3rd SG Meeting – Gas Regional Initiative (GRI) Region South-South East

1. 3rd SG Meeting – Gas Regional Initiative (GRI)Region South-South East 22 January 2008Prague, Czech Republic

2. SG meeting agenda – 1 Covered in detail later

3. SG meeting agenda – 2

4. 2. Update of all stakeholders on progress made • Outline of current priorities • Priority I: Best-practice standardised bulletin board • Priority II: Summary of planned investments (incl. Storage) • Priority III: Conclusion of OBA/IPA at interconnection points • Priority IV: Best practice provision of one-stop-shop (OSS) service • Priority V: Regional entry exit tariff system (REETS) • Priority VI: Hub development as a regional balancing market

5. Priority I: Best-practice standardised bulletin board • GRI REM SSE started work on standardised trading platforms for transmission capacity on all major transmission systems of the region, which is expected to facilitate secondary market trading for shippers. • Aim: A harmonized content for individual TSO platforms according to examples provided by TAG as ‘best practice’. The platforms are expected to be ready by end of 2007. • Responsibility for implementation: TSOs, update at IG meeting in October 2007, further implementation until December 2007. • Update to be provided today!

6. Priority II: Summary of planned investments (incl. Storage) • GRI REM SSE started work in the summary of planned investments in the region which shall identify future bottlenecks and help improving congestion management. • GRI REM SSE has circulated a questionnaire to TSOs, SSOs and NRAs. A first analysis of responses has been presented at the last IG meeting in Maribor. • Aim: To include information on expansion projects (Transmission & Storage) into the survey as well, cross-check with eg GSE database. • Responsibility for data analysis: RCC. Next steps: re-circulation of questionnaire to all stakeholders with a request to check the data and re-submit any missing data items. • Update to be provided today!

7. Priority III: Conclusion of OBA/IPA at interconnection points • GRI REM SSE started work on removing obstacles to the implementation of IPA/OBA. • GRI REM SSE involved stakeholders work on a solution for the implementation of an OBA at Baumgarten including a list of remaining obstacles. • Progress made: - Murfeld and Gorizia: conclusion of IPA/OBA ?- Baumgarten: CEGH to coordinate with TSOs to conclude IPA/OBA • Responsibility: TSOs, shippers; CEGH • Update to be provided today!

8. Priority IV: Best practice provision of one-stop-shop (OSS) service • GRI REM SSE worked in ensuring market integration via simplification how gas can be shipped both within the region and across the region; role model for the whole of the EU. • GRI REM SSE agreed with TSOs that they will provide with services on request of shippers for the whole transportation route and/or at certain interconnection points. • Aim: TSOs offer OSS service to shippers who request it, cross-reference to transparency platform (GTE pilot project) and best practice cases of OSS (e.g. OMV, www.gatrac.com). • TSOs of the region are invited to join the GATRAC platform. • EFET to circulate their paper on a Regional ISO for comments. • Update to be provided today!

9. Priority V: Regional entry exit tariff system (REETS) • GRI REM SSE started work on a simulation of regional entry-exit tariff system and its impacts. • GRI REM SSE is working on promotion of a more cost reflective transportation pricing systems and easier market access for new shippers through a regional entry exit tariff system; role model for the whole of the EU. • Presentation of benchmarking results and simulation of introduction of REETS at the IG meeting in Maribor. • Next steps: AEEG to circulate REETS simulation study to stakeholders for comments • Responsibility: RCC • Update to be provided today!

10. Priority VI: Hub development as a regional balancing market • GRI REM SSE worked on introducing a back up/ back down service, day ahead products, and web-based nominations among other initiatives. • Aim: Develop hub(s) to be regional balancing points. • Progress made: - PSV: implementation of independent Market Operator for the balancing point, RCC to monitor implementation according to Action Plan.- CEGH: implementation of back-up/back-down services, RCC to monitor implementation according to Action Plan. • Next steps: Update on implementation of next steps by March 2008. • Responsibility: CEGH/EFET, PSV/EFET • Update to be provided today!

11. Overview: Implementation of bulleting board • Information submitted by TAG GmbH, Austria • TSOs covered: • TAG GmbH • Eustream (formerly: SPP) • RWE Transgas net • BOG • OMV • Snam Rete Gas

21. 3. Progress made since last IG meeting • 3.2. Conclusion of IPA/OBA • Presentation by • TSOs, Hub Operator /CEGH • Summary of progress/Status • [to be added] • Next steps (if any) • Meeting of all 5 affected partiesat E-Control’s officeto discuss the CEGH proposalon: 30 or 31 January 2008at: 14:00h Lead Regulators‘ Letterdated 16 January 2008to BOG, CEGH, Eustream,OGG, TAG

22. 3. Progress made since last IG meeting • 3.3. Promotion of one-stop-shop (OSS) services • Presentation by • TSOs • Summary of progress/Status • [to be added] • Next steps (if any) • [to be added] To be coveredunder agenda item 4.3.„R_ISO“:Conclusions of EFET-GRI REM SSE work shop

23. 3. Progress made since last IG meeting • 3.4. Hub developments as regional balancing markets: CEGH & PSV • Presentation by • CEGH, Enel Italy • Summary of progress/Status • [to be added] • Next steps (if any) • Work to progress in line with agreed time schedules • PSV • CEGH

24. Time schedule: Hub development: CEGH

25. A balancing point for the Italian gas marketA Proposal for the Action Plan • Definition of a set of IBP TF preferences • IBP TF/ AEEG meeting • IBP TF / SRG meeting • Independent Market Operator for the balancing point • Dedicated Area on the PSV web site • Balancing Market Organisation • Balancing Market Rules • Full implementation of the market balancing mechanism • september 2007 • October/December 2007 • October/December 2007 • March 2008 • March 2008 • Consultation Jan 2008 Definition March 08 • Consultation April 2008 Definition May 2008 • October 2008

26. 4. Progress made since last IG meeting (cont’d) • 4.1. Survey of planned investment • Presentation by • RCC, E-Control GmbH (Austria) & AEEG (Italy) • Summary of progress/Status • Presentations by stakeholders: RWE Transgas net and GTE • Next steps (if any) • Requirements on long term planning • TSOs and RCC to make proposalsAmendments to 3rd packaged • Demand & Supply balanced to be provided by RCC members at a national level, in line with example provided below

27. Presentation by stakeholders • Presentations by • RWE Transgas Net • GTE: Winter Outlook • AEEG: National demand

28. Suggested next steps 2007 ECRB South East Europe Gas Survey, table 5, annex

29. Suggested next steps Questions to SG members • Which approach is useful for a regional long term planning? • Could the GTE approach be used as a starting point to define (a) different gas flow scenarios and (b) long term projections e.g. until 2020? • What are likely scenarios that could impact on supply/demand in the region? • Demand side: Supply side:- Power station newbuilt - IGI (Poseidon)- Household demand - Nabucco - Industry demand - LNG Poland - Extension Transmed. - North stream • Update on situation for each country: Priorities infrastructure planning • Report/Presentation at the next IG meetingAim: To develop a better understanding for natural gas supply/demand in the region and implications for infrastructure investmentSG invited to send their comments to dan.rieser@e-control.at Your inputneeded!

30. 4. Progress made since last IG meeting (cont’d) • 4.2. Comments on a Regional Entry Exit Tariff System • Presentation by • RCC, E-Control GmbH (Austria) & AEEG (Italy) • Summary of progress/Status • Paper has been provided, complementary to presentation at the last IG meeting • Paper is available from ERGEG GRI REM SSE 2nd SG web page • Next steps (if any) • Suggestion: Invitation to all members of the SG to comment on the paper, comments should be directed to rcarnevalini@autorita.energia.it (CC to markus.krug@e-control.at)by 31 March 2008

31. 4. Progress made since last IG meeting (cont’d) • 4.3. Comments on EFET`s proposal of a Regional ISO Model as a way forward • Presentation by • RCC, E-Control GmbH (Austria) & AEEG (Italy):Conclusions from joint workshop (21 January 2008) • Summary of progress/Status • Status:EFET has released the paper, CEER has provided commentsGRI REM SSE has also been given the opportunity to comment • Next steps (if any) • EFET will evaluate all comments and produce a revised version of the paper for presentation at the next IG meeting

32. Conclusion • Conclusions of today’s workshop • Practical examples of regional TSO cooperation already exist • Identification of costs and benefits for regional market integration/of a R_ISO based on existing examples • Parallel process to 3rd Package • Workshop identifies the following areas where regional TSO cooperation delivers the greatest benefits to market integration • Access to capacity/Congestion Management at Cross Border Points • Management of capacities (“one-stop-shop”) • Easier access to the systems through Interconnection Point Agreements • Harmonisation of services • Merging of balancing zones to foster wholesale trading • Regional investment planning to remove physical congestion • Roles and reponsibilities • Cost / Benefit analysis • TSOs: current main focus is development of European standards

33. Outlook Outlook: Next steps after today’s workshop • EFET to evaluate all comments and draft an evaluation and conclusions paper based on the outcomes of the workshop • TSOs are invited to make a proposal (e.g. MoU on cooperation) covering the identified issues, the envisaged structure for cooperation and a time schedule for implementation • RCC to update progress on Regional TSO-cooperation at next IG meeting WITH ALL STAKEHOLDERS in mid-April 2008 • Forms of Regulatory Cooperation

34. Presentation by EFET: Market barriers in SSE

35. Participation of SEE GRI in PWC MulitClient Study • Structure of the PWC Multi Client study 2006/2007 for the Regional Electricity Market: • Austria, Czech Republic, Germany, Hungary, Poland, Slovakia and Slovenia 39 traders, with a response of 48%, research was done between June and October 2006 • Analyse of requirements for traders for an efficient and transparent market • Traders where asked directly about their experience Comparison Country by Country • The survey covers following main topics: • Network access administration and bureaucratic formalities • Power exchanges and trade mechanisms • Balance Energy • Congestion Management • Market structure and Timetable • Divergent IT Platforms and Data Delivery • Overall valuation

36. 5. Discussion • 5.2. Comments from stakeholders • Presentation by • [to be added] • Summary of progress/Status • [to be added] • Next steps (if any) • [to be added]

37. 6. Closure 6.1. AOB • Any AOB? 6.2. Summary of key achievements in the region • In line with updates of each action point(see above) 6.3. Outlook and next steps • 30./31.1.2008: Possible date for OBA /Baumgarten meeting • 17./18.4. 2008: Meeting reg. R_ISO implementation • 6.4. Proposed date(s) of the next meeting • 20./21.5.2008: Next IG meeting (Thessaloniki, Greece)

38. 1. Opening: Action points: 3rd SG meeting (1-3)

39. 1. Opening: Action points: 3rd SG meeting (4-7)

40. Conclusions and Outlook • [to be added]