1. CMP PROPOSAL FOR HARMONISATION 16 th IG meeting Madrid 6 th May 2011

2. 2 PROPOSAL Index 1.Introduction 2.Proposal

3. 3 PROPOSAL Introduction 1

4. 4 PROPOSAL Introduction At the 15 th Implementation Group meeting of the South Gas Regional Initiative that took place on 19 th October 2010, French, Portuguese and Spanish TSOs were asked to start working in the harmonisation of the Congestion Management Procedures according to what is being discussed in Europe. The mandate includes two parts: 1.Detailed description of current CMP in France, Portugal and Spain. 2.Proposals for harmonisation.

5. 5 PROPOSAL CMP country analysis Method Enagás / Naturgás GRTgazREN (*) TIGF CMPs EU proposal Oversubscription & buy-back (optional) Surrender of booked capacity Firm day-ahead UIOLI Long-term UIOLI Other CMPs Interruptible UIOLI Interruptible capacity Secondary market (*) At REN side, contracts longer then one year are not possible *

6. 6 PROPOSAL Preliminary views – working proposal The group proposes to start with the harmonisation of Long-term UIOLI between Spain and France, and within France: It’s part of the EC CMP proposal. Regulation on long-term UIOLI is already in place in France and Spain There is a need of harmonisation, since long-term capacity has been allocated in coordination (OSs/OSPs) but different rules are being applied with undesired consequences. Harmonisation is relatively simple – rules are not so different and the number of “regulatory pieces” affected is limited. Portugal would be excluded, since no long-term contracts are in place and a whole revision of Portugal’s regulation would be required. However, parallel activity in CAM harmonisation between Portugal and Spain is already taking place.

7. 7 PROPOSAL Harmonisation proposal 2

8. 8 PROPOSAL The Long-term UIOLI is designed to free up capacity already booked but not used by shippers. This procedure will only be applied for firm capacities (not interruptible even for the long term). The Long-Term UIOLI procedure can be applied at the following IPs:  GRTgaz North-GRTgaz South  GRTgaz South-TIGF  TIGF-Larrau  TIGF-Biriatou Long-term UIOLI (I) NORTH SPAIN SOUTH TIGF ? 5 1 2 4 6 NORTH SPAIN SOUTH TIGF ?

9. 9 PROPOSAL The initial proposal would be the following: Long-term UIOLI procedure can be triggered when all of the following conditions are met at one particular point and direction:  No primary capacity available at the point in the direction requested, thus the TSO is unable to meet at least 1 duly justified request from a shipper (the procedure is not triggered if access has not been denied to any shipper by the TSO),  After 6 consecutive months, the effectively daily used capacity by a shipper is on average less than 80% of its daily contracted capacity,  The shipper is unable to get the firm capacity in the secondary market (either on a bilateral basis, or bulletin board, if any applied). It must be taken into account that in France, shippers concerned may question the UIOLI procedure and justify its rate of utilisation by public service obligation (requirement to cover a 2% of daily peak demand).  If PSOs are taken into account when assessing the effective utilisation (which is reasonable), the application of UIOLI on both sides might not be consistent unless PSOs are harmonised. A joint decision by the stakeholders in charge of applying the mechanism (TSOs subject to approval of NRAs?) in both countries would be required and supported by regulation. This proposal is very similar to the regulation in place in France, and to one of the mechanisms in place in Spain. It would basically entail in Spain substituting long-term UIOLI regulation in Royal Decree 949/2001 for the proposal, and minor revisions in France. In Spain it would be convenient to develop a consistent LT UIOLI mechanism for other points. Long-term UIOLI (II)

10. 10 PROPOSAL Relevant aspects to be considered:  For IPs where flows reflect consumption of CCGTs, the percentage would need to be relaxed – and maybe based on peak usage and not (or not only) average usage.  Harmonisation of notice periods and deadlines would be required  Difficulties due to the fact that long-term contracts in Spain exist, but are not binding for the shipper (i.e. can under certain conditions be cancelled at no cost).  Should financial guarantees be harmonised?  Is the TSO in charge of applying the mechanism? If so, how is coordination ensured? Is the NRA approval required?  Coordination between NRAs in case of dispute or, if for any other reason, their intervention is required. Long-term UIOLI (III)

11. Thank you for your attention!