CNMC and CRE intend to formally approve IFE rules 3.1 by mid-March

1. CASC extension to IFE IFE approval process by NRAs (1/2) CNMC and CRE intend to formally approve IFE rules 3.1 by mid-March • The analysis of IFE Rules 3.1 had been made more complex by their fully new structure compared with the previous version (3.0). • However, a high level of cooperation with TSOs (REE and RTE) enabled NRAs (CNMC and CRE) to assess the rules at the earliest stage of the process in January, and to share their joint comments on the basis of the consulted draft, before its formal submission. • Except NRA’s comments on firmness regime and some minor issues, all main comments have been taken into account in the rules formally submitted mid-February. • Therefore, CNMC and CRE intend to approve the IFE rules 3.1 by mid-March, to allow the go-live of the project for the monthly April auction (taking place late March). • As stated during the previous meetings, CNMC and CRE fully support the extension of the CASC platform to the France-Spain border, as a significant milestone towards the achievement of the target model at the long-term timeframe. SWE IG meeting – 25 February 2014 1

2. CASC extension to IFE IFE approval process by NRAs (2/2) However, IFE rules 3.1 should be considered only as transitory solution for the LT auctions. NRAs request TSOs to apply HAR on the FR-SP border by the end of 2014 • The target model provides not only for a single allocation platform but also for harmonised allocation rules applying to long-term explicit auctions. • During the IG meeting on 3 December 2013, applying specific rules (IFE 3.1) to allocate long-term capacity on IFE border by CASC was accepted by NRAs as a transitory solution to avoid any further delay on the project. • CNMC and CRE thus recall their request to TSOs to submit Harmonised Allocation Rules (currently applying to CASC) including the France-Spain border, at the earliest opportunity when the SWE region is coupled, and at the latest by the end of 2014. • In these rules, the firmness regime shall evolve in the light of the work carried out by NRAs on FCA NC (ACER’s Reasoned Opinion published on 20 Dec) and of the comments raised by stakeholders, calling for firmer Transmission Rights (no cap on price spread, no cap on volumes after long term firmness deadline). • During the last IG meeting, NRAs also required TSOs to implement shadow auctions as the fallback solution in case of day-ahead decoupling. Rules applying to such shadow auctions could also be included in the HAR. SWE IG meeting – 25 February 2014 2