19 th November 2018 Agenda 1. Introduction and Status Review 2. - PowerPoint PPT Presentation

EBCC Presentation 19 th November 2018

Agenda 1. Introduction and Status Review 2. Operational Update 3. 6 Month Operational Review 4. Focus for 2018/19 5. Security Review 6. Modification Update 7. Project Update 8. Any Other Business 9. Diary Planning

Operational Update October 2018

Operational Update - October 2018 • Cash Collection 99.97% • Rolling 12 Months 98.52% • 1 Failure to Pay Invoice Notice issued • No Cash Calls issued • No Further Security Request Notices Issued • No Failure to Pay Cash Call Notices issued

Cash Collection Monthly Breakdown Of Cash Collected At Payment Due Date 102% 99.96% 99.99% 99.99% 99.98% 100.00% 99.97% 99.76% 99.59% 99.57% 99.48% 100% 98% % Of Cash Collected 95.38% 96% 94% 92% 90% 88.52% 88% 86% 84% 82% Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Target PDD Collected PDD Collected PDD This graph provides a breakdown of the monthly figures that were collected against target on payment due date.* All figures rounded to 2 decimal places

Year Cash Collection Yearly Cash Collection Targets Payment Due Date 100% 99.63% 99.51% 99.51% 99.51% 99% 98.52% % Of Cash Collected 98% 98% 98% 98% 98% 98% 97% 96% 95% 2014 2015 2016 2017 2018 Target PDD Collected PDD The above graph is a yearly breakdown of cash collection against target on payment due date. The data is collated as a rolling 12 month figure.

Year Cash Calls position 45 Yearly Total Of Cash Calls Issued 41 40 40 35 31 30 No. Of Cash Calls 25 25 20 17 15 10 5 0 2014 2015 2016 2017 2018 This Graph provides a yearly breakdown of cash calls issued.

Overview of Cash Calls process • 41 Cash Calls have been issued in 2018, this figure is comparable to 2017 • 265 Users have been contacted during 2018 as a result of:- – Instances where utilisation has increased above 75% to discuss remedial action. – Utilisation has increased above 100% due to the following reasons:- • Genuine cash call but users have paid in additional funds immediately to avoid cash call being issued prior to 3pm • Provided missing CVA data • Paid EBI or Amendment invoices early

6 Month Operational Review April 2018 – October 2018

6 Month Operational Review • Cash Collection figures have remained consistent over the last 6 months. • Cash Call figures have remained significantly low since April 2018, this is due to the continued pro-active engagement with users reaching 75% where Users have taken early remedial action by placing additional funds in the Cash Call account or increasing Security. • Due to the high SAP prices in March, this has had an effect on the 12 month Rolling Sap Price as a consequence we have seen an increase in Securities during the annual security renewals. • 100% Letter of Credit Renewals in place prior to Expiry date. • 2 New members have joined the Credit Risk Team • The Credit Risk Team have supported 2 Customer Discovery Days providing additional training on the Energy Balancing Process.

Focus for next 6 months October 2018 – April 2019

Focus for next 6 months - Team • Team re-organisation – Due to OLS 3 members of the Credit Risk team will be leaving by the end of March 2019 • Mark Cockayne will be passing over responsibility to Palminder Sandhu to Manage the Credit Risk Team over the next few months. • Brendan Gill joins the Credit Risk team from today to replace Loraine O’Shaughnessy and Sandra Dworkin who will be leaving at the end of March 2019. • A full review of the Credit Risk Team is under review to look at process improvements, and where synergies of roles can be merged. • CICM Training across the team will continue • Continue to Support Customer Discovery days

Credit & Risk Management Team - Current Energy Settlements and Credit Manager Mark Cockayne Neutrality Finance Credit Risk Lead EB Credit Risk Lead (DSC) Neutrality Accountant Loraine O’Shaughnessy Sandra Dworkin Rehana Begun EB Security & Cash EB Credit Controller Credit Controller Neutrality Finance Xoserve DSC A/R & Security Process Credit & Risk Call Process Credit & Risk Credit Risk Assistant Co-ordinator Credit Risk Credit Risk Co-Ordinator Accountant Co-Ordinator Sue Nunnington/ Co-ordinator Co-Ordinator TBC Sheila Chauhan Monali Kale Sharon McBride Therese Siene Nichola Dowding Credit & Risk EB Credit & Risk CDSP Credit & Risk Business Process Business Process Business Pocess Administrator Administrator Administrator Farhan Haq Liz Bennett Vacancy

Credit & Risk Management Team – April 19 Mark Cockayne (M3) Business Process Manager (M2) Support EBCC Palminder Sandhu Credit Risk Lead (DSC & EB) Neutrality Finance (E1) Neutrality Accountant (E1) Brendan Gill Rehana Begun EB Security & Cash EB Credit Controller Neutrality Xoserve DSC Credit Controller Call Process & Security Process Finance Assistant Credit & Risk Credit Risk Credit Risk Credit Risk (DS3) Co-Ordinator (DS3) Co-Ordinator (DS3)) Co-ordinator (DS3) Co-Ordinator (DS3) Jehanzeb Chohan Monali Kale Nicola Dowding Sharon McBride Therese Siene EB Credit & Risk Credit & Risk Business Credit & Risk Business Process Process Administrator Business Process Administrator (DS2) Administrator (DS2) Liz Bennett (DS2) Sheila Chauhan Farhan Haq

Focus for next 6 months - Operational • Review the Winter Planning – Termination end to end process • Continue customer visits and early engagement with new market participants. • Brexit – Review potential impacts to Financial Institutes • EBCC Operational Pack – Review and update reporting mechanism • Continue to embed Xoserve’s Strategy House, • Full review of Energy Balancing Credit Rules • Support System enhancements to Gemini • Potential changes to internal A/R functionalities

Security Review April 2018 – October 2018

Security Review • Mod 587 - Seasonal energy balancing credit cover – 2 User’s have taken this service since it was introduced only an increase of 1 since last review • Letter of Credit Security has increased by £5.6m since April 2018. • Deposit Deed Security has reduced by £1.7m since April 2018. • The BBR changed August 2018, due to the increase interest is being applied to Deposit Deed and Cash Call Accounts which is payable quarterly by the bank. • 3 User admissions completed since April 2018 • 2 Voluntary discontinuances since April 2018

Security Update – November 2018 Period Letter of Deposit Deposit CC A/C Total Credit Deed Deed Deposit Security FSR held October £286,830,200 £38,259,000 £510,000 £224,000 £325,323,700 18

Security held – November 2018 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 CC A/C Deposit 5,000,000 Deposit Deed FSR 0 Letter of Credit Deposit Deed

Spread of Financial Exposure Aggregate Secured Limit by Rating Band- Letter of Credit £120,000,000.00 33 £100,000,000.00 35 £80,000,000.00 20 £60,000,000.00 £40,000,000.00 Secured Credit Limit 6 £20,000,000.00 3 5 £0.00 Aa3 AA- A1 A+ (S&P) A2 A (S&P) (Moody's) (S&P) (Moody's) (Moody's) £25,605,000 £62,000,000

Spread of Financial Exposure Aggregate Secured Credit Limit by Rating Band - Deposit Deed £25,000,000.00 94 £20,000,000.00 5 £15,000,000.00 Secured Credit Limit £10,000,000.00 £5,000,000.00 1 £0.00 AA- (S&P) A+ (S&P) A2 (Moody's) £25,605,000 £62,000,000

Rating Comparison Table Financial Insitute Moody's S&P Barclays Bank PLC A2 A BNP Paribas Aa3 A Citibank, N.A. A1 A+ Credit Agricole Corporate and Investment Bank A1 A+ DBS Bank Ltd. Aa1 AA- DNB Bank ASA Aa2 A+ DZ BANK AG Aa1 AA- HSBC Bank plc Aa3 AA- ING Bank N.V. Aa3 A+ JPMorgan Chase Bank, N.A. Aa1 A+ Landesbank Hessen-Thueringen GZ Aa3 A Lloyds Bank Plc Aa3 A+ Mizuho Bank, Ltd. A1 A MUFG Bank Ltd A1 A Natixis A1 A+ Aa3 AA- Nordea Bank AB Rabobank Aa3 A+ Royal Bank of Canada (London Branch) Aa2 AA- Santander UK PLC Aa3 A SEB Aa2 A+ Societe Generale A1 A Standard Chartered Bank A1 A Sumitomo Mitsui Banking Corporation A1 A Svenska Handelsbanken AB Aa2 AA-

Modification Update

Project Update

A.O.B 1. Voluntary Discontinuance

Diary Planning