Organisational Development Nigel Sisman GTE+ Senior Adviser GTE+ Workshop on GTE+ Work Programme 24 June 2008 Good morning and thank-you for coming to our workshop ..... I’m one of the three new recruits into Brussels to help our journey towards ENTSOG. We want the day to be as interactive as possible; so we will use a few slides at the start of each session but allow plenty of opportunity for feedback and to promote dialogue. I will spend a few minutes talking about what we refer to as “Organisational Development”; the process of establishing the new ENTSOG organisation. _________

Organisational development First GTE+ work programme Statutes development First “ENTSOG” work programme You will have seen the timeline in the consultation document. It has four steps ; The recruitment of 3 dedicated staff into GTE+ in Brussels – this has happened I will concentrate on the next three steps: Firstly, the purpose of today; we need to deliver a good first GTE+ work programme Secondly we need to develop the new organisation, ENTSOG – which means we need rules – the Statutes Finally we need to sort out priorities post Third Package organisation ; including the priorities for Code developments; what I will call the “First ENTSOG work programme

First Annual Work Programme Consultation Why? To explain how we have started create dialogue and stakeholder participation provide opportunity for feedback, listen and respond establish first work programme to make the best possible progress with the available resources The first GTE+ Annual Work Programme Consultation is our first opportunity to indicate our short term plans. We also want to listen and be responsive to the market We have selected areas of work based on feedback from stakeholders and from the key activity areas identified in the Third Package. _______________ So why this process; why this workshop? ________ , _______ , _________ 1. We want to explain how we have started; the Third Package will give TSOs new obligations and whilst we don’t have them yet we want to start work where feasible __________ 2. We want to create dialogue and stakeholder participation; this will be essential if we are to build outcomes that fairly balance the interests and needs of all stakeholders _________ 3. We want to provide opportunity for feedback, .... go beyond that we need major inputs from stakeholders, and then we need to listen and respond _________ 4. We want to establish ........; we are not ENTSOG yet. So we have to choose areas where we are likely to be effective; where we can deliver in the transitional period before Third Package is implemented. We want to talk with you beyond this workshop; our consultation closes at end of July; we will talk to any or all of you on a bi-lateral basis if that would help. It is critical that we have a good dialogue and that, where it is practical and possible, that we deliver in response to market players. JWe will talk about the processes for feedback at the end of the day. ____________ Our objective is to deliver a refined work programme for end of September; that allows us time to think about, and respond to feedback. Our aspiration is to be responsive where we can be. ______ Deliverable: Refined work programme for end of September 2008

Statutes development Why? To be ready to establish ENTSOG as soon as possible establish processes to enable TSO delivery on Third Package obligations engage with stakeholders about how the development and consultation processes will operate Deliverables Consultation about processes ENTSOG Statutes, rules and procedures Transition plan So let’s move on to the second major step ahead of us: TSOs will be obliged by the Third Package to establish ENTSOG; that means we will have to establish rules; Statutes and Rules of Procedure; and they will have to be submitted to the Agency for their opinion. We will also have to define new ways of working; particularly new development and consultation processes. We’ve called all that “Statute development” ________ So why have we put this in our plan? _____, _______ , ______ 1. We want to be ready to establish ENTSOG as soon as possible ______ 2. We need good organisation and processes to ensure delivery of Third Package obligations._____ 3. But most critical of all how the development and consultation processes will operate We know the importance stakeholders place on the consultation processes; we are also aware of the importance many attach to voting rights. BUT Dev and consultation is about more than voting rights; it is the full development and consultation process that is important. We can talk more in the Q&As about the different types of consultations (annual work programme and specific initiative developments) . What is important is that the processes are open, transparent and responsive; that we have wide and effective participation, that stakeholder requirements and proposals are carefully considered, that full justification of acceptance or rejection is provided within the process. Code development will be over-seen by the Agency; with intervention if ENTSOG does not “play the game”. The TSO initial view is that ENTSOG members should vote on proposals but why is that the TSO initial view? TSOs will have special obligations under the Third Package (duties to co-operate; responsibility to promote the single European market ) and therefore ENTSOG recommendations will need to reflect these objectives; quite different to the position of other market players who will have no such obligations (and which will not be subject to the same degree of regulatory scrutiny) Thus TSOs’ intent is to define open, transparent, responsive processes. The combination of special obligations and regulatory oversight to provide confidence that stakeholder views and requirement of the market will be properly taken into consideration. .... But this will all be the subject of consultation (perhaps this Autumn) and we will need to co-ordinate this with the regulators ._________ Thus our deliverables will be:

First ENTSOG/Second GTE+ consultation Why? To demonstrate progress – achievement and process trial new development and consultation processes establish priorities for ENTSOG Deliverable Priority plan with TSO/stakeholder commitment So that will bring us to the third significant step – the Second GTE+ consultation although we might want to say this is the first ENTSOG consultation. ________ So why will we want another consultation next year? __________ , ____________ !. ________ 2. ________ 3. By this time the Third Package framework should be clear; the formulation of the Agency, the obligations on the TSOs will be clear. We will have learning from this, first consultation processes; from the consultation on development and consultation processes. We will still be in “shadow” mode but we will be much closer to ENTSOG. This will be the time to define the work programme to apply in the post Third Package world, for 2010 and beyond. This will be the time to look forward and set the priorities for European code development. We could have ENTSOG established by then; it will depend upon the Third Package implementation and particularly the processes associated with the establishment of ENTSOG. __________ The objective would be a priority plan that TSOs and stakeholders will be committed to We should view this second GTE+ consultation as being an opportunity to establish priorities for Code development that should be able to start in 2010 should we get ENTSOG established

Organisational Development First Annual Work Programme Consultation Establish ENTSOG Statutes and Rules Second Annual Work Programme Consultation So to summarise: OD is about creating the organisation that will be ENTSOG We have recruited and started some work but we are in an early “shadow” mode ______________ The First GTE+ Annual Work Programme Consultation is our first opportunity to indicate our plans and to listen and be responsive to the market. We want your feedback both throughout the day and during the rest of June and July. ______________ We will be developing ENTSOG Statute and Rules and want to engage with stakeholders about how the development and consultation processes will work – we note the regulators want to do the same and so we must co-ordinate with them and seek to establish a carefully balanced attribution of roles and responsibilities between the new European TSO and regulator’s formal bodies and the other major stakeholders. We expect to consult on the ENTSOG “ development & consultation processes” in the Autumn. __________ We hope that our second work programme consultation will feature significant interaction with stakeholders and regulators and Commission so that we can establish prioiities for Code development ________ Our challenge remains to build wide stakeholder confidence in our approach and processes and that we can ensure that the First Work Programme meets stakeholder expectations. Initial Challenge: Ensuring First Work Programme meets stakeholder expectations

Discussion