1. Romanian Energy Program, Phase III (REP3) Black Sea Energy Conference April 3-5, 2006 Bucharest, Romania Regulatory Workshop Linda Key Breathitt Senior Energy and Regulatory Consultant Thelen Reid & Priest LLP Washington, DC 20001 Romanian Energy Program, Phase III (REP3)

2. Overview of Issues Regional Cooperation Infrastructure Investment Security of Supply Environmental Protection Energy Affordability

3. Benefits of Regional Cooperation Better practices can be shared Economic benefits for in-country and region Energy security enhancements Value of relationships among regulators

4. Infrastructure Investment Investors want certainty Planning process helps sort out need Transmission vs. generation Recovery of investment through rate structure Regional approach can minimize duplication Consumers benefit but must be explained

5. Security of Supply = Reliability Adequate supply promotes economic development Regional cooperation produces good planning decisions Transmission critical for energy security Strong grid code (reliability rules) Fuel diversity

6. Environmental Protection Precious natural resources need good stewards to protect Regulators do have an important role Renewable resources are gaining worldwide acceptance with growing demand Black Sea regions can share standard setting for environmental improvements

7. Energy Affordability Rate setting and hearing process Consumer participation Workshops and forums for ratepayers Conservation and demand reduction measures

8. Closing Thoughts 21st century – great time to be a regulator Technological advances improving efficiency Global economy driving us to be better stewards Many more resources available Regional coordination and cooperation has big gains