ERGEG – Stakeholder Meeting Tuesday 14 th November 2006

Article 1: General Provisions 1.9 Intraday allocation mechanisms to be established by 1 Jan 2008 Current NI market and SEM design is day ahead No provision for Intraday allocations TSO can utilise spare capacity for SO-SO trading within day Significant changes would be required to market rules and systems Not considered likely in the short term

Article 2: Congestion Management Methods 2.5 Long term (annual, periodic etc) cross border capacity rights must be subject to UIoLI/UIoSI following nomination Current NI market and SEM design is day ahead No provision for Secondary gate closure TSO can utilise spare capacity for SO-SO trading within day Significant changes would be required to market rules and systems Not considered likely in the short term

2.9 No reserve prices allowed in capacity allocation methods – long term and day ahead auctions. Reserve price contributes to TUoS charges paid by the NI customer Reserve set and agreed by NIAER Annual/Monthly auctions at present No Day ahead auctions in SEM due to market design If reserve price removed may mean increased TUoS charges for NI customer Significant changes required to market rules and systems for day ahead auctions

2.13 TSOs must provide ‘compensation’ for non- availability of firm capacity rights Participants rebated capacity charges for the duration of the unplanned outage where greater than 24 hours

Article 3: Co-ordination 3.1&3.2 TSOs must adopt coordinated congestion management methods within the region by 1 st January 2007 SONI has worked closely with participants to achieve a coordinated approach Moyle/N-S Capacity auctions and gate closures aligned to facilitate market participants Possible to consider coordination of gate closure and auction timetables between N-S, Moyle and IFA interconnectors

3.5 Key points for cross border coordination: - Identical/compatable capacity timeframes and IC gate closure times -Consistent/Compatable contractual framework for access SONI has worked closely with participants to align gate closure and auction timescales N-S gate closure is at 09:30 D-1 with allocations being issued by D-1 Moyle gate closure is 11:00 D-1 by which stage participants will have received their allocations on the N- S interconnector Auction allows participants to buy N-S capacity the day before Moyle capacity Currently no coordination with IFA in respect of both capacity allocations and gate closure

Article 4: Timetable for Market Operations 4.3 Intraday allocations mechanisms must be employed for unused capacity following determination of day ahead schedules Design of NI market and SEM is a day ahead market and there is no provision for intraday allocation mechanisms SONI as TSO can utilise spare capacity for SO- SO trading to maintain security of supply Significant changes would be required to market rules and systems. Not likely to be considered in the short term

Article 5: Transparency Congestion Management Methodologies for calculation of available interconnection capacity Moyle is a HV/DC interconnector with a static NTC therefore is not applicable 5.5 Capacity use information: Actual net physical flows This information can be collated from the BM reports website – no aggregated metering files published This information will be available with the introduction of the SEM in Nov 2007

Article 6: Use of Congestion Income 6.1 Congestion management procedures can only generate revenues for TSOs and ICOs when congestion exists. Applies per capacity timeframe. Revenues contribute to TUoS charges paid by the NI customer No revenues generated for TSOs and ICOs