1. 13th December 2013 Teleconference
25th IG Meeting South Gas Regional Initiative
13th December 2013
Teleconference

2. Agenda

3. II. CAM. Steps to progress on the implementation of the CAM NC
II.1.Status of the TSOs IT implementation plans, agreements with PRISMA
II.2 Issues to be agreed
II.3 Training sessions for stakeholders to use PRISMA
II.4 Update of the Roadmap calendar

4. (for information by TSOs)
II. Steps to progress on the implementation of the CAM NC
II.1 Status of the TSOs IT implementation plans and agreements with PRISMA
(for information by TSOs)

5. II. Steps to progress on the CAM NC implementation
II.2 Issues to be agreed
(for discussion)

6. II. Steps to progress on the CAM NC implementation
Issues to be agreed
Auction processes: URGENT to decide subjects affecting March auction
Finalising the design of the auction: i.e. large and small price steps for ascending clock auctions (Y, Q, M products)
Agreement on the single shipper (same afiliate) at both sides of the border?
Specific calendar with dates of auctions and time for bidding rounds
Type of information to disclose to the market. What, How and When?
Documents to be prepared by TSOs jointly/independently
Are there any subject regarding interoperability to solve?
Amount of firm capacity to be offered – TSOs?
Each TSO must provide the available capacity in the physical points and in the virtual points on their side of the interconnection of the border asap
Once agreed the common value of available capacity by interconnected TSOs, the split of capacity for the yearly and quarterly products for 2014, at least need to be provided asap

7. II. Steps to progress on the CAM NC implementation
Issues to be agreed
Interruptible capacity:
Capacity products to be offered additionally to the day ahead products
Amount of firm capacity to be allocated (95%) as a condition to offer interruptible capacity. For interruptible daily and within-day capacity products the CAM NC requires to sell previously all the firm capacity products
Auction calendar for interruptible products
Rules for converting interruptible capacity into firm capacity
Detail of the allocation (over-nomination) procedure for intraday products, if any
Financial guarantees:
Use of “credit limit check” via PRISMA

8. II. Steps to progress on the CAM NC implementation
Issues to be agreed
Contracts:
Two contracts on both sides of the border:
Standard contract before the auction + Annex with the allocated quantity after the auction (automatically included in the contract by operators)
Old contracts in physical points to be modify to the virtual point by October 2014
Secondary market:
PRISMA secondary market functions will be available in early 2014.
To be decided:
When secondary trades will be made possible at both borders.
Where the transactions take place (platform, bilateral agreements, etc)
Type of information to be published by operators

9. II. Steps to progress on the CAM NC implementation
Issues to be agreed
Exchange of information between adjacent TSOs
Procedure to exchange data, integration in the interconnection agreement
Information to be exchanged:
Before the gas day:
Capacity booking situations on both sides of the IP in order to offer as much bundled capacity as possible, unbunbled products will be offered following the amount and duration of capacity products established in the contracts if any or for a maximum period of one year.
Nominations
After the gas day: measurement and reconciliation
TSOs websites: link to PRISMA, data included in TSOs regular publications
TSOs and NRAs to coordinate the schedule of the allocations in each country and will inform shippers about other capacity allocations in each country ASAP
Stakeholders information:
TSO will communicate results of the auctions: aggregated to the market, allocated capacity to the participant – a need of definition for day and intraday auction results (inmediately after auctions?)

10. II. Steps to progress on the CAM NC implementation
Issues to be agreed
Monitoring by NRAs
NRAs will have access to auctions information via PRISMA.
NRAs could request TSOs information to perform the monitoring task.
Procedures of coordination between NRAs on both sides of the border?
Information about other capacity allocations calendar in the region and beyond
Information to the market on how the non-auction capacity allocation in the interconnections are going to work in the interim period ( i.e.monthly, daily allocation of capacity from March 2014 onwards)
Calendar of national allocation of interest for the market

11. II. Steps to progress on the CAM NC implementation
NRAs regulatory development
Spain:
a CNMC Circular to regulate the allocation processes.
France:
a CRE Deliberation will describe the allocation procedures at the IPs with Spain. Also, the tariff related aspects will be reflected in the yearly decision on transmission tariffs by the end of 2013.
Portugal:
a ERSE Deliberation based on the conclusions of the SGRI.

12. II. CAM
Public Consultation on the Regulators Paper to progress on the early implementation of CAM NC
Evaluation of responses received in the PC finished on 4 Dec 2013
10 stakeholders have answered: 2 TSOs + 7 shippers + 1 association
General comments:
Considered as positive for integration of three countries towards the common objective of European gas internal market (welcomed by 7 stakeholders specifically)
Thanks the effort NRAs-TSOs
Regional shippers should not support incremental costs compared to other shippers in MS that are not working on the early CAM NC implementation.
Other issues should be developed simultaneously and coordinately
Common criteria to apply CMP on bundled products.
Efficient mechanisms to ensure that the maximum amount of unused available capacity is released back to the market: OSBB as essential to sell bundled capacity on more than a day-ahead basis.
Interoperability measures.

13. II. CAM 1) Bundled capacities 2) Split of the capacity to be offered
COMMENTS ON CAM TOPICS
1) Bundled capacities
Importance of TSOs’ coordination and information exchange.
One association encourages Regulators to urge TSOs participating in PRISMA.
A proposal: to link bids for several periods (years and months) to ensure a continuous supply for some periods such as 3 months. To offer products like a French TSO making bundled bids in “FOS + PEG NORD”: considering more than one IP and conditioned bids (one company contract provisionally allocated capacity as definitive if company get capacity in another/s IP, ex ante established in the bid).
2) Split of the capacity to be offered
In relation to the planned auctions at PT-ES border: why yearly capacity products will only be sold for the following year and not for 15 years. 
One recommendation of using the same allocation methodology to allocate day- ahead capacity products on both sides of the FR-ES border.

14. II. CAM 3) Interruptible capacity
COMMENTS ON CAM TOPICS
3) Interruptible capacity
One TSO reaffirms on the threshold to be established for the offer of interruptible capacity when allocated firm capacity is lower than, but very closed to 100%. Also, they propose the offer of interruptible products in an unbundled way since the conditions for interruption will always be different on two sides of the IP. Besides, if there is firm available capacity at one side of the IP and interruptible available capacity on the other side, both products should be offered in an unbundled way.
One shipper supports the Paper Regulators: (1) to sell interruptible capacity at PT-ES VIP via auction if a small bundled capacity remains unsold and (2) NRAs to set appropriate rules for TSOs to convert as much subscribed interruptible capacity as possible into firm capacity.
Other shipper proposes a different option from threshold: if there is more demand than offer in the auction, then interruptible capacity could be offered.
One request about more information on schedule, rules, criteria and offer of interruptible capacity. In particular, further clarification about offer frequency at the ES-PT border (on a daily basis as requiring in CAM NC or in a yearly basis).

15. II. CAM 4) VIP One shipper comments on: COMMENTS ON CAM TOPICS
The adequate coordination between TSOs which allows to maximize the offer and use of the existing firm capacity (i.e. BRS operations).
The commercial flow from one country system to the other and firm capacity booking should not be limited by internal physical issues which TSOs should manage.
The TSO should not condition the gas flow when VIP is created.
One TSO points out that, as from 1 October 2014, all existing contracts at the physical IPs will be transferred to the VIPs and capacity available should only be allocated at the VIP, bundled and unbundled.

16. II. CAM
COMMENTS ON CAM TOPICS
5) Users registration for participating in the auctions and shipper codes
“The EIC shall be globally unique: only one code is allocated per organization (business group); the same shipper on both sides of the border will have the same EIC code.”
Two opposite views:
1 shipper and 1 association propose two EIC for one bundled capacity allocation.
Two legal entities belonging to the same parent company or business group will be allocated different EIC.
Unique EIC is in place for IT convenience of PRISMA/TSOs and not founded on any piece of regulation. Not support that a company group using different trading entities on each side of the border will have to apply for licenses on the other side of the border. Two companies on each side of the border, of the same business group, should be able to get bundled capacity under each names and EICs.
3 shippers and 1 TSO agree on one EIC for one bundled capacity allocation. The EIC should be a unique reference by business group (the only one decision maker).
Two companies belonging to the same business group may bid for bundled capacity on both sides of the IPs, under the same EIC code.
The CAM NC does not forbid that two companies of the same group book a bundled capacity. Companies of the same group should be considered as the same shipper, according to the relationship of “control” in EC Regulation 139/2004.
The company who was allocated capacity should be the same (same EIC) that the one who signs the contract with the TSOs. There is no possibility to transfer the allocated capacity to affiliates.

17. II. CAM 6) Financial guarantee
COMMENTS ON CAM TOPICS
6) Financial guarantee
One shipper proposes to use a single financial guarantee: a financial guarantee to participate in the auction and, in the case that capacity is finally allocated to the shipper, the same guarantee should be used as a guarantee associated to the contract, which aims to cover possible unpaid TPA tariffs.
Another shipper expresses their concerns on how the VIP affects to financial guarantees already in place.
Other shipper considers that they can choose how to establish the financial guarantee: bank endorsement or deposit.
7) Auction process: no particular comments received
8) Prices
One shipper considers that, until Tariff NC is implemented, Regulators should set guidelines to define the regulated prices in countries on both sides of the IPs. Also they request:
a reference to the formation of the prices of unbundled products
clarification of the destination of the auction premium. In their opinion, it should be returned to the system.
Another shipper considers that the reserve price is a key point to ensure the success of the implementation process and to avoid pancaking effect.

18. II. CAM 9) Contracts COMMENTS ON CAM TOPICS
One TSO reminds the importance of the contractual rules to be respected. They propose that two contracts, with TSOs on the two sides, will be signed before the auction. Also, only the company that has been allocated the capacity can sign the contracts/annexes with TSOs on both sides of the border.
One shipper considers that standard contracts (to be signed with TSOs on both sides of the IPs) and Annexes on allocated quantities should be available ASAP. Also, they suggest that a simplified single contract for both sides of each IP would be extremely convenient.
One shipper considers that these new rules do not comply with the provision established in Spanish regulation: Orden IT/326/2005, of October 5th, establishes that monthly programs in the entry system of cross border interconnections will be binding for the following two months. Any modification of the utilization of the contracted capacity is subject to the Technical Manager of the National Gas System decision.
Other shipper thinks that the contract should be also unique or common (bundled context).

19. II. CAM 10) Capacity transfer to affiliates COMMENTS ON CAM TOPICS
One shipper proposes the modification of this point, in order to allow another legal entity belonging to the same business group to sign the contracts/annexes once capacity has been allocated.
In contrast, another shipper understands that after this initial step proposed, any company with booked capacity could sell its capacity in the secondary market, and, in the same way, a shipper could transfer to another subsidiary or affiliate of its group.
11) Monitoring
One shipper underlines that NRAs’ outstanding coordination is essential.
Another opinion: NRA to consider shippers/users comments to get the required information for evaluating the process development.

20. II. CAM 12) Stakeholders information
COMMENTS ON CAM TOPICS
12) Stakeholders information
One shipper remarks that TSOs must provide users and potential users with the appropriate information before and after de auction: auctions conditions, operational issues, maintenances, prices, price revisions, contracts. In a user friendly manner.
13) Capacity not allocated in auctions
One shipper considers that interoperability issues are critical to avoid mismatching between rules, criteria, scheduling and systems as consequence of the different regulation on both sides of the border in relation to the capacities not allocated in the monthly auction which will be sold as day ahead and intraday capacity products, until the full implementation of CAM NC.
14) Secondary market
One shipper suggests setting up the same publication requirements as CAM NC entails for the primary trades.
Another shipper proposes a coordinated and unique secondary capacity market for each IP (physical or virtual) at two borders. They propose a different duration of capacity products from the primary market. So, a firm yearly product could be sold in the secondary market for one month or more, as a monthly product.

21. II. CAM
COMMENTS ON CAM TOPICS
15) Interim period
One comment from one shipper welcoming this period.
16) Interaction with other capacity allocations in the region
Considered important to maximize actual flows in the region through an efficient maximization of allocated capacity.
Essential to get a regional market as interim step towards a single European Energy market.
NRAs should ensure and promote this interaction and consider that using the same booking platform should be easier. In the case of France, where shippers can book linked capacity from FOS to PEG NORD, through two different Entry‐Exit zones.
17) Calendar
Regarding the annual yearly capacity auction calendar, one shipper considers that the 7 months period preceding the beginning of the capacity utilization period is too long. Reasons: benefits for shippers and TSOs since shippers would reduce the risk of booking yearly capacity and TSO might observe an increase in the value of capacity contracted in yearly products (more capacity booked could benefit market liquidity). Also they propose the option of contracting yearly capacity products between the annual yearly products and the annual quarterly products auctions.

22. (for information by TSOs and discussion)
II. Steps to progress on the CAM NC implementation
II.3 Training sessions for stakeholders to use PRISMA
(for information by TSOs and discussion)

23. II. Steps to progress on the CAM NC implementation
II.4 Update of the Roadmap calendar
(for discussion)

24. II. CAM

25. II. Steps to progress on the CAM NC implementation
Date
Task/Event
Responsible
Tool
3 Mar 2014
Annual yearly capacity auction
TSOs
PRISMA
3 Feb 2014
Communication of capacity to be offered in the annual auction
TSOs Website
To be scheduled in February
SG meeting
Stk, NRAs,TSO
meeting
February 2014
Publication of applicable contracts
NRAs/TSOs
NRAs/TSOs Websites
Approval of NRAs regulatory developments
NRAs -
To be determined
Jan/Feb 2014
IT testing
IT systems
WS training for stakeholders to use PRISMA
TSOs, PRISMA
Before 30 Jan 2014
Publication of calendar establishing the timings for auctions, starting dates, standard capacity products for the period March 2013 – February 2014
December 2013
Final agreements on points in discussion

26. (for information by TSOs)
III. Infrastructures
III South Gas Regional Investment Plan (GRIP). Feedback from the ENTSOG WS on 26 November
(for information by TSOs)

27. IV. AOB and next meetings

28. V. AOB and next meetings - 2014
26 IG, to be ready for the SG meeting – IG meeting on 23 January?
SG meeting on February?