1st RCC Meeting – Region South-South East

June 1, 2006, ROME

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Part I – General Issues

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1. Opening

• Welcome

• Approval of the Agenda

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1.1 Approval of the Agenda – Part I

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1.1 Approval of the Agenda – Part II

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2. ERGEG Regional Initiative2. 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

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The idea behindThe 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)

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What do we want to achieve?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

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Scope Scope Region Countries Lead

Regulator

North-West

Netherlands, Belgium, France, Great Britain, Ireland

Germany, Denmark, Netherlands

NL

North (*)

South Spain, 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.

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ERGEGestablished Regional Co-ordination Committees (RCCs). Each RCC :- comprises regulators from the region;- has autonomy, & adopts its own decision making process

ERGEGestablished Regional Co-ordination Committees (RCCs). Each RCC :- comprises regulators from the region;- has autonomy, & adopts its own decision making process

IMPLEMENTATION GROUPIncludes TSOs, Market Operators

(where appropriate)This is the ‘do-er’ for each Regional

InitiativeChaired by RCC

IMPLEMENTATION GROUPIncludes TSOs, Market Operators

(where appropriate)This is the ‘do-er’ for each Regional

InitiativeChaired 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 COMMISSIONEU COMMISSION

StructureStructure

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Information – Access to Documents – Transparency

www.ergeg.org/portal/page/portal/ERGEG_HOME/ERGEG_RI/Gas_Regional_Initiative

ERGEG website www.ergeg.org regional initiatives

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Contact Persons

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ERGEG - Timetable

Timing Action

April 2006 Finalise scope of gas REMs

May 2006 ERGEG presents establishment of gas REMs to the Madrid Forum

June 2006 1st 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 2006 RCCs 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

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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, …

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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?)

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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

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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, MinistriesRepresentatives of:

• consumers• traders• suppliers • distributors. • others (Trade Unions? Environmentalist?)

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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

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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.

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3. Organisation of the SSE Region – Rules of Procedure

Reporting to ERGEG TF GMI

• By contact persons

Reporting to Madrid Forum

• By chairmen

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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

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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:

o RUS-SK-CZ-GER (Velke Kapusany-Waidhaus od. Hora Svate Kateriny)o RUS-SK-A-SI-I (Velke Kapusany-Goricia)o RUS-SK-A-I (Velke Kapusany-Tarvisio-I)o RUS-SK-A-GER (Velke Kapusany-Oberkappel)o RUS-PL-GER (Brest - Frankfurt/Oder)

Current and expected infrastructure development and its regulatory framework

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4. Priorities of SSE Region – Priorities (3)

3) Transparency requirements covering:

- Access to Storage Services

- Hub Service

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4. Priorities of SSE Region – Priorities (4)

4) Interoperability issues:

- Gas quality issues

- Infrastructure interconnection agreements

- Operational balancing

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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

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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 1.7 - 31.8

• Public hearings and discussion 25./26.9

• Draft Action Plan circulation 10.10, approval 31.10