1. NETWORK TARIFFS IN LITHUANIA AISTIJA ZUBAVICIUTE National Control Commission for Prices and Energy 3 July 2006, Riga Baltic Electricity Market Mini-Forum

2. 2 STRUCTURE OF THE ELECTRICITY PRICE

3. 3 METHODS OF TARIFF SETTING - 1 Generation and independent supply prices are not regulated - bilateral agreements or auctions, except, if generator and independent supplier has more than 25% of the market share, then Commission sets the price cap Additional electricity (Auction) price is set by Electricity trading in auction rules Balansing energy price set by Methodology of the balance energy price regulation – regulating energy price up/down*1,2/0,8 Public service obligation price is set by Methodology of setting electricity, which is bought by obligation providing public services, selling volumes (17,35%) and prices (43,18 EUR/MWh)

4. 4 METHODS OF TARIFF SETTING - 2 Transmission, distribution and public supply prices are regulated by price caps mechanisms 3 year revision period and annual correction by 4 indexation factors: inflation and efficiency volume adjustment contingency under/over recovery of revenue Tariff design developed by the network operators, approved by the Commission

5. 5 AVERAGE PRICES OF THE TRANSMISSION, DISTRIBUTION AND PUBLIC SUPPLY SERVICES IN 2005 NameValue, EUR/MWh Transmission price6,37 - ancillary services3,68 Distribution prices: - medium voltage (RST)17,67 - medium voltage (VST)18,65 - low voltage (RST)20,42 - low voltage (VST)23,43 Public supply prices (RST/VST)0,61/0,58

6. 6 TRANSMISSION TARIFFS (more info – www.le.lt) NameValue (VAT excluded) Differentiated two-component prices charged (except using renewable and waste resources) by the transmission system operator: demand component, when the ownership boundary is between 330-110 kV voltage equipment, LTL/kW per month 5.62 demand component, when the ownership boundary is between 35-6 kV voltage equipment, LTL/kW per month 10.39 energy component, when the ownership boundary is between 330-110 kV voltage equipment, LTC/kWh 1.16 energy component, when the ownership boundary is between 35-6 kV voltage equipment, LTC/kWh 1.18 Differentiated price for the capacity reserve service – capacity component (except using renewable and waste resources), LTL/kW per month 6.88

7. 7 DISTRIBUTION TARIFFS – EASTERN REGION (more info – www.rst.lt) NameValue (VAT excluded) Electricity distribution by 6 kV to 110 kV voltage network service prices: demand component, LTL/kW per monthI plan - 1,2 II plan - 2,65 III plan - 5,1 energy component, LTC/kWh I plan - 5,5 II plan - 4,5 III plan - 3,7 Electricity distribution by 0.4 kV voltage network service price, LTC/kWh: 8,9

8. 8 DISTRIBUTION TARIFFS – WESTERN REGION (more info – www.vst.lt) NameValue (VAT excluded) Electricity distribution by 6 kV to 110 kV voltage network service prices: demand component, LTL/kW per monthI plan - 1,2 II plan - 2,65 III plan - 5,1 energy component, LTC/kWh I plan – 7,7 II plan – 6,8 III plan – 5,7 Distribution by 0.4 kV voltage network: demand component, LTL/kW per monthI plan - 1,2 II plan - 2,65 III plan - 5,1 energy component, LTC/kWh (there is also differentiation by 2 and 3 time zones) I plan – 7,7 II plan – 6,8 III plan – 5,7

9. 9 PAYMENTS FOR CONNECTIONS - 1 NameValue for one phase connection Value for three phase connection One-part tariff, LTL/kW108.0142.8 Two-part tariff: For allowed capacity, LTL/kW108.0142.8 For distance, LTL/m14.819.2

10. 10 PAYMENTS FOR CONNECTIONS - 2 One-part charge, when L > < xL Two-part charge, when L > Lv ir k > xL here: k= L / P; P – new connection capacity, kW Lv and xL – quantities of electricity network extension – Lv = 38 m, xL = 4,49 m/kW L – the shortest geometrical distance between the customer’s ownership boundary and calculated connection point, m Example of two-part charge for one phase connection: M = 108,0 x P +14,8 (L – 4,49xP), LTL

11. 11 PROCEDURES ON AGREEMENTS - 1 Eligible customers may purchase electricity from public or independent suppliers and in other manner set forth in the Electricity Trading Rules If customer wants to buy electricity from the Public Supplier, it needs to have an agreement with him, but there is no need for agreements with network operators If eligible customer wants to buy electricity from Independent Supplier, he has to have the agreements with him and the network operators All agreements, except for households, are fixed-date

12. 12 PROCEDURES ON AGREEMENTS - 2 As it was set time in the agreement each eligible customer (except households) has to indicate planned to purchase electricity volumes by supplier’s specified periods Before concluding or terminating the electricity supply contract with an eligible customer located in the territory specified in the independent supplier’s license, the independent supplier must communicate a 30 calendar day’s written notification to the effect to the public supplier Before concluding or withdrawing from a contract for the supply of electricity concluded with the independent supplier, the eligible customer located in the territory indicated in the independent supplier’s license must communicate a 30 calendar day’s written notification to the effect to the public supplier