Regulators’ views on Transparency

1. Regulators’ views on Transparency Dominique Jamme Director Gas Infrastructure and Networks Commission de Régulation de l’Energie GIE Annual Conference, 22-23 November 2007

2. Agenda • Introduction • Transparency in transport • Transparency in storage GIE Annual Conference, November 2007

3. The importance of transparency • Transparency is a prerequisite for the development of competitive markets • It allows newcomers to book at first capacity in the infrastructure and use efficiently all mechanism (ie IUOLI) in order to optimize the capacities and gas flows of their portfolio • It shows whether there is capacity hoarding • It helps investments decisions • Independent operators should be willing to provide transparency as much as possibe in order to sell in the best possible conditions their capacity products • On the contrary, lack of transparency favours the incumbent suppliers • Large discrepancies between TSOs of published information create an uneven playing field between shippers • Transparency on capacity and flows is key GIE Annual Conference, November 2007

4. Agenda • Introduction • Transparency in transport • Transparency in storage GIE Annual Conference, November 2007

5. The current level of transparency in transport in Europe is unsatisfactory • According to the ERGEG 2007 compliance report, transparency requirements in Regulation 1775/2005/EC is unsatisfactory. In particular • The publication of historical flows (publication of maximum and minimum utilisation rate) is low • The publication of contracted and available capacities is unsatisfactory • In addition, the monitoring indicates that publication is restrained because of the extensive use by some TSOs of the minus 3 rule • The results of the monitoring shows that a high number of TSOs limit their publications without the authorisation of their NRAs GIE Annual Conference, November 2007

6. At EU level, transparency remains a priority for regulators • The EU Commission has suppressed the minus 3 rule in the 3rd package proposal • This was a recommendation of ERGEG • ERGEG proposes further improvements in the publication in particular the replacement of maximum and minimum flows with daily flows • At regional level, regulators tackle transparency issues • For example, in the NW region, transparency has been improved at Taisnières (Fluxys) and Obergailbach (GDFDT) • However, TSOs have requested not to publish for more than 100 points in Germany and 15 points in the Netherlands GIE Annual Conference, November 2007

7. ERGEG Transparency Monitoring 2007 GIE Annual Conference, November 2007

8. ERGEG Transparency Monitoring 2007 Publication ofinformation limited Publication ofinformation not limited GIE Annual Conference, November 2007

9. ERGEG Transparency Monitoring 2007 Reportclearlyshows: Un-satisfactoryand un-acceptablelevel ofcompliancein someareas! GIE Annual Conference, November 2007

10. Agenda • Introduction • Transparencyin transport • Transparency in storage GIE Annual Conference, November 2007

11. Regulators have also identified a significant lack of transparency regarding storages • In March 2005, the industry voluntarily agreed to comply with the GGPSSO • This includes transparency requirements, which are crucial both in terms of competition and SoS • The monitoring of these guidelines by the ERGEG has shown a low level of compliance with regard to the most important points, including transparency GIE Annual Conference, November 2007

12. Regulators have also identified a significant lack of transparency regarding storages • ERGEG’s 2006 report showed that • Out of the EU’s 20 largest SSOs, 12 did not respect the requirements about gas in store levels, inflows and outflows • In spite of having more than 3 users, 7 SSOs did not publish aggregated outflows, aggregated inflows and historical utilization rates (or publish information that is not of good quality) • 12 SSOs did not publish information about maintenance periods • An informal check on the progress made by SSOs since ERGEG had delivered its final report showed only limited progress • These results need to be improved GIE Annual Conference, November 2007

13. Regulators support measures related to storage access proposed in the 3rd package • The storage proposals of the 3rd package follow a series of recommendations of ERGEG • This way forward is a very good news and is completely justified. With regard to transparency, the proposals are: • “Detailed information regarding the technical information necessary to gain effective access” • Contracted capacity and available capacity on a regular, rolling, numerical, user friendly and non-discriminatory basis • Gas in store, inflows, outflows to be published on a daily basis, including those exempted from TPA • The publication of gas in stock, inflows and outflows should become the standard now. GIE Annual Conference, November 2007

14. Conclusions • Information allowing newcomers to better access the facilities is essential • ERGEG has played an essential role to improve transparency as it is key for competition • ERGEG will continue to be active/leader on that issue GIE Annual Conference, November 2007