8th IG-Meeting
Coordinated Auctioning, Auction Office
and Organisational Issues
Christian Todem
Vienna
11.09.2007
Agenda
State of Play
Antitrust and Merger Regulation Issues
Documents requested by CEE-Regulators
Updated Project Plan
Project Office
Open Topics
Conclusions
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State of Play
Managing director/MD contract
Cost sharing agreement
Business plan, budget and shareholder‘s loan (
)
Not yet started
Started
In implementation
Completed
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)
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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, 1st letter to the Commission:
 CEE TSOs have already submitted a letter, on 26th 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.
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Antitrust & Merger Regulation Issues II/II
Previous steps, 2nd letter to the Commission:
 CEE TSOs have submitted a second letter, on 10th 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.
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Documents requested to Regulators
At the last IG-meeting (June 12th in Vienna) the CEE Regulators
requested:
Updated Project Plan
Articles of Association
Basic Business Plan figures
Documents have been submitted to CEE-lead Regulator after
receiving the approvals of all TSOs by end of August.
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Project Office
Creation of an permanent project structure:
 In order not to lose time and to avoid further delay a Project Office 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 Office (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 Office.
 Also a external consultant has been chosen to support the work!
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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.
Test calculations, Long Term Concept (Y,M auctioning):
 First test calculations have been performed (only for D concept).
 Long term concept is still under elaboration; first concept test
calculations are currently in progress.
 The Consultant will also assist in performing test calculations.
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Open topics II/II
IT:
 IT-Tender for capacity calculation and auctioning is under
preparation.
 Delay is obvious.
 Experience of similar projects shows that development will take
about 6 months.
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Conclusion I/II
Statement 1 at last IG meeting:
“It’s obvious that still problems (e.g. Y, M concept and improvement of
transparency in D cap. calculation) have to be solved.”
CEE TSOs have chosen to take external consultant support, especially
for improving the transparency in D capacity calculation.
First promising inputs and suggestions have already been made for
improving the methodology in terms of transparency.
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Conclusion I/II
Statement 2 at last IG meeting:
“To start with flow-based D (and M) auctions within 2008 is the realistic
case. However additionally has to be solved: How to proceed with
especially Y auction for 2008 in order not to “block” flow-based D (and
M) auctions in advance (support of regulators)?”
CEE TSO have elaborated two options and ask Regulators for their
opinion:
Option 1: Maintain the present method – bilateral (coordinated) auctions –
for the whole year 2008.
Option 2: Let the possibility of FBA introduction during the year 2008 and
shift offered capacities for 2008 from yearly to monthly and daily
in the whole CEE region.
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Implementation of load flow-based auctions in CEE
Option 1 (January 2009):
 Consistent package for Y/M/D can be developed from the scratch
 Sufficient time for proper testing
Option 2 (September 2008):
 Any delay will cause new change
 Consistency of 2008 NTC approach for Y/M with FBA for D needs to
be investigated
 Capacities for Y/M most likely have to be decreased to safeguard
FBA for D
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Thank you
for your attention
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