisions of Grid Code OC 5.5.1 relating to the carrying out of a Reactive Test (including re-tests) shall apply to the carrying out of Contract Tests. 7. Termination Save where expressly provided otherwise in a Tender, each Market Agreement shall contain terms entitling NGC to terminate that Market Agreement in the event that the User fails to provide a satisfactory level of service and entitling the User to terminate the Market Agreement in the event that NGC fails (without reasonable cause) to make due payment to the User, in each case as more particularly defined therein. 8. De-energisation, Decommissioning and Disconnection Subject to all rights and obligations of NGC and the User accrued at such date, utilisation, available capability and synchronised capability payments referred to in this Appendix 2 shall cease to fall due and payable to any User in respect of any Despatch Unit with effect from the date of expiry or termination for whatever reason of the relevant Market Agreement in accordance with its terms or (if earlier) with effect from the date of De-energisation, Decommissioning or Disconnection of that Despatch Unit for any reason pursuant to the relevant Supplemental Agreement or this Agreement. Appendix 3 Technical Data Section 1 Reactive Utilisation Data This Section 1 of Appendix 3 specifies the technical data to be used to determine the utilisation payments to be made in accordance with Appendix I and Appendix 2. For the purposes thereof, the following terms shall have the following meanings:- Ulead = leading Mvarh produced by the relevant Despatch Unit at the Commercial Boundary in the relevant Settlement Period measured by metering meeting the requirements of Appendix 4 and as specified in the relevant Ancillary Services Agreements (including a Market Agreement) where the User has complied with a Reactive Despatch Instruction in accordance with Grid Code SDC2, otherwise 0; Ulag = lagging Mvarh produced by the relevant Despatch Unit at the Commercial Boundary in the relevant Settlement Period measured by metering meeting the requirements of Appendix 4 and as specified in the relevant Ancillary Services Agreements (including a Market Agreement) where the User has complied with a Reactive Despatch Instruction in accordance with Grid Code SDC2, otherwise 0; U = the total Mvarh (leading and lagging) where U = Ulead + Ulag [Mvarh per Settlement Period per Despatch Unit] For the avoidance of doubt, leading Mvarh shall mean Mvarh imported by the Despatch Unit at the Commercial Boundary irrespective of the direction of Active Power flow, and lagging Mvarh shall mean Mvarh exported by the Despatch Unit at the Commercial Boundary irrespective of the direction of Active Power flow. Section 2 Reactive Power Capability Data & Redeclarations This Section 2 of Appendix 3 specifies the technical data to be used to determine the capability payments to be made in accordance with Appendix 1 and Appendix 2. 1. For the purposes thereof, the following terms shall have the following meanings:- Qlead = min (QRlead, QClead) [Mvar] Qlag = min (QRlag, QClag) [Mvar] where QC = as specified in the relevant Ancillary Services Agreement (including a Market Agreement), being the high voltage value (specified in whole Mvar) equivalent at the Commercial Boundary to the low voltage Mvar capability (leading or lagging) of the relevant Despatch Unit as described in paragraph 2 below, representing the capability to supply continuously leading or lagging Mvar (as the case may be); QR = as determined in accordance with the relevant Ancillary Services Agreement (including a Market Agreement), being, in relation to a Settlement Period, the high voltage value (specified in whole Mvar) equivalent to the redeclared low voltage Mvar capability (leading or lagging) of the relevant Despatch Unit (or, in the absence of such redeclaration. such high voltage value reasonably determined by NGC as a result of monitoring and/or testing as provided in the relevant Ancillary Services Agreement (including a Market Agreement)), and QRlead, and QRlag, shall be construed accordingly. 2. (a) In respect of capability payments made in accordance with Appendix 1:- (i) QC shall be the capability required to be provided under and in accordance with the Connection Conditions of the Grid Code (where applicable. as determined by any direction in force from time to time and issued by the Director relieving the relevant User from the obligation under its Licence to comply with such part or parts of the Grid Code as may be specified therein); and (ii) QC and QR shall represent the high voltage value equivalent at Rated MW at the Commercial Boundary. (b) In respect of capability payments made pursuant to a Market Agreement in accordance with Appendix 2:- (i) QC shall be the capability required to be provided under and in accordance with the Connection Conditions of the Grid Code or, where the Market Agreement is in respect of a Tender for terms for the provision of the Enhanced Reactive Power Service specified in sub-paragraph 1.3(a) of this Schedule, a capability agreed to be provided in excess of that required under and in accordance with the Connection Conditions of the Grid Code but so that in such a case QC cannot exceed TQ3 (defined in Appendix 5); (ii) QC shall represent the high voltage value equivalent at a nominated Genset Registered Capacity specified by a Tenderer in the Tender at the Commercial Boundary within the system voltage range specified in the relevant Market Agreement; and (iii) QR shall represent the high voltage value equivalent at the then current Genset Registered Capacity at the Commercial Boundary within the system voltage range specified in the relevant Market Agreement. (c) For the purposes of this section 2, the figures for QC and QR shall be determined in a manner consistent with the principles and methodologies set out in a document published or to be published from time to time by NGC for this purpose. For the avoidance of doubt, leading capability shall mean the ability to import Reactive Power at the Commercial Boundary irrespective of the direction of Active Power flow, and lagging capability shall mean the ability to export Reactive Power at the Commercial Boundary irrespective of the direction of Active Power flow. Appendix 4 Metering 1. Pooling and Settlement Agreement For the avoidance of doubt, nothing in this Appendix shall affect the rights and obligations of those Parties also party to the Pooling and Settlement Agreement under Clause 60 and Schedule 21 thereto with regard to Metering Equipment and Metering Systems insofar as such provisions relate to Reactive Energy. 2. Despatch Units 2.1 For the purposes of this Schedule and the Appendices, subject always to sub-paragraph 2.2. the quantities of Mvarh imported and exported by a Despatch Unit shall be derived from the relevant Metering System for that Despatch Unit registered with the Settlement System Administrator. 2.2 Where the existing Metering System for the Despatch Unit registered with the Settlement System Administrator does not incorporate Metering Equipment capable of measuring and recording Mvarh imports and exports for that Despatch Unit for each Settlement Period. then the relevant User shall register or procure that there is registered in accordance with Clause 60.2.2 of the Pooling and Settlement Agreement a Metering System which does incorporate such Metering Equipment. 2.3 All relevant Metering Equipment identification and location codes shall be set out in the relevant Ancillary Services Agreement, and the Generator hereby agrees to facilitate agreement between the Parties with respect thereto by providing NGC as soon as reasonably practicable following request with all necessary supporting diagrams and other written documentation. 2.4 Where the configuration of the Metering System is such that:- 2.4.1 Mvarh import and export values for the Despatch Unit are not measured at the Commercial Boundary, and/or 2.4.2 Mvarh import and export values for the Despatch Unit are measured by more than one Meter; and/or 2.4.3 the Mvarh import and export values for the Despatch Unit are measured by a Meter which also measures the Mvarh import and export values of one or more other Generating Units. Plant and Apparatus or other equipment, then appropriate loss adjustment factors and aggregation methodologies (as the case may be) shall be used to determineon a Settlement Period basis the Mvarh import value and Mvarh export value for the relevant Despatch Unit at the Commercial Boundary to be used for the purposes of this Schedule. Subject always to sub-paragraph 2.5, the appropriate factors and methodologies for each relevant Despatch Unit shall be agreed by NGC and each relevant User (both acting reasonably) in the relevant Ancillary Services Agreement by adoption of one or more of the factors or methodologies set out in the document entitled "Methodology Document for the Aggregation of Reactive Power Metering" (as amended from time to time) published by NGC for this purpose. This document shall specify the respective factors and methodologies to be applied for particular Metering System configurations in order to determine so far as reasonably practicable the Mvarh import value and Mvarh export value for the relevant Despatch Unit at the Commercial Boundary as required by this sub-paragraph 2.4 2.5 Loss adjustment factors and aggregation methodologies need not be agreed between NGC and the relevant User in connection with any configuration described in sub-paragraph 2.4.3 in respect of periods prior to 1st April, 1998. 3. Non-Centrally Despatched Generation Units and other Plant and/or Apparatus (or other equipment) In respect of each Generating Unit whose MW output is sold in accordance with the Pool Rules, the provisions of paragraph 2 shall apply (as if references therein to Despatch Unit were to Generating Unit). In all other cases, the following provisions shall apply:- 3.1 The quantities of Mvarh imported and exported shall be measured and recorded through Meters complying with all relevant Codes of Practice to the extent applying to Reactive Energy, Which shall include without limitation those relating to calibration, testing and commissioning. 3.2 Such Meters shall be capable of providing a Mvarh import and export value for each Settlement Period for each Non Centrally Despatched Generating Unit or other Plant and/or Apparatus or other equipment. 3.3 Such Meters shall be situated as close as reasonably practicable to the Commercial Boundary taking into account relevant financial considerations. 3.4 The principles set out in paragraph 2.4 in relation to adjustment and aggregation shall apply. 3.5 For the purposes of remote interrogation the relevant Ancillary Services Agreement shall include appropriate terms with regard to the provision and maintenance of all communication links. 4. Trading Sites It is the intention of the Parties that the treatment of Trading Sites for the purposes of metering and the provisions of this Appendix shall be the subject of a review by the Transmission Users Group as referred to in Appendix 7. 5. Definitions In this Appendix 4, the terms "Codes of Practice", "Meters", Metering Equipment", "Metering System" and "Reactive Energy" shall have the meaning attributed to each of them in the Pooling and Settlement Agreement. Appendix 5 Submission of Tenders The provisions of this Appendix 5 specify the manner in which Users shall complete Tenders comprising prices and Tendered Capability Breakpoints relating to the Obligatory Reactive Power Service and terms for the provision of the Enhanced Reactive Power Service specified in sub-paragraph 1.3(a) of this Schedule, in each case in respect of Despatch Units. A Tender shall include (inter alia) details of the Reactive Power range, the prices tendered for utilisation and capability and an indexation mechanism as set out below. Each Tender must relate to one Despatch Unit only. Users wishing to tender in relation to more than one Despatch Unit must therefore submit separate Tenders for each Despatch Unit. 1. Reactive Power Capability 1.1 In respect of each Despatch Unit, a Tenderer must nominate a Genset Registered Capacity which it anticipates will be the actual Genset Registered Capacity on the Contract Start Day for that Despatch Unit (in this Appendix 5 referred to as "the Nominated Genset Registered Capacity") to be used for the duration of the Market Agreement. All capability data used for the purpose of a Tender must be expressed as the capability of a Despatch Unit at the Commercial Boundary and must represent the value of Reactive Power output which can be supplied continuously at the Commercial Boundary when the Despatch Unit is operating at the Nominated Genset Registered Capacity. 1.2 In respect of each Despatch Unit, all capability data relating to the provision of the Enhanced Reactive Power Service specified in sub-paragraph 1.3(a) of this Schedule must be expressed as the capability of that Despatch Unit at the Commercial Boundary across a system voltage range to be specified by the Tenderer in its Tender (or otherwise in accordance with directions given by NGC). 1.3 All Reactive Power capability data in respect of a Despatch Unit must be expressed as positive, whole numbers in Mvar, with leading and lagging capability data distinguished by the subscripts lead and lag. 1.4 In respect of each Despatch Unit, and subject to any directions issued from time to time by NGC with regard to such values, the User must submit at least one Reactive Power capability value and may in addition submit up to a further two Reactive Power capability values (all three being "Tendered Capability Breakpoints"), for both leading and lagging Mvar. One of these Tendered Capability Breakpoints, in respect of both leading and lagging Mvar, must be equivalent to the minimum Reactive Power capability of a Despatch Unit which a User is obliged to provide under and in accordance with the Connection Conditions of the Grid Code (to the nearest whole Mvar) after application of the principles set out in subparagraphs 1.1 and 1.2 above and as further described in the package of information referred to in subparagraph 5.3(b)(i) of this Schedule. 1.5 The Tendered Capability Breakpoints shall be defined for the purposes of this Appendix as TQ1, TQ2, TQ3, for leading and laggin. Mvar as the case may be, where:- TQ3lead TQ2lead TQ1lead 0 and TQ3lag TQ2lag TQ1lag 0 1.6 Where only two Tendered Capability Breakpoints are tendered, for leading or lagging Mvar as the case may be, then the value of TQ3 shall be deemed to be null for the purposes of calculating payments for capability and utilisation and no additional payments for capability will fall due and payable in respect of a Despatch Unit for the provision of Reactive Power capability above Tendered Capability Breakpoint TQ2. 1.7 Where only one Tendered Capability Breakpoint is tendered, for leading or lagging Mvar as the case may be, then the values of TQ2 and TQ3 shall be deemed to be null for the purposes of calculating payments for capability and utilisation and no additional payments for capability will fall due and payable in respect of a Despatch Unit for the provision of Reactive Power capability above Tendered Capability Breakpoint TQ1. 1.8 The Reactive Power capability value at zero Mvar (referred to in paragraph 2 below as Q0) shall be treated as a Tendered Capability Breakpoint for the purposes of tendering capability and utilisation prices and calculating capability and utilisation payments. 2. Prices In respect of each Tendered Capability Breakpoint, prices submitted by Users must be zero or positive. quoted in pounds sterling to the nearest tenth of a penny and shall otherwise be tendered as described in sub-paragraphs 2.1, 2.2 and 2.3 below. The prices shall be described using the following notation:- C1lag is the price applicable between Tendered Capability Breakpoints Q0 and TQ1lag including TQ1lag C2lag is the price applicable between Tendered Capability Breakpoints TQ1lag and TQ2lag including TQ2lag C3lag is the price applicable between Tendered Capability Breakpoints TQ2lag and TQ3lag including TQ3lag C1lead is the price applicable between Tendered Capability Breakpoints Q0 and TQ1lead including TQ1lead C2lead is the price applicable between Tendered Capability Breakpoints TQ1lead and TQ2lead including TQ2lead C3lead is the price applicable between Tendered Capability Breakpoints TQ2lead and TQ3lead including TQ3lead where C shall represent CU, CA or CS, as the case may be. 2.1 Utilisation Prices (CU) (a) Utilisation prices submitted by Users must be:- (i) quoted in units of (pound)/Mvarh; and (ii) no greater than (pound)999.999/Mvarh. (b) Utilisation prices must increase across the Reactive Power capability range, for leading or lagging Mvar as the case may be, such that:- CU3lead o CU2lead o CU1lead o 0 CU3lag o CU2lag o CU1lago 0 (c) Utilisation payments shall be made for metered Reactive Power output and shall be calculated in accordance with Appendix 2. 2.2 Available Capability Prices (CA) (a) Available capability prices submitted by Users must be:- (i) quoted in units of (pound)/Mvar/h; and (ii) no greater than (pound)999.999/Mvarlh. (b) Available capability prices must increase across the Reactive Power capability range, for leading or lagging Mvar as the case may be, such that:- CA3lead o CA2lead o CA1lead o 0 CA3lag o CA2lag o CA1lag o 0 (c) Available capability payments shall be calculated in accordance with Appendix 2. 2.3 Synchronised Capability Prices (CS) (a) Synchronised capability prices submitted by Users must be:- (i) quoted in units of (pound)/Mvar/h; and (ii) no greater than (pound)999.999/Mvar/h. (b) Synchronised capability prices must increase across the Reactive Power capability range, for leading or lagging Mvar as the case may be, such that;- CS3lead o CS2lead o CS1lead o 0 CS3lag o CS2lag o CS1lag o 0 (c) Synchronised capability payments shall be calculated in accordance with Appendix 2. 3. Indexation Where a Tender is submitted in respect of a period which exceeds the minimum 12 month period required by sub-paragraph 5.3(d)(v) of this Schedule, then the User shall submit one mechanism for calculating indexation on an annual basis which shall apply to all prices submitted in the Tender for all subsequent periods of 12 months following the minimum 12 month period to which the Tender applies. Such mechanism shall be based on either the Retail Prices Index (as referred to in paragraph 5 of Appendix 1), a fixed percentage (which may be positive, zero or negative) or a summation of such Retail Prices Index and such fixed percentage. 4. Other Technical Information A User shall submit with a Tender such other technical information as reasonably directed by NGC in accordance with sub-paragraph 5.3(b)(i) of this Schedule. Such information may include (without limitation):- 4.1 in relation to a Tender for the Enhanced Reactive Power Service specified in sub-paragraph 1.3(a) of this Schedule, details of the capability of the Generating Unit to provide Reactive Power at the generator stator terminals by reference to the Generator Performance Chart submitted in accordance with Operating Condition 2.4.2 of the Grid Code, which capability must represent the true operating characteristics of that Generating Unit., and 4.2 details of the system voltage range over which the User proposes to make available from the Generating Unit such Enhanced Reactive Power Service (and in each case any restrictions thereto); and 4.3 in relation to a Tender for the Enhanced Reactive Power Service specified in sub-paragraph 1.3(a) of this Schedule, the ambient air temperature at which such Enhanced Reactive Power Service is specified, and variations to such Enhanced Reactive Power Service in accordance with any air temperature range specified by NGC; and 4.4 details, including prices, of any additional services offered as part of any Enhanced Reactive Power Service (not being the Enhanced Reactive Power Service specified in sub-paragraph 1.3(a) of this Schedule); and 4.5 any restrictions on NGC selecting part of an Enhanced Reactive Power Service. Appendix 6 Qualification and Evaluation Criteria Section A - Qualification Criteria 1. Without prejudice to the requirements of sub-paragmph 5.3 of this Schedule, all Tenders must satisfy the following mandatory qualification criteria:- 1.1 in relation to a Tender for provision of the Enhanced Reactive Power Service specified in subparagraph l.3(a) of this Schedule. the leading and/or lagging capability (as the case may be) comprised therein, being the capability in excess of that required under and in accordance with the Connection Conditions of the Grid Code, must be at least 15 Mvar leading, and/or 15 Mvar lagging (as the case may be) or (if lower) such amount of Mvar representing an additional 10% of that required under and in accordance with the Connection Conditions of the Grid Code (in each case as measured at the Commercial Boundary); and 1.2 in relation to a Tender for provision of any other Enhanced Reactive Power Service, the leading and/or laggin capability (as the case may be) comprised therein must be at least 15 Mvar leading and/or 15 Mvar lagging (as the case may be) (as measured at the Commercial Boundary); and 1.3 the tendered capability must be subject to Mvar metering meeting the requirements of Appendix 4; and 1.4 the tendered capability must be subject to Mvar despatch facilities reasonably acceptable to NGC, incorporating the ability for NGC to receive from the Tenderer relevant technical, planning and other data in NGC's reasonable opinion necessary in connection therewith: and 1.5 the site in question must be the subject of an agreement for connection to, and/or use of, the NGC Transmission System or (as the case may be) a Distribution System. Section B - Evaluation Criteria The overall economic value of a Tender (and where appropriate any part thereof) will be assessed by reference to the following criteria (which are not listed in any order of importance or priority):- 2.1 in relation to a Generating Unit providing the Obligatory Reactive Power Service, a comparison with the default payment arrangements for that Generating Unit, including the effect (if any) of the balance of tendered capability and utilisation prices as a hedge against forecast costs of that Generating Unit pursuant to the default payment arrangements; 2.2 the location of the tendered capability and its effectiveness in providing voltage support for the NGC Transmission System; 2.3 its interaction with other Tenders, in terms (inter alia) of relative prices and capability tendered and relative effectiveness in providing voltage support as referred to in sub-paragraph 2.2 above; 2.4 forecast savings (if any) in constraint costs resulting from the consequential effect on power flows; and 2.5 any forecast benefit or detriment attributable to it in the context of the investment pi ' g process referred to at paragraph 4 below. 3. Particular factors affecting the value of a Tender (and where appropriate any part thereof) may include (without limitation) the following evaluation criteria (which are not listed in any order of importan ce or priority):- 3.1 the amount of leading and lagging Mvar tendered and the impact (if any) of any changes in the technical data, the Genset Registered Capacity and other information submitted to NGC pursuant to the Data Registration Codes of the Grid Code since the date of submission of the Tender; 3.2 prices and other terms offered within the Tender; 3.3 the number of months over which capability is tendered; 3.4 forecast Mvarh output, including any revised forecast of Mvarh output taking into account tendered utilisation prices (for the avoidance of doubt of the Tender and of all other Tenders pursuant to sub-paragraph 2.3 above); 3.5 in relation to a Generating Unit, forecast MW output and MW availability; 3.6 the expected availability and quality of capability tendered, in terms of reliability and dependability for despatch purposes, derived from:- (i) historical performance (where relevant); (ii) expected reliability of capability tendered signalled by tendered prices; (iii) any programme agreed with NGC for the restoration of capability; 3.7 the availability of suitable monitoring facilities; 3.8 the capability (if any) of a Generating Unit to provide voltage support services when not providing, Active Power (for example pumped storage plant operating, in spin-gen mode or when pumping and open cycle gas turbine plant when declutched and operating in Synchronous Compensation mode); 3.9 the complexity of the terms offered within the Tender; 3.10 the results of any testing carried out pursuant to sub-paragraph 5.3(e)(ii) of this Schedule and (where applicable) the absence of any such testing; and 3.11 any other factors enhancing or constraining the capability tendered, derived (inter alia) from technical and other information made available to NGC (including without limitation operational and planning data provided to NGC pursuant to the Grid Code). 4. For the avoidance of doubt, Tenders will be considered in the investment planning process of NGC's Transmission Business only if, and to the extent, required to enable NGC to comply with its obligations under the Act and the Transmission Licence, and in such a case any consequential benefit or detriment attributable to the Tender will be taken into account in the tender evaluation process and Tenders will be evaluated accordingly. 5. For the avoidance of doubt:- (a) extant voltage support for the NGC Transmission System whether via contracted services from third parties or assets owned and/or operated by NGC's Transmission Business: and (b) forecast Mvarh Demand on the NGC Transmission System and at Grid Supply Points, in each case as at the relevant Market Day and as anticipated by NGC at the subsequent Contract Start Day and throughout the term of the Tender, will be taken into account in the tender evaluation process and Tenders will be evaluated accordingly. Appendix 7 Matters for Review Matter Date of review 1. The values of X and Y referred to in Appendix 1 in respect 1st October, 1998 of Settlement Periods from (and including) 1st April, 1999. 2. Applicable principle: The degree and extent to which a competitive market has been established in accordance with the provisions of this Schedule (taking into account, inter alia, the amount of Mvar capability the subject of Market Agreement and the utilisation thereof). 2. Any payment arrangements formulated by NGC in conjunction 1st October, 1998 with any relevant User in relation to Non-Centrally Despatched Generating Units Applicable principle: The extent to which it is reasonably practicable to achieve consistency with the provisions of Appendix 1 or Appendices 2 and 5 (as the case may be). 3. The treatment of Trading Sites for the purposes of 1st October, 1999 metering and calculation of Mvar capability in connection with this Schedule. Applicable principle: Non 4. The indexation factor referred to in Appendix 1 to apply 1st October, 2000 in respect of all periods from (and including) 1st April, 2001 Applicable principles: Those charging principles set out in Appendix 8 5. (a) The extent of any change in the nature of, or Not applicable extent of recovery under the Pooling and Settlement Agreement of, variable costs incurred or to be incurred by Generating Units providing the Obligatory Reactive Power Service; and (b) the extent to which such changes should lead to a change in the specific costs identified in paragraph 1 of Appendix 8 upon which the totality of payments referred to therein is based and founded. Applicable principle: That, to the extent innovation in the development of the default payment arrangements or the giving of appropriate economic signals is not thereby stifled, the specific costs from time to time identified in paragraph 1 of Appendix 8 (and upon which the totality of payments referred to therein is based and founded) should continue to comprise the totality of variable costs (actual or estimated) incurred or to be incurred in respect of, and aggregated across, all Generating Units providing the Obligatory Reactive Power Service, provided always that each of those specific costs from time to time identified shall only be a variable cost not recovered under the Pooling and Settlement Agreement which:- (i) is not being incurred at the date this Schedule comes into effect; or (ii) is being incurred at the date this Schedule comes into effect and as at that date is either identified as a specific cost in paragraph 1 of Appendix 8 or is being recovered under the Pooling and Settlement Agreement. Appendix 8 Charging Principles In accordance with the relevant provisions of this Schedule, the following principles are intended to form the basis of the default payment arrangements for the provision of the Obligatory Reactive Power Service set out in this Schedule and are intended to be taken into account in any review of the indexation factor referred to in Appendix 1. However, they are not intended to stifle innovation in the development of the default payment arrangements or the giving of appropriate economic signals. It is therefore the Parties' intention that, upon any change in the nature of, or extent of recovery under the Pooling and Settlement Agreement of, variable costs (actual or estimated) incurred or to be incurred by Generating Units providing the Obligatory Reactive Power Service, the specific costs identified in paragraph I below shall be a matter for review by the Transmission Users Group as more particularly referred to as item 5 of Appendix 7. 1 . The totality of payments that would be made pursuant to the default payment arrangements in the absence of Market Agreements shall be based and founded upon the following variable costs (actual or estimated) incurred or to be incurred in respect of, and aggregated across, all Generation. Units providing the Obligatory Reactive Power Service:- 1.1 the additional heat losses incurred as a consequence of producing Reactive Power, measured at the high voltage side of the generator/transformer terminals, the calculation of such heat losses to take account of the square law relationship between the electric current and the additional heat losses incurred; and 1.2 maintenance costs incurred as a direct result of Reactive Power output (including a sum in respect of any reduction in the working, life of generating unit components consequent upon Reactive Power output). 2. For the avoidance of doubt, and without limitation, the totality of payments referred to in paragraph 1 above shall not take into account in respect of any Generating Unit providing the Obligatory Reactive Power Service the fixed costs incurred in achieving initial compliance with the relevant provisions of the Grid Code. 3. Further for the avoidance of doubt, the totality of payments referred to in paragraph I above shall, to the extent affecting the specific costs therein identified, take due account of any change in or amendments to, or replacement of, the Pooling and Settlement Agreement, the Grid Code and any other statutory or regulatory obligation, in each case coming into force or effect after 1st October, 997 and affecting the provision of the Obligatory Reactive Power Service. THE NATIONAL GRID COMPANY plc BY ....................................................................... EACH OF THE USERS BY ....................................................................... for The National Grid Company plc in exercise of the authority vested in it by Clause 25.1 of the Master Agreement pursuant to and in accordance with a determination of the Director General of Electricity Supply dated 30 March 1998 EX-10 5 EX 10.9 USE OF DISTRIBUTION SYSTEM AGREEMENT EXHIBIT 10.9 17/3/98 DATED 199[ ] South Western Electricity plc and [USER] - ------------------------------------------------------------------------------ USE OF SYSTEM AGREEMENT - ----------------------------------------------------------------------------
TABLE OF CONTENTS Clause Heading Page 1. DEFINITIONS AND INTERPRETATION.............................................................................4 2. CONDITIONS PRECEDENT......................................................................................17 3. CONNECTION AGREEMENTS.....................................................................................18 4. USE OF SYSTEM ............................................................................................20 5. COMMENCEMENT, DURATION AND CONTROLLED MARKET START UP.....................................................21 6. CHARGES ...........................................................................................21 7. BILLING AND PAYMENT BY SETTLEMENT CLASS...................................................................23 8. SITE SPECIFIC BILLING AND PAYMENT.........................................................................24 9. LIMITATION OF LIABILITY...................................................................................25 10. ENERGISATION, DE-ENERGISATION AND RE-ENERGISATION........................................................27 11. COMPLIANCE WITH THE DISTRIBUTION CODE....................................................................32 11A. COMPLIANCE WITH THE METER OPERATOR CODE OF PRACTICE.....................................................32 11B. COMPLIANCE WITH THE RADIO TELESWITCH AGREEMENT..........................................................32 12. METERING DATA AND METERING EQUIPMENT.....................................................................32 13. PROVISION OF INFORMATION.................................................................................34 14. DEMAND CONTROL...........................................................................................36 15. REVENUE PROTECTION.......................................................................................36 16. GUARANTEED PERFORMANCE STANDARDS.........................................................................36 17. VARIATIONS...............................................................................................37 18. TERMINATION..............................................................................................39 19. FORCE MAJEURE ...........................................................................................41 20. CONFIDENTIALITY RESTRICTIONS ON THE COMPANY..............................................................41 21. CONFIDENTIALITY RESTRICTIONS ON THE USER.................................................................43 22. DISPUTES ...............................................................................................45 23. RESTRICTIVE TRADE PRACTICES ACT..........................................................................46 24. MISCELLANEOUS ...........................................................................................46 25. GOVERNING LAW ...........................................................................................49 26. ASSIGNMENT AND SUB-CONTRACTING...........................................................................49 27. COUNTERPARTS SCHEDULE 1 - COVER...........................................................................................50 SCHEDULE 2 - MANDATORY TERM FOR SUPPLY CONTRACT..............................................................57 SCHEDULE 3 - USE OF SYSTEM CHARGES...........................................................................58 SCHEDULE 4 - TRANSACTIONAL CHARGES...........................................................................85 SCHEDULE 5 - CALCULATION OF INTEREST ON RECONCILIATION ACCOUNTS..............................................92 SCHEDULE 6 - BILLING AND PAYMENT DISPUTES....................................................................93 SCHEDULE 7 - APPROVAL AND PERMISSION PROCEDURES..............................................................96 SCHEDULE 8 - METERING FUNCTIONALITY AND DATA REQUIREMENTS....................................................99 SCHEDULE 9 - METERING ACCURACY..............................................................................104 SCHEDULE 10 - EVENT LOG.....................................................................................105 SCHEDULE 11 - DEMAND CONTROL................................................................................110 SCHEDULE 12 - STANDARD CONNECTION AGREEMENT.................................................................120 SCHEDULE 13 - REPORTING.....................................................................................122
AGREEMENT is made the day of 199[ ] BETWEEN: (1) South Western Electricity plc, a company incorporated in England and Wales (registered No. 2366894), whose registered office is at 800 Park Avenue, Aztec West, Almondsbury, Bristol, BS32 4SE (the "Company"); (2) [SUPPLIER] a company incorporated in [England and Wales [Scotland] (registered No. [ ]], whose registered office is at [ ] (the "User"), each a "party" and together the "parties". WHEREAS: (A) The Company is obliged by Condition 8B of its PES Licence to offer to enter into an agreement with the User for the provision of Use of Distribution System in accordance with the requirements set out in Condition 8B of its PES Licence. (B) The Company has accordingly agreed to provide use of system to the User on the terms and conditions set out in this Agreement. THE PARTIES AGREE as follows: DEFINITIONS AND INTERPRETATION In this Agreement except where the context otherwise requires the following expressions shall have the meanings set opposite them: "Accreditation" means accreditation of any relevant person and certification of that person's business processes by the Accreditation Authority and "Accredited" shall be construed accordingly; "Accreditation Authority" has the meaning given to that term in the Settlement Agreement; "Act" means the Electricity Act 1989; "Affiliate" in relation to either party means any holding company of that party, any subsidiary of that party or any subsidiary of a holding company of that party, in each case within the meaning of Sections 736, 736A and 736B of the Companies Act 1985; "Approved Credit Rating" has the meaning given to that term in Schedule 1; "Authorised Area" means the area from time to time comprised in Schedule 1 of the PES Licence; "Competent Authority" means the Secretary of State, the Director, and any local or national agency, authority, department, inspectorate, 4 minister, ministry, official or public or statutory person (whether autonomous or not) of the government of, the United Kingdom or of the European Union; "Condition 8 Statement" means the statement in relation to charges for use of system for the time being in force pursuant to Condition 8 of the PES Licence; "Condition 11E Statement" means the statement in relation to charges for Metering and Data Services (as defined in the PES Licence) for the time being in force pursuant to Condition 11E of the PES Licence; "Connection Agreement" means an agreement between the Company and any Customer which provides that the Customer has the right for that Customer's Installation to be and remain directly or indirectly connected to the Distribution System; "Controlled Market Start-Up" means the phased implementation by the Director, in the period subsequent to 31st August 1998, of trading arrangements designed to facilitate competition in the supply of electricity, effected in accordance with Condition 7B of the PES Licence; "Cover" has the meaning given to that term in Schedule 1; "Customer" means a person to whom the User proposes to supply or for the time being supplies electricity through an Exit Point or from whom the User or any Relevant Exempt Supplier is entitled to recover charges, compensation or an account of profits in respect of electricity supplied through an Exit Point; "Customer's Installation" means any structures, equipment, lines, appliances or devices used or to be used by any Customer and connected or to be connected directly or indirectly to the Distribution System; "Daily Statement" means a statement based on the Supercustomer DUoS Report providing the data items set out in Data Transfer Catalogue D0242 as amended from time to time in accordance with the provisions of the Master Registration Agreement; "Data Aggregation Services Agreement" means any agreement between the Company in its capacity as Data Aggregator and the User 5 for the provision of data aggregation services to be provided by the Data Aggregator; "Data Aggregator" means a person appointed to provide the services described in Condition 11C paragraph 1(e) of the PES Licence in relation to the relevant Metering Point; "Data Collection Services Agreement" means any agreement between the Company in its capacity as Data Collector and the User for the provision of data collection services to be provided by the Data Collector; "Data Collector" means a person appointed to provide the services described in Condition 11C paragraph 1(c) and (d) of the PES Licence in relation to the relevant Metering Point; "Data Protection Act" means the Data Protection Act 1984; "Data Transfer Catalogue" means the catalogue of data flows, data definitions and data formats as annexed to the Master Registration Agreement; "Data Transfer Network" means the electronic network provided as part of the Data Transfer Service; "Data Transfer Service" means the service to be provided by the Data Transfer Service Controller and described in Condition 11B of the PES Licence; "Data Transfer Service Agreement" means the agreement dated 30th July 1997 between the Data Transfer Service Controller, and users of the Data Transfer Service as at the date of this Agreement; "Data Transfer Service Controller" means the body established by all Public Electricity Suppliers (as defined in the Act) to provide the Data Transfer Service; "De-energise" means, in relation to any Metering Point, deliberately to prevent the flow of electricity from the Distribution System through the relevant Exit Point (or, in the case of an Unmetered Supply, any one or more of the relevant Exit Points) to the relevant Customer's Installation for any purpose other than a System Outage; "De-energisation Works" means the movement of any switch, the removal of any fuse or meter, or the taking of any other step to De-energise a Metering Point; 6 "De-register" means in relation to a Metering Point to change the status of the Supply Number relating to that Metering Point within MPAS so as to prevent any further Registrations (as defined by the Master Registration Agreement) in respect of that Supply Number ("De-registered" shall be construed accordingly and "De-Registration Notice" shall be construed as a notice issued by the Company to De-Register); "Directive" includes any present or future directive, requirement, instruction, direction or rule of any Competent Authority (but only, if not having the force of law, if compliance with the Directive is in accordance with the general practice of persons to whom the Directive is addressed) and includes any modification, extension or replacement thereof then in force; "Director" means the Director General of Electricity Supply appointed for the time being pursuant to the Act; "Disconnection Notice" means a notice sent by the User to the Company pursuant to Clause 10 and which: (a) identifies the Metering Point to which the notice relates by reference to the Supply Number for that Metering Point; and (b) requests the Company to send a De-Registration Notice to the MPAS Operator instructing it to De-register the Metering Point; "Dispute Final Reconciliation Run" means [awaiting Settlement Agreement definition]; "Distribution Business" has the meaning given to that term in the PES Licence; "Distribution Code" means the distribution code established pursuant to the PES Licence; "Distribution System" means the Company's system for the distribution of electricity and shall have the meaning given to the phrase "Licensee's Distribution System" in the PES Licence; "Enabling Agreement" means an agreement for the provision of Exempt Supply Services; 7 "Energise" means, in relation to any Metering Point, deliberately to allow the flow of electricity from the Distribution System through the relevant Exit Point (or, in the case of an Unmetered Supply, any one or more of the relevant Exit Points) to the relevant Customer's Installation where such a flow of electricity has never previously existed; "Energisation Works" means the movement of any switch or the addition of any fuse or meter to Energise a Metering Point; "ERS" means the electronic registration system operated by the Settlement System Administrator in England and Wales pursuant to the terms of the Settlement Agreement; "ESPR" means the Electricity (Standards of Performance) Regulations 1993 SI 1993/1193 as amended or re-enacted from time to time; "Equivalent Meter" means an equivalent half hourly meter as defined by the Unmetered Supplies Procedure; "Exempt Supplier" means a person who is authorised to supply electricity by an exemption granted under section 5 of the Act; "Exempt Supply Services" means exempt supply services as defined in Condition 1 of the PES Licence but disregarding any reference to those services being provided by the Company; "Exit Point" means a point of connection at which a supply of electricity may flow between the Distribution System and the Customer's Installation or User's Installation or the distribution system of another person; "Final Reconciliation Run" means [awaiting Settlement Agreement definition]; "Force Majeure" means any event or circumstance which is beyond the reasonable control of either party and which results in or causes the failure of that party to perform any of its obligations under this Agreement including act of God, strike, lockout or other industrial disturbance, act of the public enemy, war declared or undeclared, threat of war, terrorist act, blockade, revolution, riot, insurrection, civil commotion, public 8 demonstration, sabotage, act of vandalism, lightning, fire, storm, flood, earthquake, accumulation of snow or ice, explosion, fault or failure of plant or machinery which (in each case) could not have been prevented by Good Industry Practice, governmental restraint, Act of Parliament, other legislation, bye law and Directive (not being any order, regulation or direction under Section 32, 33, 34 or 35 of the Act) or the failure of any generator or NGC to deliver electricity to the Company or any deficiency in such delivery to the extent that such failure or deficiency or the consequences thereof could not have been prevented by Good Industry Practice by the Company, provided that lack of funds shall not be interpreted as a cause beyond that party's reasonable control; "Gateway" has the meaning given to that term in the Data Transfer Service Agreement; "Good Industry Practice" means the exercise of that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced operator engaged in the same type of undertaking under the same or similar circumstances; "Grid Code" means the Grid Code established pursuant to NGC's transmission licence; "Grid Supply Point" means [awaiting Settlement Agreement definition]; "Grid Supply Point Group" means [awaiting Settlement Agreement definition]; "Initial Account" has the meaning given to that term in Clause 7.3; "Initial Settlement and Reconciliation means [awaiting Settlement Agreement Agent" definition]; "Initial Settlement Run" means [awaiting Settlement Agreement definition]; "Invoice Date" means a date on which an account (including an Initial Account or Reconciliation Account) is produced by the Company pursuant to this Agreement; 9 "Key" means a rechargeable key-shaped device containing a memory chip which is encoded or charged at a Vending Outlet with the amount paid and is used as the mechanism for transferring payment for energy to a Key Meter. Following transfer of payment a Key may be recharged and reused. Keys will also transmit data, including meter readings and tariff details, between vending equipment and Key Meters and can provide instructions to re-program Key Meters; "Key Meter" means a Prepayment Meter which operates using a Key; "kVA" means kilovoltamperes; "Line Loss Factor" means [awaiting Settlement Agreement definition]; "Line Loss Factor Class" means [awaiting Settlement Agreement definition]; "Market Domain I.D." has the meaning given to that term in the Data Transfer Service Agreement; "Master Connection and Use of System means the agreement of that name dated 30th March 1990 Agreement" governing connection to and use of NGC's transmission system, as at the date of this Agreement; "Master Registration Agreement" means the agreement of that name dated [ ], as at the date of this Agreement; "Maximum Capacity" has the meaning (if any) given to that term in the relevant Connection Agreement; "Maximum Power Requirement" means the maximum amount of electricity expressed in kilowatts or kilovoltamperes which is requested by the relevant Customer to be supplied through an Exit Point; "Meter Administrator" means a duly Accredited person appointed by a Customer to administer an Equivalent Meter pursuant to the Unmetered Supplies Procedure; "Meter Operation Services Agreement" means any agreement between the Company in its capacity as Meter Operator and the User for the provision of meter operation services to be provided by the Meter Operator; "Meter Operator" means a person appointed by the User, or where applicable the Customer to provide the services described in 10 Condition 11C paragraphs 1(a) and 1(b of the PES Licence in relation to the relevant Metering Point and Accredited by the Accreditation Authority; "Meter Operator Code of Practice" means the code of practice of that name, as amended from time to time, pursuant to the Meter Operator Code of Practice Agreement; "Metered Data" means data concerning the quantities of energy exported or imported, measured, collected, recorded or otherwise determined pursuant to the Settlement Agreement; "Metering Point" has the meaning given to that term in the Master Registration Agreement; "MPAS" has the meaning given to that term in the Master Registration Agreement; "MPAS Operator" means the Company in its capacity as the person who provides the services described in Condition 11B of the PES Licence; "NGC" means The National Grid Company plc; "Operational Metering Equipment" means metering equipment suitable to provide the Company with such data as it requires for use of system or operational purposes; "PES Licence" means the public electricity supply licence granted to the Company pursuant to section 6 (1) (c) of the Act, as at the date of this Agreement; "Prepayment Infrastructure Services Agreement" means any agreement between the Company and the User for the provision of prepayment infrastructure services to be provided by the Company pursuant to Condition 11C paragraph 1(f) of the PES Licence; "Prepayment Meter" means a metering system that permits the supply of electricity under arrangements which provide for the electricity supplied to be paid for in full in advance of its consumption and the recovery of sums in respect of the other matters referred to in paragraph 12(2) of Schedule 7 to the Act; "Prescribed Period" shall have the meaning given to that term in the ESPR; "Prescribed Sum" shall have the meaning given to that term in the ESPR; 11 "Profile Class" means [awaiting Settlement Agreement definition]; "Quarter" means the period of three months commencing on 1st January, 1st April, 1st July and 1st October in each year; "Radio Teleswitch Agreement" means the agreement of that name detailing the rights and obligations of inter alios, the Company and the User in relation to the use of radio teleswitches; "Reconciliation Account" has the meaning given to that term in Clause 7.4; "Reconciliation Run" means [awaiting Settlement Agreement definition]; "Re-energise" means, in relation to any Metering Point, deliberately to allow the flow of electricity from the Distribution System through the relevant Exit Point (or, in the case of an Unmetered Supply, any one or more of the relevant Exit Points) to the relevant Customer's Installation where such flow of electricity was previously prevented by De-energisation Works; "Re-energisation Works" means the movement of any switch, the replacement of any fuse or meter, or the taking of any other step to Re-energise a Metering Point; "Registration Notice" means a notice sent to the MPAS Operator by either the User or the Company, as the case may be, instructing the MPAS Operator to change the status of a Metering Point in the way set out in the notice; "Regulations" means the Electricity Supply Regulations 1988 SI 1988/1057 as amended or re-enacted from time to time; "Related Undertaking" in relation to either party means any undertaking in which that party has a participating interest as defined in Section 260 of the Companies Act 1985; "Relevant Exempt Supplier" means an Exempt Supplier which has entered into an Enabling Agreement with the User in respect of supplies of electricity to Customers of that Exempt Supplier; 12 "Relevant Instruments" means: (a) the Act and all subordinate legislation made under the Act, as at the date of this Agreement; (b) the Data Protection Act and all subordinate legislation made under it, as at the date of this Agreement; (c) the PES Licence and the Second Tier Supply Licence, and any determination or notice made or issued by the Director pursuant to the terms thereof; (d) the Settlement Agreement; (e) the Data Transfer Service Agreement; (f) the Master Registration Agreement; and (g) the Master Connection and Use of System Agreement, and whether under any of the foregoing or otherwise, all authorisations, approvals, licences, exemptions, filings, registrations, notarisations, consents and other matters, which are required, or which the Company acting in accordance with Good Industry Practice would obtain, in connection with the provision of the services under this Agreement, of or from any Competent Authority as at the date of this Agreement; "Revenue Protection Code of Practice" means the code of practice detailing the rights and obligations of, inter alios, the Company and the User in relation to the prevention of meter interference and other forms of illegal abstraction of electricity titled Revenue Protection - Code of Practice as amended from time to time in accordance with its terms; "Second Tier Supply Business" has the meaning given to that term in the PES Licence; "Second Tier Supply Licence" means the second tier supply licence granted to the User to supply electricity pursuant to Section 6 (2) of the Act and covering the relevant part of the Authorised Area, as at the date of this Agreement; "Secretary of State" has the meaning given to that expression in the Interpretation Act 1978; 13 "Security and Safety of Supplies Statement" means the statement in relation to security and safety of supplies for the time being in force pursuant to Condition 9A of the PES Licence; "Service Agreements" means the: (a) Master Registration Agreement; (b) Data Transfer Service Agreement; (c) Meter Operation Services Agreement; (d) Prepayment Infrastructure Services Agreement; (e) Data Collection Services Agreement; and (f) Data Aggregation Services Agreement; "Settlement" means [awaiting Settlement Agreement definition]; "Settlement Agreement" means the Pooling and Settlement Agreement dated 30th March 1990 (as amended), including all Service Lines and Agreed Procedures (as therein defined) made under it, as at the date of this Agreement; "Settlement Class" means [awaiting Settlement Agreement definition]; "Settlement Day" means [awaiting Settlement Agreement definition]; "Settlement Data" means data used in the Settlement System including data provided pursuant to the Master Registration Agreement, Data Aggregation Services Agreement, Data Collection Services Agreement, Meter Operation Services Agreement [and the Prepayment Infrastructure Services Agreement]; "Settlement Register" means [awaiting Settlement Agreement definition]; "Settlement Run" means as appropriate, an Initial Settlement Run, Reconciliation Run, Final Reconciliation Run or Dispute Final Reconciliation Run; "Settlement Timetable" means [awaiting Settlement Agreement definition]; 14 "Settlement System" means [awaiting Settlement Agreement definition]; "Settlement System Administrator" means [awaiting Settlement Agreement definition]; "Standard Connection Agreement" means a Connection Agreement on standard terms of connection prepared by the Company and approved by the Director under Condition 8C of the PES Licence as amended from time to time with the approval of the Director, the terms of which as at the date of this Agreement are set out at Schedule 12; "Standard Settlement Configuration" means [awaiting Settlement Agreement definition]; "Supercustomer DUoS Report" means a report of profiled data by Settlement Class providing the data items set out in Data Transfer Catalogue D0030 (as amended from time to time in accordance with the provisions of the Master Registration Agreement); "Supply Business" has the meaning given to that term in the PES Licence; "Supply Contract" means a contract (whether oral or in writing) between the User or any Relevant Exempt Supplier and a Customer for a supply of electricity to such Customer through an Exit Point from time to time; "Supply Number" has the meaning given to that term in the Master Registration Agreement; "System Outage" means in relation to the Distribution System a planned or unplanned interruption to the flow of electricity through the whole or part of the Distribution System implemented by or on behalf of the Company for safety or system security reasons or to enable the Company to inspect or effect alterations, maintenance, repairs or additions to any part of the Distribution System; "Systems" means [ ]; Note: To be resolved in the STS/JPW debate on Millennium Compliance "Tariff Customer" shall have the meaning given to that term in the Act; 15 "Time Pattern Regime" means [awaiting Settlement Agreement definition]; "Tariff Management Agreement" means the agreement of that name dated [ ] governing the establishment of a forum to oversee the allocation and use of Key Meter tariffs; "Transactional Charges" means the charges payable for the services listed in Part 1 of Schedule 4; "Unit" means kilowatt hour; "Unit Rate" means a charge in pence and/or pound(s) applied to a Unit; "Unmetered Connection Agreement" means a Connection Agreement relating to an Unmetered Supply which regulates (amongst other things) the preparation and keeping up-to-date of an inventory of the Customer's Installation; "Unmetered Supplies Certificate" means a certificate issued by the Company in its sole discretion to a Customer under the Unmetered Supplies Procedure which states (amongst other things) the Supply Numbers of the Metering Points by reference to which the Company has authorised the Customer to receive Unmetered Supplies; "Unmetered Supplies Procedure" means the [Agreed Procedure] of that name [established under the Settlement Agreement]; "Unmetered Supply" means a supply of electricity the quantity of which the Company through the issue of a relevant Unmetered Supplies Certificate has authorised not to be measured by physical metering equipment; "Use of Distribution System" means the use of the Distribution System for the passing of electricity into the Distribution System and for the transportation of such electricity by the Company through the Distribution System to Exit Points; "Use of System Charges" has the meaning given to that term in Clause 6.1; "User's Installation" means structures, equipment, lines, appliances or devices connected or to be connected to the Distribution System at any Exit Point used or to be used by the User in connection with this Agreement; 16 "Value Added Tax" has the meaning given to that term in the Value Added Tax Act 1994 and any tax of a similar nature which may be substituted for or levied in addition to it; "Vending Outlet" means a vending machine or retail outlet authorised by the Company to operate equipment for charging Keys on its behalf; and "Working Day" has the meaning given to that term in section 64 of the Act. In this Agreement, unless the context requires otherwise, any reference to: 1.2 1.2.1 a "person" includes a reference to a body corporate, association or partnership; 1.2.2 the singular shall include the plural and vice versa; 1.2.3 this "Agreement" shall mean this agreement and the Schedules; 1.2.4 a Clause or Schedule is a reference to a clause of or schedule to this Agreement; 1.2.5 writing includes all methods of reproducing words in a legible and non-transitory form; and 1.2.6 a charging period is, subject to any contrary indication, a reference to the period specified in Schedule 3 or Schedule 4 as appropriate (or if no period is specified a calendar month). 1.3 The headings in this Agreement are for ease of reference only and shall not affect its interpretation. 1.4 In this Agreement, references to "include" or "including" are to be construed without limitation to the generality of the preceding words. 2. CONDITIONS PRECEDENT The provisions of Clauses 4, 6, 7, 8, 10 and 12 to 16 inclusive of this Agreement are conditional upon each of the following conditions precedent being fulfilled: 2.1.1 the User holding the Second Tier Supply Licence; 2.1.2 the Company holding the PES Licence; 2.1.3 both parties having entered into the Master Connection and Use of System Agreement and any necessary supplemental agreement pursuant to it; 2.1.4 both parties being a party to, and a pool member under, the Settlement Agreement; 2.1.5 there being in full force and effect as between the parties the Master Registration Agreement and Data Transfer Service Agreement, such agreements being unconditional save for any conditions that this Agreement becomes unconditional; and 17 2.1.6 where the User does not hold an Approved Credit Rating, provision by the User of any Cover that may be required by the Company in accordance with Schedule 1. 2.2 If the conditions precedent set out in Clause 2.1 are not fulfilled at the date hereof each party shall use reasonable endeavours to procure the fulfilment of those conditions relating to it which have not already been fulfilled. 2.3 Once each of the conditions precedent in Clause 2.1 has been fulfilled, each party shall use reasonable endeavours to keep such conditions precedent relating to it fulfilled throughout the term of this Agreement. 2.4 If any of the conditions precedent set out in Clause 2.1 has not been fulfilled or waived within 3 months of the execution of this Agreement then, subject to any accrued rights and obligations of either party (including any claim either party may have pursuant to the provisions of Clause 2.2 or 2.3) this Agreement shall automatically terminate 2.5 Neither party shall be obliged to perform any of its obligations under this Agreement, and in particular the obligations set out in Clause 2.1, except for the obligation set out in Clause 2.1.6, prior to the commencement of Controlled Market Start-Up in the Authorised Area. 3. CONNECTION AGREEMENTS 3.1 The Company hereby appoints the User as its agent for the purpose of procuring Standard Connection Agreements in accordance with Clause 3.2 and 3.5 and the User agrees to act in that capacity. In respect of the Customers of a Relevant Exempt Supplier, the User is authorised to and shall appoint the Relevant Exempt Supplier as the sub-agent of the User for the purpose of procuring Standard Connection Agreements in accordance with Clause 3.2 and 3.5 and shall procure that the Relevant Exempt Supplier agrees to and does act in that capacity. The User shall and shall procure that such sub-agent shall: 3.1.1 not pledge the credit of the Company in any way; 3.1.2not make or give any representation or warranty in relation to the Company unless the representation or warranty itself has been expressly approved in writing by the Company; 3.1.3not agree or purport to agree to any obligations on the Company other than those in the Standard Connection Agreement; and 3.1.4not agree or purport to agree any variation to any Standard Connection Agreement. 3.2 Subject to the provisions of Clause 3.5, the User shall procure that on each occasion on which it or any Relevant Exempt Supplier enters into a Supply Contract (whether written or oral) (except for the renewal of an existing Supply Contract entered into after [31 August 1998]) that unless and to the extent that the provisions of Clause 3.5 apply to the relevant Customer: 18 3.2.1 there is included in that Supply Contract the term set out in Schedule 2 or another term having the same effect as that term and that such term is drawn to the attention of the relevant Customer before the Supply Contract is entered into; and 3.2.2 the Customer simultaneously enters into a Standard Connection Agreement in relation to the connection of each Exit Point through which the supply of electricity to the relevant Metering Point(s) will flow. 3.3 The User shall indemnify the Company against all actions, proceedings, costs, demands, claims, expenses, liability, loss or damage arising from, or incurred by the Company as a consequence of, the User or any Relevant Exempt Supplier failing to comply with Clause 3.2. Where the User or any relevant Exempt Supplier does not on the Company's reasonable request in the context of an actual or threatened dispute, difference or disagreement with the relevant Customer, provide sufficient evidence to establish in any such case that a Standard Connection Agreement was procured in accordance with Clause 3.2 or Clause 3.5 (where the User has procured a Standard Connection in accordance with Clause 3.5), then the User shall indemnify the Company as if no Standard Connection Agreement had been procured. Where such records are released to the Company such records shall be subject to the Company's obligations of confidentiality under Clause 20. 3.4 Where the User or any Relevant Exempt Supplier has procured a Standard Connection Agreement on behalf of the Company and the Company intends to negotiate non-standard terms to apply in addition to or in substitution for the terms under the Standard Connection Agreement, the Company shall notify the User that the Company intends that non-standard terms will apply in respect of that connection. Where non-standard terms are agreed, the Company shall notify the User as soon as reasonably practicable of any non-standard terms which affect the Use of System Charges payable in respect of that Customer. 3.5 Notwithstanding the provisions of Clause 3.2, when at any time prior to 31st March 2000 the User or any Relevant Exempt Supplier proposes to enter into or enters into a Supply Contract with any Customer who: 3.5.1 is being supplied with electricity other than as a Tariff Customer of the Company before [31st August 1998]; and 3.5.2 as a relevant demand in Megawatts calculated in accordance with Condition 2 of the Second Tier Supply Licence at the premises to which that supply is made in excess of 0.1 of a Megawatt; and 3.5.3 has prior to [date 3 months before 31st August 1998] failed to enter into a Connection Agreement in respect of Exit Points at the premises referred to in Clause 3.5.2 through which the supply of electricity will flow under the Supply Contract to be entered into or entered into between the User or any Relevant Exempt Supplier and the relevant Customer. then by way of exception from the provisions of Clause 3.2 and in respect of the Exit Points referred to in Clause 3.5.3 and any Exit Point through or at which the Customer commences to receive a supply after the date of this Agreement in excess of 0.1 of a Megawatt 19 calculated on the basis set out in Clause 3.5.2, the User shall be obliged only to, and shall procure that any Relevant Exempt Supplier will, use its reasonable endeavours to procure that the relevant Customer simultaneously enters into a Standard Connection Agreement in relation to each of the Exit Points referred to in Clause 3.5.3. Where the User procures a Standard Connection Agreement from a customer pursuant to this Clause 3.5 it shall notify the Company as soon as reasonably practicable. 4. USE OF SYSTEM 4.1 Subject to the terms of this Agreement, the Company shall transport electricity through the Distribution System to each Exit Point relating to a Metering Point or Metering Points registered to the User under the Master Registration Agreement or in ERS subject to any arrangements made between the respective Customers and the Company and the requirements (if any) of the respective Customers agreed between such Customers and the Company up to the Maximum Capacity (if any) and subject to such variations (if any) as may be permitted by the Regulations. 4.2 The obligation of the Company to transport electricity to a particular Exit Point pursuant to Clause 4.1 is in each case subject to: 4.2.1 the User being authorised by its Second Tier Supply Licence to supply electricity to each of the premises to be supplied with electricity through such Exit Point; 4.2.2 unless and to the extent that the provisions of Clause 3.5 apply to the relevant Exit Point there being a Connection Agreement in full force and effect relating to the connection of the relevant Customer's Installation; 4.2.3 the User being validly registered under the Master Registration Agreement or in ERS in respect of each Metering Point relating to Customers to be supplied by the User through such Exit Point; 4.2.4 the Company receiving confirmation that a Meter Operator, Data Collector and Data Aggregator, which in each case has been Accredited, have been appointed for each Metering Point relating to Customers to be supplied through such Exit Point. (For the avoidance of doubt, no Meter Operator is required to be appointed in relation to an Unmetered Supply); 4.2.5 subject to Clause 12.9, the Company receiving confirmation that metering equipment has been installed in accordance with Clause 12; 4.2.6 where applicable, the Company receiving confirmation that the User has given notice of that Exit Point to NGC pursuant to the Master Connection and Use of System Agreement; 4.2.7 where the User intends to supply any Unmetered Supply there being in full force and effect in relation to each relevant Exit Point an Unmetered Supplies Certificate and an Unmetered Connection Agreement; 4.2.8 where the User intends to supply an Unmetered Supply which is to be submitted to Settlement on the basis of half-hourly data generated by an equivalent meter, a Meter Administrator having been and remaining appointed by the Customer; 20 4.2.9 the Company not being entitled under Schedule 6 of the Act to refuse to furnish a supply of electricity, or to cut-off a supply of electricity that is already furnished, through its Distribution System to that Exit Point; and 4.2.10 when the User intends to recover payment from the relevant Customer through a Key Meter, the User being a party to the Tariff Management Agreement. COMMENCEMENT, DURATION AND CONTROLLED MARKET START UP 5.1 Subject to Clause 2, and to Clause 5.2, this Agreement shall take effect on the date hereof and shall continue in force until terminated in accordance with the provisions of Clause 18. 5.2 During the period of Controlled Market Start-Up, the Company shall provide, and the User shall be entitled to receive, Use of Distribution System only insofar as it relates to: 5.2.1 supplies of electricity to premises in relation to which the Director has directed, pursuant to paragraph 5 of Condition 7B of the PES Licence, that Condition 8B of the PES Licence should have effect; and 5.2.2 supplies of electricity to premises permitted pursuant to Condition 2 and 3 of the Second Tier Supply Licence. 6. CHARGES 6.1 The User shall pay to the Company in respect of Use of Distribution System the charges set out in Schedule 3. The Company may vary such charges at any time by giving at least 40 days written notice to the User. Such charges (the "Use of System Charges") and any variations are and will be calculated in accordance with the Condition 8 Statement and the Condition 11E Statement. The Use of System Charges shall be deemed to include: 6.1.1 charges for the Use of Distribution System provided by the Company to the User under this Agreement; 6.1.2 charges for those services described under the heading "Standard Services" in the Revenue Protection Code of Practice; and 6.1.3 charges for certain services provided by the Company to the User pursuant to: (A) any Meter Operation Services Agreement as amended from time to time; (B) any Data Collection Services Agreement as amended from time to time; (C) any Data Aggregation Services Agreement as amended from time to time; (D) any Prepayment Infrastructure Services Agreement as amended from time to time; and (E) the Master Registration Agreement as amended from time to time, as identified in each such agreement as being recoverable by the Company as an element of the charges which it levies on the User under this Agreement. 21 On any occasion upon which the charges payable by the User under this Agreement have not been calculated strictly in accordance with the Condition 8 Statement and/or Condition 11E Statement an appropriate adjustment shall be made by the Company and submitted to the User. Where: (A) the adjustment discloses an overcharge, the Company shall repay to the User the amount by which the User has been overcharged together with interest thereon from the due date of the invoice containing the overcharge until the date of repayment. Such interest shall accrue from day to day at the base lending rate during such period of [Barclays] Bank Plc, compounded annually; or (B) the adjustment discloses an undercharge, the User shall pay to the Company the amount, by which the User has been undercharged together in the case of all charges which are not Transactional Charges with interest thereon from the due date of the invoice which should have included the amount of the undercharge until the date of payment. Such interest shall accrue from day to day at the base lending rate during such period of [Barclays] Bank Plc, compounded annually. Where the User disputes the adjustment, the parties shall attempt to resolve the dispute in good faith. Where the dispute remains unresolved after 20 Working Days either party may refer the dispute to the arbitration in accordance with Clause 22 and the parties agree to pay the amount payable or repayable (if any) as determined thereby. 6.3 The Company shall invoice Use of System Charges (but excluding for the avoidance of doubt any charges calculated by reference to number or frequency of specific transactions) by reference to Settlement Class using aggregated data obtained from the Supercustomer DUoS Report except in relation to those Metering Points registered to the User under the Master Registration Agreement or in ERS where: 6.3.1 the supply of electricity is measured by Half-Hourly Metering Equipment (as defined in Part I of the Settlement Agreement) for the purposes of Settlement; and/or 6.3.2 the Use of System Charge is not comprised solely of one or more standing charge(s) and/or one or more Unit Rate(s); and/or 6.3.3 the Use of System Charge is specified in Schedule 3 as not being billed by Settlement Class. All Use of System Charges payable by the User pursuant to this Clause 6 and Clauses 7 and 8: 6.4.1 are exclusive of Value Added Tax and the Company may add to such amounts and the User shall pay Value Added Tax (if any) at the rate applicable thereto from time to time and Value Added Tax shall be payable at the same time and in the same manner as the amounts to which it relates; and 6.4.2 shall be without prejudice to any claims or rights which the User may have against the Company and except as expressly permitted by Schedule 6 below shall be made without any set-off 22 or deduction in respect of any claims or disputes or otherwise. 6.5 In relation to the provision of those services described under the heading "Transactional Services" in the Revenue Protection Code of Practice the User shall pay to the Company the charges set out in Part I of Schedule 4, on the terms and in the manner described in Part II of that Schedule 4. 6.6 The User shall provide Cover in accordance with the provisions of Schedule 1. 6.7 The Company may charge the User Use of System Charges calculated by reference to electricity discovered or reasonably and properly assessed to have been consumed by a Customer while a customer of the User but not recorded at the time of consumption (for whatever reason) by the metering equipment installed pursuant to Clause 12.1. At any time when the Company charges the User Use of System Charges under this Clause, it shall explain to the User the calculation of those charges and the basis of that calculation. 6.8 The User shall pay to the Company in respect of any services provided under this Agreement the charges set out in the relevant Schedule or (if no such charge is specified in this Agreement or agreed between the parties) the Condition 8 Statement. Without prejudice to Clause 6.1, where the Company is intending to revise the charges set out in Schedule 3 and Schedule 4, it shall serve a copy of any notice it sends to the Director pursuant to Condition 8 paragraph 18 of the PES Licence on the User as soon as reasonably practicable after such notice is sent to the Director. 7. BILLING AND PAYMENT BY SETTLEMENT CLASS 7.1 This Clause 7 applies to Use of System Charges which are invoiced by reference to Settlement Class in accordance with Clause 6.3. 7.2 The User shall procure the delivery to the Company of Supercustomer DUoS Reports in accordance with the timetable for Settlement after each Settlement Run relating to each Settlement Day. Following receipt of each Supercustomer DUoS Report, the Company shall deliver Daily Statements to the User as soon as reasonably practicable. 7.3 The Company shall submit to the User as soon as is reasonably practicable after the end of each charging period an account ("Initial Account") specifying Use of System Charges payable in respect of each Initial Settlement Run in respect of which a Daily Statement has been produced and which has not previously been included in an Initial Account. Such Initial Accounts shall be based upon the Daily Statements provided pursuant to Clause 7.2. 7.4 Where a subsequent Daily Statement for any Settlement Day indicates that, as a result of a subsequent Reconciliation Run, Final Reconciliation Run or Dispute Final Reconciliation Run, the Use of System Charges in respect of that Settlement Day are different to those previously billed, the Company shall calculate such difference and the interest thereon and shall submit an account ("Reconciliation Account") in respect of such difference to the User as soon as reasonably practicable after the end of each charging period. Such interest shall be calculated in accordance with Schedule 5. 23 Within 10 days of the date of an Initial Account or Reconciliation Account submitted in accordance with Clauses 7.3 or 7.4, the User shall pay to the Company all sums due in respect of such Initial Account or Reconciliation Account in pounds sterling by [electronic transfer of funds to such bank account (located in the United Kingdom) as is specified in the Initial Account or Reconciliation Account, quoting the Initial Account or Reconciliation Account number against which payment is made and/or such other details as the Company may reasonably require]. Subject to Clause 7.6, if any amount remains unpaid after the due date of any sum due in accordance with this Clause 7.5, the Company shall (in addition to any other remedies and interest payable under Clause 7.4) be entitled to charge interest on the amount unpaid, including interest on any Value Added Tax unpaid, at the rate of 3% per annum above the base lending rate during such period of [Barclays] Bank Plc, compounded annually. 7.6 Where any sum included in an Initial Account or Reconciliation Account submitted in accordance with Clauses 7.3 or 7.4 is disputed by the User, the provisions of Schedule 6 shall apply. 8. SITE SPECIFIC BILLING AND PAYMENT 8.1 This Clause 8 applies to Use of System Charges in relation to Metering Points that fall within sub-Clauses 6.3.1 - 6.3.3 (inclusive). 8.2 As soon as is reasonably practicable after the end of each charging period, the Company shall submit to the User an account specifying the Use of System Charges payable for the whole or any part of that charging period. Such account shall be based on: 8.2.1 data from metering equipment or any Equivalent Meter provided by the User in accordance with Clause 12.2 or, where actual data are not available, estimated data prepared in accordance with methods of estimation established under the Settlement Agreement by the relevant Data Collector; and 8.2.2 other data as specified in the Condition 8 Statement and/or the relevant Connection Agreement. Provided that the Company may use estimated data prepared by the Company where the User fails to provide the data under Clause 8.2.1 and 8.2.2. Where an account is based on estimated data, the account shall be subject to any adjustment which may be necessary following the receipt of actual data from the User. Within 14 days of the date of an account submitted in accordance with Clause 8.2, the User shall pay to the Company all sums due in respect of such account by [electronic transfer of funds to such bank account (located in the United Kingdom) as is specified in the account, quoting the account number against which payment is made and/or such other details as the Company may reasonably require]. Subject to Clause 8.4, if any amount remains unpaid after the due date thereof, the Company shall (in addition to any other remedies) be entitled to charge interest on the amount unpaid, including interest on any Value Added Tax unpaid, at the rate of 3% per annum above the base lending rate during such period of [Barclays] Bank Plc, compounded annually. 24 8.4 Where any sum included in an account submitted in accordance with Clause 8.2 is disputed by the User the provisions of Schedule 6 shall apply. 9. LIMITATION OF LIABILITY 9.1 Subject to Clause 9.5 and Clause 9.11 and save as provided in this Clause 9.1 and Clause 9.2 and save where any provisions of this Agreement provide for an indemnity neither party (the "party liable") nor any of its officers, employees or agents shall be liable to the other party for loss arising from any breach of this Agreement other than for loss directly resulting from such breach and which at the date hereof was reasonably foreseeable as not unlikely to occur in the ordinary course of events from such breach in respect of: 9.1.1 physical damage to the property of the other party, its officers, employees or agents; and/ or 9.1.2 the liability of such other party to any other person for loss in respect of physical damage to the property of any person. Provided that the liability of either party in respect of all claims for such loss shall in no circumstances exceed (pound)1 million per incident or series of related incidents; And provided further that either party shall be entitled: (A) to deduct from any sums payable in respect of its liability for loss or damage in respect of any event under this Agreement any sums which it is liable to pay to a person who has a connection to the Distribution System or any other person in respect of the same loss or damage in respect of the same event; (B) where it has already made payment in respect of its liability for loss or damage in respect of an event under this Agreement at the time at which it becomes liable to pay to any other person in respect of the loss or damage in respect of the same event, to reclaim from the other party the amount of its liability to that other person but not exceeding the amount already paid to the other party in respect of loss or damage in respect of the same event. PROVIDED THAT where either party becomes aware of any claim, difference, dispute or proceedings (actual or threatened) which it reasonably expects may lead to a liability to a person other than the other party in respect of an event which may give rise to a liability to the other party under this Agreement and which may fall within the provisos (A) and (B) to this Clause 9.1 that party shall consult with the other party as to the conduct of that or those claim, difference, dispute or proceedings (actual or threatened). 9.2 Nothing in this Agreement shall exclude or limit the liability of the party liable for death or personal injury resulting from the negligence of the party liable or any of its officers, employees or agents and the party liable shall indemnify and keep indemnified the other party, its officers, employees or agents, from and against all such liability and any loss or liability which such other party may suffer or incur by reason of any claim on account of death or personal injury resulting from the negligence of the party liable or any of its officers, employees or agents. 25 9.3 Subject to Clause 9.5 and save where any provision of this Agreement provides an indemnity neither party, nor any of its officers, employees or agents, shall in any circumstances whatsoever be liable to the other party for: 9.3.1 any loss of profit, loss of revenue, loss of use, loss of contract or loss of goodwill; or 9.3.2any indirect or consequential loss; or 9.3.3loss resulting from the liability of such other party to any other person howsoever and whenever arising save as provided in Clauses 9.1 and 9.2. 9.4 The rights and remedies provided by this Agreement to the parties are exclusive and not cumulative and exclude and are in place of all substantive (but not procedural) rights or remedies express or implied and provided by common law or statute in respect of the subject matter of this Agreement, including any rights either party may possess in tort which shall include actions brought in negligence and/or nuisance. Accordingly, each of the parties hereby waives to the fullest extent possible all such rights and remedies provided by common law or statute, and releases the party liable, its officers, employees and agents to the same extent from all duties, liabilities, responsibilities or obligations provided by common law or statute in respect of the matters dealt with in this Agreement and undertakes not to enforce any of the same except as expressly provided herein. 9.5 Save as otherwise expressly provided in this Agreement, this Clause 9 insofar as it excludes or limits liability shall override any other provision in this Agreement provided that nothing in this Clause 9 shall exclude or restrict or otherwise prejudice or affect any of: 9.5.1the rights, powers, duties and obligations of either party which are conferred or created by the Act, any licence granted pursuant to the Act or any subordinate legislation made under the Act; or 9.5.2the rights, powers, duties and obligations of the Director or the Secretary of State under the Act, any such licence or otherwise howsoever. 9.6 Each of the sub-Clauses of this Clause 9 shall: 9.6.1 be construed as a separate and severable contract term, and if one or more of such sub-Clauses is held to be invalid, unlawful or otherwise unenforceable the other or others of such sub-Clauses shall remain in full force and effect and shall continue to bind the parties; and 9.6.2 survive termination of this Agreement. 9.7 Each party hereby acknowledges and agrees that the other party holds the benefit of Clauses 9.1 and 9.2 and 9.3 above for itself and as trustee and agent for its officers, employees and agents. 9.8 Each party hereby acknowledges and agrees that the provisions of this Clause 9 have been the subject of discussion and negotiation and are fair and reasonable having regard to the circumstances as at the date hereof. 26 9.9 For the avoidance of doubt, nothing in this Clause 9 shall prevent or restrict either party enforcing any obligation (including suing for a debt) owed to it under or pursuant to this Agreement. 9.10 Where either party, in breach of its obligations under Clause 24.4.3, fails to deliver any notice, request or other communication to the recipient's Gateway and such failure occurs for reasons outside that party's direct control, the breaching party shall have no liability to the other under this Agreement and the parties shall rely instead upon the provisions of the Data Transfer Service Agreement. NOTE: millennium compliance is outstanding. 10. NERGISATION, DE-ENERGISATION AND RE-ENERGISATION 10.1 Energisation Works, De-energisation Works and Re-energisation Works carried out by or on behalf of the User pursuant to this Clause 10 shall be carried out by a person who is either engaged by the Company to carry out such work or who: 10.1.1 is an Approved Contractor, in accordance with the procedure set out in Schedule 7; and 10.1.2 is a Competent Person to whom a Permission has been issued in accordance with the procedure set out in Schedule 7, to carry out the particular activities comprising the Energisation Works, De-energisation Works or Re-energisation Works; and 10.1.3 acts in accordance with the requirements set out in Schedule 7. 10.2 Where: 10.2.1 neither the User nor any of its contractors is an Approved Contractor; or 10.2.2 no employee of the User or any of its contractors (if they are Approved Contractors) holds a Permission; or 10.2.3 the User does not have the rights of access required to undertake such De-energisation Works; or 10.2.4 the parties so agree the Company shall, to the extent that it may lawfully do so, at the request of the User, when the User is entitled to have carried out De-energisation Works and Re-energisation Works, carry out such works at the cost of the User within a reasonable time or, in circumstances of urgency, as soon as reasonably practicable. The Company shall on request by the User inform the User of its reasonable requirements for the details by reference to which Metering Points to be De-energised or Re-energised are to be identified. 10.3 The Company and the User shall both act in accordance with Good Industry Practice when carrying out, or procuring the carrying out of, any Energisation Works, De-energisation Works or Re-energisation Works. 27 10.4 If circumstances exist which entitle the User or any Relevant Exempt Supplier to Energise, De-energise or Re-energise Metering Point(s) pursuant to the Supply Contract with the relevant Customer then, subject to Clause 10.12, the User may Energise, De-energise or Re-energise such Metering Point(s) provided that it acts where relevant, in accordance with the 'code of practice on payment of bills and guidance for dealing with customers in difficulty', which the User must submit to and have approved by the Director in accordance with Condition 30 of the Second Tier Supply Licence. 10.5 If the User resolves to Energise or Re-energise a Metering Point pursuant to Clause 10.4 then: 10.5.1 the User shall decide on the extent and nature of the Energisation Works or Re-energisation Works and the User shall undertake such Energisation Works or Re-energisation Works at its own cost; and 10.5.2 when such Energisation Works or Re-energisation Works are complete the User shall, in accordance with the Master Registration Agreement, instruct the MPAS Operator to register the relevant Metering Point as energised (but only, in the case of an Unmetered Supply, if the Energisation Works or Re-energisation Works have allowed the flow of electricity through each relevant Exit Point). 10.6 If the User resolves to De-energise a Metering Point pursuant to Clause 10.4 then: 10.6.1 the User shall decide on the extent and nature of the De-energisation Works and the User shall undertake such De-energisation Works at its own cost; 10.6.2 when such De-energisation Works are complete the User shall, in accordance with the Master Registration Agreement, instruct the MPAS Operator to register the relevant Metering Point as de-energised (but only, in the case of an Unmetered Supply, if the De-energisation Works have prevented the flow of electricity through each relevant Exit Point); 10.6.3 where the Company carries out De-energisation Works on behalf of the User pursuant to Clause 10.2 the User shall indemnify the Company against all actions, proceedings, costs, demands, claims, expenses, liability, loss or damage arising from, or incurred by the Company as a consequence of, physical damage to the property of the Company, its officers, employees or agents and in respect of the liability of the Company to any other person for loss in respect of physical damage to the property of any person, in each case as a consequence of acting in reliance on any instructions given by the User to the Company which are materially inaccurate or misleading; 10.6.4 where the Company carries out De-energisation Works on behalf of the User pursuant to Clause 10.2 the Company shall indemnify the User against all actions, proceedings, costs, demands, claims, expenses, liability, loss or damage arising from, or incurred by the User as a consequence of, physical damage to the property of the User, its officers, employees or agents and in respect of the liability of the User to any other person for loss in respect of physical damage to the property of any person, in each case as a consequence of acting contrary to an accurate and appropriate instruction to De-energise a Metering Point. 28 10.7 The Company may, upon giving the User 2 Working Days' prior written notice, De-energise any Metering Point if: 10.7.1 the Company is entitled to do so pursuant to the Connection Agreement relating to such Metering Point; or 10.7.2 any of the conditions set out in Clause 4.2 cease to be fulfilled (or, in the case of Clause 4.2.4, remain unfulfilled 10 Working Days after the service of notice by the Company requiring the User to remedy the situation) in relation to the relevant Exit Point (or, in the case of an Unmetered Supply, any one or more of the relevant Exit Points). 10.8 Notwithstanding the provisions of Clause 10.7 the Company may, at any time with no prior notice to the User, De-energise any Metering Point if: 10.8.1 the Company is instructed, pursuant to the terms of the Master Connection and Use of System Agreement (as amended from time to time) or the Settlement Agreement (as amended from time to time), to do so; 10.8.2 the Company reasonably considers it necessary to do so for safety or system security reasons; 10.8.3 the Company reasonably considers it necessary to do so to avoid interference with the regularity or efficiency of its Distribution System; 10.8.4 an accident or emergency occurs or threatens to occur which requires the Company to do so to avoid the risk of personal injury to any person or physical damage to the property of the Company, its officers, employees or agents or the property of any other person; 10.8.5 it is entitled to do so under Schedule 11; or 10.8.6 subject to the terms of a replacement agreement, this Agreement is terminated in accordance with the provisions of Clause 18. In these circumstances the Company shall inform the User as soon as reasonably practicable and in any event by the end of the next Working Day when MPAS is available of the fact that the Metering Point has been De-energised. 10.9 If the Company resolves to De-energise a Metering Point pursuant to Clause 10.7 or 10.8 then: 10.9.1 the Company shall decide on the extent and nature of the De-energisation Works required to De-energise the relevant Metering Point; and 10.9.2 the Company shall Re-energise the Metering Point as soon as reasonably practicable after the circumstance giving rise to such De-energisation has ended; 10.9.3 except where the Company resolves to De-energise a Metering Point pursuant to Clauses 10.7.1, 10.8.1, 10.8.2, 29 10.8.3, 10.8.4 or 10.8.6 following termination of this Agreement by the User under Clause 18.4 the Company shall undertake both the De-energisation Works and the subsequent Re-energisation Works at the cost of the User and the User shall pay the Company, the relevant charges listed at Schedule 4 associated with both the De-energisation Works and the subsequent Re-energisation Works. 10.10 If the Company De-energises a Metering Point pursuant to Clause 10.7 or 10.8 and such Metering Point remains De-energised for a period of 3 Working Days then: 10.10.1 the Company shall forthwith instruct the User to send a Registration Notice to the MPAS Operator instructing the MPAS Operator to register the relevant Metering Point as de-energised (but only, in the case of an Unmetered Supply, if the De-energisation works have ceased the flow of electricity through each relevant Exit Point); and 10.10.2 within 2 Working Days of receiving an instruction from the Company pursuant to Clause 10.10.1, the User shall send such a Registration Notice to the MPAS Operator. 10.11 If the Company Re-energises a Metering Point pursuant to Clause 10.9 then: 10.11.1 if an instruction has been given by the Company under Clause 10.10.1 the Company shall forthwith instruct the User to send a Registration Notice to the MPAS Operator instructing the MPAS Operator to register the relevant Metering Point as energised (but only, in the case of an Unmetered Supply, if the Re-energisation works have allowed the flow of electricity through each relevant Exit Point); and 10.11.2 within 2 Working Days of receiving an instruction from the Company pursuant to Clause 10.11.1, the User shall send such a Registration Notice to the MPAS Operator. 10.12 The User shall not be entitled to Re-energise a Metering Point which has previously been De-energised by the Company on its own behalf (for the avoidance of doubt, not acting on the instructions or at the request of the User) or on behalf of the Company. For the avoidance of doubt, the User shall be entitled to Re-energise a Metering Point which has previously been De-energised by or on behalf of another supplier. 10.13If there is no reasonably foreseeable future use for a Metering Point the User shall be entitled to send to the Company a Disconnection Notice. In respect of any Disconnection Notice sent to the Company pursuant to this Clause, the User shall: 10.13.1 warrant that to the best of its knowledge and belief, having exercised Good Industry Practice, the Metering Point has been De-energised and that there is no reasonably foreseeable future use for the Metering Point giving details of any De-energisation Works which it has undertaken and providing an explanation for why there is no reasonably foreseeable future use for the Metering Point; and 10.13.2 indemnify the Company against all costs, demands, claims, expenses, liability, loss, or damage which the Company incurs in consequence of acting in reliance on the warranty given in Clause 10.13.1 which proves to be in any way inaccurate or misleading. 30 10.14 If a third party contacts the Company to request directly or indirectly that the Company undertakes works in relation to a Metering Point because there is no reasonably foreseeable future use for that Metering Point and the Company is satisfied that the third party is entitled to make such request then the Company shall contact the relevant User and request it to submit a Disconnection Notice. Upon receiving such a request the User shall send the Company the requested Disconnection Notice unless in the User's reasonable opinion there is a reasonably foreseeable future use for the Metering Point. 10.15 If, in any case, in the reasonable opinion of the Company there is a reasonably foreseeable future use for the Metering Point then the Company shall not be obliged to comply with a Disconnection Notice received under Clause 10.13 or 10.14 and where the Company decides not to comply it shall provide the User with the reasons for its decision. 10.16 If the Company is of the reasonable opinion that there is no reasonably foreseeable future use for a Metering Point then the Company shall contact the relevant User and request it to submit a Disconnection Notice. Upon receiving such a request the User shall send the Company the requested Disconnection Notice unless in the User's reasonable opinion there is a reasonably foreseeable future use for the Metering Point. 10.17 For the avoidance of doubt, the warranty and indemnity contained in Clause 10.13 shall not apply to any Disconnection Notice requested by the Company pursuant to Clause 10.14 and 10.16. 10.18 Subject to Clause 10.15, within 5 Working Days of receipt of the Disconnection Notice, the Company shall send a Registration Notice to the MPAS Operator instructing it to register the Metering Point as de-registered. 10.19 If a Metering Point has been De-energised by or on behalf of a previous supplier and the Company receives a request from the User to Re-energise such Metering Point then: 10.19.1 the Company shall Re-energise the Metering Point as soon as reasonably practicable and notify the User of when it expects to carry out the Re-Energisation Works; 10.19.2 the Company shall carry out all necessary Re-energisation Works at its own cost and shall then reclaim such costs from the previous supplier; and 10.19.3 the Company shall notify the User as soon as the Re-energisation Works are complete and the User shall, within 2 Working Days of receiving such notification, send a Registration Notice to the MPAS Operator instructing the MPAS Operator to register the relevant Metering Point as energised. 10.20 The Company shall notify Customers of and carry out System Outages in accordance with its statutory rights and obligations and Good Industry Practice. 10.21 The User shall be entitled to use the enquiry service established by the Company pursuant to Condition 9A of its PES Licence as if the User were a Customer. 31 11. COMPLIANCE WITH THE DISTRIBUTION CODE 11.1 The parties undertake to comply with the Distribution Code. 11.2 In the event of any conflict between this Agreement and the Distribution Code the Distribution Code shall prevail. 11A. COMPLIANCE WITH THE METER OPERATOR CODE OF PRACTICE 11A.1 The parties undertake to comply with the Meter Operator Code of Practice. 11A.2 The User shall procure that the Meter Operator, Data Collector and Data Aggregator appointed for each Metering Point supplied shall (where relevant) comply with the Meter Operator Code of Practice. 11A.3 In the event of any conflict between this Agreement and the Meter Operator Code of Practice this Agreement shall prevail. 11B. COMPLIANCE WITH THE RADIO TELESWITCH AGREEMENT 11B.1 The parties undertake to comply with the Radio Teleswitch Agreement 11B.2 In the event of any conflict between this Agreement and the Radio Teleswitch Agreement this Agreement shall prevail. 12.METERING DATA AND METERING EQUIPMENT 12.1 Subject to Clause 12.9, the User shall at its own cost install and maintain or procure the installation and maintenance of metering equipment at or as close as reasonably practicable to each Exit Point when the User is registered under the Master Registration Agreement or in ERS in respect of the relevant Metering Point. Such metering equipment shall be capable of providing the relevant metering data required by the Company for the calculation of Use of System Charges and such metering equipment shall comply with the requirements as indicated in Schedule 8 in the column headed "Metering Functionality" and those specified in Code of Practice 4 and Schedule 7 of the Act and the Company shall not be obliged to transport a supply of electricity through the relevant Exit Point unless and until the necessary metering equipment has been installed. The User shall procure that the metering equipment installed and maintained pursuant to this Clause 12.1 shall be capable of operating within the accuracy limits specified in Part 1 of Schedule 9. 12.2 The User shall provide the Company with such data from metering equipment installed and maintained pursuant to Clause 12.1 and from any Equivalent Meter operated under the Unmetered Supplies Procedure as the Company may reasonably require for: 12.2.1 the calculation of Use of System Charges; and 12.2.2 the operation and planning of the Distribution System. The User shall collect and provide data to the Company in accordance with this Clause 12.2 in accordance with the requirements set out in Schedule 8 in the columns headed "Meter Reading Frequency" and "Time for Provision of Data to the Distributor". 32 12.3 The User shall not and shall procure that no Relevant Exempt Supplier will change or modify the type of metering equipment installed and maintained pursuant to Clause 12.1 except in accordance with Clause 12.1. 12.4 The User shall procure that the Meter Operator, Data Collector and Data Aggregator appointed for each Metering Point supplied in relation to which the supply of electricity is measured by Non-Half Hourly Metering Equipment (as defined in Part I of the Settlement Agreement) for the purposes of Settlement, shall provide the Company with any data required to be provided to the Distribution Business by the person appointed in that capacity under, as appropriate, the Meter Operation Services Agreement, Data Collection Services Agreement or Data Aggregation Services Agreement in accordance with the timescales specified in such agreements. 12.5 The Company shall be entitled to inspect, test and if necessary require the User to correct any metering equipment installed and maintained pursuant to Clause 12.1. The User shall use its reasonable endeavours including the inclusion of appropriate terms in its Supply Contract, to procure that the employees, agents, sub-contractors and invitees of the Company shall at all reasonable times have safe and unobstructed access to such metering equipment. Where the Company exercises its right under this Clause 12.5 the provisions set out in paragraph 2 of Schedule 9 shall apply. 12.6 The Company shall be entitled to install Operational Metering Equipment at or as close as reasonably practicable to any Exit Point in addition to any metering equipment installed and maintained pursuant to Clause 12.1 to collect data for the operation and planning of the Distribution System, but if it exercises this right it shall make no additional charge to the User in respect of such Operational Metering Equipment and shall not except in the case of the failure of metering equipment installed and maintained pursuant to Clause 12.1 use data from the Operational Metering Equipment for the calculation of Use of System Charges. For the avoidance of doubt, the Operational Metering Equipment need not be certified under paragraph 5 of Schedule 7 of the Act. 12.7 Where the Company installs Operational Metering Equipment in accordance with Clause 12.6: 12.7.1 the User shall and shall procure that any Relevant Exempt Supplier will ensure that the employees, agents and invitees of the User or Relevant Exempt Supplier (as the case may be) will not interfere with such equipment or the immediate connections to such equipment without the prior written consent of the Company, except to the extent that emergency action has to be taken to protect the health and safety of persons or to prevent serious damage to property proximate to the Operational Metering Equipment; and 12.7.2 the User shall and shall procure that any Relevant Exempt Supplier will use its reasonable endeavours including the inclusion of appropriate terms in its Supply Contract, to procure that the employees, agents, sub-contractors and invitees of the Company shall at all reasonable times have safe and unobstructed access to the Operational Metering Equipment. The Company agrees to procure that any individuals to whom access is given pursuant to this Clause 12.7.2 shall comply with all reasonable directions given by the User or the relevant Customer and its appropriately authorised employees and agents as to general safety and site security arrangements. 33 12.8 In relation to any Unmetered Supply under an Unmetered Supplies Certificate, the User and the Company shall comply with the Unmetered Supplies Procedure and in particular the Company shall from time to time calculate and forward to the Data Collector the Estimated Annual Consumption of a Customer's Installation which is not subject to Half-Hourly Trading as defined by the Unmetered Supplies Procedure. The User may supply electricity to the whole (but not a part only) of a Customer's Installation in respect of which an Unmetered Supplies Certificate has been issued by the Company. 12.9 The provisions of Clauses 12.1, 12.3, 12.4 and 12.5 shall not apply in relation to an Unmetered Supply which the User is permitted to supply under this Agreement. For the avoidance of doubt, when at any time the User ceases to be permitted to supply electricity on the basis that the supply of electricity is an Unmetered Supply, the User shall immediately become bound by all the provisions of this Clause 12 (other than those relating only to an Unmetered Supply). 13. PROVISION OF INFORMATION 13.1 Except for the renewal of an existing Supply Contract entered into after 31 August 1998, as soon as reasonably practicable following either: (i) where a Notice of Objection (for the purposes of this Clause 13 as defined in the Master Registration Agreement) is not received in relation to the User's Application for Registration (for the purposes of this Clause 13 as defined in the Master Registration Agreement) in respect of the relevant Metering Point, the expiry of the Objection Raising Period (for the purposes of this Clause 13 as defined in the Master Registration Agreement); or (ii) where a Notice of Objection is received in relation to the User's Application for Registration, the withdrawal of the Notice of Objection in relation to the User's Application for Registration, the User shall provide the following information to the Company in respect of any Exit Point through which the relevant supply is to be delivered : 13.1.1 the relevant Supply Number core data (as defined in the Master Registration Agreement); 13.1.2 the relevant Customer's name; 13.1.3 the Metering Point Address relating to each Supply Number; and 13.1.4 the Customer's Maximum Power Requirement if: (A) the Customer is not a Domestic Customer (as defined in the PES Licence); (B) the Customer has a Maximum Power Requirement not less than 20 kVA ; and (C) the Customer is a new owner or occupier of the site. 34 13.2 Except for the renewal of an existing Supply Contract entered into after 31 August 1998, as soon as reasonably practicable following either: (i) where a Notice of Objection is not received in relation to the User's Application for Registration in respect of the relevant Metering Point, the expiry of the Objection Raising Period; or (ii) where a Notice of Objection is received in relation to the User's Application for Registration, the withdrawal of the Notice of Objection in relation to the User's Application for Registration, the User shall use reasonable endeavours to provide the following information to the Company in respect of any Exit Point through which the relevant supply is to be delivered: 13.2.1 the contact name for the Customer if different from the Customer's name; and 13.2.2 the Customer's postal address if different from the Metering Point Address. 13.3 The User shall use reasonable endeavours to notify the Company of any changes to the details set out in Clause 13.1 and Clause 13.2 as soon as reasonably practicable following that change by reference to the Supply Number. 13.4 Where the User or its agent or any Relevant Exempt Supplier receives a report or enquiry from any person about any matter or incident that does or is likely to: 13.4.1 cause danger or require urgent attention in relation to the supply or distribution of electricity in the Company's authorised area (as defined in the PES Licence) through the Distribution System; or 13.4.2 affect the maintenance of the security, availability and quality of service of the Distribution System, the User shall notify the Company of such report or enquiry in a prompt and appropriate manner having regard to the nature of the incident to which the report relates. The User shall notify the Company by telephone or post using the telephone number and postal address identified in the Security and Safety of Supplies Statement or such other telephone number as may from time to time be notified in writing by the Company. For the avoidance of doubt, if the User does not discharge its obligation under Condition 15 of the Second Tier Supply Licence by providing to customers the address and telephone number of the Company's enquiry service established pursuant to Condition 9A of the PES Licence, the User shall notify the Company of reports received from customers in accordance with this Clause 13.4. 13.5 The User shall, with the consent of any Customer who may be expected, by virtue of being of pensionable age or disabled or chronically sick, to require advance notice of interruptions to the supply of electricity, provide the Company with appropriate details concerning that Customer and his requirement within 3 Working Days of receiving such requirements pursuant to its obligations under Condition 30 of the Second Tier Supply Licence. 35 13.6 The User shall, with the consent of any Customer who has agreed a password with the User or any Relevant Exempt Supplier for access to the Customer's premises, provide the Company with appropriate details concerning that Customer and his password within 2 Working Days of notification of such password by the Customer. 13.7 The User shall use reasonable endeavours to ensure that all the facts, information and other details provided pursuant to Clause 13.5 and 13.6 shall throughout the duration of this Agreement remain true, accurate and complete in all respects. 14. DEMAND CONTROL 14.1 The parties undertake to comply with Schedule 11. 15. REVENUE PROTECTION 15.1 The Company shall provide a revenue protection service in accordance with the provisions of the Revenue Protection Code of Practice. 15.2 The User shall comply with its obligations under the Revenue Protection Code of Practice. 16. GUARANTEED PERFORMANCE STANDARDS 16.1 To the extent that, due to an act or omission on the part of the Distribution Business of the Company, compensation pursuant to the ESPR would be payable to the Customer by the Company if such Customer were a Tariff Customer of the Company then the Company shall make an equivalent compensation payment to the User for the benefit of the Customer in accordance with the provisions of this Clause 16. 16.2 To the extent that, due to circumstances other than those described in Clause 16.1, compensation pursuant to the ESPR would be payable to the Customer by the Company if such Customer were a Tariff Customer of the Company then the Company shall not be liable to make any payment to the User for the benefit of the Customer. 16.3 In the circumstances described in Clause 16.1, the Company will comply with the terms and procedures of the ESPR as if the Customer were a Tariff Customer provided that: 16.3.1 the User shall be deemed to be a "person having apparent authority to represent the customer" for the purposes of ESPR regulation 2(4)(d) if the Customer independently contacts the User in relation to a matter which forms the basis of the Customer's claim under the ESPR; and 16.3.2 where the ESPR require the Company to "pay to the customer the Prescribed Sum" the Company shall pay the User the Prescribed Sum for the benefit of the Customer and the User shall pass the payment on to the Customer as soon as reasonably practicable by [method of payment ]. 16.4 If the Customer contacts the User in relation to a matter which might form the basis of a claim under the ESPR then the User shall diligently record the details of the Customer's complaint and shall not agree or imply that the Customer's complaint is valid unless the 36 matter is one which would be governed by Clause 16.2. If the matter is one which in the User's reasonable opinion will be governed by Clause 16.1 then the User shall pass on the details of the Customer's complaint to the Company as soon as reasonably practicable together with details of the Customer's name and address. In such circumstances the Prescribed Period will relate to the time at which the Customer or the User on behalf of the Customer contacts the Company and the time at which the Customer contacts the User will not be relevant to the calculation of the Prescribed Period. 16.5 If the Customer contacts the Company in relation to a matter which might form the basis of a claim under the ESPR then the Company shall diligently record the details of the Customer's complaint and shall not agree or imply that the Customer's complaint is valid unless the matter is one which would be governed by Clause 16.1. If the matter is one which in the Company's reasonable opinion will be governed by Clause 16.2 then the Company shall tell the Customer to contact the User direct. In such circumstances the Prescribed Period will relate to the time at which the Customer contacts the User and the time at which the Customer contacts the Company will not be relevant to the calculation of the Prescribed Period. 16.6 When the User has received a payment from the Company pursuant to Clause 16.3.2 then the User shall pass such payment to the Customer as soon as reasonably practicable and if, due to the User's delay, an additional payment becomes due pursuant to ESPR regulation 14 then this additional payment shall be the liability of the User. 16.7 Neither party shall lead a Customer to believe that he has a valid claim for a guaranteed standard payment by reason of the action or default of the other party. Where however a Customer does have a valid claim, a breach of the provisions of this Clause 16.7 shall not excuse the party against whom the claim lies from making the relevant payment. 16.8 In the event of a dispute between the Company and the User as to which party is liable to pay compensation pursuant to Clause 16.1 or 16.2 then in the first instance the Company shall make the compensation payment for the benefit of the Customer and then the dispute shall be referred to the Director and shall be deemed to be a dispute which may be referred to the Director by either party in accordance with section 39 of the Act and ESPR regulation 13. The rules on "Presumptions and evidence" contained in ESPR regulation 16 and all other relevant provisions of the ESPR shall be deemed to apply to any such dispute. The Company shall, as soon as reasonably practicable after the end of each Quarter, provide the User with a report in accordance with Schedule 13. 17.VARIATIONS 17.1The parties acknowledge and agree the desirability of achieving and maintaining consistency and the absence of conflict between the provisions of this Agreement and each of the Relevant Instruments. However, the parties recognise that, due principally to the different functions and objectives of this Agreement and of the Relevant Instruments, the fact that not every Relevant Instrument binds both the Company and the User, and the different procedures for the variation of this Agreement and of the Relevant Instruments, it will not in all circumstances be possible to avoid inconsistency or conflict. 37 17.2 The parties acknowledge that the Settlement Agreement may be amended from time to time in a manner which is likely to change the User's requirements for the provision of Use of Distribution System. Whenever such a change occurs the User may serve upon the Company a notice setting out the change to the Settlement Agreement and the consequent amendments to the Agreement which it believes are required. Upon receipt of such notice by the Company, the parties shall negotiate in good faith the terms of any amendments. If amendments to the Agreement have not been agreed and put into place within 14 days after the User serves its notice proposing changes, either party shall be entitled to refer the matter to the Director, pursuant to Condition 11F of the PES Licence. 17.3 The Company may propose amendments to this Agreement to the extent necessary to ensure that any change to, or the coming into force of, any Relevant Instrument does not materially affect the Company's ability to perform, or the cost to it of performing, any of its obligations under this Agreement. Any such proposal shall be in writing and shall specify: 17.3.1 the Relevant Instrument concerned; 17.3.2 where relevant, the nature of the change to such Relevant Instrument relied on by the Company; 17.3.3 the proposed amendments to the Agreement; 17.3.4 the reasons why the Company considers the proposed amendments to be within the scope of this Clause 17.3; 17.3.5 that similar amendments shall be proposed by the Company in respect of ach subsisting agreement which it has entered into in its Authorised Area for the provision of Use of Distribution System services and which is similarly affected; and 17.3.6 that, so far as the Company is reasonably able, taking account of all relevant factors, the amendments will result in the lowest practicable increase in the charges payable for the Use of Distribution System services having regard to the other options available. 17.4 Unless the User serves a counter-notice within 28 days of receipt of such proposal, such proposed amendment to the Agreement shall take effect upon the expiry of such 28 day period. Where the User serves a counter-notice, both parties shall negotiate in good faith the terms of any such variation, but if a variation to the Agreement has not been agreed and put into effect within 28 days after it has been proposed by the Company, either party shall be entitled to refer the matter to the Director pursuant to Condition 8D of the PES Licence. 17.5 For the avoidance of doubt, nothing in this Agreement shall oblige either party to act at any time in a manner contrary to any existing, new or changed Relevant Instrument. 38 17.6 Without prejudice to Clause 17.2 and 17.3, either party shall at any time be entitled to propose amendments to this Agreement by notice in writing to the other party. The parties shall negotiate in good faith the terms of any such variation, but if a variation to this Agreement has not been agreed and put into effect within 28 days after it has been proposed, either party shall be entitled to refer the matter to the Director, pursuant to Condition 8D of the PES Licence. 17.7 The parties shall give effect to any determination made by the Director pursuant to Condition 8D of the PES Licence in relation to this Agreement. If the Director determines that amendments to the Agreement are required, the Company shall make such amendments as have been specified by him. 17.8 Except where this Agreement provides to the contrary, no amendment to this Agreement shall be effectiv unless in writing signed by both parties. 18. TERMINATION 18.1 The User may terminate this Agreement by giving the Company 3 months' notice in writing (or such lesser period as may be agreed between the parties). 18.2 The Company may terminate this Agreement by giving the User 3 months' notice in writing (or such lesser period as may be agreed between the parties) save that the Company shall not be entitled to terminate pursuant to this Clause 18.2 for so long as it is required to offer terms for Use of Distribution System to the User pursuant to the PES Licence. 18.3 The Company may terminate this Agreement with immediate effect by notice to the User on or at any time if the User shall fail to pay (other than by inadvertent error in funds transmission which is discovered by the Company, notified to the User and corrected within two Working Days thereafter) any amount properly due or owing from it pursuant to the terms of this Agreement and such default is unremedied at the expiry of the period of 7 Working Days immediately following receipt by the User of written notice from the Company of such non-payment. 18.4 A party (the "Initiating Party") may terminate this Agreement with immediate effect by notice to the other party (the "Breaching Party") on or at any time after the occurrence of any of the following events: 18.4.1 the Breaching Party being in material breach of any of the material terms or conditions of this Agreement and, if the breach is or was capable of remedy, having failed to remedy the breach within 30 days of receipt of a notice from the Initiating Party giving full details of the breach, requiring the Breaching Party to remedy the breach and stating that a failure to remedy the breach may give rise to termination under this Clause 18.4.1; 18.4.2 the Breaching Party passing a resolution for its winding-up, or a court of competent jurisdiction making an order for the winding-up or dissolution of the Breaching Party; 39 18.4.3 the making of an administration order in relation to the Breaching Party or the appointment of a receiver or an administrative receiver over, or an encumbrancer taking possession of or selling, the whole or any substantial part or parts of the Breaching Party's assets, rights, or revenues; 18.4.4 the Breaching Party making an arrangement or composition with its creditors generally or making an application to a court for protection from its creditors generally; 18.4.5 the Breaching Party being unable to pay its debts within the meaning of Section 123 of the Insolvency Act 1986, but as if in that Section the sum of (pound)10,000 was substituted for the sum of (pound)750; 18.4.6 without prejudice to Clause 19 a circumstance of Force Majeure which affects the performance by the Breaching Party of substantially all of its obligations under this Agreement continuing for more than 180 days; 18.4.7 the Breaching Party ceasing to carry on its business comprising (in the case of the User) the supply of electricity or (in the case of the Company) the distribution of electricity, unless: (A) such cessation is intended to be and is temporary and is caused by a circumstance of Force Majeure; or (B) (for the avoidance of doubt) such cessation involves solely the assignment of rights and/or the sub-contracting or delegation of obligations in accordance with the provisions of Clause 26; or 18.4.8 any of the conditions precedent set out in Clause 2.1 ceasing to be satisfied in relation to the Breaching Party and, if the situation is or was capable of remedy, the Breaching Party having failed to remedy the situation within 30 days of receipt of a notice from the Initiating Party giving full details of the condition(s) precedent that has ceased to be fulfilled, requiring the Breaching Party to remedy the situation and stating that a failure to remedy the situation may give rise to termination under this Clause 18.4.8. 18.5Except where expressly stated to the contrary, the rights and obligations of the parties under this Agreement shall cease immediately upon termination of this Agreement. However, termination shall not affect any rights and obligations which have accrued on or before the date of termination. 18.6 Clauses 1, 3.3, 6.5, 6.7, 7-10 (inclusive), 18, 20-22 (inclusive) and 24-26 (inclusive) shall survive the termination, for whatever reason, of this Agreement. 18.7 Upon termination of this Agreement the User shall pay to the Company the termination fee set out in Schedule 4 (if any) and where this Agreement is terminated by the Company under Clause 18.3 or 18.4, any reasonable costs incurred by the Company as a result of termination. 40 19. FORCE MAJEURE 19.1 If either party (the "Affected Party") shall be unable to carry out any of its obligations under this Agreement due to any circumstance of Force Majeure this Agreement shall remain in effect but save as otherwise provided in this Agreement both parties' obligations shall be suspended without liability for the period during which the circumstance of Force Majeure prevails provided that: 19.1.1 the Affected Party gives the other party prompt notice describing the circumstance of Force Majeure, including the nature of the occurrence and its expected duration and, where reasonably practicable, continues to furnish regular reports with respect thereto during the period of Force Majeure; 19.1.2 the suspension of performance is of no greater scope and of no longer duration than is required by the circumstance of Force Majeure; 19.1.3 no obligations of either party that arose before the circumstance of Force Majeure causing the suspension of performance are excused as a result of the Force Majeure; 19.1.4 the Affected Party uses all reasonable efforts to mitigate the impact of the circumstances of Force Majeure and to remedy its inability to perform as quickly as possible; and 19.1.5 immediately after the end of the circumstances of Force Majeure the Affected Party notifies the other party in writing of the same and each party resumes performance of its obligations under this Agreement. 20. CONFIDENTIALITY RESTRICTIONS ON THE COMPANY 20.1In this Clause 20 "Confidential Information" means any information which the Company or any Affiliate or Related Undertaking of the Company either: 20.1.1 receives from the User property under this Agreement; or 20.1.2 holds in respect of a Customer supplied by the User which information it has previously acquired in its capacity as the operator of the Distribution Business; or 20.1.3 receives from any Customer, which, if received from the User, would fall within Clause 20.1.1; or 20.1.4 received from the Supplier in error, but which would usually be considered to be confidential, and the provisions of this Clause 20 shall apply to such Confidential Information, save where the User notifies or otherwise gives prior written agreement to the Company that such Confidential Information need not be treated as confidential. 20.2 Where the Company or any Affiliate or Related Undertaking of the Company receives or acquires Confidential Information the Company shall (and shall procure that such Affiliate or Related Undertaking shall): 41 20.2.1 not use the Confidential Information for any purpose other than as required or expressly permitted under this Agreement or any other agreement entered into between the Company and the User for the provision of services by the Distribution Business of the Company; 20.2.2 without prejudice to Clause 20.2.1, not use the Confidential Information in a manner which may obtain for the Company or any Affiliate or Related Undertaking of the Company (as the case may be) any commercial advantage in the operation of the Supply Business or of the Second Tier Supply Business except, in relation to the information falling within Clause 20.1.2 where the Company supplied electricity to the relevant Customer at the time the information was acquired by the Company; 20.2.3 not authorise access to nor disclose any Confidential Information other than: (A) to such of the employees of the Company or any Affiliate or Related Undertaking of the Company as require to be informed thereof for the effective performance of the Company's obligations under this Agreement or any other agreement entered into between the Company and the User for the provision of services by the Distribution Business of the Company or for the effective operation of the Distribution Business; (B) to such agents, consultants, professional or other advisors and contractors as require to be informed thereof or to provide advice which is in connection with the operation of the Distribution Business; (C) to the Director; or (D) information which the Company or any Affiliate or Related Undertaking of the Company (as the case may be) is required or permitted to make disclosure of: (1) in compliance with the duties of the Company or any Affiliate or Related Undertaking of the Company (as the case may be) under the Act or any other requirement of a Competent Authority; (2) in compliance with the provisions of any Relevant Instruments; (3) in compliance with any other requirement of law; (4) in response to a requirement of any Stock Exchange or the Panel on Takeovers and Mergers or any other regulatory authority (whether or not similar to those bodies); or (5) pursuant to the arbitration rules of the Electricity Arbitration Association or pursuant to any judicial or other arbitral process or tribunal of competent jurisdiction; (E) in the case of information falling within Clause 20.1.2 to the person who supplied electricity to the relevant Customer at the time such information was acquired by the Company; and 42 20.2.4 take all reasonable steps to ensure that any such person as is referred to in sub-Clauses 20.2.3(A), (B) and (C) above to whom the Company or any Affiliate or Related Undertaking of the Company (as the case may be) discloses Confidential Information does not use that Confidential Information for any purpose other than that for which it was provided and does not disclose that Confidential Information otherwise than in accordance with the provisions of this Clause 20. 20.3 The Company warrants that it has effected, and undertakes that it will during the term of this Agreement effect and maintain, all such registrations as it is required to effect and maintain under the Data Protection Act to enable it lawfully to perform the obligations imposed on it by this Agreement. The Company undertakes to comply with the Data Protection Act in the performance of this Agreement. 20.4 The User agrees that where the Company uses or discloses Confidential Information in accordance with this Clause 20 such Confidential Information need not be treated as confidential for the purposes of Condition 12 of the PES Licence to the extent of such use or disclosure. 20.5 The Company undertakes that, in any case where information to be disclosed by it under this Agreement may lawfully be disclosed only with the prior consent of the person to whom the information relates, it will use its reasonable endeavours to obtain such prior consent so as to enable it, or the User as the case may be, promptly to perform its obligations under this Agreement, provided that where the consent of the Customer is required to be obtained for the purposes of this Agreement, the User (and not the Company) shall have the obligation to obtain such consent under Clause 21.6. 21. CONFIDENTIALITY RESTRICTIONS ON THE USER 21.1 In this Clause 21 "Confidential Information" means: 21.1.1 any information (whether in writing, in disc or electronic form or otherwise) which has been properly disclosed by the Company under this Agreement but which would usually be considered to be confidential; and 21.1.2 any information which is marked as confidential or which is provided together with a covering letter or fax indicating its confidential nature, and to the extent that any Affiliate or Related Undertaking of the User is in possession of Confidential Information the User shall procure that such Affiliate or Related Undertaking observes the restrictions in sub-Clauses 21.2 to 21.4 inclusive as if in each sub-clause there was substituted for the User the name of the Affiliate or Related Undertaking. 21.2 The User hereby undertakes to the Company that it will preserve the confidentiality of, and not directly or indirectly reveal, report, publish, disclose or transfer or use for its own purposes, Confidential Information except: 21.2.1 in the circumstances set out in Clause 21.3; 43 21.2.2 to the extent otherwise required or expressly permitted by this Agreement or any other agreement entered into between the Company and the User for the provision of services by the Distribution Business of the Company; or 21.2.3 with the prior consent in writing of the Company. The circumstances set out in this Clause 21.3 are: 21.3.1 where the Confidential Information, before it is furnished to the User, is in the public domain; 21.3.2 where the Confidential Information: (A) is acquired by the User in circumstances in which this Clause 21 does not apply; (B) is acquired by the User in circumstances in which this Clause 21 does apply and thereafter ceases to be subject to the restrictions imposed by this Clause 21; or (C) (after it is furnished to the User) enters the public domain; otherwise (in any such case) than as a result of (i) a breach by the User of its obligations in this Clause 21 or (ii) a breach by the person who disclosed that Confidential Information of that person's confidentiality obligation and the User is aware of such breach; 21.3.3 if the User is required or permitted to make disclosure of the Confidential Information to any person: (A) in compliance with the duties of the User under the Act or any other requirement of a Competent Authority; (B) in compliance with the provisions of any Relevant Instrument; (C) in compliance with any other law or regulation; (D) in response to a requirement of any Stock Exchange or the Panel on Takeovers and Mergers or any other regulatory authority (whether or not similar to those bodies); or (E) pursuant to the rules of the Electricity Arbitration Association or pursuant to any judicial or arbitral process or tribunal of competent jurisdiction; 21.3.4 to any Affiliate or Related Undertaking of the User, to the employees, directors, agents, consultants and professional advisers of the User or any Affiliate or Related Undertaking of the User, and to any Relevant Exempt Supplier in each case on the basis set out in Clause 21.4; or 21.3.5 to the extent the Confidential Information is required to be disclosed by the User for the purposes of providing billing information to Customers. 21.4 The User shall take all reasonable steps to ensure that any such person as is referred to in Clause 21.3.4 to whom the User discloses confidential information does not use that confidential information for any purpose other than that for which it is provided and does not disclose that confidential information otherwise than in accordance with this Clause 21. 44 21.5 The User warrants that it has effected, and undertakes that it will during the term of this Agreement effect and maintain, all such registrations as it is required to effect and maintain under the Data Protection Act to enable it lawfully to perform the obligations imposed on it by this Agreement. The User undertakes to comply with the Data Protection Act in the performance of this Agreement. 21.6 The User undertakes that, in any case where information to be disclosed under this Agreement may lawfully be disclosed only with the prior consent of the person to whom the information relates, it will use its reasonable endeavours to obtain (where appropriate, through its Supply Contracts) such prior consent so as to enable it, or the Company as the case may be, promptly to perform its obligations under this Agreement. 22. DISPUTES 22.1Save where expressly stated in this Agreement to the contrary, and subject to any contrary provisions of the Act, any licence issued pursuant to the Act or the Regulations (or any other regulations made under Section 29 of the Act), or the rights, powers, duties and obligations of the Director or the Secretary of State under the Act, any such licence or otherwise howsoever, any dispute or difference of whatever nature howsoever arising under out of or in connection with this Agreement between the parties shall be and is hereby referred to arbitration pursuant to the arbitration rules of the Electricity Arbitration Association in force from time to time. 22.2 Whatever the nationality, residence, or domicile of either party and wherever the dispute or difference or any part thereof arose, the law of England shall be the proper law of any reference to arbitration hereunder and in particular (but not so as to derogate from the generality of the foregoing) the seat of any such arbitration shall be England or Wales and the provisions of the Arbitration Act 1996 shall apply to any such arbitration wherever the same or any part of it shall be conducted. 22.3 Subject always to Clause 22.5, if any consumer of electricity (the "consumer") brings any legal proceedings in any court against any party (the "defendant party") and the defendant party wishes to make a third party claim (as defined in Clause 22.4) against the other party which would but for this Clause 22.3 have been a dispute or difference referred to arbitration by virtue of Clause 22.1 then, notwithstanding the provisions of Clause 22.1 which shall not apply and in lieu of arbitration the court in which the legal proceedings have been commenced shall hear and completely determine and adjudicate upon the legal proceedings and the third party claim not only between the consumer and the defendant party but also between either or both of them and the other party whether by way of third party proceedings or otherwise as may be ordered by the court. 22.4 For the purpose of this Clause 22 "third party claim" shall mean: 22.4.1 any claim by a defendant party against the other party (whether or not already a party to the legal proceedings) for any contribution or indemnity; or 45 22.4.2 any claim by a defendant party against the other party for any relief or remedy relating to or connected with the subject matter of the legal proceedings and substantially the same as some relief or remedy claimed by the consumer; or 22.4.3 any requirement by a defendant party that any question or issue relating to or connected with the subject matter of the legal proceedings should be determined not only as between the consumer and the defendant party but also as between either or both of them and the other party (whether or not already a party to the legal proceedings). 22.5 Clause 22.3 shall apply only if at the time the legal proceedings are commenced no arbitration has been commenced between the defendant party and the other party raising or involving the same or substantially the same issues as would be raised by or involved in the third party claim. The tribunal in any arbitration which has been commenced prior to the commencement of legal proceedings shall determine the question, in the event of dispute, whether the issues raised or involved are the same or substantially the same. 23. RESTRICTIVE TRADE PRACTICES ACT 23.1 To the extent that any provision of this Agreement or of any arrangement of which it forms part constitutes a restriction or information provision within the meaning of the Restrictive Trade Practices Act 1976 (the "RTPA") so as to render this Agreement or arrangement (as the case may be) registrable under the RTPA, no such restriction or information provision shall take effect until the earlier of: 23.1.1 the day after particulars of this Agreement or that arrangement have been furnished to the Director General of Fair Trading in accordance with the RTPA; or 23.1.2 the day after the Secretary of State for Trade and Industry has granted an exemption pursuant to Section 100 of the Act in respect of this Agreement or that arrangement. MISCELLANEOUS 24.1 Entire Agreement 24.1.1 This Agreement and any document referred to herein represents the entire understanding, and constitutes the whole agreement, in relation to its subject matter and supersedes any previous agreement between the parties with respect thereto and without prejudice to the generality of the foregoing excludes any warranty, condition or other undertaking implied at law or by custom. 24.1.2 Each party confirms that, except as provided in this Agreement and without prejudice to any liability for fraudulent misrepresentation, no party has relied on any representation, warranty or undertaking which is not contained in this Agreement or any document referred to herein. 24.2 Severability If any provision of this Agreement shall be held to be invalid or unenforceable by a judgement or decision of any court of competent 46 jurisdiction or any authority (including the Director) whose decisions shall be binding on the parties, the same shall be deemed severable and the remainder of this Agreement shall remain valid and enforceable to the fullest extent permitted by law. In any such case, the parties will negotiate in good faith with a view to agreeing one or more provisions which may be substituted for such invalid or unenforceable provision in order to give effect, so far as practicable, to the spirit of this Agreement. 24.3 Waivers The failure by any party to exercise, or the delay by any party in exercising any right, power, privilege or remedy provided under this Agreement or the Distribution Code or by law shall not constitute a waiver thereof nor any other right, power, privilege or remedy. No single or partial exercise of any such right, power, privilege or remedy shall preclude any future exercise thereof or the exercise of any other right, power, privilege or remedy. 24.4 Data Transfer 24.4.1 Any notice, request or other communication shall be sent by the means (if any) indicated in Schedule 10 and shall have the content (if any) indicated in Schedule 10 and where Schedule 10 specifies a Data Transfer Catalogue reference number in relation to any notice, request or other communication, such notice, request or communication shall be sent in the format and with the content described under such reference in the Data Transfer Catalogue, as amended from time to time. 24.4.2 Where this Agreement requires any notice, request or other communication to be sent via the Data Transfer Network, the relevant message shall be addressed to the appropriate Market Domain I.D. as follows: (A) if to the Company, [insert appropriate M.D.I.D]; (B) if to the User, [insert appropriate M.D.I.D]. 24.4.3 Where this Agreement requires any notice, request or other communication to be sent via the Data Transfer Network, the party sending the relevant message shall be responsible for ensuring that it reaches the relevant Gateway within any time period laid down in this Agreement for the provision of such notice, request or communication (and any such message shall be deemed received by the recipient at the point in time it is delivered to such Gateway). Provided that the party sending a message shall have no obligation to ensure receipt where the intended recipient has failed, contrary to the Data Transfer Service Agreement, to remove or process all messages delivered to its Gateway and to ensure that such messages are made available to its internal systems as expeditiously as possible so that the Gateway is able to continue to process incoming and outgoing messages. 24.4.4 If the Data Transfer Network or any relevant part of such network is at any time for any reason unavailable for the sending of messages between the parties, then during the period of unavailability: 47 (A) the parties shall use any means reasonable in the circumstances to send any notice, request or other communication that this Agreement would otherwise require to be sent via the Data Transfer Network; (B) where other means are used in accordance with Clause 24.4.4(A), the parties shall be relieved from any service levels set out in this Agreement relating to any affected notice, request or other communication (except to the extent that this Agreement expressly provides for alternative service levels in such circumstances) but shall use their reasonable endeavours to send such notice, request or other communication as soon as reasonably practicable; and (C) to the extent that no such other means are practicable given the nature of the communication and the surrounding circumstances, such unavailability of the Data Transfer Network shall be deemed (to the extent not caused by a breach by either party of the Data Transfer Service Agreement) to constitute a circumstance of Force Majeure for the purposes of this Agreement. 24.4.5 Where either party, in breach of its obligations under Clause 24.4.3, fails to deliver any notice, request or other communication to the recipient's Gateway and such failure occurs for reasons outside that party's direct control, the breaching party shall have no liability to the other under this Agreement in respect of that breach and the parties shall rely instead upon the provisions of the Data Transfer Service Agreement. 24.5 Notices 24.5.1 Save as provided in Clause 13.4, Clause 24.4 and Schedule 11, any notice, request or other communication to be made by one party to the other under or in connection with this Agreement shall be in writing and shall be delivered personally or sent by first class post, courier or fax to that other party (marked for the attention of Distribution Support Services Manager as follows: (A) if to the Company, to: Address: 800 Park Avenue, Aztec West, Almondsbury, Bristol, BS32 4SE Fax: 01454 452282 (B) if to the User, to: Address: Fax: or to any such other persons, addresses or fax numbers as may from time to time be notified by one party to the other. 24.5.2 Unless otherwise stated in this Agreement, a notice, request or other communication sent in accordance with Clauses 13.4, 24.5.1 and paragraph 11.1 of Schedule 11 shall be deemed received: 48 (A) if delivered personally when left at the address referred to above; (B) if sent by post 3 Working Days after the date of posting; and (C) if sent by fax, upon production by the sender's equipment of a transmission report indicating that the fax was sent to the fax number of the recipient in full without error. 24.6 Millennium Compliance NOTE: This issue is outstanding. 25. GOVERNING LAW 25.1 This Agreement is governed by, and shall be construed in accordance with English law. 25.2 Each party agrees that without preventing any other mode of service, any document in an action (including any writ of summons or other originating process or any third or other party notice) may be served on any party by being delivered to or left for that party at its address for service of notices under Clause 24.5 and each party undertakes to maintain such an address at all times in the United Kingdom and to notify the other party in advance of any change from time to time of the details of such address in the manner prescribed in Clause 24.5. 26. ASSIGNMENT AND SUB-CONTRACTING 26.1 Neither party shall assign any of its rights under this Agreement without the prior written consent of the other party, such consent not to be unreasonably withheld. 26.2 Either party may sub-contract or delegate the performance of all or any of its obligations under this Agreement including activities envisaged by the Distribution Code to any appropriately qualified and experienced third party, but shall at all times remain liable to the other party in relation to all sub-contracted or delegated obligations. 27. COUNTERPARTS This Agreement may be executed in any number of counterparts each of which when executed and delivered shall be an original, but all the counterparts together shall constitute the same document. IN WITNESS WHEREOF this Agreement has been executed the day and year first above written. 49 SCHEDULE 1 Cover 1.1 Provision of Cover The User shall provide Cover from time to time in accordance with the following provisions: 1.1.1 the User shall not later than the date of this Agreement or 13 days before Controlled Market Start-up in the Authorised Area (whichever is later) deliver to the Company evidence reasonably satisfactory to it that: (i) it presently holds an Approved Credit Rating; or (ii) it has provided and is not in default under the Cover obligations referred to in paragraph 1.1.2 below; 1.1.2 If the User does not hold or ceases to hold an Approved Credit Rating it shall, not later than the later of the date of this Agreement or 13 days before Controlled Market Start-up in the Authorised Area, or the date upon which it ceases to have an Approved Credit Rating: (A) deliver to the Company a Qualifying Guarantee in a form agreed between the parties in such amount as shall be notified by the Company to the User in accordance with paragraph 2; or (B) deliver to the Company a Letter of Credit (available for an initial period of not less than 6 months) in such amount as shall be notified by the Company to the User in accordance with paragraph 2; and/or (C) place such amounts in the Escrow Account as shall be notified by the Company in accordance with paragraph 2. 1.2 Maintenance of Cover Where the User is required to provide Cover in accordance with the terms of paragraph 1.1, it shall at all times thereafter maintain an Amount equal to or more than the Cover applicable to it. Immediately upon any reduction occurring in the Amount provided by the User or any Letter of Credit or Qualifying Guarantee being for any reason drawn down or demanded respectively, the User will procure that new Letter of Credit or Qualifying Guarantees are issued or cash is placed in the Escrow Account in an amount required to restore the Amount to an amount at least equal to the Cover applicable to the User, and in such proportions of Letters of Credit, Qualifying Guarantees and/or cash as the User may determine. Not later than 10 Working Days before any outstanding Letter of Credit and/or Qualifying Guarantee is due to expire, the User shall procure to the satisfaction of the Company that its required Amount will be available for a further period of not less than 6 months which may be done in one of the following ways: 50 1.2.1 subject to the issuing bank continuing to have the credit rating set out in the definition of Letter of Credit, provide the Company with confirmation from the issuing bank that the validity of the Letter of Credit has been extended for a period of not less than 6 months on the same terms and otherwise for such amount as is required by this Schedule 1; or 1.2.2 provide the Company with a new Letter of Credit issued by an issuing bank with an Approved Credit Rating for an amount at least equal to the required Amount applicable to it (less its balance on the Escrow Account) which Letter of Credit shall be available for a period of not less than 6 months; or 1.2.3 subject to the entity issuing the Qualifying Guarantee continuing to have an Approved Credit Rating provide the Company with confirmation from the issuing entity that the validity of the Qualifying Guarantee has been extended for a period of not less than 6 months on the same terms and otherwise for such amount as is required by this Schedule 1; or 1.2.4 provide the Company with a new Qualifying Guarantee for an amount at least equal to the required Amount applicable to it (less its balance on the Escrow Account) which Qualifying Guarantee shall be available for a period of not less than 6 months; or 1.2.5 place such amount in the Escrow Account of an amount as shall ensure that the credit balance applicable to the User and placed in the Escrow Account shall be at least equal to the required Amount. 1.3 Failure to supply or maintain Cover If the User fails at any time to provide or maintain Cover to the satisfaction of the Company in accordance with the provisions of this Schedule 1, the Company may at any time while such default continues, and if at such time any Letter of Credit and/or Qualifying Guarantee forming part of the Cover is due to expire within nine Working Days immediately, and without notice to the User, demand payment of the entire amount of any outstanding Letter of Credit and/or Qualifying Guarantee and shall place the proceeds of the Letter of Credit and/or Qualifying Guarantee to the Escrow Account. 1.4 Substitute Letter of Credit or Qualifying Guarantee 1.4.1 If the bank issuing the User's Letter of Credit ceases to have the credit rating set out in the definition of Letter of Credit such User shall forthwith procure the issue of a substitute Letter of Credit by a bank that has such a credit rating or a Qualifying Guarantee or place cash in the Escrow Account. 1.4.2 If the entity providing the User's Qualifying Guarantee ceases to have an Approved Credit Rating the User shall forthwith procure a replacement Qualifying Guarantee from an entity with such a credit rating or a Letter of Credit or place cash in the Escrow Account. 51 2. Credit Monitoring 2.1 Determination of Cover The amount of Cover which the User shall be required to maintain shall be determined from time to time by the Company in accordance with this Schedule 1 on the basis of the criteria set out in paragraph 2.2, and shall be notified to the User. 2.2 Criteria for the provision of Cover If paragraph 1.1.2 applies, the amount of Cover required to be provided by the User is the greater of an amount to be reasonably assessed by the Company as the aggregate amount reasonably anticipated by the Company as being payable by the User in respect of Use of System Charges referred to in this Agreement over a 60 day period and (pound)1,000. 2.3 Six Monthly Variation In respect of paragraph 2.2, the Company shall calculate the amount for the two six month periods commencing 1st April and 1st October in each year and shall advise the User accordingly. 2.4 Increase or Decrease of Cover If, after considering any representation which may be made by the User, the Company reasonably determines that the User's Cover should be increased or decreased, it shall so notify the User. If the Company so determines that such Cover should be decreased and the User consents then that reduction shall take place. The Company shall consent to an appropriate reduction in the available amount of any outstanding Qualifying Guarantee or Letter of Credit and/or shall subject to paragraph 5.1 permit such part of the deposit held in the Escrow Account to be released to the User as is sufficient to reduce the User's Amount to the level of Cover applicable to it. If the Company so determines that the User's Cover should be increased, the User shall, within five Working Days of notice as aforesaid, procure an additional or replacement Qualifying Guarantee or Letter of Credit or place cash in the Escrow Account in an amount sufficient to increase its Amount so as to be at least equal to the new level of Cover applicable to it. 2.5 Notification in respect of Cover The Company shall notify the User promptly if: 2.5.1 the User fails to provide, maintain, extend or renew a Qualifying Guarantee or a Letter of Credit which it is required to provide, maintain, extend or renew pursuant to paragraphs 1 or 2; or 2.5.2 the Company shall make a demand under any such Qualifying Guarantee or a call under a Letter of Credit; or 2.5.3 the Company becomes aware that the User (a) shall cease to have an Approved Credit Rating, or (b) shall be placed on credit watch by the relevant credit rating agency (or becomes subject to an equivalent procedure) which in any case casts doubt on the User's retaining an Approved Credit Rating; or 52 2.5.4 the Company becomes aware that any bank that has issued a Letter of Credit which has not expired shall cease to have the credit rating required by this Schedule 1; or 2.5.5 the Company becomes aware that any entity providing a Qualifying Guarantee which has not expired shall cease to have an Approved Credit Rating. Provided always that the failure by the Company to notify the User pursuant to this paragraph 2.5 shall not relieve the User of its obligations under and in accordance with the terms of this Schedule 1. 2.6 Release from Cover Obligations Upon the termination of this Agreement and provided that all amounts owed by the User in respect of the Use of System Charges and any other amount owed by the User under the Agreement have been duly and finally paid including interest, the User shall be released from the obligation to maintain Cover and the Company shall consent to the revocation of any outstanding Qualifying Guarantee or Letter of Credit and the User shall be entitled to withdraw the balance (including interest credited thereto) standing to the credit of the User on the Escrow Account at that date. 3. Payment Default If, by 12:30 hours on any Payment Date the Company has been notified by the User or it otherwise has reason to believe that the User will not have remitted to it by close of banking business on the Payment Date all or any part ("the amount in default") of any amount which has been notified by the Company to the User as being payable by the User by way of the Use of System Charges on the relevant Payment Date or any other amounts owing under this Agreement except for the disputed amount of a Designated Dispute (as defined in Schedule 6), then the Company shall be entitled to act in accordance with the following provisions (or whichever of them shall apply) in the order in which they appear until the Company is satisfied that the User has discharged its obligations in respect of the Use of System Charges or such other amounts under this Agreement which are payable in respect of the relevant account: (a) the Company, to the extent that the User is entitled to receive payment from the Company pursuant to this Agreement (unless it reasonably believes that such set-off shall be unlawful), shall be entitled to set off the amount of such entitlement against the amount in default; (b) the amount of funds then standing to the credit of the Escrow Account to the extent that it represents Cover provided by the User in accordance with paragraph 1.2.2 shall be released to the Company and set-off against the amounts unpaid by the User and for that purpose the Company shall be entitled to place such funds in any account of the Company at its sole discretion and shall notify the User accordingly; (c) the Company may demand payment under any outstanding Letter of Credit supplied by the User in a sum not exceeding the amount of the Cover; 53 (d) the Company may demand payment under any outstanding Qualifying Guarantee provided for the benefit of the User pursuant to paragraph 1.2.3. 4. Utilisation of Funds In addition to the provisions of paragraph 3 above, if the Company serves a notice of termination under the terms of Clause 18 of the Agreement then the Company shall be entitled to demand payment of any of the Use of System Charges and any other amounts owing by the User under the Agreement which are outstanding whether or not the Payment Date in respect of them shall have passed and: (i) to make demand under any outstanding Qualifying Guarantee or a call under any outstanding Letter of Credit supplied by the User; and (ii) the funds in the Escrow Account to the extent that they represent Cover provided by the User shall be released to the Company and set-off against the Use of System Charges and any other amount owing by the User under the Agreement unpaid by the User and for that purpose the Company shall be entitled to place any such amount released to it from the Escrow Account to any account of the Company as it shall in its sole discretion think fit. 5. User's Right to Withdraw Funds 5.1 If the User is not in default in respect of any amount owed to the Company in respect of the Use of System Charges or any other amount owing by the User under the Agreement, the Company shall permit the release to such User within a reasonable time after such User's written request therefor any amount of cash provided by the User by way of Cover which exceeds the amount which such User is required to provide in accordance with paragraph 1 of this Schedule 1. 5.2 Interest (at a rate to be agreed by the User with the Bank) on the amount deposited in the Escrow Account shall accrue for the benefit of the User and be compounded quarterly. 6. No Security For the avoidance of doubt, nothing in this Schedule 1 will be effective to create a charge or other security interest. 7. Disputes The parties shall attempt to resolve in good faith any dispute in relation to this Schedule 1. Where the dispute remains unresolved after 14 days either party may refer the dispute to the Director for determination. Any determination by the Director shall be final and binding 8. Definitions In this Schedule 1, except where the context otherwise requires, the following expressions shall have the meanings set opposite them: "Amount" means the aggregate of available amounts of each outstanding Letter of Credit and Qualifying Guarantee plus 54 the principal amount (if any) of cash that the User has placed in the Escrow Account (and which has not be repaid to the User or withdrawn by the Company in accordance with this Schedule 1); for the purpose of this definition, in relation to a Letter of Credit "available amount" means the face amount thereof less (i) payments already made thereunder and (ii) claims made thereunder but not yet paid. "Approved Credit Rating" means a short-term debt rating of not less than the rating set out in Part [ ] of the Settlement Agreement as amended from time to time. Cover" means the aggregate amount for the time being which the User shall be required by the Company to provide and maintain in accordance with this Schedule 1. "Escrow Account" a separately designated bank account in the name of the User at such branch of Barclays Bank PLC or such branch of any other bank, in the City of Bristol as the Company shall specify (the "Bank") (on terms to be approved by the Company and which provide, inter alia, that the funds held in the Escrow Account may be released by the Bank to the Company in the circumstances envisaged in paragraphs 3 and 4 of this Schedule 1 with the right to direct payments from the Escrow Account in favour only of the Company until the events specified in paragraph 2.6 have occurred) to which all deposits required to be made by the User pursuant to Schedule 1 of this Agreement shall be placed provided that such proceeds are not to be withdrawn by the User save in accordance with the terms of this Schedule 1. "Letter of Credit" means an unconditional irrevocable standby letter of credit in such other form as the Company may reasonably approve issued for the account of the User in sterling in favour of the Company, allowing for partial drawings and providing for the payment to the Company forthwith on demand by any United Kingdom clearing bank or any other bank which in each case has a long term debt rating of not less than single "A" by Standard and Poor's Corporation or by Moody's Investors Services, or such other bank as the Company may approve and which shall be available for payment at a branch of the issuing bank. 55 "Payment Date" means the date for payment of any Initial Account, Reconciliation Account or other account submitted to the User pursuant to this Agreement. "Qualifying Guarantee" means a guarantee in favour of the Company and in such form as may be agreed between the Company and the User and which is provided by an entity which holds an Approved Credit Rating. 56 SCHEDULE 2 Mandatory Term for Supply Contract I agree that, by entering into this contract with my supplier, I am also entering into a Standard Connection Agreement (the terms of which my supplier has made known to me) with my local network operator. 57 SCHEDULE 3 Use of System Charges Please see following schedule. 58 Supercustomer DUoS Charges Look-Up Table TABLE 1
- ----------------------------------------------------------------------------------------------------------------------------------- LLF Valid Profile Meter Timeswitch LAF Standard Settlement Special General DUoS Tariff 010 1 500,501,801,802 LLC 393 Domestic 10 020 1 835,587 LLC 393 Key Meter Domestic 20 020 1 49,50,560,561 LLC 243 Key Meter Domestic 20 030 2 573,580,807,808 LLC 244 Economy 7 30 030 2 31,541 LLC 176 Economy 7 30 030 2 32,542 LLC 177 Economy 7 30 030 2 33,543 LLC 178 Economy 7 30 030 2 34,544 LLC 179 Economy 7 30 030 2 35,545 LLC 180 Economy 7 30 030 2 35,546 LLC 181 Economy 7 30 030 2 37,547 LLC 182 Economy 7 30 030 2 38,548 LLC 183 Economy 7 30 030 2 39,549 LLC 184 Economy 7 30 030 2 47,584 LLC 432 Economy 7 30 030 2 40,550 LLC 185 Economy 7 30 030 2 41,551 LLC 186 Economy 7 30 040 2 42,552 LLC 244 Key Meter Economy 7 40 050 2 536 LLC 128 Domestic Seasonal 50 050 2 54,58,566,570 LLC 436 Domestic Seasonal 50 051 2 537 LLC 342 Domestic Seasonal Contr Night 51 060 2 557 LLC 334 3 Rate Heating 60 060 2 53,57,565,569 LLC 435 3 Rate Heating 60 061 2 558 LLC 343 3 Rate Heating Contr Night 61 070 2 558,576,820,821 LLC 261 Preserved White Meter 70 070 2 51,575 LLC 427 Preserved White Meter 70
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LLF Valid Profile Meter Timeswitch LAF Standard Settlemen Special General DUoS Tariff Class Class Code Type Configuration Conditions Description Code - ---------------------------------------------------------------------------------------------------------------------------------- 110 3 500,501,801,802 LLC 393 Small Non Domestic 110 120 3 835,587 LLC 393 Key Meter Small Non Dom 120 120 3 49,50,560,561 LLC 243 Key Meter Small Non Dom 120 130 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 140 3 835,587 LLC 393 Preserved Key Meter Small Non Dom. 120 140 3 49,50,560,561 LLC 243 Preserved Key Meter Small Non Dom. 120 210 4 573,580,807,808 LLC 244 Small Non Domestic E7 210 210 4 31,541 LLC 176 Small Non Domestic E7 210 210 4 32,542 LLC 177 Small Non Domestic E7 210 210 4 33,543 LLC 178 Small Non Domestic E7 210 210 4 34,544 LLC 179 Small Non Domestic E7 210 210 4 35,545 LLC 180 Small Non Domestic E7 210 210 4 36,546 LLC 181 Small Non Domestic E7 210 210 4 37,547 LLC 182 Small Non Domestic E7 210 210 4 38,548 LLC 183 Small Non Domestic E7 210 210 4 39,549 LLC 184 Small Non Domestic E7 210 210 4 47,584 LLC 432 Small Non Domestic E7 210 210 4 40,550 LLC 185 Small Non Domestic E7 210 210 4 41,551 LLC 186 Small Non Domestic E7 210 210 4 564,579,803,804 LLC 154 Small Non Domestic E7 210 220 4 42,552 LLC 244 Key Meter Small Non Dom E7 220 230 4 573,580,807,808 LLC 244 Preserved Small Non Domestic E7 210 230 4 31,541 LLC 176 Preserved Small Non Domestic E7 210 230 4 32,542 LLC 177 Preserved Small Non Domestic E7 210 230 4 33,543 LLC 178 Preserved Small Non Domestic E7 210 230 4 34,544 LLC 179 Preserved Small Non Domestic E7 210
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LLF Valid Profile Meter Timeswitch LAF Standard Settlement Special General DUoS Tariff Class Class Code Type Configuration Conditions Description Code - ---------------------------------------------------------------------------------------------------------------------------------- 230 4 35,545 LLC 180 Preserved Small Non Domestic E7 210 230 4 36,546 LLC 181 Preserved Small Non Domestic E7 210 230 4 37,547 LLC 182 Preserved Small Non Domestic E7 210 230 4 38,548 LLC 183 Preserved Small Non Domestic E7 210 230 4 39,549 LLC 184 Preserved Small Non Domestic E7 210 230 4 47,584 LLC 432 Preserved Small Non Domestic E7 210 230 4 40,550 LLC 185 Preserved Small Non Domestic E7 210 230 4 41,551 LLC 186 Preserved Small Non Domestic E7 210 230 4 564,579,803,804 LLC 154 Preserved Small Non Domestic E7 210 240 4 42,552 LLC 244 Preserved Key Meter Small Non Domestic E7 220 250 4 536 LLC 128 Non Domestic Seasonal 250 250 4 54,58,566,570 LLC 436 Non Domestic Seasonal 250 251 4 537 LLC 342 Non Domestic Seasonal Contr Nht 251 260 4 536 LLC 128 Preserved Non Domestic Seasonal 250 260 4 54,58,566,570 LLC 436 Preserved Non Domestic Seasonal 250 261 4 537 LLC 342 Preserved Non Domestic Seasonal Contr Nht 251 270 3 46,556 LLC 319 Preserved Day and Night Tariff 270 280 4 56,60,568,572 LLC 246 E7 Day & Night Tariff 280 280 4 562 LLC 344 E7 Day & Night Tariff 280 281 4 563 LLC 345 E7 D & N Tariff Contr Nght 281 310 3 500,501,801,802 LLC 393 Small Non Domestic 110 320 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 330 4 573,580,807,808 LLC 244 Small Non Domestic E7 210 330 4 31,541 LLC 176 Small Non Domestic E7 210 330 4 32,542 LLC 177 Small Non Domestic E7 210 330 4 33,543 LLC 178 Small Non Domestic E7 210
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LLF Valid Profile Meter LAF Standard Settlement Special General DUoS Tariff Class Class Timeswitch Code Type Configuration Conditions Description Cod210e 330 4 34,544 LLC 179 Small Non Domestic E7 210 330 4 35,545 LLC 180 Small Non Domestic E7 210 330 4 36,546 LLC 181 Small Non Domestic E7 210 330 4 37,547 LLC 182 Small Non Domestic E7 210 330 4 38,548 LLC 183 Small Non Domestic E7 210 330 4 39,549 LLC 184 Small Non Domestic E7 210 330 4 47,584 LLC 432 Small Non Domestic E7 210 330 4 40,550 LLC 185 Small Non Domestic E7 210 330 4 41,551 LLC 186 Small Non Domestic E7 210 330 4 564,579,803,804 LLC 154 Small Non Domestic E7 210 340 4 573,580,807,808 LLC 244 Small Non Domestic E7 210 340 4 31,541 LLC 176 Small Non Domestic E7 210 340 4 32,542 LLC 177 Small Non Domestic E7 210 340 4 33,543 LLC 178 Small Non Domestic E7 210 340 4 34,544 LLC 179 Small Non Domestic E7 210 340 4 35,545 LLC 180 Small Non Domestic E7 210 340 4 36,546 LLC 181 Small Non Domestic E7 210 340 4 37,547 LLC 182 Small Non Domestic E7 210 340 4 38,548 LLC 183 Small Non Domestic E7 210 340 4 39,549 LLC 184 Small Non Domestic E7 210 340 4 47,584 LLC 432 Small Non Domestic E7 210 340 4 40,550 LLC 185 Small Non Domestic E7 210 340 4 41,551 LLC 186 Small Non Domestic E7 210 340 4 564,579,803,804 LLC 154 Small Non Domestic E7 210 350 4 576,582,820,821 LLC 261 Preserved Small Non Domestic (8hr) 350 350 4 51,575 LLC 427 Preserved Small Non Domestic (8hr) 350 410 2 or 4 577,583,824,825 LLC 270 Preserved Off Peak Night only (8hrs) 410
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LLF Valid Profile Meter AF Standard Settlement Special General DUoS Tariff Class Class Timeswitch Code Type Configuration Conditions Description Cod210e 410 2 or 4 45,555 LLC 268 Preserved Off Peak Night only (8hrs) 410 410 2 or 4 44,554 LLC 265 Preserved Off Peak Night only (8hrs) 410 410 2 or 4 55,567 LLC 62 Preserved Off Peak Night only (8hrs) 410 415 2 or 4 577,583,824,825 LLC 270 Preserved Off Peak Night only (8hrs) 410 415 2 or 4 45,555 LLC 268 Preserved Off Peak Night only (8hrs) 410 415 2 or 4 44,554 LLC 265 Preserved Off Peak Night only (8hrs) 410 415 2 or 4 55,567 LLC 62 Preserved Off Peak Night only (8hrs) 410 420 2 or 4 21,530 LLC 73 Preserved Off Peak Bi 420 420 2 or 4 20,529 LLC 67 Preserved Off Peak Bi 420 425 2 or 4 21,530 LLC 73 Preserved Off Peak Bi 420 425 2 or 4 20,529 LLC 67 Preserved Off Peak Bi 420 430 2 or 4 574,581,818,819 LLC 251 Preserved Off Peak (7hrs) 430 430 2 or 4 573,580,807,808 LLC 447 Preserved Off Peak (7hrs) 430 430 2 or 4 43,553 LLC 252 Preserved Off Peak (7hrs) 430 430 2 or 4 48,585 LLC 148 Preserved Off Peak (7hrs) 430 430 2 or 4 52,586 LLC 312 Preserved Off Peak (7hrs) 430 435 2 or 4 574,581,818,819 LLC 251 Preserved Off Peak (7hrs) 430 435 2 or 4 43,553 LLC 252 Preserved Off Peak (7hrs) 430 435 2 or 4 48,585 LLC 148 Preserved Off Peak (7hrs) 430 435 2 or 4 52,586 LLC 312 Preserved Off Peak (7hrs) 430 435 2 or 4 74,599 LLC 447 Preserved Off Peak (7hrs) 430 435 2 or 4 63,588 LLC 448 Preserved Off Peak (7hrs) 430 435 2 or 4 64,589 LLC 449 Preserved Off Peak (7hrs) 430 435 2 or 4 65,590 LLC 450 Preserved Off Peak (7hrs) 430 435 2 or 4 66,591 LLC 451 Preserved Off Peak (7hrs) 430
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LLF Valid Profile Meter LAF Standard Settlement Special General DUoS Tariff Class Class Timeswitch Code Type Configuration Conditions Description Cod243010e --------------------------------------------------------------------------------------------------------------------------- 435 2 or 4 67,592 LLC 452 Preserved Off Peak (7 hrs) 430 435 2 or 4 68,593 LLC 453 Preserved Off Peak (7 hrs) 430 435 2 or 4 69,594 LLC 454 Preserved Off Peak (7 hrs) 430 435 2 or 4 70,595 LLC 455 Preserved Off Peak (7 hrs) 430 435 2 or 4 71,596 LLC 456 Preserved Off Peak (7 hrs) 430 435 2 or 4 72,597 LLC 459 Preserved Off Peak (7 hrs) 430 440 2 or 4 11,520 LLC 33 Preserved Off Peak A 440 440 2 or 4 12,521 LLC 34 Preserved Off Peak A 440 440 2 or 4 8,517 LLC 23 Preserved Off Peak A 440 440 2 or 4 16,525 LLC 41 Preserved Off Peak A 440 440 2 or 4 14,523 LLC 37 Preserved Off Peak A 440 440 2 or 4 13,522 LLC 36 Preserved Off Peak A 440 440 2 or 4 10,519 LLC 25 Preserved Off Peak A 440 440 2 or 4 19,528 LLC 44 Preserved Off Peak A 440 440 2 or 4 9,518 LLC 24 Preserved Off Peak A 440 440 2 or 4 5,514 LLC 20 Preserved Off Peak A 440 440 2 or 4 7,516 LLC 22 Preserved Off Peak A 440 440 2 or 4 2,511 LLC 17 Preserved Off Peak A 440 440 2 or 4 17,526 LLC 42 Preserved Off Peak A 440 440 2 or 4 3,512 LLC 18 Preserved Off Peak A 440 440 2 or 4 6,515 LLC 21 Preserved Off Peak A 440 440 2 or 4 1,510 LLC 16 Preserved Off Peak A 440 440 2 or 4 15,524 LLC 40 Preserved Off Peak A 440 440 2 or 4 18,527 LLC 43 Preserved Off Peak A 440 440 2 or 4 4,513 LLC 19 Preserved Off Peak A 440
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LLF Valid Profile Meter Timeswitch LAF Standard Settlement Special General DUoS Tariff Class Class Code Type Configuration Conditions Description Cod243010e - -------------------------------------------------------------------------------------------------------------------------------- 440 2 or 4 62,578 LLC 346 Preserved Off Peak A 440 440 1 or 3 500,501,801,802 LLC 393 Preserved Off Peak A 440 445 2 or 4 11,520 LLC 33 Preserved Off Peak A 440 445 2 or 4 12,521 LLC 34 Preserved Off Peak A 440 445 2 or 4 8,517 LLC 23 Preserved Off Peak A 440 445 2 or 4 16,525 LLC 41 Preserved Off Peak A 440 445 2 or 4 14,523 LLC 37 Preserved Off Peak A 440 445 2 or 4 13,522 LLC 36 Preserved Off Peak A 440 445 2 or 4 10,519 LLC 25 Preserved Off Peak A 440 445 2 or 4 19,528 LLC 44 Preserved Off Peak A 440 445 2 or 4 9,518 LLC 24 Preserved Off Peak A 440 445 2 or 4 5,514 LLC 20 Preserved Off Peak A 440 445 2 or 4 7,516 LLC 22 Preserved Off Peak A 440 445 2 or 4 2,511 LLC 17 Preserved Off Peak A 440 445 2 or 4 17,526 LLC 42 Preserved Off Peak A 440 445 2 or 4 3,512 LLC 18 Preserved Off Peak A 440 445 2 or 4 6,515 LLC 21 Preserved Off Peak A 440 445 2 or 4 1,510 LLC 16 Preserved Off Peak A 440 445 2 or 4 15,524 LLC 40 Preserved Off Peak A 440 445 2 or 4 18,527 LLC 43 Preserved Off Peak A 440 445 2 or 4 4,513 LLC 19 Preserved Off Peak A 440 445 2 or 4 62,578 LLC 346 Preserved Off Peak A 440 445 1 or 3 500,501,801,802 LLC 393 Preserved Off Peak A 440 450 2 or 4 25,534 LLC 108 Preserved Off Peak Bii 450 450 2 or 4 22,531 LLC 104 Preserved Off Peak Bii 450
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LLF Valid Profile Meter Timeswitch LAF Standard Settlement Special General DUoS Tariff Class Class Code Type Configuration Conditions Description Cod243010e - ---------------------------------------------------------------------------------------------------------------------------------- 450 2 or 4 24,533 LLC 107 Preserved Off Peak Bii 450 450 2 or 4 23,532 LLC 106 Preserved Off Peak Bii 450 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 450 1 or 3 23,532 LLC 393 Preserved Off Peak Bii 450 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 455 2 or 4 500,501,801,802 LLC 108 Preserved Off Peak Bii 450 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 455 2 or 4 25,534 LLC 104 Preserved Off Peak Bii 450 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 455 2 or 4 24,533 LLC 107 Preserved Off Peak Bii 450 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 455 2 or 4 23,532 LLC 106 Preserved Off Peak Bii 450 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 455 1 or 3 500,501,801,802 LLC 393 Preserved Off Peak Bii 450 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 460 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 470 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 480 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 840 2 576,582,820,821 LLC 261 Preserved White Meter 70 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 840 2 51,575 LLC 427 Preserved White Meter 70 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 850 2 573,580,807,808 LLC 244 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 850 2 31,541 LLC 176 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 850 2 32,542 LLC 177 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 850 2 33,543 LLC 178 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 850 2 34,544 LLC 179 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 850 2 35,545 LLC 180 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 850 2 36,546 LLC 181 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 850 2 37,547 LLC 182 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 850 2 38,548 LLC 183 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 850 2 39,549 LLC 184 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- 850 2 47,584 LLC 432 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- ------------------------------------- ----------------------- - ------ ------------------ ---------------------- ---------- -------------------------------------------- ------------ -- 850 2 40550 LLC 185 Preserved Economy 7 30 - ------ ------------------ ---------------------- ---------- -------------------------------------------- ------------ --
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LLF Valid Profile Meter Timeswitch Code LAF Standard Settlement Special General DUoS Tariff Class Class Type Configuration Conditions Description Cod243010e - ------ ----------------------------------------------------------------------------------------------------------------------- 850 2 41,551 LLC 186 Preserved Economy 7 30 - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- 860 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- 870 1 500,501,801,802 LLC 393 Preserved Domestic 10 - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- 890 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- 900 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- 910 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- 920 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- 930 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- - ------ ------------------ ------------------------- --------------------------------------------- ---------------------------- 950 3 500,501,801,802 LLC 393 Preserved Small Non Domestic 110 - ------ ------------------ ------------------------- --------------------------------------------- ----------------------------
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Provisional Format of Condition 8 Statement - Model Use of System Agreement Schedule 3 - Table 1 - Non- Supercustomer and hal hourlSites LLF Valid Profile Meter Timeswitch AF Standard Settlement Special General Description DUoS Tariff Class Class Code Type Configuration Condition Cod243010e - ------ ------------------ --------------------------- --------------------------------------- ------------------------------------ - ------ ------------------ --------------------------- ------------------------------- --------------------------------------------- 510 5,6,7,8 OR H/H LHV 393 Monthly Tariff HV 510 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 510 5,6,7,8 OR H/H LHV 154 Monthly Tariff HV 510 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 510 5,6,7,8 OR H/H LHV 127 Monthly Tariff HV 510 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 510 5,6,7,8 OR H/H LHV 135 Monthly Tariff HV 510 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 520 5,6,7,8 OR H/H LHV 393 Monthly Tariff HV Parallel Gen 520 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 520 5,6,7,8 OR H/H LHV 127 Monthly Tariff HV Parallel Gen 520 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 521 H/H LHV Export (HV) 521 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 530 5,6,7,8 OR H/H LHV 258 Preserved Monthly Tariff HV8HR 530 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 540 5,6,7,8 OR H/H LLV 393 Monthly Tariff S/S 540 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 540 5,6,7,8 OR H/H LLV 154 Monthly Tariff S/S 540 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 540 5,6,7,8 OR H/H LLV 127 Monthly Tariff S/S 540 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 540 5,6,7,8 OR H/H LLV 135 Monthly Tariff S/S 540 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 550 5,6,7,8 OR H/H LLV 393 Monthly Tariff S/S Parallel Gen 550 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 550 5,6,7,8 OR H/H LLV 127 Monthly Tariff S/S Parallel Gen 550 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 551 H/H LLV Export (S/S) 551 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 560 5,6,7,8 OR H/H LLV 258 Preserved Monthly Tariff S/S8HR 560 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 570 5,6,7,8 OR H/H LLC 393 Monthly Tariff LV 570 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 570 5,6,7,8 OR H/H LLC 154 Monthly Tariff LV 570 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 570 5,6,7,8 OR H/H LLC 127 Monthly Tariff LV 570 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 570 5,6,7,8 OR H/H LLC 135 Monthly Tariff LV 570 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 580 5,6,7,8 OR H/H LLC 393 Monthly Tariff LV Parallel Gen 580 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 580 5,6,7,8 OR H/H LLC 127 Monthly Tariff LV Parallel Gen 580 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 581 H/H LLC Export (LV) 581 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 590 5,6,7,8 OR H/H LLC 258 Preserved Monthly Tariff LV8HR 590 - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- - ------ ------------------ ------------------------ ------------------------------- --------------------------------------------- 600 H/H LEV Blue Circle Plymstock 600 - ------ ------------------ ------------------------ ------------------------------- ---------------------------------------------
Provisional Format of Condition 8 Statement - Model Use of System Agreement Schedule 3 - Table 1 - Non- Supercustomer and half hourly Settled Sites LLF Valid Profile Meter LAF Standard Special General DUoS Tariff Class Class Timeswitch Type Settlement Condition Description Cod243010e Code Configuration - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 601 H/H LEV Blue Circle Plymstock Export 601 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 610 H/H LE2 ICI Severnside 610 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 611 H/H LE2 ICI Severnside Export 611 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 620 H/H LE3 Britannia Zinc Avonmouth 620 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 621 H/H LE3 Britannia Zinc A-mouth Export 621 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 630 H/H LE4 Rolls Royce Filton Main 630 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 631 H/H LE4 Rolls Royce Filton Main Export 631 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 640 H/H LE4 Rolls Royce Filton TT 640 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 641 H/H LE4 Rolls Royce Filton TT Export 641 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 650 H/H LE5 Royal Ordnance Puriton 650 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 651 H/H LE5 Royal Ordnance Puriton Export 651 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 660 H/H LE6 Devonport Dockyard 660 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 661 H/H LE6 Devonport Dockyard Export 661 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 670 H/H LE7 Standard 33kV Terms 670 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 671 H/H LE7 Standard 33kV Terms Export 671 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 680 H/H LE7 Standard 33kV Terms 680 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 681 H/H LE7 Standard 33kV Terms Export 681 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 690 H/H LE8 Caberboard South Molton 690 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 691 H/H LE8 Caberboard South Molton Export 691 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 710 H/H LH2 ECC Cornwall 710 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 711 H/H LH2 ECC Cornwall Export 711 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 720 H/H LH8 BAE Filton 720 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 721 H/H LH8 BAE Filton Export 721 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 730 H/H LPB PBA Avonmouth Internal Sites 730 - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- - ------ -------------------------------------- ---------- ----------------------- ----------------------------------------------- 731 H/H LPB PBA Avonmouth Int Sites Export 731 - ------ -------------------------------------- ---------- ----------------------- -----------------------------------------------
Provisional Format of Condition 8 Statement - Model Use of System Agreement Schedule 3 - Table 1 - Non- Supercustomer and hal hourly Settled Sites LLF Valid Profile Meter Timeswitch Code LAF Standard Settlement Special General DUoS Tariff Class Class Type Configuration Condition Description Cod243010e ---------------------------------------------------------------------------------------------------------------------------------- 970 H/H LLC Unmetered - Pseudo Metered 970 980 8 502,857 LLC 428 Unmetered - Profiled 980 980 1 503,858 LLC 431 Unmetered - Profiled 980 980 1 504,859 LLC 429 Unmetered - Profiled 980 980 1 505,860 LLC 430 Unmetered - Profiled 980
Supercustomer DUoS Tariffs - Condition 8 Schedule 3 Table 2 - Apr 1998 Price Levels - -------- ------------------------------------------------------------------------------------------------------------------------- DUoS DUoS Charges Tariff Code Fixed Charges Unit Rate 1 Unit Rate 2 Unit Rate 3 Amount (p/Supply Frequency Amount Time Pattern Amount (p/k/Wh) Time Amount (p/k/Wh) Time Number) (per) (p/kWH) Regime Pattern Pattern Regime Regime 10 7.78 day 1.88 1 20 14.60 day 1.88 1 Of 0.685 day which is for the provision of PPI 20 14.60 day 1.88 21 1.88 231 Of 0.685 day which is for the provision of PPI 30 10.30 day 2.12 40 1,1124,1126,1128, 113,9, 1141, 0.43 206 1,1125,1127, 1143,1145,1147,1149, 1129,1140,1142, 13, 97,1151, 1153 1144,1146,1148, 40 17.12 day 2.12 401 0.43 2061 of 0.685 day which is for the provision of PPI 1150,1398,1152,
Supercustomer DUoS Tariffs - Condition 8 Schedule 3 Table 2 - Apr 1998 Price Levels DUoS DUoS Charges Tariff Code Fixed Charges Unit Rate 1 Unit Rate 2 Unit Rate 3 Unit Rate 3 Amount (p/Supply Frequency Amount Time Amount (p/k/Wh) Time Amount (p/k/Wh) Time Number) (per) (p/kWH) Pattern Pattern Pattern Regime Regimes Regime 50 10.74 day 3.60 1120,273 0.78 1121,274 0.43 1122,275 51 0.00 day 0.43 1123 60 10.74 day 3.08 1131,270 0.88 1132,271 0.43 1133,272 61 0.00 day 0.43 1134 70 10.30 day 2.12 55,1118 0.60 194,1119 110 10.74 day 1.97 1 120 17.56 day 1.97 1 of 0.685 day which is for the provision of ppm 120 17.56 day 1.97 21 1.97 231 of 0.685 day which is for the provisin of ppm 210 13.26 day 2.21 401 0.43 221 ,2061 1124,1126,1128,1139,1141, 1125,1127,1129 1143,1145,1147,1149,1397,1151 1140,1142,1144 1153 1146,1148,1150 1398,1152,1154
Supercustomer DUoS Tariffs - Condition 8 Schedule 3 Table 2 - Apr 1998 Price Levels DUoS DUoS Charges Tariff Code Fixed Charges Unit Rate 1 Unit Rate 2 Unit Rate 3 Unit Rate 3 Amount (p/Supply Frequency (per) Amount Time Amount (p/k/Wh) Time Pattern Amount (p/k/Wh) Time Number) (p/kWH) Regimes Pattern Pattern Regime Regime 220 20.08 day 2.21 401 0.43 206 1 of 0.685 day which is for the provision of ppm 250 14.74 day 3.75 1120,273 0.84 1121,274 0.43 1122.275 251 2.74 day 0.43 1123 270 13.26 day 2.72 183 0.50 71 280 14.74 day 2.89 276,1135 0.53 277,1136 0.43 160,1137 281 2.74 day 0.43 1138 350 13.26 day 2.21 55,1118 0.60 194 1119 410 2.74 day 0.60 196,193,190,1119 420 2.74 day 1.08 156,102 430 2.74 day 0.43 210,212,206,1125,1127,1129,1140,1142,1144,1146,1148, 1150,1398,1152,1154
Supercustomer DUoS Tariffs - Condition 8 Schedule 3 Table 2 - Apr 1998 Price Levels DUoS DUoS Charges Tariff Code Fixed Charges Unit Rate 1 Unit Rate 2 Unit Rate 3 Unit Rate 3 Amount (p/Supply Frequency Amount Time Amount Time Pattern Amount (p/k/Wh) Time Number) (per) (p/kWH) Pattern (p/k/Wh) Regimes Pattern Regime Regime 440 2.74 day 0.92 228,149,136,171,153 151,138, 185,137,129,131,125, 173,126, 130,113,157, 174,127,1130,1 450 2.74 day 1.12 68,61,67,66,1 Note Time Pattern Regimes denoted 1 are default time and tele-switch regimes used when TPR's not complying with those specified above are transmitted. Public Lighting and Unmetered Supplies DUoS Charges - April 1998 Price Levels DUoS Fixed Exit Control Unit Unit Time Tariff ((pound) Point Timeswitch Device Load Rate 1 Rate 2 Code /MPAN/yr) ((pound)/yr) ((pound)/yr) ((pound)/yr) ((pound)/kW/yr) (p/kWh) Time (p/kWh) 970 209.00 0.50 10.95 3.00 34.70 0.80 07:00-23:00 0.32 23:00-07:00 980 9.00 0.50 10.95 3.00 37.35 0.80 07:00-23:00 0.32 3:00-07:00
Site Specific DUoS Charges - April 1998 Price Levels DUoS Fixed Metering Capacity Max Rective Unit Month Time Unit Time Unit Time Unit Time Tariff Charge Charge3 Charge Demand Power Rate Pattern Rate 2 Pattern Rate 3 Pattern Rate 4 Pattern Charge ((pound) ((pound) ((pound) Nov-Feb Charge 1 Regime (p/kWh) Regime (p/kWh) Regime (p/kWh) Regime Code /site/month) /month) /kVA/month)((pound) (p/kVArh (p/kWh) /kW/month) (excess) 510 20.00 1.50 1st400 1.18 0.00 0.14 0.86 Jan 1 Excess 1.08 0.77 Dec+Feb 0.61 Nov+Mar 0.27 Other 510 20.00 11.50 1st400 1.18 0.00 0.14 1.01 Jan 39 0.15 221 Excess 1.08 0.90 Dec+Feb 0.71 Nov+Mar 0.30 Other - - 510 20.00 11.50 1st 400 1.18 0.00 0.14 1.01 148 1 0.42 80,1482 0.12 221 Excess 1.08 247 1,38 1 80,2472 221 382 520 20.00 11.50 1st 400 1.18 0.00 0.14 0.86 Jan 1 Excess 1.08 0.77 Dec+Feb 0.61 Nov+Mar 0.27 Other 520 20.00 11.50 1st 400 1.18 0.00 0.14 1.01 1481 0.42 80,1482 0.12 221 Excess 1.08 530 20.00 11.50 1st 400 1.18 0.00 0.14 1.01 Jan 56 0.16 195 Excess 1.08 0.90 Dec+Feb 0.71 Nov+Mar 0.30 Other
Site Specific DUoS Charges - April 1998 Price Levels DUoS Fixed Metering Capacity Max Rective Unit Month Time Unit Time Unit Time Unit Time Code ((pound) (pound) ((pound) Charge Charge 1 Regime p/kWh) Regime Regime (p/kWh) Regime /site/ /month) /kVA/month) ((pound) (p/kVArh (p/kWh) month) Nov-Feb (excess) ((pound) /kW/month) 540 7.00 8.30 3 1st 50 1.50 0.00 0.27 1.30 Jan 1 Excess 1.15 1.17 Dec+Feb 0.97 Nov+Mar 0.42 Other 540 7.00 8.303 1st 50 1.50 0.00 0.27 1.53 Jan 39 0.22 221 Excess 1.15 1.37 Dec+Feb 1.13 Nov+Mar 0.46 Other 540 7.00 8.303 1st 50 1.40 0.00 0.27 2.35 148 1 0.43 80,148 2 0.19 221 Excess 1.05 247 1,38 1 80,247 2 221 38 2 550 7.00 8.303 1st 50 1.50 0.00 0.27 1.30 Jan 1 Excess 1.15 1.17 Dec+Feb 0.97 Nov+Mar 0.42 Other - - 550 7.00 8.303 1st 50 1.40 0.00 0.27 2.35 148 1 0.43 80,1482 0.19 221 Excess 1.05
Site Specific DUoS Charges - April 1998 Price Levels DUoS Fixed Metering Capacity Max Rective Unit Month Time Unit Time Unit Time Unit Time Code ((pound) ((pound) ((pound) Charge (p/kVArh 1 Regime Regime (p/kWh) Regime Regime /site /month) /month) Nov-Feb (excess) (p/kWh) (p/kWh) /month) ((pound) 560 7.00 8.303 1st 50 1.50 0.00 0.27 1.53 Jan 56 0.24 195 Excess 1.15 1.37 Dec+Feb 1.13 Nov+Mar 0.46 Other 570 7.00 4.253 1st 20 1.65 0.00 0.43 1.62 Jan 1 Excess 1.30 1.46 Dec+Feb 1.22 Nov+Mar 0.57 Other 570 7.00 4.253 1st 20 1.65 0.00 0.43 1.92 Jan 39 0.25 221 Excess 1.30 1.73 Dec+Feb 1.43 Nov+Mar 0.64 Other 570 7.00 4.253 1st 20 1.50 0.00 0.43 3.20 148 1 0.47 80,148 2 0.21 221 Excess 1.15 247 1 38 1 80,247 2 221 38 2 580 7.00 4.253 1st 20 1.65 0.43 1.53 Jan 1 Excess 1.30 1.37 Dec+Feb 1.13 Nov+Mar 0.46 Other 580 7.00 4.253 1st 20 1.50 0.00 0.43 3.20 148 1 0.47 80,1482 0.21 221 Excess 1.15 Site Specific DUoS Charges - April 1998 Price Levels DUoS Fixed Metering Capacity Max Rective Unit Month Time Unit Time Unit Time Unit Time Code ((pound) ((pound) ((pound) Charge (p/kVArh 1 Regime Regime (p/kWh) Regime Regime /month) ((pound) 590 7.00 4.253 1st 20 1.65 0.00 0.43 1.92 Jan 56 0.28 195 Excess 1.30 1.73 Dec+Feb 1.43 Nov+Mar 0.64 Other 670 56.90 41.40 1st 3000 0.00 0.14 0.49 Jan 39 0.10 221 1.15 0.43 Dec+Feb Excess 1.00 0.34 Nov+Mar 0.17 Other Notes Time Pattern Regimes denoted `1' apply for price indicated in November -February only Time Pattern Regimes denoted `2' apply for price indicated in October - March only. `3' Metering charges for HV, S/S and LV sites> 100kw are (pound)11.50/month independent of voltage connection
SCHEDULE 4 Transactional Charges Part I (i)- Transaction Charges for energisation, de-energisation and re-energisation services NOTE: The way in which some of these services are provided will depend upon site specific requirements and /or supplier instructions. The charges listed here should, therefore be taken as indicative only. 1. Electricity Supply Regulation Checks If carried out at the same time as other work Nil Charge For each separate visit made to a customer's premises at Supplier request (pound)22.00 2. Energise, (Re-energise) a Connection A charge will be payable by the Supplier in respect of each site visit made to energise, (re-energise) a connection, including the statutory inspection and tests. Simple re-energisation (e.g. replace fuse) For visits made in accordance with the appointment guidelines (pound)22.00 For visits made same day or at short notice (pound)35.00 For visits made outside normal working hours:- Monday - Friday 16:30 - 22:00 Saturday 08:00 - 22:00 (pound)50.00 All other times and Bank Holidays (pound)50.00 3. Energisation, (re-energisation) Not actioned A charge will be payable by the Supplier in respect of each abortive visit made to energise, (re-energise) a connection. For visits made in accordance with the appointment guidelines (pound)13.00 For visits made same day or at short notice (pound)26.00 For visits made outside normal working hours:- Monday - Friday 16:30 - 22:00 Saturday 08:00 - 22:00 (pound)36.00 All other times and Bank Holidays (pound)36.00 4. De-energise Connection A charge will be payable by the Supplier in respect of each site visit made to de-energise a connection. Simple de-energisation (e.g remove fuse) For visits made in accordance with the appointment guidelines (pound)15.00 For visits made same day or at short notice (pound)28.00 For visits made outside normal working hours:- Monday - Friday 16:30 - 22:00 Saturday 08:00 - 22:00 (pound)38.00 All other times and Bank Holidays (pound)38.00 Complex de-energisation and subsequent re-energisation (e.g cutting and (pound)75.00 re-jointing service cable outside customer's premises) - Time and per hour Material based on the stated hourly rate (during normal working hours) 5. Visit to de-energise : not actioned A charge will be payable by the Supplier in respect of each abortive site visit made to de-energise a connection. For visits made in accordance with the appointment guidelines (pound)13.00 For visits made same day or at short notice (pound)26.00 For visits made outside normal working hours:- Monday - Friday 16:30 - 22:00 Saturday 08:00 - 22:00 (pound)36.00 All other times and Bank Holidays (pound)36.00 6. Energisation, (Re-energisation) or De-energisation of Temporary Connection (e.g. Christmas lighting, televising a theatrical or sporting event etc.) The cost of the connection and disconnection will be charged for in accordance with our Statement of the Charges as Basis of charges for Connection to South Western per 2,3,4 & Electricity plc's Electricity Distribution System. 5 above 7. Short-term De-energisation and Subsequent Re-energisation of a Connection For each site visit made to a customer's premises for safety reasons, by Nil Charge appointment and with at least two working days' notice to de-energise the connection and then revisit at an agreed time to re-energise it. Part 1 (ii) Transaction charges for Revenue Protection Services NOTE : The way in which some of these services are provided will depend upon site specific requirements and/or supplier instructions. The charges listed should, therefore, be taken as indicative only and are based on the understanding that such work is carried out at the same time as other invetigatory work is undertaken. 1. An administration charge will be payable by suplliers in all cases where there is clear evidence of interference with the meter or connection equipment. (pound)158.00 2. Replace meter like for like From (pound)30.00 3. Replace time/teleswitch (pound)57.00 4. Replace credit meter with prepayment meter From (pound)110.00 5. Replace (a) seal (pound)0.50 (b) meter tails (pound)12.00 6. Fit additional security devices (a) self destruct label (pound)0.50 (b) security cable & blocks (pound)18.00 7. De-energise supply: (a) Remove fuse From (pound) 6.00 (b) Remove meter From (pound) 9.00 8. Revisit de-energised supply (excluding first visit within 14 days and which is made in accordance From - - with the appointment guidelines) (pound)25.50 9. Revisit customer previously suspected of tampering From (pound)25.50 10. Obtain a rights of entry warrant (pound)65.00 Part 1 (iii) Other services ancillary to use of system transactional charges a) Meter Operation Services, Data Collection Services, Prepayment Meter Services and Metering Point Administration Services: Will be charged in accordance with the Company's Agreement for Meter Operation Services, Data Collection Services; Prepayment Meter Services and Metering Point Administration Services: b) Radio Teleswitching Services The Company may provide Radio Teleswitching Services to those who wish to sponsor group codes. The charges for these services will be fixed by agreement in each case and will reflect the complexity in the proposed arrangements. c) Miscellaneous Charges: Other charges for other services ancillary to the Use of System will be individually quoted. Part II - Payment Terms 1. Within 21 days after the end of each calendar month the Company shall submit to the User an account specifying the payment due from the User in respect of services referred to in Part I of this Schedule performed during that month and any Value Added Tax payable thereon. 2. Within 30 days of the date of an account submitted in accordance with paragraph 1, the User shall pay to the Company all sums due in respect of such account in pounds sterling by electronic transfer of funds to such bank account (located in the United Kingdom) as is specified in the statement, quoting the invoice number against which payment is made. 3. Notwithstanding Clause 8.2 of the Revenue Protection Code of Practice, any disputes shall be governed by Schedule 6. SCHEDULE 5 Calculation of Interest on Reconciliation Accounts For the first day after the Invoice Date of the Initial Account the following calculation shall be used by the Company in preparing a Reconciliation Account: T1 = (Vr - Vr-1) x (I1 x 1/365) + (Vr - Vr-1) For all subsequent days until the Invoice Date of the Reconciliation Account the following calculation shall be used by the Company in preparing a Reconciliation Account: Tn+1 = Tn x (In x 1/365) + Tn where Tn= amount due under a Reconciliation Account, including interest calculated on a daily compound basis r = run number. For an Initial Settlement Run r = 0, and for a Final Settlement Run, r = 4 In = The Barclays Bank plc daily declared base interest rate for the Working Day prior to day n Vr = amount due from run calculation r, excluding interest due n = day number count For the purpose of calculating daily interest rates, the number of days in a leap year shall be deemed to be 365. For the avoidance of doubt, the Invoice Date of the Initial Account shall be when n = 0. SCHEDULE 6 Billing and Payment Disputes 1. This Schedule 6 applies to disputes about Use of System Charges payable by the User pursuant to Clauses 6, 7 and 8: 1.1 where the User disputes an Initial Account or Reconciliation Account or an account issued under Clause 8.2 and the dispute is a Designated Dispute (as defined in paragraph 1.2 below): A. the User shall pay such amount of Use of System Charges due as are not in dispute and shall be entitled to withhold the balance pending resolution of the dispute; B. the parties shall use reasonable endeavours to resolve the dispute in good faith; C. where the dispute remains unresolved after 20 Working Days either party may refer the dispute to arbitration in accordance with Clause 22; and D. following resolution of the dispute, any amount agreed or determined to be payable shall be paid within 20 Working Days after such agreement or determination and interest shall accrue on such amount plus Value Added Tax (if any) from the date such amount was originally due until the date of payment at the rate of 1% per annum above the base rate during such period of Barclays Bank plc compounded annually. 1.2 a dispute shall be a "Designated Dispute" for the purposes of this paragraph 1 where within 7 days of receiving a request for payment the User in good faith provides the Company with a statement and explanation of the amount in dispute where: A. there is an error in the information used for the calculation or an arithmetic error in the calculation of Use of System Charges by the Company which is apparent on the face of the Initial Account or Reconciliation Account; and/or B. for a Metering Point within Clause 6.3.1, the Company chooses not to use the half-hourly data (whether actual or estimated) provided by the Data Collector for the purposes of Settlement in calculating Use of System Charges and the User disputes the accuracy or validity of the data actually used. 1.3 for the avoidance of doubt, the disputes about the matters listed at paragraph 1.3 A and B below are not Designated Disputes and paragraph 1.1 shall not apply where: A. the Company has invoiced Use of System Charges in accordance with Clause 6.3; and B. the Company has used estimated data in accordance with Clause 8.2.1. 1.4 where, other than in the case of a Designated Dispute within 7 days of receiving a request for payment the User in good faith provides the Company with a statement and explanation of the amount of use of System Charges in dispute: A. the User shall pay the total amount of such charges as they fall due in accordance with Clause 6.4; B. the parties shall use reasonable endeavours to resolve the dispute in good faith; C. where the dispute remains unresolved after 20 Working Days either party may refer the dispute to arbitration in accordance with Clause 22; and D. following resolution of the dispute, any amount agreed or determined to be repayable (including where appropriate any interest paid pursuant to Clause 7.5 or Clause 8.3) by the Company shall be paid within 20 Working Days after such agreement or determination and interest shall accrue on such amount from the date such amount was originally paid by the User until the date of repayment at 1% per annum above the base rate during such period of Barclays Bank plc, compounded annually. SCHEDULE 7 APPROVAL AND PERMISSION PROCEDURES 28.DEFINITIONS In this Schedule 7, except where the context otherwise requires, the following terms shall have the meanings set opposite them:- "Applicant" means a person who applies for approval pursuant to paragraph 3; "Approved Contractor" means a contractor approved pursuant to paragraph 3; "Competent Person" means a person appointed by an Approved Contractor in accordance with paragraph 4.1; "Certificate of Competence" means a certificate issued by an Approved Contractor in accordance with paragraph 4.1; "Permission" means a permission issued in writing by the Company pursuant to paragraph 5; "Quality Assurance Certification means a body assessed, validated and regulated by the UK Body" Accreditation Service; and "Works" means any Energisation Works, Re-energisation Works or De-energisation Works. 29. PRINCIPLES 29.1 Subject to the provisions of Clause 10 and this Schedule 7, the User shall be entitled to procure the performance of Works on the Distribution System by a person who is not an employee of the Company. For the avoidance of doubt this Schedule 7 does not apply to work carried out by a Meter Operator pursuant to the Meter Operation Services Agreement. 29.2 A Competent Person shall be recognised to be a suitable person to carry out Works on the Distribution System in accordance with and to the extent specified in a Permission. 29.3 Where the User elects to have Works performed on the Distribution System by an Approved Contractor rather than the Company, the Approved Contractor shall undertake to perform all the categories of Works in accordance with and to the extent specified in the Permissions held by its Competent Persons, and the Company shall only be obliged to undertake such categories of Works as are not so specified. The User shall remunerate the Company for undertaking any such Works by reference to the relevant charges set out in Schedule 4, or by agreement where the charges for such Works are not set out therein. 30.PROCEDURE FOR APPROVING CONTRACTORS 30.1Where an Applicant has applied for approval as an Approved Contractor for the purposes of this Schedule 7, the Company shall appoint a Quality Assurance Certification Body to carry out an assessment of the Applicant's qualifications for approved status. The Applicant shall be advised of any assessment fees payable to the Company. The Quality Assurance Certification Body shall advise the Company and the Applicant of the results of the assessment, and the Company shall decide whether the Applicant may be approved together with the reasons for that decision. 30.2 An approval pursuant to paragraph 3.1: 30.2.1 shall be valid for three years, during which period the Company may at any time carry out inspections of the Approved Contractor's work on site; and 30.2.2 may be withdrawn at any time by the Company, subject always to the Approved Contractor being given a reasoned explanation. The Company may accept an approval of an Applicant given by another public electricity supplier in accordance with the procedure stated in this paragraph 3. 31.PROCEDURE FOR RECOGNISING COMPETENT PERSONS 31.1 A person shall be recognised by the Company as being a suitable person to perform Works on the Distribution System if that person is employed by an Approved Contractor and has been appointed in writing by the Approved Contractor as a Competent Person, being someone who has successfully completed satisfactory training and examination in electrical safety awareness and appropriate technical knowledge, and who personally holds a Certificate of Competence issued by the Approved Contractor as evidence of a suitable qualification in all such respects. 31.2 A Certificate of Competence issued to an Approved Contractor's employee in accordance with this paragraph 4 shall certify that employee's suitability to perform Works on the Distribution System subject to a Permission. The Approved Contractor shall be responsible for giving the Company a copy of each Certificate of Competence issued by it, for reissuing or revoking each Certificate of Competence every three years, and for maintaining a record of all Certificates of Competence currently in force. 31.3 A Competent Person must have a valid Certificate of Competence available for inspection at all times when performing any Works on the Distribution System. PROCEDURE FOR GRANTING PERMISSION 32.1The User shall be entitled to procure the performance of Works on the Distribution System by a Competent Person provided that the Competent Person has a valid Permission. The grant of a Permission to a Competent Person shall not be unreasonably withheld, provided that the Company shall always have a prior right to undertake a trade test and safety awareness assessment of that person and that the reasonable costs of exercising this right shall be paid by the Approved Contractor if requested by the Company. 32.2 The nature, scope, and extent of the Works which a Competent Person may undertake shall be at the Company's sole discretion. A Permission shall specify in writing the categories of Works which the Competent Person is allowed to undertake on the Distribution System, and the Competent Person's authority to undertake Works shall be limited to those categories alone and shall in no circumstances whatsoever extent to any other category of Works howsoever described. 32.3 Notwithstanding anything in paragraph 5.2, the categories of Works specified in a Permission may (for example only and without limitation) include any of the following: the withdrawal or replacement of fuse links in the service terminations; the connection or severing of wiring between service terminations, meters and distribution boards; attendance at or the performance of work in a Distribution System substation without the need for personal supervision; the supervision or control of a working party which undertakes any of the above; and the operating of high or low voltage switchgear. 33.DISPUTES 33.1The parties shall attempt to resolve in good faith any dispute in relation to assessment fees payable to the Company pursuant to paragraph 3.1 of this Schedule 7. Where a dispute remains unresolved after 14 days either party may refer the dispute to the Director for determination. Any determination by the Director shall be final and binding. SCHEDULE 8 Metering Functionality and Data Requirements
DUOS Charge Application Metering Meter Reading Time for Provision of Data Functionality Frequency to the Distributor - --------------------------------------------------------------------------------------------------------------------------- Monthly Tariff HV Single Phase or Three Phase 24hr kW MD, kV Arh Total kWh Total Monthly Day + 3 Working Days Monthly Tariff HV Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2 Monthly Day + 3 Working Days Monthly Tariff HV Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2, kWhRate 3 Monthly Day + 3 Working Days Monthly Tariff HV Parallel Gen Single Phase or Three Phase 24hr kW MD, kV Arh Total kWh Total Monthly Day + 3 Working Days Monthly Tariff HV Parallel Gen Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2, kWhRate 3 Monthly Day + 3 Working Days Export (HV) Single Phase or Three Phase 24hr kW, kVArh Total kWh Total Monthly Day + 3 Working Days Monthly Tariff HV8HR Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2 Monthly Day + 3 Working Days Monthly Tariff S/S Single Phase or Three Phase 24hr kW MD, kV Arh Total kWh Total Monthly Day + 3 Working Days Monthly Tariff S/S Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2 Monthly Day + 3 Working Days Monthly Tariff S/S Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2, kWhRate 3 Monthly Day + 3 Working Days - - Monthly Tariff S/S Parallel Gen Single Phase or Three Phase 24hr kW MD, kV Arh Total kWh Total Monthly Day + 3 Working Days Monthly Tariff S/S Parallel Gen Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2, kWhRate 3 Monthly Day + 3 Working Days Export (S/S) Single Phase or Three Phase 24hr kW MD, kV Arh Total kWh Total Monthly Day + 3 Working Days Monthly Tariff S/S8HR Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2 Monthly Day + 3 Working Days Monthly Tariff LV Single Phase or Three Phase 24hr kW MD, kV Arh Total kWh Total Monthly Day + 3 Working Days Monthly Tariff LV Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2 Monthly Day + 3 Working Days Monthly Tariff LV Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2, kWh Rate 3 Monthly Day + 3 Working Days Monthly Tariff LV Parallel Gen Single Phase or Three Phase 24hr kW MD, kV Arh Total kWh Total Monthly Day + 3 Working Days
Metering Functionality and Data Requirements continued DUOS Charge Application Metering Functionality Meter Reading Time for Provision of Data Frequency to the Distributor - ----------------------------------------------------------------------------------------------------------------------------------- Monthly Tariff LV Parallel Gen Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2, kWhRate 3 Monthly Day + 3 Working Days Export (LV) Single Phase or Three Phase 24hr kW MD, kV Arh Total kWh Total Monthly Day + 3 Working Days Monthly Tariff LV8H Single Phase or Three Phase 24hr kW MD, kVArh Total kWh Rate 1 kWh Rate 2 Monthly Day + 3 Working Days Domestic Single Phase or Polyphase kWh Total Bi-annually Day + 3 Working Days Supply Key Meter Domestic Single Phase Supply kWh Total Bi-annually Day + 3 Working Days Economy 7 Single Phase or Polyphase kWh Rate 1 Bi-annually Day + 3 Working Days Supply kWh Rate 2 Domestic Seasonal Single Phase or Polyphase kWh Rate 1 Bi-annually Day + 3 Working Days Supply kWh Rate 2 kWh Rate 3 Domestic Seasonal Controlled Night Single Phase Supply kWh Rate 3 Bi-annually Day + 3 Working Days 3 Rate Heating Single Phase or Polyphase kWh Rate 1 Bi-annually Day + 3 Working Days Supply kWh Rate 2 kWh Rate 3 3 Rate Heating Controlled Night Single Phase Supply kWh Rate 3 Bi-annually White Meter Single Phase or Polyphase kWh Rate 1 Bi-annually Day + 3 Working Days Supply kWh Rate 2
Metering Functionality and Data Reqts continued DUOS Charge Application Metering Functionality Meter Reading Time for Provision of Data Frequency to the Distributor - ----------------------------------------------------------------------------------------------------------------------------- Small Non Domestic Single Phase or Polyphase Supply kWh Total Bi-annually Day + 3 Working Days Key Meter Small Non Domestic Single Phase Supply kWh Total Bi-annually Day + 3 Working Days Key Meter Small Non Domestic Single Phase Supply kWh Rate 1 Bi-annually Day + 3 Working Days kWh Rate 2 Small Non Domestic E7 Single Phase Supply kWh Rate 1 Bi-annually Day + 3 Working Days kWh Rate 2 Key Meter Small Non Domestic E7 Single Phase Supply kWh Rate 1 Bi-annually Day + 3 Working Days kWh Rate 2 Non Domestic Seasonal Single Phase or Polyphase Supply kWh Rate 1 Bi-annually Day + 3 Working Days kWh Rate 2 Non Domestic Seasonal kWh Rate 3 Controlled Night Single Phase Supply kWh Rate 3 E7 Day & Night Tariff Single Phase or Polyphase Supply kWh Rate 1 Bi-annually kWh Rate 2 E7 Day & Night Tariff kWh Rate 3 Controlled Night Single Phase Supply kWh Rate 3 Bi-annually Small Non Domestic (8Hr) Single Phase or Polyphase Supply kWh Total Bi-annually Day + 3 Working Days
Metering Functionality and Data Requirements continued
DUOS Charge Application Metering Functionality Meter Reading Time for Provision of Data Frequency to the Distributor ---------------------------------------------------------------------------------------------------------------------------- Off Peak Night Only (8hr) Single Phase or Polyphase Supply kWh Total Bi-annually Day + 3 Working Days Off Peak Bi Single Phase or Polyphase Supply kWh Total Bi-annually Day + 3 Working Days Off Peak (7 hrs) Single Phase or Polyphase Supply kWh Total Bi-annually Day + 3 Working Days Off Peak A Single Phase or Polyphase Supply kWh Total Bi-annually Day + 3 Working Days Off Peak Bii Single Phase or Polyphase Supply kWh Total Bi-annually Day + 3 Working Days Note: For SSC's Refer to Schedule 3, Table 1. Note: For deemed half-hourly sites half-hourly kWh and half hourly KVArh are required for DUoS billing purposes.
SCHEDULE 9 Metering Accuracy Metering Accuracy 1. Metering equipment installed and maintained pursuant to Clause 12.1 shall be capable of operating within the accuracy limits specified pursuant to the Settlement Agreement and where no accuracy limits are specified in relation to an element of any metering equipment under the Settlement Agreement, the accuracy of that element shall be no less than that specified in Tables 1-4 (inclusive) of Code of Practice Four approved pursuant to the Settlement Agreement ("the agreed accuracy limits"). Disputes in relation to Metering Accuracy 2. Unless the accuracy of metering equipment installed and maintained pursuant to Clause 12.1 is disputed by notice in writing ("dispute notice") given by one party to the other, such metering equipment shall be deemed to be accurate. If a dispute notice is given: 2.1 unless otherwise agreed, the metering equipment shall as soon as practicable be examined and tested by a meter examiner in accordance with schedule 7 to the Act; 2.2 if on such test : 2.2.1it shall be found that the inaccuracy of the registration of the metering equipment at normal loads exceeds the agreed accuracy limits, suitable adjustment shall be made in the accounts rendered by the Company and the metering equipment or part thereof found to be inaccurate shall be recalibrated or replaced and the cost of such test and recalibration or replacement shall be paid by the User; 2.2.2the metering equipment is found to be accurate within the said limits, the metering equipment shall be deemed to be accurate and the cost of moving, testing and replacing the metering equipment or any part thereof shall be paid by the party who gave the relevant dispute notice. SCHEDULE 10 Event log In the following table: A) "DTC ref" means the relevant reference number in the Data Transfer Catalogue; B) "DTN" means the Data Transfer Network and "Phone" means telephone; C) the descriptions of the data flows concerned under "Message" are for ease of reference only and shall not affect the obligations of either party under the relevant provisions of this Agreement; and D) "CR" means that there is currently no DTC reference, but that a change request is required. Where there is more than one means of transmission specified in Schedule 10 (one of which being via the Data Transfer Network) it is expected that the parties shall transmit any notice, request or other communication via the Data Transfer Network.
Agreement From To Message Medium DTC ref Clause No. DNT Phone Fax Post ---------------------------------------------------------------------------------------------------------------------- 3.3 Company User Request for evidence of SCA for 3.3 User Company Provision of evidence of SCA for specific exit point x x 3.4 Company User Notification that non standard terms apply to a connection x x 3.5.3 User Company Notification of procurement of SCA for 100 kW customer without CA at 31/5/98 x x 4.2.4 User/Agent Company Confirmation of Appointment of Accredited Meter Operator, Data Collector and Data Aggregator x x x 4.2.5 User/Agent Company Confirmation metering equipment installed x x x 4.2.8 User/Agent Company Confirmation of customers appointed Meter Administrator x x 6.1 Company User Notification of variation of charges x x 7.2 User/Agent Company Provision of non-half hourly Supercustomer DUoS Report x x x D0030 Company User Provision of Daily Statements x D0242 7.3,7.4 Company User Billing by Settlement Class 8.2 Company User Company Refund/Cheque 8.2 Company User Company Invoice Site Specific Billing 10.2 User Company Request Company to undertake Energisation, de-energisation x or Re-energisation works 10.2.4 Company User Request for details needed to x x identify Metering Points 10.2.4 User Company Details needed to identify Metering Points x x 10.7 Company User 2 Working days notice of de-energisation works x x
Agreement From To Message Medium DTC ref Clause No. DNT Phone Fax Post ---------------------------------------------------------------------------------------------------------------------- 10.8 Company User Notice that Metering Point has been de-energised by Company x x x 10.10 Company User Instruction to send registration notice (following de-energisation) x x 10.11 Company User Instruction to send registration notice (following re-energisation) x x 10.13, 10.14, 10.16 User Company Disconnection Notice x x x D0132 10.14, 10.15 Company User Refusal to disconnect x x x 10.19 User Company Request to de-energise x x D0134 10.19.1 Company User/Agent Notification of when Re-energisation work is expected to be undertaken x x 10.19.3 Company User Instruct user to send registration notice 12.2 User/Agent Company Metering technical data (NHH) x x x D0150 12.2 User/Agent Company Metering Technical data (HH) x x x D0268 12.2 User/Agent Company Meter readings (HH) x x x D0010 12.2 User/Agent Company Meter advance reconciliation report (HH meters) x x x D0008 12.2 User/Agent Company Estimated half-hourly data report x x x D0022 12.2 User/Agent Company Validated half hourly advances for inclusion in aggregated x x x D0036 supplier matrix, including unmetered 12.2 User/Agent Company Validated half hourly advances where half hourly periods are x x x D0275 specified in UTC 12.4 User/Agent Company Notification of meter mapping details x x x D0149 Agreement From To Message Medium DTC ref Clause No. DNT Phone Fax Post ---------------------------------------------------------------------------------------------------------------------- 12.4 User/Agent Company NHH Meter readings x x x D0010 12.4 User/Agent Company Meter Technical Details x x x D0150 12.5 Company User/Agent Test metering system x x x D0001 12.8 Company Agent Estimated Annual Consumption for unmetered sites which are not subject to HH trading x x (DC) 13.1,13.2 User Company Customer details x x x D0131 13.3 User Company Change of Customer details x x x D0131 13.4 User/Agent Company Report possible safety problem D0135 13.4 Agent Company report urgent possible safety problem to Security of Supplies and (MOP,DC) Safety Enquiry service x x x 13.5,13.7 User Company Provision of details of special needs customers x x x D0225 13.6,13.7 User Company Provision of details of password x x x D0131 16.4 User Company Details of customer complaint in respect of a guaranteed standard claim x
SCHEDULE 11 Demand Control INTRODUCTION The capacity and other technical parameters of the constituent elements which make up the Distribution System provide operational constraints on Demand and the coincidence of Demand. DEFINITIONS In this Schedule 11, except where the context otherwise requires, the following expressions shall have the meanings set opposite them: "Capacity Headroom" means a margin of 5 to 15 % below the maximum capacity of the Distribution System supplying a group of Customers; "Compliance Notice" means a notice issued to a Supplier pursuant to paragraph 8.5; "Demand" has the meaning given to that term in the Distribution Code; "Effective Date" means the date that a notice issued pursuant to this Schedule 11 is deemed received in accordance with Clause 24.5.2 and/or paragraph 11.3 (as appropriate); "Emergency SRN" means a notice issued pursuant to paragraph 8.1; "Firm SRN" means a notice issued pursuant to paragraph 7.1; "Load Managed Area" means an area designated pursuan to paragraph 5.1; "Load Managed Area Notice" means a notice issued pursuant to paragraph 5.1; "Provisional SRN" means a notice issued pursuant to paragraph 6.1; "Security of Supply" means the ability of the Company to provide supplies to Customers, that comply with the Electricity Supply Regulations and with ERP2/5 and ERP28; "SSC" means Standard Settlement Configuration; "Supplier" means a person authorised to supply electricity pursuant to section 6(1)(c) and/or section 6(2) of the Act; and "Total System" has the meaning given to that term in the Distribution Code; 36.GENERAL OBLIGATIONS 3.1 The User shall use reasonable endeavours to ensure that it does not make any changes to SSCs in force at particular Metering Points which have or may have a materially adverse effect on the discharge of the Company's statutory and/or regulatory obligations to develop and maintain an efficient, secure, safe, co-ordinated and economical system for the distribution of electricity by increasing the coincidence of Demand on the Distribution System in a way which is likely to infringe the Capacity Headroom so that it is insufficient to allow for normal variations in Demand. 3.2 The Company shall use reasonable endeavours to issue notices in Load Managed Areas in the following order: Provisional SRN; Firm SRN and Emergency SRN and normally not to issue a notice for a relevant geographic area within 30 days of the Effective Date of the last notice for that relevant geographic area. 37.CONSULTATION The User may at any time seek advice concerning operational constraints on the Distribution System from the Company on such reasonable terms as the parties may agree in writing. 38.LOAD MANAGED AREAS 5.1 The Company may from time to time designate areas of the Distribution System as Load Managed Areas where the Company: 38.1.1 has identified a need to reinforce or extend the capacity of such areas and prior to issuing a Load Managed Area Notice, either: (A) avoided the need for such reinforcement or extension through a reduction in coincidence of Demand by adopting Customer Demand management to control the timing of load switching; or (B) reasonably believes that such reinforcement or extension would be avoided through a reduction in coincidence of Demand by Suppliers adopting Customer Demand management to control the timing of load switching. 5.2 A Load Managed Area Notice shall be sent to the User, all other Suppliers and the Director. 5.3 A Load Managed Area Notice shall be effective when received or deemed received in accordance with Clause 24.5.2 and shall indicate: the geographical area to which it applies by map, postcode or such other method as the Company considers reasonable; the time or times of day during which in the Company's opinion changes to SSCs in force at particular Metering Points induced by Suppliers have increased the coincidence of Demand to such an extent that Security of Supply may be threatened; and that it shall continue in force until withdrawn in writing by the Company by serving a notice on all Suppliers. 5.4 The parties acknowledge and agree that the issue of a Load Managed Area Notice constitutes notice that: (i) significant modifications of Customer Demand in the area identified in such notice may threaten Security of Supply; (ii) Provisional SRNs, Firm SRNs and Emergency SRNs may be issued in respect of that area; (iii) any future changes to SSCs in force at particular Metering Points in that area may be subject at the request of the Company to change in accordance with paragraph 7.5 or 8.5; and (iv) any changes to SSCs referred to in paragraph 5.4(iii) will if requested by the Company pursuant to paragraph 7.5 or 8.5 or if made voluntarily by a Supplier be at the relevant Supplier's cost. 5.5 The Company may designate Load Managed Areas: 5.5.1 any time up to and including 31 March 1998; and 5.5.2 any time from [31 August 1998]. (For the avoidance of doubt, the Company shall not designate Load Managed Areas during the period from 1 April 1998 to 30 August 1998 inclusive). 39.PROVISIONAL SECURITY RESTRICTION NOTICES 6.1 The Company may from time to time issue a Provisional Security Restriction Notice where in the Company's opinion the changes to SSCs in force at particular Metering Points since the Effective Date of a Load Managed Area Notice have increased the coincidence of Demand in the whole or part of the area identified in that notice so as to materially infringe the Capacity Headroom on such area since the issue of that notice. 6.2 A Provisional SRN shall be sent to the User, all other Suppliers and the Director. 6.3 A Provisional SRN shall be effective when received or deemed received in accordance with Clause 24.5.2 and shall indicate: the geographical area to which it applies by map, postcode or such other method as the Company considers reasonable; the time or times of day during which Capacity Headroom has been infringed from the Effective Date of the Load Managed Area Notice; and that it shall continue in force until withdrawn in writing by the Company by serving a notice on all Suppliers. 6.4 The parties acknowledge and agree that the issue of a Provisional SRN constitutes notice that: (i) any modifications of Customer Demand induced by changes to SSCs in the area identified in such notice may threaten Security of Supply; (ii) Firm SRNs and Emergency SRNs may be issued in respect of that area and that such notices will normally not be issued within 30 days of the Effective Date of the relevant Provisional SRN; (iii) any future changes to SSCs in force at particular Metering Points in that area may be subject at the request of the Company to change in accordance with paragraph 7.5 or 8.5 ; and (iv) any changes to switching times in order to effect changes to SSCs referred to in paragraph 6.4(iii) will if requested by the Company pursuant to paragraph 7.5 or 8.5 or if made voluntarily by a Supplier be at the relevant Supplier's cost. 40.FIRM SECURITY RESTRICTION NOTICES 7.1 The Company may from time to time issue a Firm Security Restriction Notice where in the Company's opinion the changes to SSCs in force at particular Metering Points since the Effective Date of a Load Managed Area Notice have increased the coincidence of Demand in the whole or part of the area identified in that notice and as a result there is a material risk to Security of Supply. 7.2 A Firm SRN shall be sent to the User, all other Suppliers and the Director. 7.3 A Firm SRN shall be effective when received or deemed received in accordance with Clause 24.5.2 and shall indicate: the geographical area to which it applies by map, postcode or such other method as the Company considers reasonable; the time or times of day during which Capacity Headroom is infringed and into which Demand cannot be moved as a result of changes to switching times by Suppliers; the time or times of day during which there is sufficient capacity at the Effective Date of the Firm SRN into which Demand can be moved; and that it shall continue in force until withdrawn in writing by the Company by serving a notice on all Suppliers. 7.4 The parties acknowledge and agree that the issue of a Firm SRN constitutes notice that: (i) any modifications of Customer Demand induced by changes to SSCs in the area identified in such notice may threaten Security of Supply; (ii) Emergency SRNs may be issued in respect of that area and that such notices will normally not be issued within 30 days of the Effective Date of the relevant Firm SRN; (iii)any future changes to SSCs in force at particular Metering Points in that area may be subject at the request of the Company to change in accordance with paragraph 7.5 or 8.5; and (iv) any changes to switching times in order to effect changes to SSCs referred to in paragraph 7.4(iii) will if requested by the Company pursuant to paragraph 7.5 or 8.5 or if made voluntarily by a Supplier be at the relevant Supplier's cost. 7.5 When the Company issues a Firm SRN it may where it reasonably believes that SSCs allocated in respect of the Customers of a Supplier since the Effective Date of the relevant Load Managed Area Notice or Provisional SRN have materially contributed to the risk to Security of Supply in respect of which the Firm SRN has been issued, also send a separate notice to that Supplier and a copy to the Director, requiring it to change at the Supplier's cost within such period of time as the Company considers reasonable the SSCs in force at particular Metering Points in the area designated in the Firm SRN to the SSCs for the relevant Metering Points at the Effective Date of the relevant Provisional SRN or where the Company reasonably believes it is necessary to such other SSCs as shall not have a materially adverse effect on Security of Supply or to take such other action as the Company considers reasonable. 41.EMERGENCY SECURITY RESTRICTION NOTICES 8.1 The Company may at any time issue an Emergency Security Restriction Notice where in the Company's opinion there is an immediate risk to Security of Supply. (For the avoidance of doubt the issue of an Emergency SRN shall not be restricted to Load Managed Areas). 8.2 An Emergency SRN shall be sent to the User, all other Suppliers and the Director. 8.3 An Emergency SRN shall be effective when received or deemed received in accordance with paragraph 11.3 below and shall indicate: the geographical area to which it applies by map, postcode or such other method as the Company considers reasonable; the time or times of day into which Demand cannot be moved as a result of changes to switching times by Suppliers; the time or times of day during which there is sufficient capacity at the Effective Date of the Emergency SRN into which Demand can by moved; and that it shall continue in force until withdrawn in writing by the Company by serving a notice on all Suppliers. 8.4 The parties acknowledge and agree that the issue of an Emergency SRN constitutes notice that: (i) any modifications of Customer Demand induced by changes to SSCs in the area identified in that notice may threaten Security of Supply; (ii) any future changes to SSCs in force at particular Metering Points in that area may be subject to reversion to the SSCs for the relevant Metering Points at the Effective Date of the Emergency SRN or such other SSCs as shall not have a materially adverse effect on Security of Supply; and (iii)any changes to switching times in order to effect changes to SSCs referred to in paragraph 8.4(ii) will if requested by the Company be at the relevant Supplier's cost. 8.5 When the Company issues an Emergency SRN it may where it reasonably believes that SSCs allocated in respect of the Customers of a Supplier have materially contributed to the risk to Security of Supply in respect of which the Emergency SRN has been issued, also send a Compliance Notice to that Supplier and a copy to the Director. A Compliance Notice shall require the Supplier to change at the Supplier's cost within such period of time as the Company considers reasonable the SSCs in force at particular Metering Points in the area designated in the Emergency SRN to the SSCs for the relevant Metering Points at the Effective Date of the relevant Firm SRN or where the Company reasonably believes it is necessary to such other SSCs as shall not have a materially adverse effect on Security of Supply or to take such other action as the Company considers reasonable. PROVIDED that where the Company requires changes to SSCs in an area which is not a Load Managed Area or to SSCs which have not been modified by the Supplier since the Effective Date of the current Load Managed Area Notice then the cost of Meter Operator visits required to affect such changes shall be at the Company's cost. 8.6 Failure to Comply with an Emergency SRN or a Compliance Notice shall constitute a breach of this Agreement and the Company may with no prior notice to the User where the User is in such breach De-energise any Metering Point affected by the Emergency SRN or Compliance Notice for which the User is registered in MPAS as the Supplier. 42.CONFIDENTIALITY 9.1 Any notice issued by either party pursuant to this Schedule 11 shall be confidential and neither party shall pass on any information contained in such notice to any other person but shall only be able to say that there has been an incident on the Total System and (if known and if power supplies have been affected) an estimated time of return to service. 43.APPEALS PROCEDURE 10.1 The parties shall attempt to resolve in good faith any dispute in relation to this Schedule 11. Where the dispute remains unresolved after 14 days either party may refer the dispute to the Director for determination. Any determination by the Director shall be final and binding. 44.NOTICES 11.1 Save as provided in paragraph 11.2 a notice, approval, consent or other communication to be made by one party under or in connection with this Schedule 11 shall be in writing and shall be delivered personally or sent by first class post, courier or fax to the other party at the address specified in this paragraph and marked for the attention of the person so specified: if to the Company, to: Address: Facsimile: Attention: if to the User, to: Address: Facsimile: Attention: or to such other persons, addresses or facsimile numbers as the relevant party may from time to time specify by notice in writing to the other party. 11.2 An Emergency SRN shall be dictated by the Company to the User to the person(s) specified in this paragraph on the telephone number so specified who shall record it and on completion shall repeat the notification in full to the Company and check that it has been accurately recorded: Attention: Telephone Number: or to such other persons or telephone numbers as the User may from time to time specify by notice in writing to the Company, PROVIDED THAT the User shall ensure that such person(s) shall be contactable at the specified telephone number at all times. 11.3 An Emergency Security Restriction Notice shall be deemed received when the Company has dictated it to the User. 11.4 The Company shall also send an Emergency SRN in writing as soon as reasonably practicable to the User in accordance with paragraph 11.1 above (for the avoidance of doubt, such notice shall be for the record and shall not replace the notice given in accordance with paragraph 11.2 but shall be deemed received in accordance with Clause 24.5.2 of this Agreement) 12. REVIEW PROCEDURE 12.1 The Company shall, no later than the later of 6 months after its Effective Date or 6 months after its last review, review every Load Managed Area Notice, Provisional SRN, Firm SRN and Emergency SRN issued by it pursuant to this Schedule 11 which is still in force. 12.2 Where the Company reasonably believes that the relevant notice should continue in force it will notify all Suppliers and the Director accordingly, together with its reasons. 12.3 Where the Company reasonably believes that the relevant notice should not continue in force it will withdraw the relevant notice and notify all Suppliers and the Director. SCHEDULE 12 Standard Connection Agreement Standard Terms of Connection (A) The electricity you receive from your electricity supplier will be delivered using the distribution network run by your local network operator. To receive a supply of electricity you require both: a connection agreement with your local network operator to maintain the connection of your premises to the network; and a supply contract with your electricity supplier. (B) Your electricity supplier has been appointed as the agent of your local network operator to obtain a connection agreement with you on these standard terms. When you enter into your electricity supply contract, you are also entering into this connection agreement with your local network operator. (1)Interpretation: In this agreement the terms "we", "our" and "local network operator" mean, for each connection to a network through which you are supplied under your electricity supply contract, the public electricity supplier which owns or operates that network. (2) Existing terms: Any existing terms applying to your connection to our network (except for our tariff terms or another standard connection agreement) will apply instead of this agreement to the extent that they are inconsistent with this agreement. (3) Duration of this connection agreement: This agreement takes effect from the time that your electricity supply contract takes effect and will continue (even if your electricity supply contract ends) until it ends under Clause 11 below. (4) Connection to our network: Your premises will remain connected to our network in accordance with the provisions of the Electricity Act 1989, any other legal requirements that apply from time to time, and the terms of this agreement. (5) Network constraints: Our obligations under this agreement are subject to the maximum capacity and any other design feature of your connection. In accordance with existing legal rules, you must contact us in advance if you propose to make any significant change to your connection, electric lines or electrical equipment, install or operate generating equipment or do anything else that could affect our network or require alterations to your connection. (6) Delivery of electricity: We do not guarantee that we will deliver electricity through our network at all times or that electricity delivered through our network will be free of brief variations in voltage or frequency. (7) Cutting off your supply: We may cut off the supply of electricity to your connection where we are entitled to do so under the general law. We may also cut off your supply of electricity where we are required to do so under your electricity supply contract or the electricity industry arrangements under which we operate. If something goes wrong: If we fail to comply with any term of this agreement, or are negligent, you may be entitled under the general law to recover compensation from us for any loss you have suffered. However, we will not be required to compensate you for loss caused by anything beyond our reasonable control, or for any indirect, consequential, economic or financial loss (including losses of revenue, profit or opportunity, wasted expenses or loss of contract or goodwill), other than where you are entitled to recover compensation for such loss under the general law in relation to death or personal injury. (8) Business customers: If the electricity supplied to your premises is used wholly or mainly for business purposes, each of us will only be liable to the other in accordance with the limitations in Clause 8 and up to a maximum of (pound)100,000 per calendar year. (9)Changing this connection agreement: The terms of this connection agreement will be changed automatically to incorporate any changes which are approved by the Director General of Electricity Supply. Any change which is approved will be announced in at least three national daily newspapers and will take effect from the date stated in those announcements. Either of us may ask the other to accept a change to any part of this agreement at any time if either believes the change is needed because of the nature of your connection or because this agreement is no longer appropriate. (It is unlikely that we will propose any changes unless your connection is at high voltage, you have generating equipment or there are other special features.) If a change is proposed under this clause, and cannot be agreed between us within 28 days, either of us may ask the Director General of Electricity Supply to decide whether or not the change should be made. (10)Ending this connection agreement: This agreement will end in relation to a connection when one of the following occurs: you begin to take your electricity supply through that connection from us on our tariff terms; you permanently stop having electricity delivered through that connection; you no longer either own or occupy the premises at which that connection is situated; or any circumstances arise which legally entitle us to cut off your electricity supply to that connection and we write to you advising you that this agreement is ended. The ending of this agreement will not affect any rights, remedies or obligations which may have come into being under this agreement and Clauses 8 and 9 will continue to apply to those rights, remedies and obligations. (11)Transferring this connection agreement: You are not entitled to transfer this agreement to another person without our consent. (12) Providing information: You must provide us with any information we request in relation to the nature, or use by you, of electrical equipment on your premises. We will only ask for information that we need in relation to this agreement or the Distribution Code that applies under our Public Electricity Supply Licence. Edition 1
SCHEDULE 13 Reporting The report by the Company pursuant to Clause 16.9 shall be a report by the Distribution Business on the standards set out below, excluding those standards which are specific to the Supply Business. Standard Description Reporting Details: ------------------------------------------------------------------------------------------------- Total within Authorised Area for customers of all suppliers of electricity GS1 Main fuse failure Number of failures within the last quarter GS2 Supply network failure Number of failures within the last quarter GS3 Giving Supply by installing a Number of failures within the last quarter meter GS4 Estimating the cost of a new Number of failures within the last quarter supply GS5 Planned supply interruption Number of failures within the last quarter GS6 Supply voltage Number of failures within the last quarter GS7 Meter accuracy Number of failures within the last quarter GS8 Account queries Number of failures within the last quarter GS9 Appointment on electricity Number of failures within the last quarter supply business GS10 Penalty payments Number of failures within the last quarter OS1 Restoration of supply Number of failures within the last quarter following distribution system failure over 1 minute OS2 Correction of non-statutory Number of failures within the last quarter voltage levels OS3 Provision of a new supply Number of failures within the last quarter OS4 Reconnection following Number of failures within the last quarter disconnection for non-payment OS5 Resiting whole current meters Number of failures within the last quarter
OS6 Changing a meter to affect a Number of failures within the last quarter change in the basis of charging for supply OS7 Obtaining firm/customer meter Number of failures within the last quarter readings OS8 Responding to written queries Number of failures within the last quarter
EX-10 6 EX 10.11 FORM OF AGREEMENT Exhibit 10.11 STANDARD CONNECTION AGREEMENT Standard Terms of Connection A. The electricity you receive from your electricity supplier will be delivered using the distribution network run by your local network operator. To receive a supply of electricity you require both: . a connection agreement with your local network operator to maintain the connection of your premises to the network; and . a supply contract with your electricity supplier. B.Your electricity supplier has been appointed as the agent of your local network operator to obtain a connection agreement with you on these standard terms. When you enter into your electricity supply contract, you are also entering into this connection agreement with your local network operator. 1.Interpretation: In this agreement the terms "we", "our" and "local network operator" mean, for each connection to a network through which you are supplied under your electricity supply contract, the public electricity supplier which owns or operates that network. 2.Existing Terms:Any existing terms applying to your connection to our network (except for our tariff terms or another standard connection agreement) will apply instead of this agreement to the extent that they are inconsistent with this agreement. 3.Duration of this connection agreement:This agreement takes effect from the time that your electricity supply contract takes effect and will continue (even if your electricity supply contract ends) until it ends under Clause 11 below. 4.Connection to our network: Your premises will remain connected to our network in accordance with the provisions of the Electricity Act 1989, any other legal requirements that apply from time to time, and the terms of this agreement. 5.Network constraints: Our obligations under this agreement are subject to the maximum capacity and any other design features of your connection. In accordance with existing legal rules, you must contact us in advance if you propose to make any significant change to your connection, electric lines or electrical equipment, install or operate generating equipment or do anything else that could effect our network or require alterations to your connection. 6.Delivery of electricity: We do not guarantee that we will deliver electricity through our network at all times or that electricity delivered through our network will be free of brief variations in voltage or frequency. 7.Cutting off your supply: We may cut off your supply of electricity to your connection where we are entitled to do so under general law. We may also cut off your supply of electricity where we are required to do so under your electricity supply contract or the electricity industry arrangements under which we operate. 8.If something goes wrong: If we fail to comply with any terms of this agreement, or are negligent, you may be entitled under the general law to recover compensation from us for any loss you have suffered. However, we will not be required to compensate you for loss caused by anything beyond our reasonable control, or for any indirect, consequential, economic or financial loss (including loss of revenue, profit or opportunity, wasted expenses or loss of contract or goodwill), other than where you are entitled to recover compensation for such loss under the general law in relation to death or personal injury. 9.Business customers:If the electricity supplied to your premises is used wholly or mainly for business purposes, each of us will be liable to the other in accordance with the limitations in Clause 8 and up to a maximum of (pound)100,000 per calendar year. 10.Changing this connection agreement: The terms of this connection agreement will be changed automatically to incorporate any changes which are approved by the Director General of Electricity Supply. Any change which is approved will be announced in at least three national daily newspapers and will take effect from the date stated in those announcements. Either of us may ask the other to accept a change to any part of this agreement at any time if either believes the change is needed because of the nature of your connection or because this agreement is no longer appropriate. (It is unlikely that we will propose any changes unless your connection is at high voltage, you have generating equipment or there are other special features.) If a change is proposed under this clause, and cannot be agreed between us within 28 days, either of us may ask the Director General of Electricity Supply to decide whether or not the change should be made. 11.Ending this connection agreement:This agreement will end in relation to a connection when one of the following occurs: . you begin to take your electricity supply through that connection from us on our tariff terms: . you permanently stop having electricity delivered through that connection. . you no longer either own or occupy the premises at which the connection is situated; or . any circumstances arise which legally entitle us to cut off your electricity supplyto that connection and we write to you advising you that this agreement is ended. The ending of this agreement will not effect any rights, remedies or obligations which may have come into being under this agreement and Clauses 8 and 9 will continue to apply to those rights, remedies and obligations. 12.Transferring this connection agreement: You are not entitled to transfer this agreement to another person without our consent. 13.Providing information:You must provide us with any information we request in relation to the nature, or use by you, of electrical equipment on your premises. We will only ask for information that we need in relation to this agreement or the Distribution Code that applies under our Public Electricity Supply Licence. EX-21 7 EX 21.1 SUBSIDIARIS OF REGISTRANT EXHIBIT 21.1
Southern Investments UK plc - subsidiaries SIUK plc Subsidiary % owned Status South Western Electricity plc 100 Operating Aztec Insurance Limited 100 Operating EA Technology Limited 7.7 Operating ElectraLink Limited 6.19 Operating Electricity Association Limited 5.9 Operating Electricity Pensions Limited 0 Operating Electricity Pensions Trustee Limited 5 Operating ESN Holdings Limited 4.5 Operating Non-Fossil Purchasing Agency Limited 8.3 Operating Northmere Limited 0 Operating REC Collect Limited 25 Operating South West Enterprise Limited 0 Operating South Western Electricity Share Scheme Trustees Limited 100 Dormant South Western Energy Limited 100 Dormant South Western Helicopters Limited 100 Operating South Western Natural Gas Limited 100 Dormant South Western Power Limited 100 Operating Green Electron Limited 90 Operating South Western Power Investments Limited 100 Operating Teesside Power Limited 7.7 Operating Wind Electric Limited 11.7 Operating Wind Resources Limited 45 Operating Carland Cross Limited 100 Operating Coal Clough Limited 100 Operating Winterton Power Limited 25 Operating St Clements Services Limited 9.1 Operating SWEB Data Collection Services Limited 100 Operating SWEB Finance Limited 100 Dormant SWEB Gas Limited 100 Dormant SWEB Insurance Limited 100 Operating SWEB Investments 1996 Limited 100 Operating Croeso Systems Development Limited 50 Operating SWEB Investments Limited 100 Operating SWEB Limited 100 Dormant SWEB Natural Gas Limited 100 Dormant SWEB Pension Trustee Limited 100 Dormant SWEB Property Developments Limited 100 Operating Temple Back Developments Limited 49 Operating Weston-Super-Mare Developments Limited 100 Operating SWEB Property Investments Limited 100 Operating SWEB Retail Limited 100 Dormant SWEB Telecom Limited 100 Dormant UK Data Collection Services Limited 8.3 Operating Western Natural Gas Limited 100 Dormant
EX-24 8 EX 24.1 POWER OF ATTORNEY Exhibit 24.1 June 9, 1998 Miles W. McHugh, Wayne Boston and Richard A. Childs Dear Sirs: Southern Investments UK plc proposes to file or join in the filing of statements under the Securities Exchange Act of 1934, as amended, with the Securities and Exchange Commission with respect to the following: (1) the filing of this Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1998, and (2) quarterly filings on Form 10-Q for the quarters ended June 30, 1998, September 30, 1998 and December 31, 1998 and Current Reports on Form 8-K during the company's fiscal year 1998. Southern Investments UK plc and the undersigned directors and officers of said Company, individually as a director and/or as an officer of the Company, hereby make, constitute and appoint each of you our true and lawful Attorney for each of us and in each of our names, places and steads to sign and cause to be filed with the Securities and Exchange Commission in connection with the foregoing said Annual Report on Form 10-K and any appropriate amendment or amendments thereto and any necessary exhibits, said Quarterly Reports on Form 10-Q and any necessary exhibits. Yours very truly, SOUTHERN INVESTMENTS UK PLC By /s/ Richard J. Pershing Richard J. Pershing Chief Executive Officer - 2 - /s/ Robert D. Fagan /s/ Richard J. Pershing Accentacross Limited Richard J. Pershing By: Robert D. Fagan Director /s/ Thomas G. Boren /s/ Barney S. Smith Thomas G. Boren Barney S. Rush /s/ Carson B. Harreld /s/ C. Philip Saunders Carson B. Harreld C. Philip Saunders /s/ Gale E. Klappa /s/ Robert A. Symons Gale E. Klappa Robert A. Symons /s/ Roger L. Peterson Mighteager Limited By: Roger L. Petersen Director UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS OF SOUTHERN INVESTMENTS UK plc TO THE ADOPTION OF CERTAIN ACTIONS AND RESOLUTIONS IN LIEU OF MEETING The undersigned, being all of the members of the Board of Directors of Southern Investments UK plc (the "Company"), do hereby approve and adopt as of June 9, 1998, the following action and resolution: Power of Attorney to Execute Documents Filed with the Securities and Exchange Commission. RESOLVED, That for the purpose of signing reports under the Securities Exchange Act of 1934 to be filed with the Securities and Exchange Commission with respect to (1) the filing of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1998, and (2) quarterly filings on Form 10-Q for the quarters ended June 30, 1998, September 30, 1998 and December 31, 1998 and Current Reports on Form 8-K during the Company's fiscal year 1998; and of remedying any deficiencies with respect thereto by appropriate amendment or amendments, this Company, the members of its Board of directors, and its officers are authorized to give their several powers of attorney to Miles W. McHugh, Wayne Boston and Richard A. Childs. /s/ Robert D. Fagan /s/ Richard J. Pershing Accentacross Limited Richard J. Pershing By: Robert D. Fagan Director /s/ Thomas G. Boren /s/ Barney S. Rush Thomas G. Boren Barney S. Rush /s/ Carson B. Harreld /s/ C. Philip Saunders Carson B. Harreld C. Philip Saunders /s/ Gale E. Klappa /s/ Robert A. Symons Gale E. Klappa Robert A. Symons /s/ Roger L. Petersen Mighteager Limited By: Roger L. Petersen Director EX-27 9 EX 27.1 FDS
UT Exhibit 27.1 This schedule contains summary financial information extracted from Southern Investments UK plc Form 10-K for the twelve months ended March 31, 1998, and is qualified in its entirety by reference to such financial statements. Values are in (pound) sterling. 1,000,000 Pounds Sterling 12-MOS MAR-31-1998 MAR-31-1998 1.6765 PER-BOOK 1,263 322 143 0 0 1,728 0 500 (163) 337 0 0 301 283 0 80 0 0 0 0 677 1,728 760 101 628 628 132 11 42 57 (15) 0 0 34 0 60 0 0
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