1. Energy Regulators Regional Association - present and future - Maria Manicuta ERRA Bucharest APRIL 03-05, 2006 Black Sea Energy Conference

2. Slide 2 What is ERRA: Voluntary, not-for-profit organization of independent energy regulatory bodies of the Central Eastern Europe and the Commonwealth of Independent States.

3. Slide 3 Objectives:  To improve national energy regulation in member countries  To foster development of stable energy regulators with autonomy and authority;  To improve cooperation among Energy Regulators  To facilitate the exchange of information, research, training and experience among members and other regulators around the world.

4. Slide 4 ERRA Members: Currently 21 Full Members : Albania, Armenia, Bosnia & Herzegovina, Bulgaria, Croatia, Georgia, Estonia, Hungary, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Macedonia, Moldova, Mongolia, Montenegro, Poland, Romania, Russia, Turkey, Ukraine 5 Associate Members : Kosovo, National Regulatory Authority for Municipal Services (Romania), National Natural Gas Reg. Authority (Romania), IAREC Russia, NARUC

5. Slide 5 Milestones in ERRA’s history: Cooperative platform started in 1998 by the participation of 12 “later” ERRA members Established in Dec. 2000 in Bucharest by 15 members Legally registered in Budapest in Apr 2001 8 new Full and 4 new Associate Members since 2000 1 st Energy Regulation and Investment Conference in 2002 1 st Training Program in 2003

6. Slide 6 Early activities Licensing/Competition Committee - Import-Export Working Group Tariff/Pricing Committee Annual Conference

7. Slide 7 Today’s main activities Presidium Meetings Licensing/Competition Committee Tariff/Pricing Committee Annual Meeting, General Assembly sessions Energy Regulation & Investment Conference EU Integration Working Group Legal Regulation Working Group Technical Exchange Programs Peer Reviews Summer School Website

8. Slide 8 Other periodic activities Study Tours Training for Local Government Representatives Benchmarking Working Group Monitoring Working Group Joint Training with CEER Privatization Workshop Black Sea Energy Regulatory Forum South East Europe Regulatory Forum

9. Slide 9 Technical work: Licensing/Competition Committee Tariff/Pricing Committee Monitoring/Benchmarking Working Group EU Accession/Integration Working Group Legal Regulation Working Group Topical Workshops (Privatization, Monitoring, Unbundling) Export/Import Working Group

10. Slide 10 Issues analyzed and discussed Issues analyzed by the Licensing Committee: Licenses and License Enforcement, Service Quality, Competition, Market Power, Monitoring, Cross Border Capacity Allocation Methods, Unbundling of Electric Sector Functions, Regional Electricity Markets, Market Models of the ERRA Region, Balancing Markets Gas Transmission Security of Supply, Public Service Obligations, Cooperation with System Operators, Supplier of Last Resort

11. Slide 11 Issues analyzed and discussed Issues analyzed by the Tariff Committee: System Tariffs, Two-Part Tariffs for Electric Power Consumers, Differentiated Tariffs, Low Income Customers, Designing Tariffs, Utility Asset Privatisation & Regulatory Control, Technical Losses & Commercial Losses, Cross Subsidies Cross-border Tariffs, Stranded Cost, Revaluation of Fixed Assets, Natural Monopolies Revenues, Supply Quality Standards, Workshops on Rate of Return Regulation (RoR) Versus Incentive Based Regulation (IBR) and Gas Tariffs Allocation Costs, Vulnerable Customers Tariff Database

12. Slide 12 EU Integration Working Group Established in June 2002 by 7 EU Accession countries Aim: to provide a common platform for “accession” members in numerous topics related to energy regulation that necessitates common solutions and management by members Chairmen met in Vienna to define topics and the course of actions to be taken Today’s tendency: the platform is utilized not so much by ERRA’s EU members but rather ERRA members that want access to EU practices (Bulgaria, Romania, Ukraine, Moldova, Bosnia, Macedonia, Croatia)

13. Slide 13 Issues analyzed and discussed Issues analyzed by the EU Integration Working Group: Green Energy Regulation Quality of Supply Gas Transmission and Distribution Pricing Cross Border Capacity Allocation Methods Support Schemes for Distributed Generation

14. Slide 14 ERRA’ Sustainability NARUC-USAID Cooperative Agreement ends in 2007 Decreasing donor funds Increased financial contribution from ERRA Members

15. Slide 15 ERRA Members’ Links 5 ERRA members are CEER and ERGEG members ERRA members participate in the Energy Community of SEE Regulatory Working Group Some are participants in the Asian Development Bank’s CAREC initiative Expected that Serbia and Azerbaijan may apply

16. Slide 16 Our intangible achievements Strong commitment of member organizations Members’ appreciation for ERRA’s well-targeted activities ERRA’s international recognition is constantly growing Daily working relationship with: NARUC, CEER and individual CEER members Occasional working relationship with other international organizations: Eurelectric, the World Bank, IEA, EFET, Euroheat, EBRD etc.

17. Slide 17 ERRA Website

18. Slide 18 Thank you for your attention!