TITRE 28/03/2012NWE IG meeting – Amsterdam Schiphol

NWE day-ahead price coupling – cost issues

.NRAs are currently elaborating a “Letter of Comfort” (LoC) in order to provide TSOs and PXs with some comfort regarding cost recovery and cost sharing.. Pre-condition: Solution needs to be transparent, reliable, easily extendible and cost-effective. . In any case, only auditable, efficient and necessary costs will be taken into account.

Letter of Comfort (LoC) – Cost issues Letter of Comfort (LoC) – Cost issues

. TSOs and PXs are asked to provide ACER and NRAs as soon as possible with a detailed budget regarding the design, implementation and operational costs of the NWE/PCR market coupling project.

. This should include common and local cost.

.Relevant and efficient incurred costs will be the basis for cost recovery in accordance with national tariff rules.

LoC – Cost recoveryLoC – Cost recovery

.Potential approaches» TSOs bear all costs (“CWE model”)» PXs bear all costs (“Nordic market model”)» Cost sharing between PXs and TSOs

.NWE NRAs position on design and implementation costs» TSOs should bear part of the (local and common)

costs. » Exact share of costs to be borne by TSOs and covered

by tariffs shall be determined at national level by the respective NRAs.

» After providing the detailed budget TSOs and PXs are invited to start discussion on this issue with respective NRAs.

LoC – Cost sharing between TSOs / PXsLoC – Cost sharing between TSOs / PXs

.NWE TSOs and PXs were asked to provide a proposal (cross-regional roadmap; NWE IG meeting Oct. 2011).

.NRAs and ACER will address this topic in the Letter of Comfort.

LoC – Cost sharing NWE/non-NWE LoC – Cost sharing NWE/non-NWE

.Conditions for cost recovery:» Solution needs to be transparent, reliable,

easily extendible and cost-effective.» only auditable, efficient and necessary costs

will be taken into account.

.NWE NRAs support PCR and are committed to take all necessary regulatory steps to reach goal of implementing NWE/PCR market coupling.

. In case a considerable delay gets very likely at an early stage of the project, ACER and NRAs may consider alternative solutions.

LoC – Regulatory issuesLoC – Regulatory issues

Thank you for your attention!

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