1st RCC Meeting – Region South-South East June 1, 2006, ROME

2 Part I – General Issues

3 1. Opening Welcome Approval of the Agenda

4 1.1 Approval of the Agenda – Part I

5 1.1 Approval of the Agenda – Part II

6 2. ERGEG Regional Initiative ERGEG published its gas roadmap for consultation in November 2005 The roadmap sets out ERGEG‘s view on the key issues inhibiting the development of competitive gas markets ERGEG proposed a gas regional initiative to push forward market integration at a practical level 26 responses were received - non-confidential responses are published on ERGEG‘s website Support from all respondents for the gas regional initiative Lack of market integration identified by DG Competition & DG TREN as key issues Launch of the gas regional initiative in April alongside a gas roadmap conclusions paper

7 The idea behind AIM: foster the creation of regional gas markets as a stepping stone towards a single competitive market FOCUS: trading at and between gas hubs and other issues impacting market integration e.g. transparency, network access SCOPE: address the shortcomings identified by DG COMP´s Energy Sector Inquiry Interim Report Market concentration, vertical foreclosure, lack of market integration, lack of transparency,price formation INVOLVEMENT: ensure that all key stakeholders are involved the Commission, Member State governments, TSOs and other market operators (e.g. storage and hub) and other market participants (e.g. traders, shippers, suppliers, consumer organisations)

8 What do we want to achieve? PRACTICAL OUTPUT: Identify existing obstacles and potential solutions, to increase: market liquidity trading activities and competition, increase number of active traders in the region TPA efficiency through harmonised TPA rules; market oriented and cost-based offer of transport services and flexibility tools; sufficient availability of transport capacities… security of supply and competition through diversification of sources and sufficient availability of transport capacities ENSURE STRONG COORDINATION WITH THE OTHER RCCS AS A FIRST STEP TOWARDS SINGLE MARKET

9 Scope RegionCountriesLead Regulator North- West Netherlands, Belgium, France, Great Britain, Ireland Germany, Denmark, Netherlands NL North (*) SouthSpain, Portugal, Southern France Spain South- South East Italy, Austria, Slovakia, Hungary, Slovenia, Greece, Poland, Czech Republic Italy & Austria (*) Initially the North and North-West REMs will be run jointly, i.e. under the lead of DTe (The Netherlands). Once the first phase of the REMs has been completed it is intended that the North REM will revert to the leadership of BNetzA (Germany) and will be separated from the North West REM.

10 ERGEG established Regional Co-ordination Committees (RCCs). Each RCC : - comprises regulators from the region; - has autonomy, & adopts its own decision making process ERGEG established Regional Co-ordination Committees (RCCs). Each RCC : - comprises regulators from the region; - has autonomy, & adopts its own decision making process IMPLEMENTATION GROUP Includes TSOs, Market Operators (where appropriate) This is the ‘do-er’ for each Regional Initiative Chaired by RCC IMPLEMENTATION GROUP Includes TSOs, Market Operators (where appropriate) This is the ‘do-er’ for each Regional Initiative Chaired by RCC STAKEHOLDER GROUP Wide participation including market players Chaired by RCC (EC?) and used for consultation STAKEHOLDER GROUP Wide participation including market players Chaired by RCC (EC?) and used for consultation MADRID FORUM Overall forum for discussing progress in progressing regional initiatives and pan- European consistency MADRID FORUM Overall forum for discussing progress in progressing regional initiatives and pan- European consistency EU COMMISSION Structure

11 Information – Access to Documents – Transparency g/portal/page/ portal/ERGEG _HOME/ERGE G_RI/Gas_Reg ional_Initiative ERGEG website  regional initiatives

12 Contact Persons

13 ERGEG - Timetable TimingAction April 2006Finalise scope of gas REMs May 2006ERGEG presents establishment of gas REMs to the Madrid Forum June st meeting of RCC: Establish governance structure; Identify tentative priority actions based on roadmap paper and CEER/ERGEG workplan, DG COMP Sector Inquiry, EC Benchmarking report, stakeholders´ input; report to ERGEG June/July 2006RCCs to decide/establish/convene meetings of implementation Group and Stakeholder Group Aug/Sept 2006 Sept/Oct 2006 Post Autumn 2006 RCC to develop forward Action plan in consultation with implementation and Stakeholder Group RCC reports to ERGEG on Action Plan ERGEG compiles report for 4 REMs and reports to Madrid Forum RCC’s begin to implements Action Plan. Continued liaison with Implementation and stakeholders Groups

14 3. Organisation of the SSE Region – Rules of Procedure List of relevant stakeholders to be involved National stakeholders (example Austria): - national authorities: Ministry of Economics and Labour, Competition Authority - National industry: TSO: eg. OMV SSO: eg. OMV, RAG, Hub:CEGH GmbH Suppliers? Associations: Austrian Association for Gas and District Heating Industrial Union Gas & Heat, Federation of Austrian Industry European stakeholders - GIE, Eurogas, EFET, …

15 3. Organisation of the SSE Region – Rules of Procedure Roles and Responsibilities : RCC  Formed into Regional Co-ordination Committees  primary drive & motivation  Establishment and lead of regional projects  including way of work, decision making, consulting stakeholders, convene Implementation Group/Stakeholder Group, involve Member State governments and EC  Reporting and monitoring of progress  Prepare/commission discussion papers, gather information, distil/develop conclusions/way forward, develop action plan  ERGEG report to Madrid Forum Member State governments  Relevant powers often rest with Member State government  new national legislation may be needed  political support is crucial EC  Key role in supporting each gas REM project and helping to deliver objectives  Co-Chair (of which group?)

16 3. Organisation of the SSE Region – Rules of Procedure Roles and Responsibilities Implementation Group  Agreed proposals need to be implemented in a practical and efficient way  Can be invited to put forward proposals for solutions, actions  Regular dialogue with RCC – e.g. regular formal meetings IG shall consist of:  Regulators  TSOs  Hub operators  Storage operators  Ministries

17 3. Organisation of the SSE Region – Rules of Procedure Roles and Responsibilities Stakeholder Group  Stakeholders views and input crucial for progress  Stakeholders will be involved in definition of detailed objectives and timetable  regulators will ensure full transparency and consultation  formal and informal dialogue SG shall consist of:  IG members (Regulators, TSOs, Hub operators, Storage operators, Ministries  Representatives of: consumers traders suppliers distributors. others (Trade Unions? Environmentalist?)

18 3. Organisation of the SSE Region – Rules of Procedure How to consult stakeholders? Consultation Paper circulated and published on ERGEG Website Bilateral Meetings Two-day meeting with public hearings of stakeholders, discussion

19 3. Organisation of the SSE Region – Rules of Procedure Decision making rules: -Voting criteria: normally by consensus in RCC and IG. Only in special cases and if agreement cannot be reached voting by ERGEG weights (RCC) or EU weights (IG, by country). Dissenting positions officially recorded. No votes in the SG -Consultation. A consultation document should be issued by RCC by end June. Two-day session in September as a public hearing. Regulators chair the session and operators, stakeholders present their views on the proposed issues. Discussion may be solicited.

20 3. Organisation of the SSE Region – Rules of Procedure Reporting to ERGEG TF GMI By contact persons Reporting to Madrid Forum By chairmen

21 4. Priorities of SSE Region – Priorities (1) 1) Monitoring of regulatory implementation in the countries, with particular reference to: Implementation of Directive 2003/55, shortcomings and infringement procedures Steps undertaken to ensure compliance with the Regulation 1775/2205 Scope and guidelines of Regulatory Authority powers and actions

22 4. Priorities of SSE Region – Priorities (2) 2) Survey and analysis of the regional market and its problems, particularly:  Current development of hubs and other trading activities in the region  Development of the main physical and commercial gas flows  Practical case studies of gas transportation through the region for specific profiles by a fictive shipper: oRUS-SK-CZ-GER (Velke Kapusany-Waidhaus od. Hora Svate Kateriny) oRUS-SK-A-SI-I (Velke Kapusany-Goricia) oRUS-SK-A-I (Velke Kapusany-Tarvisio-I) oRUS-SK-A-GER (Velke Kapusany-Oberkappel) oRUS-PL-GER (Brest - Frankfurt/Oder)  Current and expected infrastructure development and its regulatory framework

23 4. Priorities of SSE Region – Priorities (3) 3) Transparency requirements covering:  -Access to Storage Services  -Hub Service

24 4. Priorities of SSE Region – Priorities (4) 4) Interoperability issues:  -Gas quality issues  -Infrastructure interconnection agreements  -Operational balancing

25 4. Priorities of SSE Region – Allocation of responsibilities Co-Chairs: to consult with national regulators, prepare (draft) consultation papers, questionnaires and Action Plan National regulators: to define / liaise with stakeholders provide available data consult with national stakeholders discuss and approve drafts National regulators may volunteer to lead analysis on selected issues to host meetings TSOs/HOs/SOs: to provide requested information, discuss and implement agreed Action Plan

26 5. Timetable of SSE Region – Deliverables – NEW New Timing Draft and circulate consultation document– mid June online approval of the consultation document – 30.6 combined RCC/IG meeting 13.7 Fact finding activity by regulators (compliance with directive and regulation, collection of basic market data), TSOs and others Public hearings and discussion 25./26.9 Draft Action Plan circulation 10.10, approval 31.10