9th RCC Meeting – Gas Regional Initiative (GRI) Region South-South East

1. 9th RCC Meeting – Gas Regional Initiative (GRI)Region South-South East 22 January 2008, Prague, Czech Republic

2. Agenda Under AOB

3. Suggested AOB (to be addressed later) • Update on CEER/ERGEG related issues: • Issue of barriers to market entrance • Coherence & convergence • Memorandum of Understanding • Annual Report of Regional Initiative & Annual conference of the Regional Initiative • Joint ERGEG-EFET work shop on R_ISO

4. Action Points 1-3 of the last IG meeting • Topic: Best-practice standardised bulletin boardAction: harmonized content for individual TSO platforms according to TAG and OMV best practiceResponsible/Result until: TSOs/presentation at next SG • Topic: Summary of planned investments in the region (incl. storage)Action: Inclusion of information on expansion projects (Transmission & Storage) into the surveyResponsible/Result until: RCC/presentation at next SG • Topic: Removing remaining obstacles to implementation of IPA/OBAAction 1: further update on implementationAction 2: BaumgartenResponsible/Result until: TSOs, Shippers

5. Action Points 4-6 of the last IG meeting • Topic: Best practice provision of OSS serviceAction 1: Transparency platform (GTE pilot project)Action 2: TSOs offer OSS service to shippers who request itAction 3: best practice OSS (OMV, www.gatrac.com)Responsible/Result until: TSOs/CEGH presentation at next SG • Topic: Regional Entry Exit Tariff System (REETS)Action 1: Presentation of benchmarking resultsAction 2: Simulation of introduction of REETSResponsible/Result until: RCC/presentation at next SG • Topic: Hub development as regional balancing marketAction 1: Update on implementation of next steps according scheduleResponsible/Result until: CEGH/EFET and PSV/EFET/presentation at next SG

6. SG meeting agenda – 1

7. SG meeting agenda – 2

8. SG Meeting: Agenda: Suggested next steps 2007 ECRB South East Europe Gas Survey, table 5, annex

9. GTE approach: Winter outlook (presentation at the SG)

10. Suggested next steps Questions to SG members • Which approach is useful for a regional long term planning? • Could the GTE approach be used as a starting point to define (a) different gas flow scenarios and (b) long term projections e.g. until 2020? • What are likely scenarios that could impact on supply/demand in the region? • Demand side: Supply side:- Power station newbuilt - IGI (Poseidon)- Household demand - Nabucco - Industry demand - LNG Poland - Extension Transmed. - North stream • Update on situation for each country: Priorities infrastructure planning • Report/Presentation at the next IG meetingAim: To develop a better understanding for natural gas supply/demand in the region and implications for infrastructure investmentSG invited to send their comments to dan.rieser@e-control.at Your inputneeded!

11. 4. Closure: Any other business • Any other business? • Further examination of the issue of potential barriers to market entryE.g. Traders, shippersExamination via studySimilar study carried out by PwC in electricityCollaboration with EFET to ensure high participation ratesSuggestion:Commission of similar study for natural gasCoverage of whole of SSE regionWho is interested in participating?Funding: Approximately €5000 per regulator

12. Participation of SEE GRI in PWC MulitClient Study • Structure of the PWC Multi Client study 2006/2007 for the Regional Electricity Market: • Austria, Czech Republic, Germany, Hungary, Poland, Slovakia and Slovenia 39 traders, with a response of 48%, research was done between June and October 2006 • Analyse of requirements for traders for an efficient and transparent market • Traders where asked directly about their experience Comparison Country by Country • The survey covers following main topics: • Network access administration and bureaucratic formalities • Power exchanges and trade mechanisms • Balance Energy • Congestion Management • Market structure and Timetable • Divergent IT Platforms and Data Delivery • Overall valuation

13. 4. Closure: Any other business • Brief update on findings from coherence and convergence report • Consultation process has ended/evaluation of responses document to be published soon • 15 responses received, 3 of them are confidential • Key messages from preliminary analysis of responses:- Sufficient degree of consistency between the regions- Scepticism about current approaches towards interconnection and capacity: not enough consistency, not enough progress made- Divided views on progress w.r.t. transparency- Majority in favour of deleting the 3- shipper rule- More gas hubs as functioning & liquid markets for natural gas are needed- MoU to be rolled out to all regions?

14. 4. Closure: Any other business • Discussion of MoU for SSE regionSuggested by AEEGIn line with conclusions of public consultation from the coherence and convergence report • Background:MoU concluded in GRI REM NW on 23rd of October 2007Signatories: Belgium, Denmark, France, Germany, Great Britain, Ireland, The Netherlands, Northern Ireland, Sweden (not: Poland)MoU clarifies mutual responsibilities for cooperationKey question:Do we need/would we want such an MoU also for the GRI REM SSE? Suggestion: Circulation of existing NW MoU to all RCC members

15. 4. Closure: Any other business • Update on Annual report of the Regional Initiative • Background:Annual conference on 27th February 2008 • Agenda available online from ERGEG web page • Annual report has been finalised • Timing:- 18 January: draft report submitted to to the GA and Ofgem designers • - 23 January: Board approval at Board meeting • - 25 January: deadline of GA online approval (small changes, typos etc.) • We are still awaiting the input from Commissioner Piebalgs on the joint Foreword.

16. 4. Closure: Any other business • Update from joint ERGEG-EFET workshop on R_ISO • Key findings and next steps: • ERGEG presented its view on the R_ISO model in line with its official position • Examples from other areas were reported • Stakeholders were given the opportunity to comment • Examples: EC, EURELECTRIC, EUROGAS, GTE, OGP • EFET will collect all views and revise its paper(new version/conclusions paper) • An updated paper will be available shortly

17. Conclusion • Conclusions of today’s workshop • Practical examples of regional TSO cooperation already exist • Identification of costs and benefits for regional market integration/of a R_ISO based on existing examples • Parallel process to 3rd Package • Workshop participants identified scope for the regional cooperation in the following areas where regional TSO cooperation delivers the greatest benefits to market integration • Access to capacity/Congestion Management at Cross Border Points • Management of capacities (“one-stop-shop”) • Easier access to the systems through Interconnection Point Agreements • Harmonisation of services • Merging of balancing zones to foster wholesale trading • Regional investment planning to remove physical congestion • Roles and responsibilities • Cost / Benefit analysis

18. Outlook Outlook: Next steps after today’s workshop • EFET to evaluate all comments and draft an evaluation and conclusions paper based on the outcomes of the workshop • TSOs are invited to make a proposal (e.g. MoU on cooperation) covering the identified issues, the envisaged structure for cooperation and a time schedule for implementation • RCC to update progress on Regional TSO-cooperation at next IG meeting WITH ALL STAKEHOLDERS in mid-April 2008 • Forms of Regulatory Cooperation

19. Operational Conclusions • Approval of agenda and procedures for SG meeting • Review of outcomes from joint ERGEG-EFET work shop:Comments on REETS paper • Next stepsConsultancy workCoherence and ConvergenceMoU • [to be added]