1. Market design and fair transmission tariffication - things to improve for better competition Gatis Junghans Project manager Electricity Trade Department AS LATVENERGO Mini-fora. Vilnius. 23.11.2006

2. Benefits from Baltic Power Exchange Extend trade possibilities for market participants, especially new market entrants Reveals true cost of electricity in different time periods Baltic Power exchange - logical next step to integrate Nordic and Baltic electricity markets

3. Baltics - Nord Pool Spot area in the future ?

4. EST LV LT R US BY RUS DK D PL FINLAND Charges levied on transactions through Estlink Fingrid - Input fee 0,3 €/ MWh - Output fee 0,65 €/ MWh - Market border fee 2 €/ MWh - ETSO fee 1 €/ MWh Pohivork -Transmission fee 1,45 €/ MWh

5. REGULATION No 1228/2003 [1] on conditions for access to the network for cross-border exchanges in electricity 4(2) Producers and consumers may be charged for access to networks... It would not be appropriate to apply distance- related tariffs or... a specific tariff to be paid only by exporters or importers in addition to the general charge for access to the national network.

6. REGULATION No 1228/2003 [2] on conditions for access to the network for cross-border exchanges in electricity 4(4)... charges for access to networks applied to producers and consumers shall be applied regardless of the countries of destination and, origin, respectively, of the electricity... There shall be no specific network charge on individual transactions for declared transits of electricity.

7. To sum it up Baltic power exchange is needed for  increased trade possibilities,  true reference price for electricity,  logical next step towards further integration of Baltic and Nordic markets. Transmission tariffication applied by TSOs for deliveries through Estlink interconnection  place Baltic producers in unequal position against producers in Nordic market,  contradicts efforts to integrate European wholesale markets towards the ultimate goal - a pan-European electricity market,  contradicts EU Regulation No 1228/2003 (prohibits specific network charge on individual transactions for declared transits of electricity within EU).

8. Thank you gatis.junghans@latvenergo.lv