Each User in respect of each category of connection and/or use with a direct connection to the National Electricity Transmission System shall enter into and comply with a Bilateral Connection Agreement in relation to such connection and/or use as identified in Paragraph 1.3.1(e).

Each User in respect of each category of connection and/or use with an Embedded Power Station (except those which are the subject of a BELLA) and/or in relation to a Small Power Station Trading Party and/or a Distribution Interconnector shall enter into and comply with a Bilateral Embedded Generation Agreement in relation to such use as identified in Paragraph 1.3.1(e).

Each User in respect of its Embedded Exemptable Large Power Station whose Boundary Point Metering System is registered in SMRS or is registered in CMRS by another User who is responsible for the Use of System Charges associated with the BM Unit registered in CMRS shall enter into and comply with a BELLA as identified in Paragraph 1.3.1(e).

Each User with a Secondary BM Unit shall enter in to and comply with a Virtual Lead Party Agreement in respect of the VLP Assets as identified in Paragraph 1.3.1(e).

Exhibits 1, 2, 5 and 7 in Schedule 2 to the CUSC contain the forms of Bilateral Agreements contemplated to be entered into pursuant to this Paragraph 1.3, being:

The Company and each User if a Generator shall, as between The Company and that User, in respect of the Generating Units, DC Converters and Power Park Modules from which that User is required to provide the Mandatory Ancillary Services in accordance with the Grid Code, enter into and comply with a Mandatory Services Agreement where applicable in accordance with Paragraph 1.3.3(b) in a form to be agreed between The Company and that User but based substantially on the form set out in Exhibit 4 in Schedule 2 (with necessary changes to enable the operation of those provisions, and those in Section 4 and Schedule 3 where the Generating Units, DC Converters or Power Park Modules (as the case may be) are not registered as BM Unit(s)).

Each User and The Company shall, as between The Company and that User, not later than 6 months (or such lesser time as may be agreed) prior to the expected Commissioning Programme Commencement Date, have entered into a Mandatory Services Agreement providing for payment for Mandatory Ancillary Services to be supplied by the User to The Company. In the event of a Mandatory Services Agreement not having been entered into by the said date, either party shall be entitled to initiate the procedure for resolution of the issue as an Other Dispute in accordance with Paragraph 7.4 to settle the terms of the said Mandatory Services Agreement. The Company shall not Energise the User’s Equipment or in the case of an Embedded Power Station issue an Operational Notification until the said Mandatory Services Agreement shall have been entered into by both parties.

Bilateral Agreements and Construction Agreements which are entered into between The Company and Users shall be in or substantially in the relevant exhibited form of Bilateral Agreement and/or Construction Agreement unless the parties thereto agree otherwise.

Each and every Bilateral Agreement, Mandatory Services Agreement and Construction Agreement entered into by a User and in force from time to time shall constitute a separate agreement governed by the terms of the CUSC and will be read and construed accordingly. For the avoidance of doubt no User shall enjoy any rights nor incur any obligations against any other User pursuant to the terms of any Bilateral Agreement, Mandatory Services Agreement or Construction Agreement.

a Power Station directly connected to the National Electricity Transmission System; or

an Embedded Power Station which is the subject of a Bilateral Embedded Generation Agreement or a Bilateral Embedded Licence Exemptable Large Power Station Agreement; or

where such Offer or Modification Offer is associated with Distributed Generation, a Distribution System directly connected to the National Electricity Transmission System, shall be offered on the basis of the Connect and Manage Arrangements.

a revised Offer on the basis of the Connect and Manage Arrangements as regards any Offer issued but not accepted pursuant to the Interim Connect and Management Arrangements

an offer to vary each Existing ICM Construction Agreement such that it is in a form and on terms consistent with a Construction Agreement entered into on the basis of the Connect and Manage Arrangements; and/or

a Modification Offer as regards any Bilateral Agreement entered into on the basis of the Interim Connect and Manage Arrangements which would require amendments in order to comply with the Connect and Management Arrangements, in each case on terms no less advantageous than those contained in offers made or agreements entered into pursuant to the Interim Connect and Manage Arrangements. The Applicant or User (as appropriate) shall be entitled to accept such a proposal or continue with its existing arrangements.

In the case of OTSDUW Build, The Company will issue the OTSUA Completion Notice to the Authority on the OTSUA Completion Notice Trigger Date and The Company shall also provide a copy of such OTSUA Completion Notice to the User.

In respect of any OTSUA Operational at the OTSUA Commissioning Period Effective Date, The Company will issue the OTSUA Completion Notice to the Authority as soon as practicable within 10 Business Days after the OTSUA Commissioning Period Effective Date and The Company shall also provide a copy of such OTSUA Completion Notice to the User. An OTSUA Completion Notice issued in accordance with this paragraph 1.5.3.2 for any OTSUA Operational at the OTSUA Commissioning Period Effective Date, shall be issued with effect from the same date for all OTSUA Operational at the OTSUA Commissioning Period Effective Date.

the defined terms within it, and the effect of those defined terms, shall be deemed to have the meanings they would have had if those agreements had been entered into after the OTSUA Commissioning Period Effective Date; and

the relevant Clauses within each Existing Offshore Agreement are amended and new Clauses introduced into each Existing Offshore Agreement so that each Existing Offshore Agreement is consistent in form and content with the changes introduced in CUSC Schedule 2 Exhibit 1 (Bilateral Connection Agreement) and Schedule 2 Exhibit 3A (Offshore Construction Agreement) on the OTSUA Commissioning Period Effective Date, and The Company and the User shall as quickly and as reasonably practicable take any steps as may be necessary to enable the Existing Offshore Agreements to be construed as if those agreements had been entered into after the OTSUA Commisioning Period Effective Date.

that the performance by The Company of its obligations under the BELLA should not cause it to be in breach of those provisions referred to at condition E12.6 of the ESO Licence;

that any methods by which the Relevant Transmission Licensee’s transmission system is connected to any other System for the transmission or distribution of electricity accord (insofar as applicable to The Company) with the Grid Code, the STC and the Distribution Code;

that the terms and conditions of the BELLA so settled by the Authority and of any other agreements entered into by The Company pursuant to Paragraph 1.7 should be in as similar a form as is practicable.

Subject to the other provisions of the CUSC and in particular Paragraphs 2.2.2(b) and 2.2.3, the relevant Bilateral Connection Agreement and the Grid Code, each User as between The Company and that User, shall have the right for the User's Equipment at each of its Connection Sites to remain Energised and Operational once Commissioned for the duration of the relevant Bilateral Connection Agreement in relation to that Connection Site.

If the User becomes aware that the bank or insurance company issuing the Performance Bond or Letter of Credit ceases to be a Qualified Bank or that the company giving the Performance Bond ceases to be a Qualified Company, the User shall notify The Company in writing as soon as it becomes so aware. If The Company becomes aware that the bank or insurance company issuing the Performance Bond or Letter of Credit ceases to be a Qualified Bank or that the company giving the Performance Bond ceases to be a Qualified Company, The Company may notify the User to that effect in writing. Where the bank, insurance company or the company so ceases to be either a Qualified Bank or a Qualified Company (as the case may be) as a consequence of The Company having reasonable cause to doubt the continued rating of the said bank, insurance company or company, such notice shall be accompanied by a statement setting out The Company’s reasons for having such doubt. The User shall within 21 days of the giving of such notice by The Company or the User whichever is the earlier provide a replacement Performance Bond and/or Letter of Credit from a Qualified Bank or Qualified Company, as the case may be, and/or provide a cash deposit in the required amount in a Bank Account. From the date the replacement Performance Bond or Letter of Credit or Bank Account cash deposit is effectively and unconditionally provided and Valid, The Company will consent in writing to the security which it replaces being released.

under Appendix F4 to the relevant Bilateral Connection Agreement it may do so upon obtaining the agreement of the other party such agreement not to be unreasonably withheld;

under Appendices F1, F3 or F5 to the relevant Bilateral Connection Agreement it shall be deemed to be a Modification for the purposes of the CUSC.

circuit breaker fail protection

pole slipping protection

fault disconnection facilities

automatic switching equipment

control arrangements

voltage and current signals for system monitoring

control telephony

operational metering, the User shall, as between The Company and that User, use all reasonable endeavours to ensure that during the period of such Bilateral Connection Agreement the User's Equipment which is subject to that Bilateral Connection Agreement retains such technical attributes or facilities provided always that if the User wishes to modify alter or otherwise change the same or their operation it may do so by following the procedures relating to a Modification in accordance with the CUSC.

in relation to Plant and Apparatus located between the National Electricity Transmission System and a Power Station, the electrical boundary is at the busbar clamp on the busbar side of the busbar isolators on Generators and Power Station transformer circuits;

save as specified in Paragraph 2.12.1(c) below, in relation to Plant and Apparatus located between the National Electricity Transmission System and a Distribution System, the electrical boundary is at the busbar clamp on the busbar side of the Distribution System voltage busbar selector isolator(s) of the National Electricity Transmission System circuit or if a conventional busbar does not exist, an equivalent isolator. If no isolator exists an agreed bolted connection at or adjacent to the tee point shall be deemed to be an isolator for these purposes;

in relation to Transmission Plant and Transmission Apparatus located between the National Electricity Transmission System and a Distribution System but designed for a voltage of 132KV or below in England and Wales and below 132kV in Scotland, the electrical boundary is at the busbar clamp on the busbar side of the busbar selector isolator on the Distribution System circuit or, if a conventional busbar does not exist, an equivalent isolator. If no isolator exists, an agreed bolted connection at or adjacent to the tee point shall be deemed to be an isolator for these purposes;

in relation to Plant and Apparatus located between the National Electricity Transmission System and the system of a Non-Embedded Customer, the electrical boundary is at the clamp on the circuit breaker side of the cable disconnections at the Non-Embedded Customer’s sub- station; and In the case of metal enclosed switchgear, that is not Gas Insulated Switchgear:

the electrical boundary will be the equivalent of those specified in this Paragraph 2.12.1 save that for rack out switchgear, the electrical boundary will be at the busbar shutters. In the case of Gas Insulated Switchgear:

the electrical boundary will be the equivalent of those specified in this Paragraph 2.12.1 save that the electrical boundary will be at:

is not a Gated Application for the purposes of the Gated Application and Offer Process, without prejudice to condition E12 of the ESO Licence The Company shall make a Connection Offer to that User as soon as practicable after receipt of the Connection Application and (save where the Authority consents to a longer period) in any event not more than 3 months after receipt by The Company of the Connection Application; and 2.13.3.2 is a Gated Application for the purposes of the Gated Application and Offer Process, The Company shall make a Connection Offer to that User in accordance with the Gated Application and Offer Process.

The Company shall only be obliged to provide such an offer in so far as such an offer satisfies the conditions detailed in Chapter 2 of the NETS SQSS; and

The Company shall be obliged, at the request of the User as part of the Connection Offer, to provide such information that the User may reasonably require in order to assess the probability of Notification of Restrictions on Availability being issued. For the avoidance of doubt, the information that is provided by The Company under this clause shall be a best estimate only and is not legally binding.

The Company will include Offshore Restrictions on Availability in any Offer made for New Connection Sites located in Offshore Waters which meet the Offshore Standard Design or Design Variation but not where the design is of a standard equivalent to or higher than the deterministic criteria detailed in Paragraphs 2.5 to 2.13 of the NETS SQSS. The Bilateral Connection Agreement will specify the circumstances of Offshore Restrictions on Availability during which access to the National Electricity Transmission System will be restricted; and

In the event that the User requests a Connection Offer on the basis of a Design Variation then:

The following provisions relate to the ability for invoices to be issued for Connection Charges based on an estimate of the cost of Transmission Connection Asset Works, and for a reconciliation once those costs are known.

The Company shall be entitled to invoice each User for Connection Charges payable in accordance with the CUSC in respect of any Plant and Apparatus installed as part of the Transmission Connection Asset Works on the basis set out in the Statement of the Connection Charging Methodology, until the final cost of carrying out the said Transmission Connection Asset Works shall have been determined.

As soon as practicable after the Completion Date and in any event within one year (or such later period as The Company and the relevant User shall agree) thereof. The Company shall, as between The Company and that User, provide to the User a written statement specifying the Connection Charges calculated in accordance with the Charging Statements based on the cost of carrying out the Transmission Connection Asset Works (the “Cost Statement”). The Company shall be entitled to revise Appendix B to the relevant Bilateral Connection Agreement accordingly.

In the event that the Connection Charges specified in the Cost Statement are greater than the amount paid by the User based on The Company’s estimate under Paragraph 2.14.3(b), the User shall pay to The Company the difference between the two amounts plus interest on a daily basis from the date of payment by the User of the amounts calculated on The Company’s estimate to the date of payment by the User of the difference at the Base Rate. In the event that the Connection Charges specified in the Cost Statement are less than the amount paid by the User based on The Company’s estimate, The Company shall pay to the User the difference between the two amounts plus interest on a daily basis from the date of payment by the User of the amounts calculated on The Company’s estimate to the date of repayment by The Company at the Base Rate. Such payment of reconciliation shall be made by one party to the other within 28 (twenty eight) days of the Cost Statement.

The following provisions relate to the payment for certain One-off Works, which arise in relation to the construction of a Connection Site.

Each User shall forthwith on the relevant date set out in the relevant Bilateral Connection Agreement be liable to pay to The Company the One-off Charge (if any) as set out in the relevant Bilateral Connection Agreement.

The Company shall invoice the User for an amount equal to The Company’s estimate of the One-off Charge before, on or after the relevant date set out in the relevant Bilateral Connection Agreement and the User shall pay to The Company the amount stated in The Company invoice at the later of such relevant date or 28 (twenty eight) days after the date of the said invoice.

As soon as practicable thereafter The Company shall provide the User with a statement of the One-off Charge. In the event of the amount specified in the statement being more than the amount paid by the User to The Company in terms of Paragraph 2.14.4(c), the User shall pay to The Company the difference plus interest on a daily basis from the date of the invoice under Paragraph 2.14.4(c) to the date of invoice for the difference at the Base Rate from time to time within 28 days (twenty eight) days of the date of The Company’s invoice. In the event of the amount specified in the statement being less than the amount paid by the User under the terms of Paragraph 2.14.4(c), The Company shall forthwith pay to the User an amount equal to the difference plus interest calculated on a daily basis at the Base Rate from the date of payment by the User under Paragraph 2.14.4(c) to the date on which the difference is repaid by The Company.

The Company shall be entitled to invoice each User for the indicative Site Specific Maintenance Charge in each Financial Year as set out in the Statement of the Connection Charging Methodology.

As soon as reasonably practicable and in any event by 31 July in each Financial Year The Company shall:

Two months after the date of issue of the Maintenance Reconciliation Statement and in any event by 30 September The Company shall issue a credit note in relation to any sums shown by the Maintenance Reconciliation Statement to be due to the User or an invoice in respect of sums due to The Company (such invoice to be payable within 30 days of the date of the invoice) and in each case interest thereon calculated pursuant to Paragraph 2.14.5(d) below.

Interest on all amounts due under this Paragraph 2.14.5 shall be payable by the paying CUSC Party to the other on such amounts from the date of payment applicable to the month concerned until the date of invoice for such amounts and such interest shall be calculated on a daily basis at a rate equal to the Base Rate during such period.

in the case of a User which meets The Company Credit Rating at the date of the Bilateral Connection Agreement, in accordance with Paragraph 2.20; and

in the case of a User which does not meet The Company Credit Rating at the date of the Bilateral Connection Agreement or thereafter ceases to meet it, in accordance with Paragraph 2.21.

to apply to Standards and Poor’s and/or Moody’s for a further indicative long term private credit rating; or

to confirm to The Company that it shall provide the security referred to in Paragraph 2.20.4 hereof.

not having an The Company Credit Rating; or

having a credit rating below The Company Credit Rating; or

not having obtained from Standard and Poor’s or Moody’s within 30 days of the written notification under Paragraph 2.20.2 above an indicative long term private credit rating, or if The Company becomes aware that

The Company shall provide to each relevant User a Bi- annual Estimate showing the amounts of all payments required or which may be required to be made by the User to The Company in respect of Termination Amounts (inclusive of any applicable Value Added Tax that would be due) at the following times and in respect of the following periods:-

Such Bi-annual Estimate shall be accompanied by the Secured Amount Statement specifying the aggregate amount to be secured at the beginning of and throughout each such period.

If The Company shall not provide any subsequent Bi-annual Estimate and Secured Amount Statement by the requisite date, then the User shall at the date it is next required to have in full force and effect security and whether by renewal or replacement or otherwise in respect of the following six calendar month period nonetheless provide security in accor- dance with the provisions of this Paragraph 2.21 in the same amount as the amount then in force in respect of the then current six calendar month period. Notwithstanding the foregoing, if The Company shall provide the User with any Bi-annual Estimate and Secured Amount Statement later than the date specified in Paragraph 2.21.2(a) then the following shall apply. The User shall within 30 (thirty) days of receipt of the said Secured Amount Statement procure that to the extent that the amount in respect of which security has been or is to be provided pursuant to this Paragraph 2.21.2(c) in respect of the relevant period (“the Secured Amount”) falls short of the amount stated in the Secured Amount Statement (the “Required Amount”) the Secured Amount shall be adjusted to the Required Amount.

Entitlement to Estimate If The Company is (for whatever reason) unable on any relevant date to calculate precisely any sum due or which has accrued due or in respect of which the User has a liability to The Company for payment under any of the provisions of this CUSC, The Company shall be entitled to invoice the User for a sum equal to The Company’s fair and reasonable estimate of the sums due or which may become due or in respect of which the User has a liability to The Company for payment. The Company shall also be entitled to send the User further invoices for such sums not covered in previous invoices. The User shall pay The Company all sums so invoiced by The Company.

Demands not Affected by Disputes It is hereby agreed between The Company and the User that if there shall be any dispute between the User and The Company as to:-

If there shall be any dispute as mentioned in Paragraph 2.21.2(e) the same shall, whether The Company shall have terminated the relevant Bilateral Connection Agreement and recovered or sought to recover payment under the security arrangement or not, and without prejudice to The Company’s right to recover or seek to recover such payment, be dealt with in the case of Paragraphs 2.21.2(e)(i) and 2.21.2(e)(ii) under Section 7 as a Charging Dispute and, in the case of Paragraphs 2.21.2(e)(iii) and 2.21.2(e)(iv) be dealt with under Section 7 as an Other Dispute.

A Performance Bond or Letter of Credit from a Qualified Bank for the amount stated in the Secured Amount Statement as the estimated amount to be secured, such Performance Bond or Letter of Credit to be Valid for at least the period stated in such Secured Amount Statement and to be renewed periodically where applicable in the manner stated in Paragraph 2.22.2(c); or

A cash deposit in a Bank Account at least for the amount stated in the Secured Amount Statement as the estimated amount to be secured, such cash deposit to be increased or reduced periodically where applicable in the manner stated in Paragraph 2.22.2(d); or

A Performance Bond from a Qualified Company for the amount stated in the Secured Amount Statement as the estimated amount to be secured, such Performance Bond to be Valid for at least the period stated in such Secured Amount Statement and to be renewed periodically where applicable in the manner stated in Paragraph 2.22.2(c)

Any Notice of Drawing to be delivered to Barclays Bank PLC or any other bank at which the Bank Account shall have been opened or a Qualified Bank or a Qualified Company may be delivered by hand, by post, or by other agreed communication method.

If the User becomes aware that the bank issuing the Performance Bond or Letter of Credit ceases to be a Qualified Bank or that the company giving the Performance Bond ceases to be a Qualified Company, the User shall notify The Company in writing as soon as it becomes so aware. If The Company becomes aware that the bank issuing the Performance Bond or Letter of Credit ceases to be a Qualified Bank or that the company giving the Performance Bond ceases to be a Qualified Company, The Company may notify the User to that effect in writing. Where the bank or the company so ceases to be either a Qualified Bank or a Qualified Company (as the case may be) as a consequence of The Company having reasonable cause to doubt the continued rating of the said bank or company, such notice shall be accompanied by a statement setting out The Company’s reasons for having such doubt. The User shall within 21 days of the giving of such notice by The Company or the User whichever is the earlier provide a replacement Performance Bond and/or Letter of Credit from a Qualified Bank or Qualified Company, as the case may be, and/or provide a cash deposit in the required amount in a Bank Account. From the date the replacement Performance Bond or Letter of Credit or Bank Account cash deposit is effectively and unconditionally provided and Valid, The Company will consent in writing to the security which it replaces being released.

The following provisions shall govern the issuance, renewal and release of the Performance Bond or Letter of Credit:-

The following provisions shall govern the maintenance of cash deposits in the Bank Account:-

Notwithstanding any provision aforesaid:-

where a Performance Bond or a Letter of Credit is to substitute for other securities, it must be issued or given at least 45 days before such immediately preceding 31st March or 30th September (as the case may be).

where a cash deposit in a Bank Account is to substitute for other securities, it must be deposited into the Bank Account at least 45 days before such immediately preceding 31st March or 30th September (as the case may be).

The rights and obligations of a User, and The Company in connection therewith, are subject to the following conditions precedent having been fulfilled before such rights and obligations arise:

If the conditions precedent of 3.2.2(a)(i) to (iii) have not been fulfilled in the case of 3.2.2(a)(i) and 3.2.2(a)(ii) within 6 months of the date of the relevant Bilateral Embedded Generation Agreement or in the case of 3.2.2(a)(iii) within 3 months of the date of receipt by the owner/operator of the Distribution System of the Modification Offer The Company or the relevant User may rescind the relevant Bilateral Embedded Generation Agreement and any associated Construction Agreement by giving to the other notice to that effect in which event all rights and liabilities of the parties thereunder and under the CUSC in relation to relevant Embedded Power Stations or relevant Distribution Interconnectors shall cease.

Other than as provided in Paragraph 3.2.3(b), each User, as between The Company and that User, shall not operate its User's Equipment such that its export of power onto the National Electricity Transmission System exceeds the Transmission Entry Capacity and (if any) STTEC and\or LDTEC and\or any Temporary Received TEC less any Temporary Donated TEC for the relevant Period set out in Appendix C to the relevant Bilateral Embedded Generation Agreement save as expressly permitted and instructed pursuant to an Emergency Instruction under the Grid Code or save as expressly permitted and instructed pursuant to the Fuel Security Code or as may be necessary or expedient in accordance with Good Industry Practice.

Each User in respect of an Embedded Small Power Station and a Distribution Interconnector and as a Trading Party responsible for Embedded Small Power Stations, as between The Company and that User, shall not operate its User’s Equipment or equipment for which the User is responsible (as defined in Section K of the Balancing and Settlement Code) such that its export of power onto the National Electricity Transmission System exceeds the Transmission Entry Capacity and (if any) STTEC and\or LDTEC and\or any Temporary Received TEC less any Temporary Donated TEC for the relevant Period set out in Appendix C to the relevant Bilateral Embedded Generation Agreement save as expressly permitted and instructed pursuant to the Fuel Security Code or as may be necessary or expedient in accordance with Good Industry Practice.

The Company and each User shall, as between The Company and that User, operate respectively the National Electricity Transmission System and the User System with the special automatic facilities and schemes set out in Appendix F3 to the relevant Bilateral Embedded Generation Agreement.

Each User shall ensure the User’s Equipment complies with the site specific technical conditions set out in Appendix F4 to the relevant Bilateral Embedded Generation Agreement.

Each User shall use all reasonable endeavours to ensure during the period of the relevant Bilateral Embedded Generation Agreement that the User’s Equipment shall continue to comply with the site specific technical conditions set out in Appendix F5 to the relevant Bilateral Embedded Generation Agreement.

control arrangements

voltage and current signals for system monitoring

control telephony

operational metering the User shall, as between The Company and that User, use all reasonable endeavours to ensure that during the period of such Bilateral Agreement the User's Equipment which is subject to that Bilateral Agreement retains such technical attributes or facilities provided always that if the User wishes to modify, alter or otherwise change the same or their operation it may do so by following the procedures relating to a Modification in accordance with the CUSC.

the electrical location and nomenclature of the Energy Metering Equipment installed in relation to each such customer;

the identity of the operator of the Distribution System to which such customers are connected;

the Grid Supply Point and Transmission Network Use of System Demand Zone meeting the Demand (Active Power) of each customer;

the loss factors applying to the Energy Metering Equipment installed in relation to each such customer, save where the User’s customer is connected to a Distribution System owned by a Public Distribution System Operator in which case the Public Distribution System Operator’s published statement of loss factors shall apply. Such written notice shall be given to The Company no later than 28 days prior to the commencement or cessation of use of any such exit point. If the Grid Supply Point referred to in (c) changes the User shall notify The Company forthwith after being notified of such change by the Public Distribution System Operator in question. If The Company’s basis of charging changes pursuant to the Charging Statements or, subject thereto, Parts II and III below at any time, The Company shall be entitled to ask for other information it reasonably requires for charging purposes under this Paragraph 3.5.

the User being authorised by a current Supply Licence to supply electricity to the premises to be supplied with electricity through the Connection Site; and

there being a subsisting Bilateral Connection Agreement with the Non-Embedded Customer for the Connection Site.

The Company shall, to the extent that it may lawfully do so, at the request of the Supplier, when the Supplier is entitled to have the Deenergisation of a Non-Embedded Customer, Connection Site(s), carried out, carry out such Deenergisation on behalf of and at the cost of the Supplier within a reasonable time or, in circumstances of urgency, as soon as is reasonably practicable.

The Company shall if requested by the Supplier, inform the Supplier of its reasonable requirements for the details of the Non-Embedded Customer’s Connection Site(s) to be De- energised.

The Company shall Reenergise the User’s Equipment at the Non-Embedded Customer’s Connection Site as soon as is reasonably practicable after the circumstances leading to Deenergisation under Paragraph 3.6.9.(a) have ceased to exist. Duty to Indemnify

Where The Company carries out a Deenergisation on behalf of a Supplier under Paragraph 3.6.9.(a) The Company shall indemnify the Supplier against (a) all actions, proceedings, costs, demands, claims, expenses, liability, loss or damage made against or incurred or suffered by the Supplier as a consequence of, physical damage to the property of the Supplier, its officers, employees or agents, (including any claim by another User connecting at the same substation) and (b) in respect of the liability of the Supplier to any other person for loss in respect of physical damage to the property of any person, in each case as a consequence of The Company acting contrary to an accurate and appropriate instruction from the Supplier to Deenergise the Non-Embedded Customer’s Connection Site;

Save for any matters arising from or in connection with the negligent act or omission or default of The Company, its officers, employees or agents, the Supplier shall indemnify The Company against (a) 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 (b) 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 Supplier to The Company to Deenergise the Non-Embedded Customer’s Connection Site which are materially inaccurate or misleading; and

Where the Supplier requests The Company to Deenergise a single point of connection that is both a Grid Supply Point and a Grid Entry Point, the Supplier shall also indemnify The Company against all actions, proceedings, costs, demands, claims, expenses, liability, loss or damage made against or incurred or suffered by The Company and resulting directly from such Deenergisation howsoever arising (including any claim by another User connecting at the same substation) except insofar as such actions, proceedings, costs, demands, claims, expenses, liability, loss or damage arise from the negligent act or omission or default of The Company, its officers, employees or agents. Downstream Parties

A Non- Embedded Customer shall provide its Supplier on request and as soon as is reasonably practicable with the details of any Downstream Parties including (but not limited to) contact names, addresses, email addresses, and telephone numbers.

Prior to a Supplier instructing The Company to Deenergise the Non-Embedded Customer’s Connection Site(s) under Paragraph 3.6.9.(a):

where there are Downstream Parties (other than Downstream Parties that are Affiliates of the Non-Embedded Customer), the Supplier shall, giving not less than 48 hours’ notice, arrange a meeting between the Supplier, the Non-Embedded Customer, those Downstream Parties and The Company to discuss the impact of the Deenergisation and whether an agreement to avoid the Deenergisation and resulting impact on those Downstream Parties can be reached to the reasonable satisfaction of the Supplier (acting reasonably); and

the Supplier shall not issue its Deenergisation instruction to The Company within 72 hours (or such longer period, determined by the Supplier from time to time, at their sole discretion, and notified to the attendees of any meeting held under (b)) from the commencement of any meeting held under (b).

is not a Gated Application for the purposes of the Gated Application and Offer Process, without prejudice to Condition E12 of the ESO Licence The Company shall make a Use of System Offer to that User as soon as practicable after receipt of the Use of System Application and (save where the Authority consents to a longer period) in any event not more than 28 days after receipt by The Company of the Use of System Application.

is a Gated Application for the purposes of the Gated Application and Offer Process, the Use of System Application and Use of System Offer shall be processed in accordance with the Gated Application and Offer Process.

The Company shall only be obliged to provide such an offer in so far as such an offer satisfies the conditions detailed in Chapter 3 of the NETS SQSS; and

The Company shall be obliged, at the request of the User as part of the Use of System Offer, to provide such information that the User may reasonably require in order to assess the probability of Notification of Restrictions on Availability being issued. For the avoidance of doubt, the information that is provided by The Company under this clause shall be a best estimate only and is not legally binding.

If a Use of System Termination Notice is given under this Section 3, the right to use the National Electricity Transmission System shall cease upon the termination date in the Use of System Termination Notice.

Prior to cessation of use by a User under this Paragraph, the User shall pay The Company all Use of System Charges payable by it under Section 3 in respect of the Financial Year in which the cessation takes place.

The rights and obligations of a User, and The Company in connection therewith, are subject to the following conditions precedent having been fulfilled before such rights and obligations arise:

If the conditions precedent of 3.8A.2(a)(i) to (iii) have not been fulfilled within 6 months of the date of the relevant Virtual Lead Party Agreement, The Company or the relevant User may rescind the relevant Virtual Lead Party Agreement by giving to the other notice to that effect in which event all rights and liabilities of the parties thereunder and under the CUSC in relation to the VLP Assets shall cease. 3.8A.3 Outages and Constraints

Subject to the other provisions of the CUSC and the Grid Code and any relevant Virtual Lead Party Agreement, The Company shall, as between The Company and that User, accept into the National Electricity Transmission System power from each User except to the extent (if any) that The Company is prevented from doing so by transmission constraints which could not be avoided by the exercise of Good Industry Practice by The Company. 3.8A.4 TECHNICAL CONDITIONS FOR VIRTUAL LEAD PARTIES 3.8A.4.1 Each User shall use all reasonable endeavours to ensure during the period of the relevant Virtual Lead Party Agreement that the VLP Assets shall comply with the technical conditions set out in Appendix F5 to the relevant Virtual Lead Party Agreement. 3.8A.4.2 If a User or The Company wishes to modify, alter or otherwise change the technical conditions or the manner of their operation under Appendix F5 to the relevant Virtual Lead Party Agreement this shall be deemed to be a Modification for the purposes of the CUSC.

Invoices issued under paragraphs 3.13.3 and 3.13.5 above and 3.13.8 (b) below shall be payable within 30 days of the date of the invoice.

Interest on all amounts due under this Paragraph 3.13 shall be payable by the paying CUSC 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.

The Company shall as soon as reasonably practicable following receipt by it of the Final Reconciliation Settlement Run or Final Reconciliation Volume Allocation Run as appropriate in respect of the last Settlement Day in each Financial Year issue a further Demand and FDSC and Unmetered Supply Volume reconciliation statement (the “Final Demand Reconciliation Statement”) in respect of Demand and FDSC and Unmetered Supply Volume related Transmission Network Use of System Charges payable in respect of each month of that Financial Year showing:-

Together with the Final Demand Reconciliation Statement The Company shall issue a credit note in relation to any sum shown in the Final Demand Reconciliation Statement to be due to the User or an invoice in respect of sums due to The Company and in each case interest thereon calculated pursuant to Paragraph 3.13.6.

Payment of any invoice issued pursuant to Paragraph 3.13.7(b) above or the application of any credit note issued pursuant to that paragraph against any liability of the User to The Company for Demand and FDSC and Unmetered Supply Volume related Transmission Network Use of System Charges will be in full and final settlement of all Demand and FDSC and Unmetered Supply Volume related Transmission Network Use of System Charges for the Financial Year to which the invoice or credit note relates provided that nothing in this Paragraph 3.13.8(c) shall affect the rights of the parties under the provisions of Paragraph 7.3.5.

The Company shall not later than 17.00 hours on the relevant Notification Date (and if this is not practicable as soon as possible thereafter as The Company, acting reasonably, considers is practicable) despatch an advice notice to the User in respect of the Settlement Day in relation to which the Balancing Services Use of System Charges are due on the relevant Payment Date.

The information on the advice notice in respect of each Settlement Day shall include the name of the User and the total amount payable to The Company in respect of Balancing Services Use of System Charges and in all cases together with any Value Added Tax thereon during each Settlement Day.

The Company shall, within a reasonable time thereafter provide a valid Value Added Tax invoice in respect of Balancing Services Use of System Charges identified on the advice note.

The User shall pay the Balancing Services Use of System Charges specified in the advice notice together with the Value Added Tax thereon to The Company no later than 12.30 hours on the Payment Date specified on the advice note in respect of such Settlement Date as if they were payments made in the manner specified in Paragraph 6.6.3.

The Company shall use reasonable endeavours to publish no later than the last Business Day in each month the Balancing Services Use of System (BSUoS) charges Forecast Information

The Balancing Services Use of System Charges Forecast Information will include:

Each update shall be based on the latest information for items which The Company reasonably expects to make a material impact to the expected Balancing Services Use of System Charges.

the Reconciled Charge exceeds the Balancing Services Use of System Charges paid by the User in respect of that Settlement Day (“Initial Charge”) The Company shall at its option either:

the Reconciled Charge is less than the Initial Charge The Company shall at its option either:-

In the event that the amount shown in any Dispute Statement exceeds the aggregate amount paid by the User in respect of the Settlement Day to which the Dispute Statement relates under any invoices issued pursuant to Paragraph 3.16.2 and Paragraph 3.17.2 above (after taking into account any credit notes issued) The Company shall submit to the User a further invoice for such excess and interest thereon calculated in accordance with Paragraph 3.17.3;

In the event that the amount shown in any Dispute Statement is less than the aggregate amount paid by the User in respect of the Settlement Day to which the Dispute Statement relates under any invoices issued pursuant to Paragraph 3.16.2 and Paragraph 3.17.2 above (after taking into account any credit notes issued) The Company shall submit to the User a credit note for the amount by which the amount paid exceeds the amount shown in the Dispute Statement together with interest thereon calculated in accordance with Paragraph 3.17.3.

is not taken into account in the Final Reconciliation Volume Allocation Run; and

has been ratified in accordance with the procedures for ratification set out in the Balancing and Settlement Code, then The Company shall use its reasonable endeavours to prepare the Balancing Services Use of System Reconciliation Statement on the basis of the ratified data.

to establish the User’s Allowed Credit; and

if required, that it has provided and is not in default under the Security Cover referred to in Paragraph 3.22.3 below.

the date of its becoming a party to the CUSC Framework Agreement; or

two Business Days after The Company notifies the User in writing that the Security Cover required exceeds the Security Amount provided; or

where and to the extent that the amount of Security Cover required exceeds the Security Amount provided as a result of a User’s revised forecast given in accordance with Paragraph 3.10 within one month of such revised forecast being provided to The Company:-

subject to the issuing bank continuing to have an Approved Credit Rating for an amount at least equal to the required Security Amount applicable to it (less the balance of deposits on the Escrow Account in respect of the Security Amount) 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 Part III; or

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 Security Amount applicable to it (less the balance of deposits on the Escrow Account in respect of the Secruity Amount) which Letter of Credit shall be available for a period of not less than 6 months; or

subject to the entity issuing the Qualifying Guarantee continuing to have an Approved Credit Rating or Credit Assessment Score for an amount at least equal to the required Security Amount applicable to it (less the balance of deposits on the Escrow Account in respect of the Security Amount) 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 Part III; or

provide The Company with a new Qualifying Guarantee for an amount at least equal to the required Security Amount applicable to it (less the its balance of deposits on the Escrow Account in respect of the Security Amount) which Qualifying Guarantee shall be available for a period of not less than 6 months; or

procure such transfer to The Company 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; or

subject to the entity issuing the Bilateral Insurance Policy or Insurance Performance Bond or Independent Security Arrangement continuing to meet the Requirements provide The Company with confirmation from the issuing entity that the validity of the Bilateral Insurance Policy or Insurance Performance Bond or Independent Security Arrangement 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 III; or

provide The Company with a new Bilateral Insurance Policy or Insurance Performance Bond or Independent Security Arrangement for an amount at least equal to the required Security Amount applicable to it (less the balance of deposits on the Escrow Account in respect of the Secruity Amount) which Bilateral Insurance Policy or Insurance Performance Bond or Independent Security Arrangement shall be available for a period of not less than 6 months.

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 this CUSC 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 a Bilateral Insurance Policy or an Insurance Performance Bond or an Independent Security Arrangement or transfer to The Company cash to be credited to the Escrow Account.

If the entity providing the User’s Qualifying Guarantee ceases to have an Approved Credit Rating or Credit Assessment Score for an amount at least equal to the required Security Amount (less the balance of the User’s deposits on the Escrow Account in respect of the Security Amount) the User shall forthwith procure a replacement Qualifying Guarantee from an entity with such a credit rating or a Letter of Credit or a Bilateral Insurance Policy or an Insurance Performance Bond or an Independent Security Arrangement or transfer to The Company cash to be credited to the Escrow Account.

If the entity providing the User’s Bilateral Insurance Policy or Insurance Performance Bond or Independent Security Arrangement ceases to meet the Requirements the User shall forthwith procure a replacement of the same or a Bilateral Insurance Policy, Insurance Performance Bond, Independent Security Arrangement, Letter of Credit, Qualifying Guarantee or transfer to The Company cash to be credited to the Escrow Account in respect of the Security Amount.

the Balancing Services Use of System Charges provided for in the CUSC, where the User is a Supplier, over a 32 day period or such period as The Company acting reasonably shall specify to the User in writing from time to time taking into account the requirements for Security Cover contained in the Balancing and Settlement Code and where The Company proposes to change such period The Company shall consult with Users; and

the Balancing Services Use of System Charges provided for in the CUSC, where the User is a Generator, over a 29 day period or such period as The Company acting reasonably shall specify to the User in writing from time to time taking into account the requirements for Security Cover contained in the Balancing and Settlement Code and where The Company proposes to change such period The Company shall consult with Users; and

in relation to Transmission Network Use of System Demand Charges calculated in the following manner for each Security Period:-

in the Financial Year in which such charges first become due the greater of zero and the User’s Base Value at Risk; and

in the case of subsequent Financial Years the greater of zero and the sum of (i) the User’s Base Value at Risk and (ii) the User’s Forecasting Performance Related VAR.

interest on the amounts referred to in (a), (b) and (c) above calculated in accordance with the provisions of this CUSC.

any applicable Value Added Tax that would be due on the amounts referred to in this Paragraph 3.23.2

that User fails to provide, maintain, extend or renew a Qualifying Guarantee or a Letter of Credit or a Bilateral Insurance Policy or an Insurance Performance Bond or an Independent Security Arrangement which it is required to provide, maintain, extend or renew pursuant to Paragraphs 3.22 or 3.23 inclusive;

The Company shall make a demand under any such Qualifying Guarantee or a call under a Letter of Credit or a Bilateral Insurance Policy or an Insurance Performance Bond or an Independent Security Arrangement; or

The Company becomes aware that that User:

The Company becomes aware that any bank that has issued a Letter of Credit in relation to that User which has not expired shall cease to have the credit rating required by this Section; or

The Company becomes aware that any entity providing a Qualifying Guarantee or a Bilateral Insurance Policy or an Insurance Performance Bond or an Independent Security Arrangement in relation to that User which has not expired shall cease to meet the Requirements in the case of a Bilateral Insurance Policy or an Insurance Performance Bond or an Independent Security Arrangement or in the case of a Qualifying Guarantee cease to have an Approved Credit Rating or Credit Assessment Score for an amount at least equal to the required Security Amount (less its balance of deposits on the Escrow Account in respect of the Security Amount); or

The Company becomes aware that the User’s Security Requirement exceeds 85% of the User’s Allowed Credit. Provided always that the failure by The Company to notify the User pursuant to Paragraphs 3.23.9, 3.23.10 or 3.23.11 shall not relieve the User of its obligations under and in accordance with the terms of this Section 3 and the Charging Statements.

The Company may demand payment under any outstanding Independent Security Arrangement provided for the benefit of the User.

it gains an Approved Credit Rating; or

it ceases to have an Approved Credit Rating; or

where the User holds an Approved Credit Rating, its specific investment grading changes; or

it has reason to believe that its Credit Assessment Score is likely to have changed since the last Independent Credit Assessment.

the obligation for Users whose Security Requirement will as a result of the Security Amendment increase at the Security Amendment Implementation Date shall be to provide the difference between the Existing Security Cover and the Security Cover in full by no later than the End Date and by increasing the Existing Security Cover each month by equal monthly amounts of the difference between the existing Security Cover and the Security Cover; and

where a User’s Security Requirement at the Security Amendment Implementation Date is less than the Existing Security Cover held for that User then The Company shall release the existing Security Cover by the appropriate amount as soon as practicable and in any event within one calendar month of the Security Amendment Implementation Date.

Until the Initial Demand Reconciliation Statement has been issued for the Financial Year ending at least six months following the Value At Risk Amendment Implementation Date, and The Company has calculated the Forecasting Performance Related VAR by reference to this, each User’s Forecasting Performance Related VAR shall be substituted by such percentage of User’s Transmission Network Use of System Demand Charges as reflects the percentage difference between the Actual Amount and the Notional Amount of the User’s Transmission Network Use of System Demand Charges for the previous Financial Year, provided that where the Notional Amount exceeds the Actual Amount, the percentage shall be zero;

the obligation for Users whose Security Requirement will increase at the Value At Risk Amendment Implementation Date as a result of the Value At Risk Amendment shall be to provide the difference between the Pre-Value At Risk Amendment Security Cover and the Security Cover in full by no later than the Value At Risk Amendment Implementation End Date and by increasing the Pre-Value At Risk Amendment Security Cover each month by equal monthly amounts of the difference between the Pre-Value At Risk Amendment Security Cover and the Security Cover; and

where a User’s Security Requirement at the Value At Risk Amendment Implementation Date is less than the Pre-Value At Risk Amendment Security Cover held for that User then The Company shall release the Pre-Value At Risk Amendment Security Cover by the appropriate amount as soon as practicable and in any event within one calendar month of the Value At Risk Amendment Implementation Date.

The provisions of this Paragraph 4.1 shall apply to Users which are Generators in respect of Generating Units, DC Converters and Power Park Modules from which they are required to provide the Mandatory Ancillary Services to The Company in accordance with the Grid Code (for the avoidance of doubt, as determined by any direction in force from time to time and issued by the Authority relieving any such 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 The Company, the ESO Licence, as may be specified in such direction).

In respect of Generating Unit(s), DC Converter(s) and Power Park Modules which are required to provide Mandatory Ancillary Services to The Company in accordance with the Grid Code and which are not registered as BM Unit(s), the Mandatory Service Agreement shall detail how the provisions of Section 4 and Schedule 3 of the CUSC which refer to BM Unit(s) shall (notwithstanding such Generating Unit(s), DC Converter(s) and Power Park Module(s) are not registered as BM Unit(s)) apply.

The Company and each User shall, as between The Company and that User, comply with the provisions regarding the Obligatory Reactive Power Service and any Enhanced Reactive Power Service contained in Schedule 3, Part I. Provision of Obligatory Reactive Power Service

Subject as herein provided, each User hereby agrees, as between The Company and that User, to provide the Obligatory Reactive Power Service from each of the BM Units specified in a Mandatory Services Agreement.

In respect of Generating Unit(s) located Offshore where the Obligatory Reactive Power Service is provided to The Company by an Offshore Transmission Licensee in accordance with the STC, the Mandatory Ancillary Services Agreement shall detail the payments that The Company shall make to the User (not withstanding that the Obligatory Reactive Power Service is provided to The Company by an Offshore Transmission Licensee). Redeclarations

(a) For the avoidance of doubt, nothing in this Paragraph 4.1.2.4 or any Mandatory Services Agreement shall affect the provisions of Grid Code OC 2 and/or BC 1 concerning the redeclaration in relation to any BM Unit (or where applicable, any CCGT Unit or Power Park Unit) of a revised capability to provide Leading and/or Lagging Mvar, where applicable at the generator stator terminals.

The Company shall have the right (but shall not be obliged) at any time to instruct a User by the issue of a Reactive Despatch Instruction to provide Leading and/or Lagging Mvars from some or all of the BM Units specified in a Mandatory Services Agreement. Monitoring

In order to comply with its obligations contained in Grid Code OC 5, The Company may use Operational Metering Equipment owned by a Relevant Transmission Licensee in accordance with Paragraph 6.7.3 to ensure that, in respect of each BM Unit, a User is complying with its obligations to provide the Obligatory Reactive Power Service both in accordance with the Grid Code and in accordance with the terms of the Mandatory Services Agreement.

Each User acknowledges that The Company may wish to install additional monitoring equipment at a Power Station to monitor the ability of any or all of the BM Units of that User to provide the Obligatory Reactive Power Service, such monitoring equipment to be installed on terms to be agreed with that User (such agreement not to be unreasonably withheld or delayed). The cost of such additional monitoring equipment and its installation shall be borne by The Company. Reactive Testing

Where, in accordance with Grid Code OC 5.4.2.4, The Company shall be entitled to require a Reactive Test, such test shall be in addition to, and shall not prejudice The Company 's right to require, the two annual Reactive Tests referred to in Grid Code OC 5.5.1.1. If a BM Unit or a CCGT Unit (as the case may be) fails a Reactive Test, then The Company shall advise the User that the BM Unit or CCGT Unit (as appropriate) has so failed whereupon, subject always to resolution of any dispute in accordance with Grid Code OC 5.5.4 and (where applicable) OC 5.5.5, the User shall immediately advise The Company of the revised capability of that BM Unit or CCGT Unit (as appropriate) to provide Leading and/or Lagging Mvars (as the case may be) in accordance with the terms of the Mandatory Services Agreement. Grid Code

It is acknowledged by The Company and each User that the provision by that User of the Obligatory Reactive Power Service in accordance with the terms of the CUSC and the Mandatory Services Agreement shall not relieve it of any of its obligations set out in the Grid Code including without limitation its obligation set out in Grid Code CC 8.1 to provide Reactive Power (supplied otherwise than by means of synchronous or static compensators) except in the case of a Power Park Module where synchronous or static compensation within the Power Park Module may be used to provide Reactive Power) in accordance with Grid Code CC

Each User hereby consents to the disclosure and use by The Company of data and other information relating to the provision by that User of the Obligatory Reactive Power Service and the relevant provisions of the Mandatory Services Agreement relating thereto to the extent necessary to enable The Company to comply with its obligations set out in the CUSC. Each User hereby consents to the disclosure and use by The Company of data and other information from any year relating to the provision by that User of the Balancing Service to the extent necessary to enable The Company to carry out its EMR Functions. Hierarchy

If any provision of the Mandatory Services Agreement to the extent relating to the Obligatory Reactive Power Service shall be inconsistent with the provisions of Schedule 3, Part I, the provisions of Schedule 3, Part I shall prevail to the extent of such inconsistency.

Each applicable 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 Authority relieving that 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 The Company, the ESO Licence, as may be specified in such direction) the Mandatory Ancillary Service of Frequency Response referred to in Grid Code CC 8.1 by means of Frequency sensitive generation in accordance with the terms of this Paragraph 4.1.3 and a Mandatory Services Agreement but subject always to and in accordance with the relevant part or parts of the Grid Code applicable thereto. Definitions

For the purposes of this Paragraph 4.1.3:

For the purposes of instructions and calculation of payments, the Mandatory Ancillary Service of Frequency Response as described in this Paragraph 4.1.3 shall be referred to as “Mode A Frequency Response”.

The Company may at any time instruct a User to operate any one or more BM Unit(s) so as to provide the following components of Mode A Frequency Response:-

The Company shall not instruct a User to provide Mode A Frequency Response and any Commercial Ancillary Service of Frequency Response simultaneously.

In the event that any instruction to provide Frequency Response does not state whether the instruction is to provide Mode A Frequency Response or any Commercial Ancillary Service of Frequency Response, such instruction shall be deemed to be an instruction to provide Mode A Frequency Response. User’s Obligation to Provide Response

When a User is instructed in accordance with Paragraphs 4.1.3.4 and/or 4.1.3.6 to operate a BM Unit so as to provide any component(s) of Mode A Frequency Response, that User shall operate that BM Unit so as to provide, for any Frequency Deviation and at any level of De-Load, at least the amount of Primary Response and/or Secondary Response and/or High Frequency Response set out respectively in the relevant Frequency Response Capability Data tables in the Mandatory Services Agreement (as such tables are to be interpreted in accordance with Paragraph 4.1.3.11). 4.1.3.7A For the avoidance of doubt a User shall ensure that the Transmission Entry Capacity, and if relevant the STTEC and\or LDTEC and\or any Temporary Received TEC less any Temporary Donated TEC, for the relevant Connection Site shall be sufficient to enable it to comply with its obligations under Paragraph 4.1.3.7 above at all times and in respect of all BM Units. Calculation of Payments

The payments to be made by The Company to a User hereunder in respect of the provision of any Mode A Frequency Response from a BM Unit shall be comprised of Holding Payments and Response Energy Payments and shall be determined in accordance with the formulae in, respectively, Paragraphs 4.1.3.9 and 4.1.3.9A and in accordance with Paragraphs 4.1.3.10 to 4.1.3.12 inclusive. Payment Formulae - Holding Payments

The Holding Payments for a BM Unit to be made by The Company to a User referred to in Paragraph 4.1.3.8 shall be calculated in accordance with the following formula:- HP = P +H +S M M M M Where: HP is the Holding Payment to be made to the User M calculated in £ per minute. P is the payment per minute to be made by The Company M to the User for the Ancillary Service of Primary Response provided by the User from the BM Unit concerned pursuant to an instruction from The Company to provide Mode A Frequency Response, and is calculated as follows:-  1  P =(P P (1−SF ))K K  M PR MW P T GRC  60   H is the payment per minute to be made by The Company M to the User for the Ancillary Service of High Frequency Response provided by the User from the BM Unit concerned pursuant to an instruction from The Company to provide Mode A Frequency Response, and is calculated as follows:-  1  H =(H H (1−SF ))K K  M PR MW H T GRC  60   S is the payment per minute to be made by The Company M to the User for the Ancillary Service of Secondary Response provided by the User from the BM Unit concerned pursuant to an instruction from The Company to provide Mode A Frequency Response, and is calculated as follows:-  1  S =(S S (1−SF ))K K  M PR MW S T GRC  60   In this Paragraph 4.1.3.9, the following terms shall have the following meanings:- P = the appropriate payment rate for Primary Response PR determined in accordance with Paragraph 4.1.3.13; P = the Primary Response capability (expressed in MW) MW for the level of De-Load of the BM Unit concerned at the end of the minute in which the service is provided. In the case of Power Park Modules this component will not exceed the value of the cap on the level of Primary Response capability (P ) as calculated in CAP 4.1.3.9.1; H = the appropriate payment rate for High Frequency PR Response determined in accordance with Paragraph 4.1.3.13; H = the High Frequency Response capability MW (expressed in MW) for the level of De-Load of the BM Unit concerned at the end of the minute in which the service is provided. In the case of Power Park Modules this component will not exceed the value of the cap on the level of High Frequency Response capability (H ) as calculated in 4.1.3.9.2; CAP S = the appropriate payment rate for Secondary PR Response determined in accordance with Paragraph 4.1.3.13; S = the Secondary Response capability (expressed in MW MW) for the level of De-Load of the BM Unit concerned at the end of the minute in which the service is provided. In the case of Power Park Modules this component will not exceed the value of the cap on the level of Secondary Response capability (S ) as calculated in 4.1.3.9.3; CAP K = the ambient temperature adjustment factor. The T Company and each User acknowledge and agree, as between The Company and that User, that K T shall be deemed to be 1 for the purposes of calculating payments until such time as they agree upon an appropriate formula and a suitable method of measuring the ambient temperature on a minute by minute basis which shall be set out in the Mandatory Services Agreement. In the event that any agreed method of measuring the ambient temperature on a minute by minute basis should fail following its implementation, then The Company and each User acknowledge and agree, as between The Company and that User, that K shall be deemed to T be 1 until the method of measuring the ambient temperature on a minute by minute basis is restored; K = where the BM Unit is a CCGT Module, the plant GRC configuration adjustment factor set out in the relevant table in the Mandatory Services Agreement for the configuration of the BM Unit concerned at the time at which the capability to provide the service is carried, otherwise 1; SF = 0, subject to Paragraph 4.1.3.21 (e); P SF = 0, subject to Paragraph 4.1.3.21 (e); S SF = 0, subject to Paragraph 4.1.3.21 (e). H

The Company and each User acknowledge and agree, as between The Company and that User, that no Holding Payment or Response Energy Payment shall be payable except in relation to periods in respect of which instructions have been issued by The Company pursuant to this Paragraph 4.1.3. Interpretation of Tables – Levels of Response

The figures for Response set out in the Frequency Response Capability Data tables and Frequency Response Power Delivery Data tables in the Mandatory Services Agreements shall be given in relation to specific Frequency Deviations and to specific levels of De-Load for a BM Unit. Such tables shall, for the purposes of Paragraphs 4.1.3.7 and 4.1.3.9A(a), be construed in accordance with this Paragraph 4.1.3.11. Subject to Paragraphs 4.1.3.11(d) and (e):-

The Frequency Response Summary Data table in the Mandatory Services Agreement shall set out figures in respect of given levels of De-Load for the purposes of calculating payment in accordance with the formulae in Paragraph 4.1.3.9. Where the level of De-Load of the BM Unit is other than one of the levels given in such table, then, the figure for P , S or H as the case may be, shall be MW MW MW calculated by linear interpolation from the figures in such table in respect of levels of De-Load. User’s submission of Holding Payment Rates

The following terms shall apply to determine the payment rates for Primary Response, High Frequency Response and Secondary Response used in the calculation of Holding Payments in accordance with Paragraph 4.1.3.9 which shall apply in respect of the provision of Mode A Frequency Response by the User to The Company from one or more BM Units in a calendar month (and, for the purposes thereof, all dates specified in this Paragraph 4.1.3.13 unless stated otherwise refer to the immediately preceding calendar month):-

Where either the User or The Company reasonably considers in light of operating experience that the levels of Response set out in the Frequency Response Capability Data tables and / or the Frequency Power Delivery Data tables in the Mandatory Services Agreement do not represent the true operating capabilities of a BM Unit(s), the User or The Company (as the case may be) shall have the right not more than once every two months (or otherwise at any time with the specific agreement of the other party to the Mandatory Services Agreement) to request (provided always that such request be accompanied by a reasonable justification therefor) that the levels of Response set out in the relevant response table(s) in the Mandatory Services Agreement be reviewed and, if appropriate, amended by agreement with such other party, such agreement not to be unreasonably withheld or delayed. Procedure for Amendments to Levels of Response

Any amendments agreed by The Company and a User pursuant to Paragraph 4.1.3.14 or determined by an arbitrator or panel of arbitrators under the Dispute Resolution Procedure in the circumstances referred to in Paragraph 4.1.3.16 shall not become effective until (in the case of agreed amendments) a date at least five Business Days after an amending agreement is entered into between The Company and the User in accordance with the Mandatory Services Agreement or, in the case of determined amendments, such other date as may be determined by an arbitrator or panel of arbitrators under the Dispute Resolution Procedure subject always to Paragraphs 4.1.3.17 and 4.1.3.18. Failure to Agree Amendments

If The Company and a User are unable to agree any amendments requested pursuant to Paragraph 4.1.3.14 within 28 days of either of them serving on the other notice of its intention to invoke the Dispute Resolution Procedure then either party may initiate the procedure for resolution of the issue as an Other Dispute in accordance with Paragraph 7.4. Dispute Resolution Procedure

The Company and each User acknowledge and agree, as between The Company and that User, that the rules of the London Court of International Arbitration shall apply to any arbitration proceedings initiated pursuant to Paragraph 7.4 in the circumstances referred to in Paragraph 4.1.3.16, but that the changes determined by any arbitrator or panel of arbitrators shall not apply in respect of any period prior to the date on which the Dispute Resolution Procedure is invoked. Implementation of Determinations

Any amendments to levels of Response determined by an arbitrator or panel of arbitrators under the Dispute Resolution Procedure in the circumstances referred to in Paragraph 4.1.3.16 shall take effect from the date five Business Days following the relevant determination. Implementation of Continuous Monitoring System

To the extent the same shall be acceptable to The Company and a User on the basis of a cost benefit analysis, The Company and a User agree, as between The Company and that User, to the implementation of a continuous monitoring system as soon as is reasonably practicable. The continuous monitoring system shall be in accordance with the relevant principles set out in Paragraph 4.1.3.21 for the purposes of confirming performance of the BM Units and adjusting payments pursuant to this Paragraph 4.1.3. Incident Based Monitoring System

Pending implementation of the continuous monitoring system, The Company and each User agree, as between The Company and that User, to implement an incident based monitoring scheme for the purpose of confirming the performance of the BM Units pursuant to this Paragraph 4.1.3. Such incident based monitoring scheme shall be in accordance with the relevant principles set out in Paragraph 4.1.3.21. Neither The Company nor the User shall unreasonably withhold or delay such agreement and/or implementation. Genset Response Monitoring Introduction

(a) This Paragraph 4.1.3.21 sets out the principles relating to:

If, at any time during the term of a Mandatory Services Agreement, there is a variation in the security standards with which The Company is obliged to comply and such variation would, in a User's reasonable opinion, materially affect the operation of the services to be provided under that Mandatory Services Agreement, The Company and that User shall negotiate in good faith with a view to agreeing and implementing appropriate amendments to any relevant Mandatory Services Agreement. If they are unable to reach agreement within 28 days of either of them serving on the other notice of its intention to invoke the Dispute Resolution Procedure, either of them may initiate the procedure for resolution of the issue as an Other Dispute in accordance with Paragraph 7.4.

Each User hereby consents to the disclosure and use by The Company of data and other information from any year relating to the provision by that User of the Balancing Service to the extent necessary to enable The Company to carry out its EMR Functions.

By 15.00 hours on each Wednesday, the User may notify The Company via the Designated Information Exchange System in the form set out in Schedule 1 to this Section 4 (a “Weekly Maximum Generation Declaration”) of the availability of Maximum Generation in relation to each of the Maximum Generation BM Unit(s) in the following Week. Failure to submit a Weekly Declaration in accordance with this Paragraph 4.2.3 shall be deemed to be an indication of availability or unavailability (as the case may be) of Maximum Generation for each Operational Day in the following Week as notified by the User in the last Weekly Maximum Generation Declaration submitted in accordance with this Paragraph 4.2.3, if any, or if no previous Weekly Maximum Generation Declaration has been submitted, in the amount of the Indicative Maximum Generation Capability specified in the Maximum Generation Service Agreement between The Company and that User.

The User may indicate in the Weekly Maximum Generation Declaration its best estimate of the amount of Maximum Generation available (the “Indicative Maximum Generation Capability”). If no such indication is given, the User shall be deemed to have notified The Company of the amount of Indicative Maximum Generation Capability set out in the Maximum Generation Service Agreement between The Company and that User.

If at any time the User becomes aware that, in respect of any Maximum Generation BM Unit(s), there are changes to the availability of Maximum Generation and/or the Indicative Maximum Generation Capability for all or part of any Operational Day as specified in the relevant Weekly Maximum Generation Declaration of any Maximum Generation Redeclaration (as the case may be), it shall notify The Company forthwith via the Designated Information Exchange System in the form set out in Schedule 2 to this Section 4 (a "Maximum Generation Redeclaration").

Each Maximum Generation BM Unit in respect of which Maximum Generation is (or is deemed to be) declared or redeclared to be available in all or part of an Operational Day in accordance with this Paragraph 4.2.3 is hereinafter referred to in respect of such Operational Day (or part thereof) as “an Available BM Unit”.

The Company may, as between The Company and that User, at any time instruct the User to provide Maximum Generation from an Available BM Unit (a “Maximum Generation Instruction”) and the User shall use reasonable endeavours to provide Maximum Generation from such Available BM Unit.

The Company shall only issue a Maximum Generation Instruction where an Available BM Unit has been instructed to generate or is already generating (in each case) at the prevailing Maximum Export Limit for that Available BM Unit.

If, following the issue by The Company of a Maximum Generation Instruction in respect of an Available BM Unit, the User submits to The Company (in accordance with Grid Code BC 1) a revised Maximum Export Limit for that Available BM Unit, that Available BM Unit shall be deemed to have ceased providing Maximum Generation immediately upon receipt by The Company of such revised Maximum Export Limit.

Any Maximum Generation Instruction issued by The Company shall be an Emergency Instruction. The method of issuing any Maximum Generation Instruction shall be specified in the Maximum Generation Service Agreement.

The Company may instruct the User to cease the provision of Maximum Generation from the instructed Available BM Unit at any time.

On receipt of a Maximum Generation Instruction the User shall use reasonable endeavours to provide Maximum Generation from the Available BM Unit continuously until the earlier of:-

The provision of Maximum Generation from an Available BM Unit shall not be achieved by the transfer of the Station Demand of the Power Station to the Station Transformer(s).

The Maximum Generation Energy Payment to be made by The Company to the User following the issue of a Maximum Generation Instruction by The Company for the provision of Maximum Generation in Operational Days in calendar month m, (UF ) shall be m calculated in accordance with the following formula:- Units UF = UF m im i=1 Where; ( ) CEC  UF =  Min Qmax EP ,X  EP  im   ij ij  2 ij    jMm In this Paragraph 4.2.5.1, the following terms shall have the following meanings:- Qmax ij Max ( QM − ( FPN + ( QAOn +QABn ) ) ,0 ) ij ij n ij ij

Where an Available BM Unit is at the time of issue of a Maximum Generation Instruction generating at a level below Connection Entry Capacity but the amount of MW delivered as Maximum Generation by such Available BM Unit is greater than 3% (or such other figure as The Company and the User may agree in the Maximum Generation Service Agreement) of the Connection Entry Capacity of that Available BM Unit, the User shall have the right to raise a dispute in accordance with the provisions of Paragraph 4.2.5.3 as to the amount of MW (represented by the value of factor X) by reference to which payment for provision of Maximum Generation shall be determined.

Where the provisions of Paragraph 4.2.5.2 apply:-

If a User and The Company fail to reach an agreement within ten Business Days of receipt by The Company of the User's written notification in accordance with Paragraph 4.2.5.5, then either party may, within twenty Business Days of receipt by The Company of the User's written notification, refer the matter to the Authority for determination as a Charging Dispute in accordance with Paragraph 7.3.

Where a dispute is resolved by issuance of a decision of the Authority pursuant to the Dispute Resolution Procedure in accordance with Paragraph 4.2.5.4 above, The Company shall (where appropriate) adjust the account between itself and the User accordingly in the next Provisional Adjustments Statement required to be issued under Paragraph 4.3.2.1. If such decision of the Authority is subsequently reversed or modified following judicial review of the Authority's decision, The Company shall adjust the account between itself and the User accordingly in the next Provisional Adjustments Statement which it issues.

The Maximum Generation Energy Fee for each Available BM Unit of a User will be that detailed in the Maximum Generation Service Agreement between The Company and that User.

The User shall have the right to notify The Company of a revised Maximum Generation Energy Fee, as between The Company and that User, not more than once every month. Such notification must be in writing and must be received by The Company no later than the fifteenth day of the calendar month. The revised Maximum Generation Energy Fee shall apply, as between The Company and that User, with effect on and from the first Operational Day of the calendar month following such notification.

The Company shall use reasonable endeavours to publish on its web- site within five Business Days of signature of a Maximum Generation Service Agreement, or within five Business Days of receipt of any updated information in accordance with this Paragraph 4.2, details of the following information in respect of each Maximum Generation BM Unit specified in such Maximum Generation Service Agreement:-

In respect of each Operational Day in a calendar month, The Company shall, by the tenth Business Day of the calendar month following that calendar month, publish on its web-site in respect of each relevant Maximum Generation BM Unit(s) the following details of each Maximum Generation Instruction (if any) issued by The Company in accordance with Paragraph 4.2.4:-

Each User consents to the disclosure by The Company of the information referred to at Paragraphs 4.2.12.1 and 4.2.12.2 above in so far as it relates the provision of Maximum Generation from its Maximum Generation BM Unit(s), provided always that The Company shall not be bound to comply with the provisions of this Paragraph with regard to the provision of information to the extent that to do so would be likely to restrict, distort or prevent competition in the provision of Maximum Generation.

Each User hereby consents to the disclosure and use by The Company of data and other information from any year relating to the provision by that User of the Balancing Service to the extent necessary to enable The Company to carry out its EMR Functions. 4.2A SYSTEM TO GENERATOR OPERATIONAL INTERTRIPPING 4.2A.1 Application The provisions of this Paragraph 4.2A shall apply to The Company and a User in respect of the provision by that User to The Company of System to Generator Operational Intertripping where details of a System to Generator Operational Intertripping Scheme are set out in Appendix F3 of the relevant Bilateral Agreement. 4.2A.2 Provision of System to Generator Operational Intertripping 4.2A.2.1 Each User hereby agrees, as between The Company and that User, to:-

Mandatory Services Agreements in respect of the provision of Mandatory Ancillary Services; and/or 4.3.1.2 (save as provided in Paragraphs 4.2.5.3 to 4.2.5.5 (inclusive)) Maximum Generation Service Agreements in respect of the provision of Maximum Generation; and/or 4.3.1.3 Paragraph 4.2A.4 in respect of the provision of System to Generator Operational Intertripping, and (if agreed between The Company and a User) may also be incorporated by reference into a Balancing Services Agreement as a term thereof so as to apply in respect of the provision of other Balancing Services (but for the avoidance of doubt not so as to thereby create any obligations on The Company and that User under the CUSC in respect thereof).

On the third Business Day following receipt from the Settlement Administration Agent of the Interim Information Settlement Run issued in respect of the final day of the previous calendar month The Company shall send to the User a statement ("Provisional Monthly Statement") consisting of:-

If the User has failed to supply any Balancing Service in accordance with the Grid Code or any instructions validly and properly issued under the Grid Code or as required by the CUSC or any Balancing Services Agreement, The Company shall set out the times and dates upon which it considers such failure of supply to have occurred and the facts or evidence which it relies upon as constituting such failure in the Provisional Monthly Statement next following the date of such failure or next following the date when The Company first becomes aware of the facts which constitute such failure.

If the User disagrees with any dates, times, facts or calculations set out in the Provisional Statement and/or the Provisional Adjustments Statement, it shall state by notice in writing to The Company the reasons and facts which it relies upon in support of such disagreement. The parties shall discuss and endeavour to resolve the matter prior to The Company sending out the Final Monthly Statement. If they reach agreement The Company shall set out in the Final Monthly Statement the adjustments required but if it cannot be resolved the dates times facts and calculations set out in the Provisional Statement and in the Provisional Adjustments Statement shall be binding upon the parties until such time as they are reversed or revised by agreement between the parties or otherwise (in accordance with Paragraph 4.3.2.8) pursuant to the Dispute Resolution Procedure.

Notwithstanding the provisions of Paragraphs 4.3.2.2 and 4.3.2.3, if any fact or matter set out in the Provisional Statement and/or in the Provisional Adjustments Statement shall be inconsistent with any fact or matter set out in a final run (if any) of the settlement calculation issued by the Settlement Administration Agent, or any change to a previous final run (if any) of a settlement calculation, the facts and matters set out in the settlement calculation or which, following a dispute and subject to Paragraph 4.3.2.5, it is found or agreed should be set out therein shall be binding upon both parties.

If either The Company or the User intends to dispute any fact or matter contained in a final run (if any) of a settlement calculation which is inconsistent with any fact or matter contained in a Provisional Statement and/or a Provisional Adjustments Statement it shall serve notice in writing on the other party to that effect in order that the other party may make such representations as it wishes to the Settlement Administration Agent or exercise such rights as it may have under the Balancing and Settlement Code in relation to such fact or matter.

On the eighteenth Business Day of each calendar month, The Company shall send to the User a statement ("Final Monthly Statement") consisting of:-

Where:-

Where a dispute is resolved by issuance of a decision by an expert or an arbitrator or panel of arbitrators pursuant to the Dispute Resolution Procedure, The Company shall adjust the account between itself and the User accordingly in the next Provisional Adjustments Statement required to be issued under Paragraph 4.3.2.1. If such decision of an expert or an arbitrator or panel of arbitrators is subsequently reversed or modified by a final judicial decision after exhaustion of all appeals if this opportunity is taken, The Company shall adjust the account between itself and the User accordingly in the next Provisional Adjustments Statement which it issues.

Subject to Paragraph 4.3.2.13, the due date of payment for the purposes of Paragraph 4.3.2.12 in respect of any disputed amount subsequently determined or agreed to be payable to the User or to The Company shall be the date for payment of the relevant Provisional Statement from which the dispute arises.

The Company shall pay to the User the amount shown as due from The Company in the Final Monthly Statement within three Business Days of the date on which such statement is or should be issued. The User shall pay to The Company the amount shown as due from the User in such statement within three Business Days of the date on which such statement is issued.

If either party ("Defaulting Party"), in good faith and/or with reasonable cause fails to pay under Paragraph 4.3.2.10 any amount properly due in respect of Balancing Services under the CUSC and the relevant Balancing Services Agreement, then such Defaulting Party shall pay to the other party interest on such overdue amount from and including the due date of such payment to (but excluding) the date of actual payment (as well after as before judgment or determination by an arbitrator or panel of arbitrators) at the Base Rate. Provided that should the Defaulting Party otherwise fail to pay any amount properly due under the CUSC and the relevant Balancing Services Agreement on the due date then the Defaulting Party shall pay to the other party interest on such overdue amount at the Enhanced Rate from the due date on which such payment was properly due to (but excluding) the date of actual payment. Any interest shall accrue from day to day.

If following a dispute or by virtue of Paragraphs 4.3.2.2, 4.3.2.3, 4.3.2.4, 4.3.2.7 or 4.3.2.8 it is determined or agreed that the User was entitled to a further payment from The Company, the User shall be entitled to interest at the Base Rate on the amount of such further payment from the due date calculated in accordance with Paragraph 4.3.2.9 until the date of payment.

If following a dispute or by virtue of the provisions of Paragraphs 4.3.2.2, 4.3.2.3, 4.3.2.4, 4.3.2.7 or 4.3.2.8 it is determined or agreed that The Company or the User was not entitled to any payment it has received, the other party shall be entitled to interest at the Base Rate on the amount so paid from the date of payment until the date of repayment or the date when The Company makes a payment to the User which takes such payment into account.

Notwithstanding any other provision of the CUSC and any Balancing Services Agreement, The Company and a User shall not be limited in any way as to the evidence they may rely upon in any proceedings arising out of or in connection with payment for any Balancing Service under the CUSC and the relevant Balancing Services Agreement and the parties agree that in the event and to the extent that either party succeeds in proving in any such proceedings that any Balancing Service was or was not provided, the successful party shall (without prejudice to any liquidated damages provision of the CUSC and/or the relevant Balancing Services Agreement) be entitled to repayment of the sums already paid or payment of sums not paid as the case may be in respect of such Balancing Service.

Save as otherwise expressly provided in the CUSC or in any Balancing Services Agreement, sums payable by The Company or a User to the other in respect of Balancing Services pursuant to the CUSC or any Balancing Services Agreement whether by way of charges, interest or otherwise shall (except to the extent otherwise required by law) be paid in full, free and clear of and without deduction, set-off or deferment in respect of any disputes or claims whatsoever save for sums the subject of a final award or judgement (after exhaustion of all appeals if this opportunity is taken) or which by agreement between The Company and the relevant User may be so deducted or set off.

The Company represents and warrants to each relevant User, as between The Company and that User, that it enters into each Balancing Services Agreement as principal and not as agent for any other person.

All amounts specified hereunder shall be exclusive of any Value Added Tax or other similar tax and The Company shall pay to the User Value Added Tax at the rate for the time being and from time to time properly chargeable in respect of the making available and/or supply of Balancing Services under the CUSC, the relevant Balancing Services Agreement, the Grid Code, or any Bilateral Agreement.

All payments by The Company to the User (or by the User to The Company) in respect of the provision of Balancing Services will be made by payment to the parties’ bank accounts details of which may be set out in the relevant Balancing Services Agreement or otherwise notified by The Company to the User (or by the User to The Company) from time to time.

The submission of all Provisional Monthly Statements and all Final Monthly Statements and facts and other evidence in support thereof and any questions in connection therewith from The Company to the User and vice versa in accordance with this Paragraph 4.3.2 must be made, in the absence of agreement to the contrary between the parties, by 19.00 hours on the Business Day concerned.

For the purpose of the regulations of HM Revenue and Customs as regards self-billing of Balancing Services and the submission of Value Added Tax invoices, the User hereby consents to the operation of a self-billing system by The Company with regard to the payment for Balancing Services to be provided pursuant to the CUSC and the relevant Balancing Services Agreement and will at all times throughout the term of the relevant Balancing Services Agreement maintain such consent. The User hereby undertakes, as between The Company and that User, to do (at The Company's cost) all acts and things reasonably necessary to enable The Company to comply with the regulations of HM Customs and Excise as regards the self- billing of Balancing Services.

Payment of any sum or the submission of any Provisional Monthly Statement or Final Monthly Statement by The Company to a User under this Paragraph 4.3.2 shall not operate to impair or be construed as a waiver of any right, power, privilege or remedy The Company may have against the User under the CUSC and/or any Balancing Services Agreement and/or the Grid Code and/or any Bilateral Agreement.

For the avoidance of doubt, The Company shall issue a Provisional Monthly Statement to the User for the calendar month following the calendar month in which any Balancing Services Agreement to which the User is a party shall expire or terminate, setting out details of the Balancing Services supplied by the User in respect thereof during that calendar month until expiry or termination, and in respect thereof the provisions of this Paragraph 4.3.2 shall continue to apply notwithstanding such expiry or termination.

These principles are to be used to establish the basic arrangements but are not intended to stifle innovation in the development of new services or the giving of appropriate economic signals.

Save where otherwise expressly provided in this Paragraph 4.4, the charges shall be "cost reflective" ie. based and founded upon the actual or estimated costs directly incurred or to be incurred by the User for the purpose of providing the service or capability concerned.

Where a capability to provide an Ancillary Service is required by the Grid Code from all BM Units or CCGT Units (as opposed to a capability made available by agreement between The Company and a User from some only of the User’s BM Units or CCGT Units), no Ancillary Service capability payment shall be made.

The cost of "Grandfathering" User's Equipment (i.e. bringing equipment owned by the User on 30th March 1990 to a condition of compliance with the Grid Code) shall not be included in Ancillary Services payments. Where a Derogation is withdrawn or reduced in scope then, except in relation to Frequency Response, the User shall be entitled to take the cost of meeting the withdrawal or reduction in the scope of the Derogation into account in its charges.

Subject to the other provisions of this Paragraph 4.4.2, the charges shall take due account of any change in or amendments to the Grid Code or any other statutory or regulatory obligation coming into force after 30th March 1990 affecting the provision of Ancillary Services.

If as a result of any changes to the Balancing and Settlement Code the User ceases to be entitled to receive payment under the Balancing and Settlement Code in respect of any elements of Ancillary Services provided by it which are expressed in this Paragraph 4.4 to be paid for under the Balancing and Settlement Code, the User shall be entitled to charge for such elements under an Ancillary Services Agreement. Where, however, such change entitles the User to be paid for any elements of Ancillary Services which are expressed in this Paragraph 4.4 to be paid for under an Ancillary Services Agreement the User shall cease to be entitled to charge for such elements under an Ancillary Services Agreement.

Part-loading of a BM Unit at a level other than that specified in a Physical Notification in order to provide Frequency Response will normally be achieved by the issue of a Bid- Offer Acceptance.

In recognition of the energy production costs likely to be incurred or avoided when providing Frequency Response, an additional amount based upon an expected delivery of Frequency Response energy shall be payable under Paragraph 4.1.3.9A.

The rates and/or prices to be indexed shall be specified in the Balancing Services Agreement or (in the case of System to Generator Operational Intertripping) in Schedule 4 to this Section 4 as applicable for a 12 month period commencing 1st April (“the base year”), and these rates and/or prices will be adjusted annually to take account of general price inflation. The index used will be the Retail Prices Index (RPI) with 1987 = 100 base.

The source of the RPI index is to be the monthly Office for National Statistics “Business Monitor MM23.”

The rates and/or prices to be indexed shall be increased (or reduced as appropriate) for the subsequent 12 month period commencing 1st April by the following factor:- RPI RPI Where RPI is the RPI for March immediately prior to commencement of that 12 month period RPI is the RPI for March immediately prior to commencement of the base year.

In subsequent years indexation will continue in accordance with the above, with always the numerator of the factor representing the RPI of the 12 month period in question and the denominator of the factor being the RPI for March immediately prior to the base year.

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, indexation for the purposes of this Paragraph 4.5 shall be calculated by The Company using an index agreed between The Company and the relevant User with a view to determining the relevant price after indexation that would be closest to the relevant price after indexation if RPI had continued to be available. If The Company and a relevant User are unable to agree a suitable index, either of them may initiate the Dispute Resolution Procedure for resolution of the issue as an Other Dispute in accordance with Paragraph 7.4.

For the avoidance of doubt, the provisions of Paragraph 11.3 with regard to determination of an alternative index should the Retail Prices Index not be published or there is a material change to the basis of such index shall not apply with respect to the rates and/or prices the subject of this Paragraph 4.5. SCHEDULE 1

termination of all Bilateral Agreements, Mandatory Services Agreements and Construction Agreements entered into by a User and cessation of any other right to use the National Electricity Transmission System pursuant to Paragraph 3.8 or Paragraph 9.23; or

a User having a Licence but not yet being connected to or otherwise using the National Electricity Transmission System, until such time as the User accepts an Offer to connect to or use the National Electricity Transmission System, a User with a Licence shall be or continue to be a CUSC Party but shall not (except in the case of Paragraph 5.1.5) have any further rights and obligations for the period of such dormancy under the CUSC (and shall be a “Dormant CUSC Party”) until the execution (or other entering into) of a Bilateral Agreement or commencement / recommencement of its right to use the National Electricity Transmission System pursuant to the CUSC. Termination or expiry of a particular Bilateral Agreement, Mandatory Services Agreement or Construction Agreement shall not, of itself, cause the relevant User to become a Dormant CUSC Party.

Deenergise that User's Equipment, or

request the owner of the Distribution System to which that User’s Equipment or equipment for which that User is responsible (as defined in Section K of the Balancing and Settlement Code) is connected to Deenergise that User’s Equipment or equipment for which that User is responsible (as defined in Section K of the Balancing and Settlement Code), 3 if it is necessary or expedient to do so to avoid the occurrence of such injury or damage.

a User shall fail to pay (other than by inadvertent error in funds transmission which is discovered by The Company, notified to that User and corrected within 2 Business Days thereafter) any amount properly due or owing from that User to The Company pursuant to the CUSC or any Bilateral Agreement and such failure continues unremedied for 7 Business Days after the due date for payment; or

in respect of a User:-

the User shall remove any of the User's Equipment:

in the case of

the User shall pay to The Company forthwith all Termination Amounts and, in the case of a User in the category of a Power Station directly connected to the National Electricity Transmission System or with a Bilateral Embedded Generation Agreement the Cancellation Charge;and

the User if unlicensed shall cease to be a CUSC Party or if licensed shall become a Dormant CUSC Party, as the case may be, and Paragraph 5.1 shall apply.

where the breach is capable of remedy, give written notice to the User specifying in reasonable detail the nature of the breach and requiring the User within 28 days after receipt of such notice, or within any longer period agreed between The Company and the User to remedy the breach, the agreement of The Company not to be unreasonably withheld or delayed; or

where the breach is incapable of remedy, give written notice to the User specifying in reasonable detail the nature of the breach and the reasons why the breach is incapable of remedy and requiring the User within 5 Business Days after receipt of such notice to undertake to The Company not to repeat the breach.

If:

Deenergise the User’s Equipment, or

request the owner of the Distribution System to which the User’s Equipment or equipment for 8 which the User is responsible (as defined in Section K of the Balancing and Settlement Code) is or to which the User's Customers are connected to Deenergise the User’s Equipment or equipment for which the User is responsible (as defined in Section K of the Balancing and Settlement Code) at the relevant site of connection or the User’s Customers (as the case may be), or

in the case of an Interconnector User or Interconnector Error Administrator request the relevant Interconnector Owner to cease or to procure the cessation of the transfer of power by or on behalf of that User across the Interconnector, forthwith following completion of the Dispute Resolution Procedure and final determination of the dispute in The Company's favour, subject to The Company having given, in the case of Deenergisation of an Embedded Small Power Station, the relevant User not less than 24 hours prior written notice and at the expiry of such notice the breach concerned remaining unremedied.

If the User fails to comply with the Grid Code (but subject always to Paragraphs 6.3.3 and 6.3.4 of the CUSC) and the Authority makes a final order or a confirmed provisional order as set out in sections 25 and 26 of the Act against the User in respect of such non-compliance which order the User breaches The Company may in respect of the relevant Connection Site(s) or site(s) of connection:

Deenergise the User's Equipment, at the relevant Connection Site,

request the owner of the Distribution System to which the User’s Equipment or equipment for which the User is responsible (as defined in Section K of the Balancing and Settlement Code) is or to which the User’s Customers are connected to Deenergise the User’s Equipment or equipment for which User is responsible (as defined in Section K of the Balancing and Settlement Code) at the relevant site of connection or such User’s Customer (as the case may be), or

request the relevant Interconnector Owner to cease or procure the cessation of the transport of power by or on behalf of that User across the Interconnector, upon the expiry of at least 12 hours, prior written notice to the User, provided that at the time of expiry of such notice the breach concerned remains unremedied.

If following any Deenergisation or cessation of use of an Interconnector pursuant to this Paragraph 5.4 or Paragraph 5.3.2 the relevant User applies to The Company for the User's Equipment to be Reenergised or for The Company to issue instructions that the User’s Customers be Re-energised or for The Company to issue instructions to the owner/operator of the Distribution System to which the User’s Equipment or equipment for which the User is responsible (as defined in Section K of the Balancing and Settlement Code) is connected that it be Re-energised or to the relevant Interconnector Owner that transport of power across the Interconnector can restart, The Company shall notify its consent to the User's Equipment being Re-energised or transport across the Interconnector restarting forthwith upon the breach of the CUSC or the relevant Bilateral Agreement which give rise to the De-energisation either:-

If The Company shall refuse to Re-energise the Users Equipment or to issue instructions that the User’s Customers be Reenergised or to issue instructions to the owner/operator of the Distribution System to which the User’s Equipment or equipment for which the User is responsible (as defined in Section K of the Balancing and Settlement Code) is connected that it be Reenergised, or to the relevant Interconnector Owner that transport of power can restart, or if the User is offered terms by The Company which the User does not accept, this shall be recognised as a dispute over the terms for connection and use of system which may be referred by the User to the Authority for determination under condition E13 of the ESO Licence. If the User accepts any terms offered by The Company or determined by the Authority The Company shall Reenergise the Users Equipment, or request the owner of the Distribution System to which either the User’s Customers or the User’s Equipment or equipment for which the User is responsible (as defined in Section K of the Balancing and Settlement Code) is/are connected to Reenergise the same or the relevant Interconnector Owner to restart that transport of power, forthwith after any request from the User for The Company to do so.

Any of the following events shall constitute an Event of Default:

In the case where a User meets The Company Credit Rating on signing a Bilateral Connection Agreement any of the following events shall constitute an Event of Default:-

In the case where a User does not meet The Company Credit Rating on signing a Bilateral Connection Agreement any of the following events shall constitute an Event of Default:-

The Company shall in relation to such an Event of Default of a User in relation to a Connection Site:

in the case of Connection Sites Onshore within six (6) months of the date of termination or such longer period as may be agreed between the Relevant Transmission Licensee and the relevant User; or

in the case of Connection Sites Offshore, on or adjacent to the Relevant Transmission Licensee’s Offshore Platform within a period agreed between the User and the Relevant Transmission Licensee; and 17

(i) The Company shall request the owner of any Distribution System to which the User is connected to Disconnect all the User's Equipment or equipment for which the User is responsible (as defined in Section K of the Balancing and Settlement Code) at the site of connection;

the User in question shall fail to provide or maintain or renew in accordance with Paragraph 3.21 or Paragraph 9.22.3 (as appropriate) the requisite amount of Security Cover; or

the User shall fail to pay any sum payable by the User in respect of Balancing Services Use of System Charges to The Company within 3 Business Days of its due date; or

an event of default under Paragraph 5.3.1(b) of the CUSC has occurred provided always that the final Paragraph of Paragraph 5.3.1(b) of the CUSC referring to the provision of guarantees shall not apply.

request the owner of the User System to which the User's Customers and/or the User are connected, to Deenergise the User's Customers and/or the User (as the case may be) and to use all reasonable endeavours to effect or (as the case may be) give instructions to give effect to 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); and/or

Deenergise the User's Equipment or equipment for which the User is responsible (as defined in Section K of the Balancing and Settlement Code) at any Connection Site(s) which serves only the User or a customer of the User; and/or

where the User is an Interconnector User request the relevant Interconnector Owner to cease or procure the cessation of the transfer of power by or on behalf of the User across the Interconnector.

The Company may terminate the relevant Bilateral Agreement and all others to which the User is a party and revoke the Use of System Supply Confirmation Notice and Use of System Interconnector Confirmation Notice forthwith by notice to the User if:-

The service of a notice under Paragraph 5.5.5.1 and/or the expiry of a notice given under Paragraph 5.6 shall not relieve the User of its obligation under Paragraph 3.9.3 or Paragraph 9.10 or any Bilateral Agreement to which the User is a party to pay any outstanding Balancing Services Use of System Charges in respect of any Settlement Day which fell prior to the issue or expiry of (as the case may be) such a notice but for which the Payment Date fell after the date of the termination of the relevant Bilateral Agreement (or use of system not subject to a Bilateral Agreement).

Connection Charges and/or Use of System Charges to the end of the Financial Year in which termination occurs all such charges becoming immediately due and payable upon the termination of the relevant Bilateral Agreement; and

Termination Amounts applicable to the Connection Site; and

where the User is in the category of a Power Station directly connected to the National Electricity Transmission System or with a Bilateral Embedded Generation Agreement Cancellation Charge, 22 such payments to be made within 28 (twenty eight) days of the date of The Company 's invoice in respect thereof.

the User shall remove any of the User's Equipment on the Relevant Transmission Licensee’s land; and

The Company shall procure that the Relevant Transmission Licensee removes, any of the Transmission Connection Assets on the land of the User concerned.

the User shall remove any of the User’s Equipment on or adjacent to the Relevant Transmission Licensee’s Offshore Platform; and

The Company shall procure that the Relevant Transmission Licensee removes any of the Transmission Connection Assets on or adjacent to the User’s Offshore Platform .

the Supplier is in breach of the CUSC relating to the supply to the Connection Site and accordingly The Company is permitted under the CUSC to Deenergise the User's Equipment; or

an Event of Default under Paragraph 5.6 has occurred in relation to the Supplier with whom the User has a Supply Agreement and the relevant event is still continuing or the relevant circumstances still exist, The Company may Deenergise the User's Equipment upon the expiry of at least 48 hours prior written notice to the User provided that at the time of expiry of such notice the breach concerned remains unremedied or (as the case may be) the reason permitting Deenergisation continues or the relevant Event of Default is still continuing and neither The Company nor the Supplier has referred the matter to the Dispute Resolution Procedure. In such event, The Company may Deenergise the User's Equipment forthwith following completion of the Dispute Resolution Procedure and final determination of the dispute in The Company 's favour.