Gdynia, Poland, 25 June 2009

1. 15th RCC Meeting Gdynia, Poland, 25 June 2009

2. 1.1 Agenda

3. 1.1 Agenda

4. 1.2 Approval of the minutes To be found under: http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_INITIATIVES/GRI/South_South_East/Meetings1/RCC_meetings/14supthsup%20SSE%20RCC/AD

5. 1.3 Review Action Points

6. 2. Presentation / URE • The Polish Gas Market

7. 3. Updates SSE Regulators Network and recent national developments • Tauern Gas Pipeline applies for exemption • On 23 June 2009, Tauerngasleitung GmbH (TGL) has submitted an exemption application under Section 20a of the Austrian Gas Act (Gaswirtschaftsgesetz) (Section 22 Directive 2003/55/EC) with the regulatory authority, the Energie-Control • Request for a partial exemption (50% of the maximum technical capacity, i.e. 650.000 Nm3/h in both directions) for a period of 25 years • TGL will launch an “Open Season 2009” which will shortly be announced in European trade publications, in international media and on the TGL website www.tauerngasleitung.at. The TGL Open Season 2009 ends with the conclusion of the transportation service contracts. • E-Control has already started discussions with BNetzA and AEEG to reach a harmonized decision

8. 3. Updates SSE Regulators Network and recent national developments • MoU between the Slovak Ministry of Economy and the Austrian Ministry of Economy on the cooperation in the energy sector under discussion • Joint promotion of reverse flow ability • Support the ability of short term activation of reverse flows in crisis situations • Endeavours to deliver oil and gas supplies through national networks and storage facilities in crisis situations

9. 4. Work Programme 2009

10. 4. Work Programme 2009

11. 4. Work Programme 2009 • After small wording amendments and slight changes, • the Work Programme has been circulated among all members • of the Stakeholder groups in mid April.

12. Example – Central Europe Preliminary – Final report expected on 15 July 2009

13. Lanzhot BTS Lanzhot CS Břeclav ExampleCzech Republic – Slovak border bidirectional measurement and transport, Lanžhot + CS Břeclav Preliminary – Final report expected on 15 July 2009

14. GTE+ Reverse Flow Study • Cost recovery ? • in most cases envisaged, no interest from the market for reverse flow capacity  need for an appropriate cost recovery mechanism • European Energy Programme for Recovery • allows 80 M€ for reverse flow projects • individual projects will be assessed  result by end 2009 • Broader question : How to recover costs for infrastructure needed for Security of Supply ? • discussions with ERGEG started • possible involvment of Member States ?

15. How to allocate costs of reverse flow investments appropriately? 1st option: inclusion in tariffs if “negligible” impact Possible solutions: Inter-TSOs compensations TSO(s) of the Member State benefitting from enhanced security of supply due to an investment enabling a reverse flow in another MS shall conclude a contract with the investing TSO(s) on the contribution to investment costs which subsequently could be allocated to the consumers benefitting from increased security of supply via network tariffs TSO(s) of the Member State benefitting from enhanced security of supply due to an investment enabling a reverse flow in another MS shall book reverse flow capacity on a long-term basis with the investing TSO(s) to contribute financially to the investment and to take over the volume/utilisation risk Role of governments? 4. Regulatory treatment of reverse flow investments

16. How to allocate costs of reverse flow investments appropriately? Are the proposed mechanisms compatible with national laws/regulations on tariff setting? Can the proposed mechanisms be regarded as general policy of SSE regulators to support reverse flow investments? 4. Regulatory treatment of reverse flow investments

17. Guidelines for importing and supplying natural gas to customers Gdynia, 25 June 2009

18. 1) Initiative • Idea on report derived in November 2008 at the RCC meeting: • to issue templates on how Traders and Shippers could enter each gas market • to avoid information asymmetries • As, according to PwC Study: • administrative ând regulatory impediments to market access exist (no english versions of documents available) • the period of time required for obtaining a trading licence is a significant barrier to gas trading in many countries • To gather requested information: 1. National Authority & Legal Basis for the issuing of trading licences a. For the delivery of natural gas at the border c. Selling natural gas directly to a customer d. Supplying balancing energy e. Transit through the national market 2. Procedure & Timetable 3. Costs 4. Additional Information

19. 2) Participation

20. 3) National Authority & Legal Basis • Austria: • “Natural Gas Act” / E-Control is competent authority • Bulgaria: • “ Energy Act“ / SEWRC is competent authority • Only a single licence each for transmitting, distributing and storing natural gas to be issued • Czech Republic: • “Energy Act (Act on the Conditions for Business and State Administration in the Energy Industries)” / ERU is competent authority • Trading activities according to public notice “Rules for the organisation of the gas market” • Italy: • “Natural Gas Act Decreto legislativo 23 maggio 2000 n. 164” (d.lgs 164/00)” • Poland: • Energy Law Act from 10th of April 1997 - The President of the ERO responsible for: issuing new licences for market entrants, licensing entrepreneurs of energy markets, approval of tariffs (distribution, transmission and trade), control of energy activity, promotion of competition • For TSO / 6 DSOs: transmission/distribution network & deals with balancing and system congestion management • Slovenia: • “Energy Act”, Energy Agency of Slovenia is competent authority to issue trading licenses • General conditions for the supply and consumption of natural gas from the transmission network have to be obeyed

21. Requirements for the delivery of natural gas at the border • Austria: • delivery contract at the entry or delivery point • Service Agreement with the Hub Operator at the entry point • Contract with a retailer/supplier, already member of a Balance Group • The representative of the Balance Group nominates “external schedules” • Bulgaria: • Natural gas extraction companies may conclude transactions for transmitting, distribution and storing gas with the licenced companies • Natural gas extraction companies may construct direct natural gas pipelines between each other and to the cunstomers • Czech Republic • Gas Transmission agreement with TSO (incl. Balancing) • Proof of financial elegibility • Imported gas can be sold at Virtual Trading Point • Italy • Authorization to import natural gas if the gas is produced in non UE countries. In this case the supplier must dispose of a volume of strategic storage equal to 10% of the annual volume of the gas he plans to import; • dispose of adequate transmission capacity if the gas is delivered within the Italian network (see section 2.c for the prerequisite regarding access to the network); • Poland • A supply and delivery contract at the entry or delivery point. • Natural Gas volumes can also be transported to the entry point at the Polish border via own transport capacities. In this case licence for foreign trade activity is required, granted by the President of the ERO. Also an agreement with TSO for natural gas transport service is needed • Slovenia • An access contract for access to transmission network • Supply contract at the entry or delivery point • Balancing contract with the transmission system operator • The representative of the Balance Group nominates the intake at the entry point for which the corresponding nominations must be made

22. b) Requirements for selling natural gas directly to a customer • Austria: • requirements as in point a) • Notification of trading activities to ECG via letter / business licence (Trade Law) • Establishment of a new Balance Group / Membership in existing • Acquirement of new customers according to switching order • Allocation of capacities at entry points & Risk for allocated and nominated volumes born by Balance Group Representative • Czech Republic: • Gas Transmission Agreement with TSO. Conditions - see a1. • Booked transmission capacity for exit point or points. • Acquirement of new customers respecting the „Switching a supplier“ rules. • Gas distribution Agreement with relevant Distribution System Operator • Italy: • Seller must dispose of the gas volumes modulation capacity required by its customers & demonstrate the origin of the gas and the reliability of the transmission system; • dispose of adequate technical and economical capacity. • Poland: • Selling natural gas according to the Polish Energy Law Act require a licence granted by the President of the ERO (exemption: if annual turnover value does not exceed the equivalent of EUR 100,000) • Licence for foreign trade activity granted by the President of the ERO. • Gas shall be delivered upon prior connection to the grid, on the basis of a sale agreement and an agreement on transmission or distribution services • Sale agreement, Transmission or distribution agreement, Transportation contract from entry to exit point, Licence for distributinon of natural gas activity, Agreement with SSO • Slovenia: • Supply contract with the customers • An access contract for access to distribution and/or transmission network • Balancing contract with the representative of Balance group • Licence for supplying

23. c) Requirements for supplying balancing energy • Austria: • See delivery to final customers • AGGM / AGCS – Merit Order lists – hourly imbalance results in • Bulgaria: • Supplier needs to be registered under the Commercial Code or under the national legislation thereof • Balancing agreement with transmission company • Czech Republic: • The responsibility for imbalance can be contractually transferred to another cleared entity (a user for whom the transmission system operator carries out imbalance evaluation, clearing and settlement under a contract). • Italy: • Applicant must have, in order to book transmission capacity, the relevant purchase, supply or service (for storage) contracts with reference to the point of the network to which he asks for capacity; • have, in the case of requests referred to entry points interconnected with foreign countries, an import contract compatible with the amount and duration of the capacity requested in that point; he must declare the country where the gas is produced, and, if required by the above mentioned regulation, he must be authorized to import natural gas; declare the possession of prerequisite for priority of access according to the criteria defined in the deliberation n. 137/02; • present financial guarantees for the amount of 3% of the annual cost of the capacity booked plus, if no adequate financial rating one third of the annual cost of the same capacity; • in case of direct supply to final customers, possession of the relevant authorization • Poland: • TSO purchases gas for balancing the system from direct suppliers of gas • TSO may select suplpier by tender or auction • In justified cases, the TSO may purchase gas directly form the shippers • Settlement at the end of each gas month (charge=absolute value of imbalance x gas reference price)

24. d) Transit through the national market • Austria: • Regulated by E-Control (Terms & conditions on homepage) • Shippers obliged to use a central trading platform for resellling capacity rights • Bulgaria: • Agreement with national transmission company at regulated tariffs • Czech Republic: • No ERO license is needed. • Gas Transmission Agreement with TSO, Transit Pricelist and Grid Code for Transit are available online • Italy: • same recalled at point 2.c. • In the case the shipper has no delivery point in the Italian market, but only capacity at an entry point and capacity in an exit point interconnected with foreign systems he is generally balanced as long as the volume of gas injected equals the volume of gas withdrawn. • Poland: • Transmission services by SGT EuRoPol SA to PGNiG SA and OOO „Gazprom Export“ through agreement on transmission capacities • Transmission tariff set by ERO • Slovenia: • An access contract for access to transmission network

25. 4) Procedure & Timetable • Austria: • Few weeks (depends on registration with AGCS or A&B) • Bulgaria: • Few weeks to months depending on kind of activity • Czech Republic: • several weeks. Maximal period for issuing of license for gas trading is 30 days • Users shall submit a request for transmission capacity booking for one or more years to the transmission system operator no later than 18 calendar days before the beginning of the first gas day of the calendar month in which gas transmission is to be started • Italy: • import natural gas must be presented to the MSE three month in advance with respect to the start of the importation (one month in the case the authorization is asked for a period shorter than one year); • supply final customers must be presented to the MSE six month in advance with respect to the start of the activity; the applicant is considered authorized if the MSE doesn’t deny within three months from the request. • Transmission capacity at the entry points interconnected with foreign countries is granted for period of a month up to seven thermal years (from 1 October to 30 September), in all the other cases, for the period of one thermal year • Poland: • Standard transmission contract on TSO website (draft contract within 40 working days) • Reply within 15 working days by applicant • Signed contract from TSO within 5 Working days (status as shipper for applicant) • Slovenia: • Acquisition of licence procedure can be reduced to a few days

26. 5) Costs • Austria: • No licence fees, costs for data-services of AGCA or A&B and for legal advice and translations • Bulgaria: • Initial licence fees for the transmission, distribution and transit transmission license of natural gas • Czech Republic: • The fee for issuing the license for trading is 100 000,- CZK (approx. 4000 EUR) • Individual costs for legal advice and translation • Italy: • Tariffs for transmission and storage services are defined and approved by AEEG and published in the TSOs and SSOs websites • For the authorizations is required a modest amount of stamp duties • Poland: • Fees equal to revenues and according to a fee index (attached) • Fees not lower than PLN 200 or higher than PLN 1 000,000 (march 31st) • Slovenia: • Energy Agency of the Republic of Slovenia does not request any licence fees • There is also no other special costs which have to be paid to start importing & supplying natural gas • There are financial instruments for insurance of payment of network charge

27. 6) Additional Information contained • Austria: • Balancing Market in brief, further links to market rules and market participants • Bulgaria: • Balancing Market in brief, further links to market rules and market participants • Czech Republic: • Balancing Market in brief, information on Czech Gas industry, further links to market rules and market participants • Italy: • Balancing Market in brief, further links to market rules and market participants • Poland: • Information on obligatory gas reserves, Balancing Market in brief, further links to market rules and market participants • Slovenia: • links to market participants

28. 6. Review of the agenda & preparation of the 6th SG meeting

29. 6. Review of the agenda & preparation of the 6th SG meeting

30. 6. Answer to DG TREN on s-t SOS measures Preparation of national emergency mechanisms • Austria: amendment to the Energy Emergency Data Order for Gas will be adopted by 1 July 2009 • Czech Republic: the process on how to execute supply restrictions will be defined by DSOs and TSOs • Hungary: change of restriction categories on the basis of discussions with stakeholders is forseen • Slovakia: amendments to the Energy Act and Regulation in force since15 March 2009, with an extension of powers of the Ministry of Economy related to the underground storage capacity

31. 6. Answer to DG TREN on s-t SOS measures Crisis management mechanisms and their implementation • Czech Republic: more precise definitions of „State of emergency“ and „Preventing a state of emergency situations“ in the secondary legislation are needed for making emergency mechanisms fully operational • Greece: DESFA to draft and submit an emergency plan to be approved by the Minister for Economic Affairs with the simple advice from the Greek regulator (RAE) Access to strategic storage • Hungary: the process on how gas in strategic storage can be accessed will be further clarified. A change in the respective legislation is foreseen to enable the TSO to nominate strategic stocks.

32. 6. Answer to DG TREN on s-t SOS measures Reverse flows • A list of possible reverse flow investments has been indicated • Germany – Austria • Austria – Slovakia • Italy – Slovenia – Austria • Greece – Bulgaria • Turkey – Bulgaria • Romania – Bulgaria • Romania – Bulgaria / Romania Hungary European Economic Recovery Plan • Timing issues for accessing funds and the related award have been raised

33. 6. Updates IPAs at other IPs

34. Survey on TSO´s coordination activities at IPs - map 27 6 26 7 1 Legend: 4 5 3 25 OBA 8 2 24 9 10 21 23 22 11 20 OBA in preparation 12 17 19 14 15 16 Others 28 29 31 30 13 18

35. 7. Regional Cooperation in the Third Package Amended Regulation (EC) 1775/2005 Article 12Regional cooperation of transmission system operators 1. Transmission system operators shall establish regional cooperation within the ENTSO for Gas to contribute to the tasks referred to in Article 8(1), (2) and (3). In particular, they shall publish a regional investment plan every two years, and may take investment decisions based on that regional investment plan. 2. Transmission system operators shall promote operational arrangements in order to ensure the optimum management of the network and shall promote the development of energy exchanges, the coordinated allocation of cross-border capacity through non-discriminatory market based solutions, paying due attention to the specific merits of implicit auctions for short term allocations and the integration of balancing mechanisms. For the purpose of achieving the goals set in paragraphs 1 and 2, the geographical area covered by each regional cooperation structure may be defined by the Commission, taking into account existing regional cooperation structures. Each Member State shall be allowed to promote cooperation in more than one geographical area. The measure referred to in the first sentence, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 28(2).

36. 7. Regional Cooperation in the Third Package Amended Directive 2003/55/EC Article 6: Regional solidarity 1. In order to safeguard a secure supply on the internal market in natural gas, Member States shall cooperate in order to promote regional and bilateral solidarity. • 2. Such cooperation shall cover situations resulting or likely to result in the short term in a severe disruption of supply affecting a Member State. It shall include: • (a) coordination of national emergency measures referred to in Article 8 of Council Directive 2004/67/EC of 26 April 2004 concerning measures to safeguard security of natural gas supply[1]; • (b) identification and, where necessary, development or upgrading of electricity and natural gas interconnections; and • (c) conditions and practical modalities for mutual assistance. • 3. The Commission and the other Member States shall be kept informed of such cooperation. • 4. The Commission may adopt guidelines for regional cooperation in a spirit of solidarity. Those measures, designed to amend non‑essential elements of this Directive by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 50(3).

37. 7. Regional Cooperation in the Third Package • Amended Directive 2003/55/EC • Article 7: • Promotion of regional cooperation • 1. Member States as well as the regulatory authorities shall cooperate among themselves for the purpose of integrating their national markets at one and more regional levels, as a first step towards a fully liberalised internal market. In particular, the regulatory authorities where Member States have so provided, or Member States shall promote and facilitate the cooperation of transmission system operators at a regional level, including on cross-border issues, with the aim of creating a competitive European market, foster the consistency of their legal, regulatory and technical framework and facilitate integration of the isolated systems forming gas islands that persist in the European Union. The geographical areas covered by such regional cooperation shall include cooperation in geographical areas defined in accordance with Article 12(3) of Regulation (EC) No …/…*. Such cooperation may cover other geographical areas. • 1a. The Agency shall cooperate with national regulatory authorities and transmission system operators to ensure the compatibility of regulatory frameworks between the regions with the aim of creating a competitive European market in natural gas. Where the Agency considers that binding rules on such cooperation are required, it shall make appropriate recommendations. • 2. Member States shall ensure, through the implementation of this Directive, that transmission system operators have one or more integrated system(s) at regional level covering two or more Member States for capacity allocation and for checking the security of the network. • 3. If vertically integrated transmission system operators participate in a joint undertaking established for implementing such cooperation, the joint undertaking shall establish and implement a compliance programme which sets out the measures to be taken to ensure that discriminatory and anticompetitive conduct is excluded. That compliance programme shall set out the specific obligations of employees to meet the objective of excluding discriminatory and anticompetitive conduct. It shall be subject to the approval of the Agency. Compliance with the programme shall be independently monitored by the compliance officers of the vertically integrated transmission system operators.

38. Identification of 3rd P. topics • Requirements on TSOs and Member States to cooperate on a regional level • How to better involve Ministries in the Regional Initiatives? • Representation of all Ministries in the SAP meetings? • MoU between the Ministries on regional cooperation (see GasPlatform in NW Europe)? • Regional ministerial councils (see Energy Community)? • Regional cooperation of TSOs and Regional Initiatives? • TSOs to form regional structure within ENTSOG? • Regional structure within ACER?

39. 8. Any other Business Next Meeting: • Date: RCC/SAP 15 & IG 16 October 2009 • Venue: Vienna

40. Contact • Konstantin Heiller • Gas Department • Konstantin.heiller@e-control.at • +43 1 24 7 24 810 • +43 664 966 7239 • www.e-control.at

41. Sightseeing tour & dinner • Sightseeing tour in Gdańsk (starts 18.00) from the hotel • Dinner at 20.00 – Café & Restaurant Red Door in the heart of the Old Town of Gdańsk

42. Further information is available at www.energy-regulators.eu Thank You !