WORKSHOP ON ELECTRICITY NETWORK TARIFFS: PROCEEDINGS (Praga, 19-20 Mayo 1999)

Recently this subject has become one of the most crucial and controversial topics for the electric power industry. Quite simply, a transparent, non-discriminatory, cost-reflective yet simple tariff system for cross-border transactions is a sine qua non for the European Union's new internal electricity market (IEM) to function in a fair and efficient manner.

A large number of studies, reports, proposals and position papers addressing this question have appeared since 19th February 1999, the official deadline for the implementation of the IEM in the EU member countries. In this regard, considerable efforts have been made by the electricity industry, the European Commission, as well as the national regulating bodies and the market participants to find a solution that can be achieved within a short time, but which can subsequently be further developed as a result of the first experiences and evolving future market needs.

Although the key principles are by now quite clear, there still remains much to do to put them into practice. Since many of the conditions and expectations are rather contradictory, a balance must be found. This means that political decisions have to be made.

The timing of the workshop was most opportune from this point of view. The 3d Meeting of the European Regulators organised by the Commission took place on 20-21 May in Florence, where some important conclusions were expected to be drawn. Therefore the workshop provided an excellent opportunity for the industry to demonstrate its standpoint and its willingness to cooperate in finding the best possible solutions.

CONTENTS:

SUBJECT 1: NATIONAL GRID TARIFFS

Moderator: Gunnar LUNDBERG Chairman of the UNIPEDE - EURELECTRIC Working Group System Tariff Issues

* Which tariff system: point-to-point or point, postage stamp, zonallnodal pricing, distance related tariffs, Alistair PARKER, Charging Development Manager, The National Grid Company (GB)

* Border transit tariffs and congestion pricing, Jean-Claude STEFFENS, Head of the European and Institutional Affairs, Electrabel (BE)

* Two main models: The Swedish system vs. the German model, Roger KEARSLEY, Deputy Head of Commercial Activities, Svenska Kraftnat (SE); Wolfgang AHLEMEYER, Director of Network Marketing, RWE Energie AG

* Round table discussion: The speakers remain in the panel. They are joined by a "question-panel", composed of Mr. Marek ZERKA (PL), Mrs. Indra ASANDER Vattenfall (SE), Dr. WoUgang FRITZ from the Institute of Power Systems and Power Economics, Aachen (DE) and Mr. Jorge VASCONSELOS, the Portuguese regulator, who will start the debate

* Incentives for network extension: ensuring a good and secure network in a competitive system , Jose ALLEN LIMA, President of UCPTE

* A method for overall costs comparison: analysis of the main cost drivers, Alain HAUTOT, Power System Operator - Financial Department, EDF (FR)

SUBJECT 2: DISTRIBUTION NETWORK TARIFFS

Moderator: Gunnar LUNDBERG Chairman of the UNIPEDE - EURELECTRIC

* Methods and philosophies used in different countries: an overview, Hermann MEIER, Mitglied des Vorstandes, ESSAG (DE)

* The role of the regulator for the transmission and distribution networks, Jon SAGEN, Office of the Norwegian Regulator

* Introduction of discussion: A Single Tariff System - pros and cons, Fernando URQUIZA AMBRINOS, Economist, UNESA (ES)

* Aspects of pricing in distributions networks, Thomas TILLWICKS, Head of Department Grid Utilisation Aare-Tessin AG fur Elektrizitat (CH)

* Handling input in lower voltage levels, decentralised production and auto-production. Franz APPESBACHER, Prokurist, Salzburger AG f. Energiewirtschaft (AT)

* Metering and billing, Otso KUUSISTO Business Unit Director, Finnish Electricity Association (F1)

SUBJECT 3: OPEN MARKET PLACES AND POOLS

Moderator: Gunnar LUNDBERG, Chairman of the UNIPEDE - EURELECTRIC

* Overview: present stage of the electricity exchanges in Europe, Andras KACSO, Head of Department, MVM Rt. (HU)

* The spot market and the financial market; financial instruments, Kjetil KNUTSSON, President and CEO of Nord Pool Consulting (NO)

* The role of the system operator: zonal charging, counter trade or nodal pricing?. Asbjorn HOWIK , Marketing Director, Stavanger Energi (NO)

* The role of the market operator: matching supply and demand , Bart PYCKE, Head of Power Trading, ELECTRABEL (BE)

* How does a pool system influence electricity prices: new contracts for the electricity markets, Fernando LASHERAS, Manager Regulatory Development, lberdrola (ES)

* The experience of building up and regulating a pool system: the Swedish regulator, Anneli GABRIELSSON, Head of Department for Network Regulation, Swedish National Energy Administration