1. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 1 Implementation and results from Deregulation 1.Introduction 2.Consequences of the liberalization 3.Illustration : the Electrabel case 4.Example of an important change program 5.Lessons and recommandations 6.Conclusion

2. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 2 1. Introduction  schedules and rhythms of liberalization  starting situations  possibility to compare  action plans  final business models already liberalized countries  return of experience countries still in the starting blocks

3. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 3 2. Consequence of the liberalization losses of synergy breaking up of value chain (high) costs of unbundling to compensate by : –new horizontal synergies –maximising efficiency of asset management and operation new functions –performant IT applications optimizing existing processes

4. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 4 3. Illustration by the Electrabel case complex and interesting case : 4 Regulating Bodies unbundling  - generation  low cost producer - transmission network :  new independent company (Elia) - trading  risk management - sales activity  new products, services, pricing techniques - distribution networks  in association with the municipalities pressures regulators NB : shareholders grid companies - State and/or municipalities (B,NL,F, SP)  2  tendencies - Privatising (UK)

5. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 5 4. Example of an important change program 4.1. regulated network business  - independant environment - new contractual rules  - connections contracts - supply contracts - access contracts

6. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 6 The new situation (contractual) GEN Customer - management of the networks - management of * connection contracts *access contracts - billing to supplyers for *acces to the networks *use of the networks Supplier 1 DGO access contract supply contract connection contract DGO

7. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 7 4.2. transformation program  - supply projects  - network projects : access and transit meter reading, treating and forwarding management of customer request data bases  3 major factors : process reengineering IT development "on-site" implementation  applications, integration and data

8. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 8 NEW Relational Scenarios Access & Transit National Communication Network Acces Register PHYSICALL SCENARIOS As today but modified Treat Complaints – Outages – Technical Problems WORKS OTHER PLAYERS Collect Treat Forward Metered Data INDEXIS Project Smallworks / ISUNET Project Acces & Transit Project China Project MRCO Project TTG/UNINOM Contact Clients Client Supply Call Center Supplier Access Responsible Net Call Center

9. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 9 4.3. on the field implementation heavy impact on organizations - unbundling call center - works applications - access and transit facility - independant organization  Indexis - service level agreements - flexibility

10. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 10 4.4. some milestones and figures - start : end 2000 - milestones :1-1-2002 1-1-2003 1-7-2003  full liberalization E and G in Flanders 1-1-2004 (?) 1-1-2007 (?) - estimated budget : > 60 M € till 1-7-2003 - ressources : > 200 people

11. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 11 4.5. major observed risks - instability of regulation - migration of huge quantities of data - interfaces between IT applications - field implementation

12. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 12 5. Lessons and recommandations to anticipate the evolution and cooperate for the establishment of the rules. being a private incumbent and vertically integrated dominant company  comfortable !  - constructive dialogue with authorities - efficiency of activities on home market - to expand core activities outside home market experience of deregulation  - increase in efficiency (but manpower  ) - no increase of revenues on the traditionnal home market - increase of revenues outside the home market only if sound expanding policy.

13. CONNEROTTE_BE_ALPHA6_BLOCK1.PPT Barcelona 12-15 May 2003 13 6. Conclusions Key words of the Electrabel transformation program : - progressiveness, harmonization and synergies / Regions Keep the customer happy !