Draft guidelines ‘Congestion Management’ EURELECTRIC’s position ERGEG public hearing 30 June 2005

GENERAL PRINCIPLES FOR CONGESTION MANAGEMENT EURELECTRIC fully in line with CBT Regulation & current guidelines for congestion management. Urgent to have market-based allocation mechanisms on all interconnectors! i.e.: explicit/ implicit auctions. Also key: maximise available capacity (compatible with security concerns) and capacity use.

ABOUT THE DRAFT GUIDELINES Well structured – principles first, then concrete provisions. Exact role of agents needs to be further clarified. Undue restrictions to trade likely to translate into inefficiencies.

EURELECTRIC COMMENTS Roles & responsibilities for capacity allocation: TSOs Regulators Fines Restrictions in capacity allocation Transparency

ROLES & RESPONSIBILITIES Involve both Regulators & TSOs in the harmonisation of allocation procedures. TSOs shall not necessarily intervene in the re-assignment of unused capacity (though they should be keept them informed).

FINES & RESTRICTIONS TO CAPACITY ALLOCATION Fines for not using the allocated capacity should be proportionate to the financial consequences. Restrictions to capacity allocation always mean a loss in efficiency (less revenues). They should thus only be permitted in case of proven abuse of dominant position.

TRANSPARENCY TSOs need information from different market participants to guarantee system security. Information required by Regulators on available generation & consumption must be published by TSOs in a non-discriminatory way. Publication under Regulators’ control.