FUI electricity region: Update on balancing workstream

1. FUI electricity region:Update on balancing workstream CRE SG FUI – 3 December 2008

2. TSOs’ views diverge Background • Regulators common position in April: • “remuneration scheme shall be approved by the regulators” • Regulators requested by the end of September that within a month TSOs propose: • a fee level with explanations on the method used to determine it; • a clear explanation on how the fee may be charged.

3. RTE’s position • “Regarding RTE, The tariff covers investments and operating costs for IFA” The fee as a remuneration scheme is an issue specific to NGIL • “There is no evidence that a fee is requested, in terms of correct remuneration of the assets” Would this fee be maintained, RTE would request it to be symmetric in order to insure an equal treatment for both sides market participants These additional revenues will be deducted from the charges to be covered by the French network tariff

4. NGIL’s position • This response did not provide expected clarifications on: • The level of the fee • The method to determine it • The charging methodology • Use of interconnector fee appears to be a sensitive issue for NGIL

5. CRE’ position • Present work on cross-border balancing in FUI aims at facilitating commercial exchanges of balancing services, in accordance with the principles of competition, transparency, non discrimination, preserving security of supply • Building and operating IFA cable is a regulated activity. All costs and revenues coming from this cable should be made transparent and cost-reflective • Transparency was one of the main concerns expressed by stakeholders  The fee’s level, as well as the charging methodology will be published and transparent • Regulators reiterate their request to have a cost-reflective fee in order to ensure that: • Impact on the development of cross-border trade is limited • TSOs’ remuneration is fair