3rd Stakeholders Group Meeting

Project status and details of the ongoing development

of the load-flow based capacity calculation/allocation system

CEE TSOsVienna

07.11.2007

2

State of Play

Antitrust and Merger Regulation Issues

Documents requested by CEE-Regulators

Updated Project Plan

Project Office

Open Topics

Conclusions

Agenda

3

Managing director/MD contract

Cost sharing agreement

Business plan, budget and shareholder‘s loan ( )

Articles of association

Bank account

Staff recruiting (Project Team) /employment contracts / accountant service

Office ( )

Founding procedure, necessary TSOs‘ confirmations, proxy issue

Antitrust and Merger/Cartel regulation issues

Service Level Agreement (inter TSO contract)

Software (common coordinated capacity calculation and allocation)

Communication infrastructure and IT hardware

Auction Rules, external data transfer (MLA)

Not yet startedStartedIn implementationCompleted

State of Play

4

Antitrust & Merger Regulation Issues I/II

Several antitrust & merger regulations could be relevant:

Antitrust regulations following art. 81/82 of EC contract

Mergers following merger Regulation 139/2004

Antitrust and merger regulations under national (German) laws

Previous steps, 1st letter to the Commission: CEE TSOs have already submitted a letter, on 26th March, regarding antitrust & merger

issues to the Commission.

The answer of the Commission puts the burden of final judgement of the notification need on TSOs’ shoulders.

5

Antitrust & Merger Regulation Issues II/II

Previous steps, 2nd letter to the Commission: CEE TSOs have submitted a second letter, on 10 th July, to the Commission for final

clarification – whether the Commission is responsible or national competition authorities.

A questionnaire has been submitted to CEE TSOs by the Commission for helping them to clarify the situation.

The EC has denied our request as we could not prove that CAO will be a fully functioning company.

The next steps are (to be elaborated in detail):

notification of all 8 TSOs to the German federal syndicate agency (Bundeskartellamt)

most likely notification of all 8 TSOs to the Polish syndicate agency

609/07 10/07 11/07 12/07 01/08 02/08 03/08 04/08 05/08 06/08 07/08 08/08 09/08 10/08 11/08 12/08 01/09

Test calculations for D/M/Y concepts

Improvement of D/M/Y concepts

Scheduling concept

Curtailment concept

Secondary market concept

Cost & revenue distribution concept

Implementation design

Processes chain & Emergency

concept

IT Tender preparationIT Tender & selection of IT provider

IT InstallationIT Tests &Dry-run

Ass

ess

men

t of

an

d d

eci

sion

on

FB

A

con

cep

ts b

y H

LM a

nd

aft

erw

ard

s op

inio

n

by R

eg

ula

tors

Acceptance by EC(merger regulations)

or national authorities (if necessary)

Board decisions & foundation

of CAO

Agreement with TSOs outside CEE

region

Auction Rules(including consultation

with traders)

Update tools of TSOs inside & outside CEE

region(incl. 7 days

regime)

Service Level Agreement

Opi

nion

of

Reg

ula

tors

Op

inio

n o

f R

eg

ula

tors

Preparation of CAO Preparation of CAO

Market Information Market Information

WG Coordinated Auction

WG Flow-based Allocation

Support by consultant

Permanent project team / CAO staff

Regulators

Other third parties

High Level GroupConsultation with regulators

Project Plan For

Next Months

Dr CAT Dry-run

Draft documents requested by regulators!

7

Project TeamCreation of an permanent project structure:

In order not to lose time and to avoid further delay a Project Team will be established. If the antitrust & merger regulation issues are clarified the Auction Office (as a

independent legal entity) can immediately be established.

Project coordination: The Project Team (managed by the designated MD of the future AO) coordinates the work

and acts as the overall project management. A permanent project staff works part/full-time for establishing and developing the future

allocation system. The already established structure (Working Groups) will assist the Project Team. Also a external consultant has been chosen to support the work!

8

Open topics I/II

Scheduling, Curtailment: Comprehensive concept has already been elaborated and experts

of involved TSOs are going to finalise it during the next month. Also different concepts and possibilities of curtailment are under

investigation.

Capacity calculations: Concept is still under elaboration. Several test calculations have been performed. The Consultant will also assist in performing test calculations.

9

Open topics II/II

IT: IT-Tender for capacity calculation and auctioning is under

preparation. Experience of similar projects shows that development will take

about 6 months.

10

Conclusions

Based on decision from CEE-Regulators no capacity – available for yearly auction for 2008 – will be shifted to monthly auctions in 2008 for enabling the start of FBA system during 2008.

So, the FBA system will start with high probability not before 2009 (yearly auction for 2009).

TSO looking forward to develop – with support from Consultants – a consistent package for Y/M/D allocations, opened for further development for intraday.

Strong cooperation with Regulatory Body is crucial to avoid further delays.

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Thank you for your attention