3 rd Stakeholders Group Meeting Project status and details of the ongoing development of the load-flow based capacity calculation/allocation system CEE TSOs Vienna

2 State of Play Antitrust and Merger Regulation Issues Documents requested by CEE-Regulators Updated Project Plan Project Office Open Topics Conclusions Agenda

3 Managing director/MD contract Cost sharing agreement Business plan, budget and shareholder‘s loan ( ) Articles of association Bank account Staff recruiting (Project Team) /employment contracts / accountant service Office ( ) Founding procedure, necessary TSOs‘ confirmations, proxy issue Antitrust and Merger/Cartel regulation issues Service Level Agreement (inter TSO contract) Software (common coordinated capacity calculation and allocation) Communication infrastructure and IT hardware Auction Rules, external data transfer (MLA) Not yet started Started In implementation Completed State of Play

4 Antitrust & Merger Regulation Issues I/II Several antitrust & merger regulations could be relevant:  Antitrust regulations following art. 81/82 of EC contract  Mergers following merger Regulation 139/2004  Antitrust and merger regulations under national (German) laws Previous steps, 1 st letter to the Commission:  CEE TSOs have already submitted a letter, on 26 th March, regarding antitrust & merger issues to the Commission.  The answer of the Commission puts the burden of final judgement of the notification need on TSOs’ shoulders.

5 Antitrust & Merger Regulation Issues II/II Previous steps, 2 nd letter to the Commission:  CEE TSOs have submitted a second letter, on 10 th July, to the Commission for final clarification – whether the Commission is responsible or national competition authorities.  A questionnaire has been submitted to CEE TSOs by the Commission for helping them to clarify the situation. The EC has denied our request as we could not prove that CAO will be a fully functioning company. The next steps are (to be elaborated in detail): notification of all 8 TSOs to the German federal syndicate agency (Bundeskartellamt) most likely notification of all 8 TSOs to the Polish syndicate agency

6 09/0710/0711/0712/0701/0802/0803/0804/0805/0806/0807/0808/0809/0810/0811/08 12/08 01/09 Test calculations for D/M/Y concepts Improvement of D/M/Y concepts Scheduling concept Curtailment concept Secondary market concept Cost & revenue distribution concept Implementation design Processes chain & Emergency concept IT Tender preparation IT Tender & selection of IT provider IT Installation IT Tests & Dry-run Assessment of and decision on FBA concepts by HLM and afterwards opinion by Regulators Acceptance by EC (merger regulations) or national authorities (if necessary) Board decisions & foundation of CAO Agreement with TSOs outside CEE region Auction Rules (including consultation with traders) Update tools of TSOs inside & outside CEE region (incl. 7 days regime) Service Level Agreement Opinion of Regulators Preparation of CAO Market Information WG Coordinated Auction WG Flow-based Allocation Support by consultant Permanent project team / CAO staff Regulators Other third parties High Level Group Consultation with regulators Project Plan For Next Months Dr CAT Dry-run Draft documents requested by regulators!

7 Project Team Creation of an permanent project structure:  In order not to lose time and to avoid further delay a Project Team will be established.  If the antitrust & merger regulation issues are clarified the Auction Office (as a independent legal entity) can immediately be established. Project coordination:  The Project Team (managed by the designated MD of the future AO) coordinates the work and acts as the overall project management.  A permanent project staff works part/full-time for establishing and developing the future allocation system.  The already established structure (Working Groups) will assist the Project Team.  Also a external consultant has been chosen to support the work!

8 Open topics I/II Scheduling, Curtailment:  Comprehensive concept has already been elaborated and experts of involved TSOs are going to finalise it during the next month.  Also different concepts and possibilities of curtailment are under investigation. Capacity calculations:  Concept is still under elaboration.  Several test calculations have been performed.  The Consultant will also assist in performing test calculations.

9 Open topics II/II IT:  IT-Tender for capacity calculation and auctioning is under preparation.  Experience of similar projects shows that development will take about 6 months.

10 Conclusions  Based on decision from CEE-Regulators no capacity – available for yearly auction for 2008 – will be shifted to monthly auctions in 2008 for enabling the start of FBA system during  So, the FBA system will start with high probability not before 2009 (yearly auction for 2009).  TSO looking forward to develop – with support from Consultants – a consistent package for Y/M/D allocations, opened for further development for intraday.  Strong cooperation with Regulatory Body is crucial to avoid further delays.

11 Thank you for your attention