1. BALTIC ELECTRICITY MARKET MINIFORA Vilnius 23 November 2006 Tasks of the summary of the IG discussion paper on the Baltic ITC mechanism Dace Bite Public Utilities Commission

2. Elements of an organisational framework ERGEG established Regional Co-ordination Committees (RCCs). Each RCC : - comprises regulators from the region; - has autonomy, & adopts its own decision making process ; & chairs mini-fora IMPLEMENTATION GROUP Includes TSOs, Market Operators (where appropriate) This is the ‘do-er’ for each Regional Initiative Chaired by RCC STAKEHOLDER GROUP (Based on mini-fora) Wide participation including market players Each mini-fora chaired by RCC and used for consultation FLORENCE FORUM Overall forum for discussing progress in progressing regional initiatives and pan- European consistency MEMBER STATES Input into identifying and solving market integration issues – e.g. legislative proposals, Member State to Member State interface EU COMMISSION

3. PRIORITIES The 1st priority topics: – Co-operation between network operators (including cross border issues and availability of transmission capacity) –Access to grid and balancing rules –Availability and control of information The 2nd priority topic: –Market development and harmonization of national legislation

4. REGULATION on conditions for access to the network for cross-border exchanges in electricity TSO should be compensated for costs incurred as a result of hosting cross-border flows of electricity on their networks by the operators of the TS from which cross-border flows originate and the systems where those flows end. Payments and receipts resulting from compensation between TSO should be taken into account when setting national network tariff

5. Regulation Commission shell set the quidlines on ITC The regulatory authorities shall ensure compliance with Regulation and quidlines The regulatory authorities shall cooperate which each other and Commission to fulfil the aims of Regulation

6. Process till now ERGEG proposed methods for ITC – WWT (With and Without Transits) and AP (Average Participation) methods ETSO proposed IMICA (Improved Modelling for Infrastructure Cost Allocation) method ERGEG draft quidlines on ITC based on IMICA method No agreement between the Regulators regarding ERGEG quidlines

7. Regulators& TSO Regulators should express the viewpoint regarding ITC method (quidlines) The Regulators should present the interests of the country and the TSO Cooperation on ITC method between Regulators&TSO – Regulators should receive from TSO regular information on ITC payments, proposed methods, the TSO’s viwpoint on the advantages and disadvantages of the specific method

8. Working Paper stating the TSOs opinion on the Baltic ITC mechanism The paper should cover the following questions: Analysis of the proposed TSO’s compensation mechanism models (IMICA, AP, WWT, combined model, other), stressing the possible impact on payments - more or less depending on model. The advantages and disadvantages of the methods. The conclusions should give a common approach that will be applicable for the Baltic countries. The conclusions of the paper will be the basis for the consultation process within ERGEG.

9. THANK YOU FOR ATTENTION Web page of PUC : WWW.SPRK.GOV.LV