1. 1 Warsaw, 16 October 2012 the system, that connects TNC New Contract Model

2. 2 the system, that connects 1.Conclusion of Contracts 2.Contracted Capacity Allocation(CCA), Capacity Allocation (CA) 3.Contracted Capacity Allocation Auction; Bundled Product. 3.Contracted Capacity Allocation for DAY AHEAD Services. 4.Change of Supplier.

3. 3 the system, that connects Conclusion of Contracts

4. 44 the system, that connects 4 Transmission Contract 1.All transmission contracts will be framework contracts. 2.Among the transmission contracts, the interoperator transmission contract (ITC) with the SSO or DSO can be identified. 3.Each framework contract will have separate CCA or CA concerning specific points. CA CCA/CA PP CONTRACT Contracted Capacity Allocation (CCA)Capacity Allocation (CA) Physical entry/exit pointEntry/exit points Duration of CCA for a given point Type of capacity – firm/interruptible

5. 55 the system, that connects 5 Transmission Contract 1.Transmission contracts are concluded for an indefinite term. 2.Contracted capacity allocation (CCA) nd capacity allocation (CA) is performed for a maximum 4 years. 3.In the moment of concluding the transmission contract and submitting the financial security the right is conveyed to use the capacity on: the Virtual Point Gas Exchange; OTC Virtual Point.

6. 6 the system, that connects Contracted Capacity Allocation(CCA), Capacity Allocation (CA)

7. 77 the system, that connects 7 CCA/CA DSO 2 UGS GAZ-SYSTEM S.A. ONTRAS TGPS FPWY R FPWE MFPWE SSO FPWY FC MFPWY SSO Mine denitration FPWE MFPWY DSO The Network User orders the capacity The DSO or SSO order the capacity

8. 88 the system, that connects 8 CCA/CA 1.Physical entry and exit points – points with a concrete location where the quantity and quality of the gaseous fuel is measured. 2.Locations where contracted capacity allocation takes place (contracted capacity). 3.The entity authorised to the capacity at the FPWE or FPWY is called the Network User. 4.Confirmation of contracted capacity allocation is an annexe to the transmission contract or the interoperator transmission contract (ITC) - contracted capacity allocation "CCA. 5.A Tariff fee is charged for use of the FPWE/FPWY. 6.Gas quality settlements are performed at the FPWE/FPWY.

9. 99 the system, that connects 9 CCA/CA DSO 2 UGS GAZ-SYSTEM S.A. ONTRAS TGPS Mine denitration PWE WPWE SSO PWE PWY R WPWY DSO WPWY SSO PWY FC Virtual Point WPWY WPWE

10. 10 the system, that connects 10 CCA/CA 1.Entry and exit points take part in the transmission of gaseous fuel. 2.For the entry and exit points: a.nominations are made, b.allocation of the quantity of the gaseous fuel is performed, c.imbalancing is ascertained. 3.The entity authorised to use the entry or exit point is called the Shipper. 4.Confirmation of the right to use the give entry or exit point is the capacity allocation (CA). 5.Use of the contract points, including the Virtual Point, is free of charge.

11. 11 the system, that connects 11 Transmission Contract DSO TSO PWE OTC Gas Exchange PWY FC PWY DSO Exit Point from DSO An entity introducing the gaseous fuel from other transmission systems or mines that wants to sell it at a Virtual Point should: 1.Enter into a transmission contract with GAZ-SYSTEM S.A. 2.The contract entitles to capacity at the WPWE GG /WPWY GG and WPWE OTC /WPWY OTC (CA). 3.To obtain CCA/CA for FPWE/PWE. PWY SSO PWE SSO

12. 12 the system, that connects 12 Transmission Contract The entity being connected to the transmission system that wants to purchase gaseous fuel at the Virtual Point should: 1.Enter into a transmission contract with GAZ-SYSTEM S.A. 2.The contract entitles to capacity at the WPWE GG /WPWY GG and WPWE OTC /WPWY OTC (CA). 3.Obtain CCA/CA for FPWY FC /PWY FC. OTC Gas Exchange DSO TSO PWE PWY FC PWY DSO Exit Point from DSO PWY SSO PWE SSO

13. 13 the system, that connects 13 Transmission Contract The entity being connected to the distribution system that wants to purchase gaseous fuel at the Virtual Point should: 1.Enter into an distribution contract with the DSO. 2.Enter into a transmission contract with GAZ-SYSTEM S.A. 3.The transmission contract entitles to capacity at the WPWE GG /WPWY GG and WPWE OTC /WPWY OTC. 4.Obtain capacity allocation (CA) for the PWY DSO to the distribution zone, to which they are connected. OTC Gas Exchange DSO TSO PWE PWY FC PWY DSO Exit Point from DSO PWY SSO PWE SSO

14. 14 the system, that connects 14 Transmission Contract An entity that wants to transport gaseous fuel to or from the storage facility should: 1.Conclude an agreement with the SSO. 2.Enter into a transmission contract with GAZ-SYSTEM S.A. 3.Obtain capacity allocation (CA) for the points PWY SSO and PWE SSO OTC Gas Exchange DSO TSO PWE PWY FC PWY DSO Exit Point from DSO SSO PWY SSO PWE SSO

15. 15 the system, that connects Contracted Capacity Allocation (CCA) Auction; Bundled Product.

16. 16 the system, that connects 16 Contracted Capacity Allocation (CCA) 1.The introduction of auction mechanisms at the connections with other gas systems in the EU, which makes it possible for the most interested entities to enter the market and may ensure the operator additional means for the development of those connections. 2.Implementation of the capacity allocation procedure via an auction based on rules resulting from the draft Network Code on Capacity Allocation (CAM NC) prepared by ENTSOg based on Directive 2009/73/EC. 3.The simplification of the procedure of changing the seller of the gaseous fuel and increasing its efficiency for customers wanting to select a new seller.

17. 17 the system, that connects 17 Contracted Capacity Allocation (CCA) PointAllocation Method Physical entry points from other transmission systems, e.g: -Lasów, Cieszyn -Drozdowicze -Włocławek/Lwówek Auction; 1)Physical exit points to the final customer 2)Physical entry points from mines 3)Physical points to/from the mixing facility, denitration facility. Customer or entity exploiting the given structure performs contracted capacity allocation 1.Contracted capacity allocation (contracted capacity) is dedicated separately to FPWE and FPWY. 2.The contracted capacity allocation procedure – contracted capacity allocation and the change in contracted capacity takes place in a "time window. 3.If the demand for capacity (contracted capacity) exceeds the technical capacity, the capacity is allocated.

18. 18 the system, that connects 18 Contracted Capacity Allocation (CCA) - Auction AUCTION Period for submission of applications in capacity allocation procedure 1 March 15 March 15 May 31 May 1 working day of June 4 working day of June 30 June TSO published information on: 1. The Contracted Capacity Allocation (CCA) 2. The Auction 3. The Allocation by the Final Customer TSO published information on: 1. The Contracted Capacity Allocation (CCA) 2. The Auction 3. The Allocation by the Final Customer The TSO published information on the capacity allocation within the auction during 5 working days from the completion of the auction Registration on the auction platform Submission by the participants of the procedure signed CCA along with the financial security

19. 19 the system, that connects 19 1.The auction is conducted on an internet platform. 2.The auction procedure ensures complete anonymity of the procedure participants. 3.The only entities that can take part in the auction are: Those that concluded a transmission (framework) contract, Those that were informed by Gaz-System S.A. of having exceeded the available capacity and of the necessity of conducting the auction, Those that registered on the website (platform) and obtained a login. 4.The auction procedure has a multi-step format. Contracted Capacity Allocation (CCA) - Auction

20. 20 the system, that connects 20 Auction Organisation: The Price Tariff as the Starting Point – the object of the auction is only an auction premium ; The prices will be called out in an offer window until the total submitted quantity bids will be smaller than and equal to the quantity of the capacity offered by the TSO; Rising prices – increase in set price steps; Small and large price steps are defined for each product included in the allocation procedure; Contracted Capacity Allocation (CCA) - Auction

21. 21 the system, that connects 21 Contracted Capacity Allocation (CCA) - Auction Price Steps - determine the size of the mark-up for the tariff fee Small Price Steps 1 cent per kWh/h Small Price Steps 1 cent per kWh/h Annual Products 2 2 Monthly Products Quarterly Products 0.5 0.2 Large Price Steps 1 cent per kWh/h Large Price Steps 1 cent per kWh/h Annual Products 10 Monthly Products Quarterly Products 2.5 1 1

22. 22 the system, that connects 22 Contracted Capacity Allocation (CCA) - Auction If the total amount of the quantity bids is at the very start smaller or equal to the quantities of offered capacity, the capacities are sold and will be allocated respectively to all the bids made, in their full quantity at the tariff price. Price StageQ4 Shipper 1 Available Capacity 5 4 3 2 150 Shipper 2Total 1150 10050

23. 23 the system, that connects 23 Contracted Capacity Allocation (CCA) - Auction If on the first day of the auction the quantity of the capacity in the submitted bids is greater than the quantity offered at the auction, the next offer windows will be open – each with a large step price mark- up. If the total quantity of the capacity in the submitted bids after closing of the offer window is equal to the offered quantity, the auction is closed. The capacity will be awarded pursuant to the quantity bids submitted throughout the duration of the offer window at a price with a mark-up in relation to the tariff price. Price StageQ4 Shipper 1 Available Capacity 5 4 3 2 150 10050 Shipper 2Total 115020015050

24. 24 the system, that connects 24 Contracted Capacity Allocation (CCA) - Auction Price Stage Q4 S1 avail. cap. 5 4 3 2 150 200 50 100 50 100 S2 Total 1150300150 Price Stage Q4 S1 avail. cap. 4 3 2/3 2 150 200 50 100 50 40 100 140 100 S2 Total 1150300150

25. 25 the system, that connects 25 Contracted Capacity Allocation (CCA) - Auction The submitted bids can be replaced with new ones until each offer window is closed. Once the offer window is closed, the submitted bids are binding until the time another offer window opens. In given offer windows the quantity offers may be the same or may be reduced (down to 0) in relation to the offer directly preceding that one, however, they cannot be higher.

26. 26 the system, that connects 26 Contracted Capacity Allocation (CCA) - Auction

27. 27 the system, that connects 27 Contracted Capacity Allocation (CCA) - Auction the same quantity of capacity is acquired on both sides of the point (within one transaction on a common platform) by the same entity but two separate contracts with two TSOs two separate nominations Exit Entry Contract Nomination Contract Nomination Lasów Auction of bundled capacity

28. 28 the system, that connects 28 Contracted Capacity Allocation (CCA) - Auction 0 2012201320142015201620172018 The first auctions of bundled products will be held in June 2013. 28 Offered for 3 quarters

29. 29 the system, that connects Change of Supplier

30. 30 the system, that connects 30 Change of Seller 1.In order to develop competition on the internal gas market, large customers that are not households should have the opportunity to select their providers, as well as sign contracts with several suppliers in order to secure their demand for gas. Such customers should be protected against non-competition clauses that are designed to eliminate competition or alternative offers. (Directive 2009/73 point 17 Preamble) 2.(…) Member States shall ensure that the eligible customer is in fact able easily to switch to a new supplier. (Directive 2009/73 Art. 3 item 3) 3.Member States shall ensure that where a customer, while respecting the contractual conditions, wishes to change supplier, the change is effected by the operator(s) concerned within three weeks. (Directive 2009/73 Art. 3 item 6)

31. 31 the system, that connects 31 Change of Seller Stages in the Change of Seller Process: 1.The Customer concludes a sale agreement with a new seller; 2.the Customer gives notice of termination of the sale agreement to the current seller; 3.The new seller informs the current seller and the TSO or DSO of the date when he will start selling the gaseous fuels; 4.New seller concludes transmission and distribution contracts; 5.Termination of transmission and distribution contract with current seller; 6.The TSO or DSO will collect the readings from the metering system in order to perform settlements with the current seller; 7.The TSO or the DSO shall immediately convey the metering data to the current and the new seller.

32. 32 the system, that connects 32 Change of Seller 1.The customer that is connected to the network is the disposer of the capacity at that point. "The capacity of the point follows the customer. 2.This principle was expressed in point 12 of the TNC and point 16 of the DNC. 3.The conclusion of transmission contract or the distribution contract with the new seller/customer immediately renders the contract with the current Shipper ineffective at that point. 4.A change in seller only concerns exit points both in the system of the TSO and the DSO. 5.The introduction of an entry point into the distribution system – with an undefined location (group MFPWY DSO ) will facilitate the change in seller process and will get rid of the current problems connected with the determination of the PWE to the distribution system. 6.The possibility of performing a partial change of Seller DSO 1 DSO 2 TSO

33. 33 the system, that connects 33 Change of Seller 1.Each seller has the right to purchase gaseous fuels from a selected seller (Art. 4j EL; § 14 System Regulation). 2.Schedules for the Termination of Contracts Household customers – the last day of the month following the month in which the declaration of that customer was delivered to the energy company (re. contracts concluded after 11.03.2010); Final customers – the schedule specified in the contract. 3.Pursuant to the Decision of the President of the OCCP No. DOK 1/2012 of 13 April 2012, the procedure for changing the seller should include all the customers with which the trading company has signed complex contracts

34. 34 the system, that connects 34 Change in Seller - Costs 1.Giving notice of termination to the current seller should take place at no additional costs and compensation other than that resulting from the wording of the contract – Art. 4j item 3 EL; 2.The Customer shall be liable only for such costs and compensation as result from the wording of the contract (e.g. contractual penalties, but they cannot directly incur any costs connected with, e.g. taking the meter readings); 3.This provision does not apply to the contracts concluded before 11.03.2010 (Art. 6 amendment of 8.01.2010).

35. 35 the system, that connects Contracted Capacity Allocation (CCA)for One Day Contracts

36. 36 the system, that connects 36 CCA for One Day Contracts 1.Conclusion of transmission contract. 2.Obtaining the CA for the given point in which the one day services will be performed. 3.Submission of security. 4.Contracted Capacity Allocation (CCA) shall take place through the approval of nominations. 5.One day services are provided on the following principles: Firm and Interruptible. 6.Interruptible services are provided on gas level 4.

37. 37 the system, that connects 37 CCA for One Day Contracts Nomination Shipper 1 Contracted capacity Shipper 1 Technical capacity Nomination Shipper 2 Interruptible capacity awarded

38. 38 the system, that connects 38 CCA for One Day Contracts Nomination Shipper 1 Contracted capacity Shipper 1 Technical capacity Nomination Shipper 2 Interruptible capacity awarded Firm capacity awarded

39. 39 the system, that connects 39 CCA for One Day Contracts Nomination Shipper 1 Contracted capacity Shipper 1 Technical capacity Additional firm capacity awarded 1.Nomination is not rejected if the Shipper 1 has daily CA at that point. In this situation, firm capacity is awarded for 1 day. 2.Re-nomination during the day is possible

40. 40 the system, that connects 40 CCA for One Day Contracts Nomination Shipper 1 Contracted capacity Shipper 1 Technical capacity Nomination Shipper 2 Nomination Shipper 3 Proportional reduction in relation to submitted nominations while day ahead allocating capacity

41. 41 the system, that connects CCA for One Day Contracts Nomination Shipper 1 Contracted capacity Shipper 1 Technical capacity Nomination Shipper 2 Nomination Shipper 3 41 Firm Interruptible

42. 42 the system, that connects 42 CCA for One Day Contracts Re-nomination Nomination Shipper 1 Contracted capacity Shipper 1 Technical capacity Nomination Shipper 2 Nomination Shipper 3 Nomination Shipper 4 With re-nomination of day ahead services, only those CCA change proportionally to the available capacity for which the re- nomination was submitted.

43. the system, that connects Thank you for your attention 43