Source illustrative graphics: eon , screenshot January 2010

2. Gas industry sees itself in uncertain, oversupplied, investment world – 2009 put gas industry growth some years back…. Source illustrative graphics: www.eon.com, screenshot January 2010

3. Common effort for robust regional investment climate remains key in uncertain world • The Regulators are faced with difficult task of how to translate market uncertainty in their tarification (and utilisation) regulation approaches, in relation to stimulating investment. • Gas investments are fundament of reaching public goal of Consumer benefits such as the long term Security of Supply, Competition and Sustainability (via gas as back up fuel for renewables). • Regulatory decisions are highly detailed and technical, but start with knowing that Policy makers will share moral responsibilityfor the technical choices, if they contribute to (national and EU) Policy goals. • Therefore publicized ‘moral support’ of Policy makers to stimulating Investment is required, if we deem Investments key. • It is difficult to support if you do not participate in the detailed process. For such trust and support it is key that all stakeholders know that investment decisions are taken on best information available. It is however inherent that a degree of uncertainty on need of investments will always remain. We should always still try to qualify and quantify such uncertainty risk. • Based on robust investment climate, ensuring decisions are taken on best information available, TSOs and shippers can ensure investments happen when needed.

4. GRI NW works on implementing robust regional investment climate. First results by 14.09.2010 • Focus on implementing policy advice 2010 • Progress of regional projects monitored for ad-hoc action RCC (all rec) • Regulators address stranded asset risk discussion via documenting solutions in exchange of letters between PB and NRAs (rec 1) • Share Regulatory best practices on re-numeration via input to FGL tarification (rec 2) • TSO’s clarify investment prerequisites via website publications (rec 4); Regulators clarify GRI NW view on scope of regional plan Anchoring risk/reward balance dialogue beyond 2010

5. Project leaders summary challenge. Rec. 1 ensures that TSO know how national regulatory system discloses risk sharing of stranded assets between involved parties Proven via legal analysis first wheel to tune Rec. 4 ensures that TSO makes very clear in advance under which conditions she/he will invest Anchoring risk/reward balance dialogue beyond 2010 Rec. 2 ensures that TSO know how national regulatory system addresses that efficient investments are reimbursed now and in future

6. Closing remarks on implementing sensitive recommendation 1 by project leader => how can one see support from NRAs: • “How do we later on measure at regional level that these ex-ante revision criteria and conditions to YES to recommendation 1 have produced appropriate level of “confidence in regulatory regime and its evolution” needed for ensuring continued cross-border investment where needed? No “50 year valid” support to TSOs in response to request for predictability of regulatory regime and its evolution , BUT.. A support by means of “defined ex-ante revision criteria and support conditions” … Critical assumption for support Recommendation 1: Societal need for preventing asymmetric risk of underinvestment. Pro’s “support” • Asymmetric risk of underinvestment • Still legal obligation in art 3 of Ro. 1775/2005 to “stimulate” investment in tariffs (art 13 of Ro. 715/2009) • So we should define in each regime stranded asset risk sharing mechanisms and (where appropriate) risk premiums as NRA, but… Pro’s “defined ex-ante revision criteria and support conditions” • Information asymmetry: best information on risk always with TSO • Risks must be measured – projects differ and so can rewards differ • If the risk does not occur, paid risk premium should be in reason reinvested in other projects likewise in insurance sector – in this case for public benefit • Therefore, communicate in advance conditions under which we might re-open the comfort we defined • Proposed to be worked case-case by NRAs in response to PB-letter requesting implementation of Recommendation 1 There is an important regional question in setting such criteria and conditions: • “How do we measure at regional level that these ex-ante revision criteria and conditions have produced “confidence in regulatory regime and its evolution” needed for cross-border investment?

7. Thank you for your attention. • Thank you already in advance to everyone here today and to core group helping to bring this whole project forward!

8. Annex – overview national legal issues vs Policy advice • Status February 2010

9. Legal analysis summary (NRAs in random order) Recommendation 1 most challenging and therefore requiring policy level support

10. Explanatory note on used symbols at legal analysis summary : +/- There maybe an issue. Depends on implementation ++ Major support + No issue + ! No issue but care needed with implementation Minor issue - - law change needed “R. x” The references in the presentation to the 7 recommendations – for full text see project documentation.