Common Position (EC) No 5/2005 of 12 November 2004 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council on conditions for access to the natural gas transmission networks
Date: 2004-11-12
Institutions: Council of the European Union
Subjects: energy transport, gas pipeline, market access, natural gas, single market, transport network

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COMMON POSITION (EC) No 5/2005

adopted by the Council on 12 November 2004

with a view to the adoption of Regulation (EC) No.../2005 of the European Parliament and of the
Council of... on conditions for access to the natural gas transmission networks

(Text with EEA relevance)

(2005/C 25E/05)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EURO-
PEAN UNION,

congestion management,
the trading of capacity rights.

transparency, balancing and

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 95 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Economic and
Social Committee,

Following consultation of the Committee of the Regions,

Acting in accordance with the procedure laid down in
Article 251 of the Treaty (1),

Whereas:

(1)

(2)

(3)

Directive 2003/55/EC of the European Parliament and of
the Council of 26 June 2003 concerning common rules
for the internal market in natural gas (2) has made a
significant contribution towards
the creation of an
internal market for gas. It is now necessary to provide
structural changes in the regulatory framework to tackle
remaining barriers to the completion of
the internal
market in particular regarding the trade of gas. Addi-
tional
in particular
regarding third party access services, principles of capa-
city allocation mechanisms, congestion management
procedures and transparency requirements.

are necessary,

technical

rules

Experience gained in the implementation and moni-
toring of a first set of Guidelines for Good Practice,
adopted by the European Gas Regulatory Forum (the
Forum) in 2002, demonstrates that in order to ensure
the full implementation of the rules set out in the Guide-
lines in all Member States, and in order to provide a
minimum guarantee of equal market access conditions
is necessary to provide for them to
it
in practice,
become legally enforceable.

for Good Practice’ was adopted at

A second set of common rules entitled ‘the Second
the
Guidelines
meeting of the Forum on 24 and 25 September 2003
and the purpose of this Regulation is to lay down, on
the basis of those Guidelines, basic principles and rules
regarding network access and third party access services,

(1) Opinion of the European Parliament of 20 April 2004 (OJ C 104 E,

30.4.2004) and Council Decision of ....

(2) OJ L 176, 15.7.2003, p. 57.

(4)

(5)

(6)

(7)

(8)

(9)

Article 15 of Directive 2003/55/EC allows
for a
combined transmission and distribution system operator.
Therefore, the rules set out in this Regulation do not
require modification of
the organisation of national
transmission and distribution systems that are consistent
with the relevant provisions of Directive 2003/55/EC
and in particular Article 15 thereof.

High pressure pipelines linking up local distributors to
the gas network which are not primarily used in the
context of local distribution are included in the scope of
this Regulation.

It is necessary to specify the criteria according to which
tariffs for access to the network are determined, in order
to ensure that they fully comply with the principle of
non-discrimination and the needs of a well-functioning
internal market and take fully into account the need for
system integrity and reflect actual costs incurred, whilst
ensuring appropriate incentives with respect
to effi-
ciency, including appropriate return on investments, and
where appropriate taking account of the benchmarking
of tariffs by the regulatory authorities.

In calculating tariffs for access to networks it is impor-
tant to take account of actual costs incurred, as well as
of the need to provide appropriate return on invest-
ments and incentives to construct new infrastructure. In
this respect, and in particular if effective pipeline-to-
pipeline competition exists, the benchmarking of tariffs
will be a relevant consideration.

The use of market-based arrangements, such as auctions,
to determine tariffs has to be compatible with the provi-
sions laid down in Directive 2003/55/EC.

A common minimum set of third party access services is
necessary to provide a common minimum standard of
access in practice throughout the Community, to ensure
that third party access services are sufficiently compa-
tible and to allow the benefits accruing from a well-func-
tioning internal market for gas to be exploited.

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(10)

(11)

References to harmonised transportation contracts in the
context of non-discriminatory access to the network of
transmission system operators do not mean that the
terms and conditions of the transportation contracts of a
particular system operator in a Member State must be
the same as
transmission system
operator in that Member State or in another Member
State, unless minimum requirements are set which must
be met by all transportation contracts.

those of another

undertakings in order to ensure an appropriate level of
liquidity on the
approach,
however, does not preclude a system where capacity
unused for a given period, determined at national level,
is made re-available to the market on a firm basis.

capacity market. This

(17) National regulatory authorities should ensure compliance
with the rules contained in this Regulation and the
guidelines adopted pursuant to it.

The management of contractual congestion of networks
is an important issue in completing the internal gas
market. It is necessary to develop common rules which
balance the need to free up unused capacity in accord-
ance with the ‘use-it-or-lose-it’ principle with the rights
of the holders of the capacity to use it when necessary,
while at the same time enhancing liquidity of capacity.

(18)

In the Guidelines annexed to this Regulation, specific
detailed implementing rules are defined on the basis of
the second Guidelines for Good Practice. Where appro-
priate,
taking into
account the differences of national gas systems.

these rules will evolve over time,

(12) Although physical congestion of networks is rarely a
problem at present in the Community, it may become
one in the future. It is important therefore to provide
the basic principle for the allocation of congested capa-
city in such circumstances.

(19) When proposing to amend the Guidelines laid down in
the Annex to this Regulation, the Commission should
all
ensure prior
relevant parties
concerned with the Guidelines,
represented by the
professional organisations, and of the Member States
within the Forum and should request the input of the
European Regulators Group for Electricity and Gas.

consultation of

(13)

to gain effective access

For network users
to gas
networks they need information in particular on tech-
nical requirements and available capacity to enable them
to exploit business opportunities occurring within the
framework of the internal market. Common minimum
standards on such transparency requirements are neces-
sary. The publication of such information may be done
by different means, including electronic means.

(20)

The Member States and the competent national authori-
ties should be required to provide relevant information
to the Commission. Such information should be treated
confidentially by the Commission.

(21)

This Regulation and the guidelines adopted in accord-
ance with it are without prejudice to the application of
the Community rules on competition.

(14) Non-discriminatory and transparent balancing systems
for gas, operated by transmission system operators, are
important mechanisms, particularly for new market
entrants which may have more difficulty balancing their
overall sales portfolio than companies already established
within a relevant market. It is therefore necessary to lay
down rules to ensure that transmission system operators
operate such mechanisms in a manner compatible with
non-discriminatory,
access
transparent
conditions to the network.

and effective

(22)

(23)

(15)

The trading of primary capacity rights is an important
part of developing a competitive market and creating
liquidity. This Regulation should therefore lay down
basic rules on that issue.

The measures necessary for the implementation of this
Regulation should be adopted in accordance with
Council Decision 1999/468/EC of 28 June 1999 laying
down the procedure for the exercise of implementing
powers conferred on the Commission (1).

Since the objective of this Regulation, namely the setting
of fair rules for access conditions to natural gas transmis-
sion systems, cannot be sufficiently achieved by the
Member States and can therefore, by reason of the scale
and effects of the action, be better achieved at Com-
munity level, the Community may adopt measures in
accordance with the principle of subsidiarity, as set out
in Article 5 of the Treaty. In accordance with the prin-
ciple of proportionality, as set out in that Article, this
Regulation does not go beyond what is necessary in
order to achieve that objective,

(16)

It is necessary to ensure that undertakings acquiring
capacity rights are able to sell them to other licensed

(1) OJ L 184, 17.7.1999, p. 23.

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HAVE ADOPTED THIS REGULATION:

city and the timely detection of future congestion and
saturation points;

Article 1

Subject matter and scope

1.
This Regulation aims at setting non-discriminatory rules
for access conditions to natural gas transmission systems taking
into account the specificities of national and regional markets
with a view to ensuring the proper functioning of the internal
gas market.

(6) ‘secondary market’ means the market of

the capacity

traded otherwise than on the primary market;

(7) ‘nomination’ means the prior reporting by the network
user to the transmission system operator of the actual
flow that he wishes to inject into or withdraw from the
system;

(8) ‘renomination’ means
corrected nomination;

the subsequent

reporting of a

This objective shall include the setting of harmonised principles
for tariffs, or the methodologies underlying their calculation,
for access to the network, the establishment of third party
access services and harmonised principles for capacity alloca-
tion and congestion management, the determination of trans-
parency requirements, balancing rules and imbalance charges
and facilitating capacity trading.

(9) ‘system integrity’ means any situation in respect of a trans-
mission network including necessary transmission facil-
ities in which the pressure and the quality of the natural
gas remain within the minimum and maximum limits laid
down by the transmission system operator, so that the
transmission of natural gas is guaranteed from a technical
standpoint;

2. Member States may establish an entity or body set up in
compliance with Directive 2003/55/EC for the purpose of
carrying out one or more functions typically attributed to the
transmission system operator, which shall be subject to the
requirements of this Regulation.

(10) ‘balancing period’ means the period within which the off-
take of an amount of natural gas, expressed in units of
energy, must be offset by every network user by means of
the injection of the same amount of natural gas into the
transmission network in accordance with the transporta-
tion contract or the network code;

Article 2

Definitions

(11) ‘network user’ means a customer or a potential customer
of a transmission system operator, and transmission
system operators themselves in so far as it is necessary for
them to carry out their functions in relation to transmis-
sion;

For the purpose of this Regulation, the following defini-

1.
tions shall apply:

(12) ‘interruptible services’ means services offered by the trans-
mission system operator in relation to interruptible capa-
city;

(1) ‘transmission’ means the transport of natural gas through
a network, which mainly contains high pressure pipelines,
other than an upstream pipeline network and other than
the part of high pressure pipelines primarily used in the
context of local distribution of natural gas, with a view to
its delivery to customers, but not including supply;

(13) ‘interruptible capacity’ means gas transmission capacity
that can be interrupted by the transmission system
operator according to the conditions stipulated in the
transportation contract;

(2) ‘transportation contract’ means a contract which the trans-
mission system operator has concluded with a network
user with a view to carrying out transmission;

(14) ‘long-term services’ means services offered by the trans-
mission system operator with a duration of one year or
more;

(3) ‘capacity’ means the maximum flow, expressed in normal
cubic meters per time unit or in energy unit per time
unit, to which the network user is entitled in accordance
with the provisions of the transportation contract;

(15) ‘short-term services’ means services offered by the trans-
mission system operator with a duration of less than one
year;

(4) ‘unused capacity’ means firm capacity which a network
user has acquired under a transportation contract but
which that user has not nominated;

(16) ‘firm capacity’ means gas transmission capacity contrac-
tually guaranteed as uninterruptible by the transmission
system operator;

(5) ‘congestion management’ means management of the capa-
city portfolio of the transmission system operator with a
view to optimal and maximum use of the technical capa-

(17) ‘firm services’ mean services offered by the transmission

system operator in relation to firm capacity;

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(18) ‘technical capacity’ means the maximum firm capacity
that the transmission system operator can offer to the
network users, taking account of system integrity and the
operational requirements of the transmission network;

(19) ‘contracted capacity’ means capacity that the transmission
system operator has allocated to a network user by means
of a transportation contract;

(20) ‘available capacity’ means the part of the technical capa-
city that is not allocated and is still available to the system
at that moment;

(21) ‘contractual congestion’ means a situation where the level
of firm capacity demand exceeds the technical capacity;

(22) ‘primary market’ means the market of the capacity traded

directly by the transmission system operator;

(23) ‘physical congestion’ means a situation where the level of
demand for actual deliveries exceeds the technical capacity
at some point in time.

The definitions contained in Article 2 of Directive 2003/
2.
55/EC, which are relevant for the application of this Regu-
lation, shall also apply with the exception of the definition of
transmission in point 3 of that Article.

Article 3

Tariffs for access to networks

1.
Tariffs, or the methodologies used to calculate them,
applied by transmission system operators and approved by the
to Article 25(2) of Direc-
regulatory authorities pursuant
to
tive 2003/55/EC, as well as tariffs published pursuant
Article 18(1) of that Directive, shall be transparent, take into
account the need for system integrity and its improvement and
reflect actual costs incurred whilst ensuring appropriate incen-
tives with respect to efficiency, including appropriate return on
the
investments, and where appropriate taking account of
benchmarking of tariffs by the regulatory authorities. Tariffs, or
the methodologies used to calculate them, shall be applied in a
non-discriminatory manner.

Member States may decide that tariffs may also be determined
through market-based arrangements, such as auctions, provided
that such arrangements and the revenues arising therefrom are
approved by the regulatory authority.

Tariffs

shall not

for network access

2.
restrict market
liquidity nor distort trade across borders of different transmis-
sion systems. Where differences in tariff structures or balancing
mechanisms would hamper trade across transmission systems,
and notwithstanding Article 25(2) of Directive 2003/55/EC,
transmission system operators shall, in close cooperation with
the relevant national authorities, actively pursue convergence of
tariff structures and charging principles including in relation to
balancing.

Article 4

Third party access services

1.

Transmission system operators shall:

(a) ensure that

they offer services on a non-discriminatory
basis to all network users. In particular, where a transmis-
sion system operator offers the same service to different
customers, it shall do so under equivalent contractual terms
and conditions, either using harmonised transportation
contracts or a network code approved by the competent
authority in accordance with the procedure laid down in
Article 25 of Directive 2003/55/EC;

(b) provide both firm and interruptible third party access
services. The price of interruptible capacity shall reflect the
probability of interruption;

(c) offer to network users both long and short-term services.

2.
Transportation contracts signed with non-standard start
dates or with a shorter duration than a standard annual trans-
portation contract shall not result in arbitrarily higher or lower
tariffs not reflecting the market value of the service, in accord-
ance with the principles laid down in Article 3(1).

3. Where appropriate, third party access services may be
granted subject to appropriate guarantees from network users
with respect to the creditworthiness of such users. Such guar-
antees must not constitute any undue market entry barriers and
must be non-discriminatory, transparent and proportionate.

Article 5

Principles of capacity allocation mechanisms and conges-
tion management procedures

Tariffs, or the methodologies used to calculate them, shall facili-
tate efficient gas trade and competition, while at the same time
avoiding cross-subsidies between network users and providing
incentives for investment and maintaining or creating intero-
perability for transmission networks.

The maximum capacity at all relevant points referred to
1.
in Article 6(3) shall be made available to market participants,
taking into account system integrity and efficient network
operation.

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Transmission system operators

2.
implement and
publish non-discriminatory and transparent capacity allocation
mechanisms, which shall:

shall

(a) provide appropriate economic signals for efficient and
maximum use of technical capacity and facilitate invest-
ment in new infrastructure;

(b) be compatible with the market mechanisms including spot
markets and trading hubs, while being flexible and capable
of adapting to evolving market circumstances;

(c) be compatible with the network access systems of

the

Member States.

3. When transmission system operators conclude new trans-
portation contracts or
existing transportation
renegotiate
contracts, these contracts shall take into account the following
principles:

(a) in the event of contractual congestion, the transmission
system operator shall offer unused capacity on the primary
market at least on a day-ahead and interruptible basis,

(b) network users who wish to resell or sublet their unused
contracted capacity on the secondary market shall be
entitled to do so. Member States may require notification
or information of
the transmission system operator by
network users.

4. When capacity contracted under existing transportation
contracts remains unused and contractual congestion occurs,
transmission system operators shall apply paragraph 3 unless
this would infringe the requirements of the existing transporta-
tion contracts. Where this would infringe the existing transpor-
tation contracts, transmission system operators shall, following
consultation with the competent authorities, submit a request
to the network user for the use on the secondary market of
unused capacity in accordance with paragraph 3.

In the event that physical congestion exists, non-discrimi-
5.
transparent capacity allocation mechanisms shall be
natory,
applied by the transmission system operator or, as appropriate,
the regulatory authorities.

Article 6

Transparency requirements

1.
Transmission system operators shall make public detailed
information regarding the services they offer and the relevant
conditions applied,
information
necessary for network users to gain effective network access.

together with the technical

2.
In order to ensure transparent, objective and non-discri-
minatory tariffs and facilitate efficient utilisation of the gas
network, transmission system operators or relevant national

authorities shall publish reasonably and sufficiently detailed
information on tariff derivation, methodology and structure.

For

3.
the services provided, each transmission system
operator shall make public information on technical, contracted
and available capacities on a numerical basis for all relevant
points including entry and exit points on a regular and rolling
basis and in a user-friendly standardised manner.

4.
The relevant points of a transmission system on which
the information must be made public shall be approved by the
competent authorities after consultation with network users.

5. Where a transmission system operator considers that it is
not entitled for confidentiality reasons to make public all the
data required, it shall seek the authorisation of the competent
authorities to limit publication with respect to the point or
points in question.

The competent authorities shall grant or refuse the authorisa-
tion on a case-by-case basis, taking into account in particular
the need to respect legitimate commercial confidentiality and
the objective of creating a competitive internal gas market. If
the authorisation is granted, available
capacity shall be
published without indicating the numerical data that would
contravene confidentiality.

No such authorisation as referred to in this paragraph shall be
granted where three or more network users have contracted
capacity at the same point.

6.
Transmission system operators shall always disclose the
information required by this Regulation in a meaningful, quan-
tifiably clear and easily accessible way and on a non-discrimina-
tory basis.

Article 7

Balancing rules and imbalance charges

1.
Balancing rules shall be designed in a fair, non-discrimina-
tory and transparent manner and shall be based on objective
criteria. Balancing rules shall reflect genuine system needs
taking into account the resources available to the transmission
system operator.

2.
In the case of non-market based balancing systems, toler-
ance levels shall be designed in a way that either reflects
seasonality or results in a tolerance level higher than that
resulting from seasonality, and that reflects the actual technical
capabilities of the transmission system. Tolerance levels shall
reflect genuine system needs taking into account the resources
available to the transmission system operator.

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3.
Imbalance charges shall be broadly cost-reflective, whilst
providing appropriate incentives on network users to balance
their input and off-take of gas. They shall avoid cross-subsidisa-
tion between network users and shall not hamper the entry of
new market entrants.

Any calculation methodology for imbalance charges as well as
the final tariffs shall be made public by the competent authori-
ties or the transmission system operator as appropriate.

4.
Transmission system operators may impose penalty
charges on network users whose input into and off-take from
the transmission system is not in balance according to the
balancing rules referred to in paragraph 1.

(a) details of third party access services including the character,
in

requirements of

these services,

duration and other
accordance with Article 4;

(b) details of

the principles underlying capacity allocation
mechanisms and on the application of congestion manage-
ment procedures in the event of contractual congestion, in
accordance with Article 5;

(c) details on the definition of the technical information neces-
sary for network users to gain effective access to the system
and the definition of all relevant points for transparency
requirements, including the information to be published at
all relevant points and the time schedule according to
which this information shall be published, in accordance
with Article 6.

5.
Penalty charges which exceed the actual balancing costs
incurred shall be taken into account when calculating tariffs in
a way that does not reduce the interest in balancing and shall
be approved by the competent authorities.

2.
Guidelines on the issues listed in paragraph 1 are laid
down in the Annex. They may be amended by the Commis-
sion; this shall be done in accordance with the procedure
referred to in Article 14(2).

6.
In order to enable network users to take timely corrective
action, transmission system operators shall provide sufficient,
well-timed and reliable on-line based information on the balan-
cing status of network users. The level of information provided
shall reflect the level of information available to the transmis-
sion system operator. Where they exist, charges for the provi-
sion of such information shall be approved by the competent
authorities and shall be made public by the transmission
system operator.

3.
The application and amendment of Guidelines adopted
pursuant to this Regulation shall reflect differences between
national gas systems, and shall therefore not require uniform
detailed terms and conditions of third party access at Com-
munity level. They may, however, set minimum requirements
to be met
to achieve non-discriminatory and transparent
network access conditions necessary for an internal gas market,
which may then be applied in the light of differences between
national gas systems.

transmission system
7. Member States shall ensure that
operators endeavour
to harmonise balancing regimes and
streamline structures and levels of balancing charges in order
to facilitate gas trade.

Article 8

Trading of capacity rights

Each transmission system operator shall take reasonable steps
to allow capacity rights to be freely tradable and to facilitate
such trade. Each such operator shall develop harmonised trans-
portation contracts and procedures on the primary market to
facilitate secondary trade of capacity and recognise the transfer
of primary capacity rights where notified by network users.
The harmonised transportation contracts and procedures shall
be notified to the regulatory authorities.

Article 10

Regulatory authorities

When carrying out their responsibilities under this Regulation,
the regulatory authorities of
the Member States established
under Article 25 of Directive 2003/55/EC shall ensure compli-
ance with this Regulation and the Guidelines adopted pursuant
to Article 9 of this Regulation.

Where appropriate they shall cooperate with each other and
with the Commission.

Article 11

Provision of information

Article 9

Guidelines

Member States and the regulatory authorities shall, on request,
provide to the Commission all information necessary for the
purposes of Article 9.

1. Where appropriate, Guidelines providing the minimum
degree of harmonisation required to achieve the aim of this
Regulation shall specify:

The Commission shall fix a reasonable time limit within which
the information is to be provided, taking into account the
complexity of the information required and the urgency with
which the information is needed.

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Article 12

Right of Member States to provide for more detailed
measures

This Regulation shall be without prejudice to the rights of
Member States to maintain or introduce measures that contain
more detailed provisions than those set out in this Regulation
and the Guidelines referred to in Article 9.

gained in the application of this Regulation. In particular the
report shall examine to what extent the Regulation has been
successful
in ensuring non-discriminatory and cost-reflective
network access conditions for gas transmission networks in
order to contribute to customer choice in a well functioning
internal market and to long-term security of supply. If neces-
sary, the report shall be accompanied by appropriate proposals
and/or recommendations.

Article 13

Penalties

The Member States shall lay down the rules on penalties
1.
applicable to infringements of the provisions of this Regulation
and shall take all measures necessary to ensure that they are
implemented. The penalties provided for must be effective,
proportionate and dissuasive. The Member States shall notify
those provisions to the Commission by 1 July 2006 at the
latest and shall notify it without delay of any subsequent
amendment affecting them.

Penalties provided for pursuant to paragraph 1 shall not

2.
be of a criminal law nature.

Article 14

Committee procedure

The Commission shall be assisted by the Committee set

1.
up by Article 30 of Directive 2003/55/EC.

2. Where reference is made to this paragraph, Articles 5 and
7 of Decision 1999/468/EC shall apply, having regard to the
provisions of Article 8 thereof.

The period laid down in Article 5(6) of Decision 1999/468/EC
shall be set at three months.

3.

The Committee shall adopt its Rules of Procedure.

Article 16

Derogations and exemptions

This Regulation shall not apply to:

(a) natural gas transmission systems situated in Member States
for the duration of derogations granted under Article 28 of
Directive 2003/55/EC; Member States which have been
granted derogations under Article 28 of Directive 2003/55/
EC may apply to the Commission for a temporary deroga-
tion from the application of this Regulation, for a period of
up to two years from the date at which the derogation
referred to in this point expires …;

(b) interconnectors between Member States and significant
increases of capacity in existing infrastructures and modifi-
cations of such infrastructures which enable the develop-
ment of new sources of gas supply as referred to in
Article 22(1) and (2) of Directive 2003/55/EC which are
exempted from the provisions of Articles 18, 19, 20
and 25(2), (3) and (4) of that Directive as long as they are
exempted from the provisions referred to in this sub-
paragraph; or

(c) natural gas transmission systems which have been granted
derogations under Article 27 of Directive 2003/55/EC.

Article 17

Entry into force

Article 15

Commission Report

This Regulation shall enter into force on the twentieth day
following its publication in the Official Journal of the European
Union.

The Commission shall monitor the implementation of
this
Regulation. In its report under Article 31(3) of Directive 2003/
55/EC, the Commission shall also report on the experience

It shall apply from 1 July 2006 with the exception of the
second sentence of Article 9(2), which shall apply from
1 January 2007.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament

The President

For the Council

The President

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ANNEX

GUIDELINES ON

1. THIRD PARTY ACCESS SERVICES

2. PRINCIPLES UNDERLYING THE CAPACITY ALLOCATION MECHANISMS, CONGESTION MANAGEMENT

PROCEDURES AND THEIR APPLICATION IN THE EVENT OF CONTRACTUAL CONGESTION, AND

3. DEFINITION OF THE TECHNICAL INFORMATION NECESSARY FOR NETWORK USERS TO GAIN EFFEC-
TIVE ACCESS TO THE SYSTEM, THE DEFINITION OF ALL RELEVANT POINTS FOR TRANSPARENCY
REQUIREMENTS AND THE INFORMATION TO BE PUBLISHED AT ALL RELEVANT POINTS AND THE
TIME SCHEDULE ACCORDING TO WHICH THIS INFORMATION SHALL BE PUBLISHED

1. THIRD PARTY ACCESS SERVICES

(1) Transmission system operators shall offer firm and interruptible services down to a minimum period of one day.

(2) Harmonised transportation contracts and common network code shall be designed in a manner that facilitates

trading and reutilisation of capacity contracted by network users without hampering capacity release.

(3) Transmission system operators shall develop network codes and harmonised contracts following proper consulta-

tion with network users.

(4) Transmission system operators shall

implement standardised nomination and renomination procedures, once
agreed within the European Association for the Streamlining of the Exchange of Energy Gas (EASEE-gas). They
shall develop information systems and electronic communication means to provide adequate data to network users
and to simplify transactions, such as nominations, capacity contracting and transfer of capacity rights between
network users.

(5) Transmission system operators shall harmonise formalised request procedures and response times according to best
industry practice with the aim of minimising response times. They shall provide for on-line screen based capacity
booking and confirmation systems, nominations and renominations procedures no later than 1 July 2006 if such
procedures have been agreed within EASEE-gas.

(6) Transmission system operators shall not separately charge network users for information requests and transactions
associated with their transportation contracts and which are carried out according to standard rules and proce-
dures.

(7) Information requests that require extraordinary or excessive expenses such as feasibility studies may be charged

separately, provided the charges can be duly substantiated.

(8) Transmission system operators shall cooperate with other transmission system operators in coordinating the main-
tenance of their respective networks in order to minimise any disruption of transmission services to network users
and transmission system operators in other areas and in order to ensure equal benefits with respect to security of
supply including in relation to transit.

(9) Transmission system operators shall publish at least once a year, by a predetermined deadline, all planned mainte-
nance periods that might affect network users' rights from transportation contracts and corresponding operational
information with adequate advance notice. This shall include publishing on a prompt and non-discriminatory basis
any changes to planned maintenance periods and notification of unplanned maintenance, as soon as that informa-
tion becomes available to the transmission system operator. During maintenance periods, transmission system
operators shall publish regularly updated information on the details of and expected duration and effect of the
maintenance.

(10) Transmission system operators shall maintain and make available to the competent authority upon request a daily
log of the actual maintenance and flow disruptions that have occurred. Information shall also be made available on
request to those affected by any disruption.

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2. PRINCIPLES UNDERLYING CAPACITY ALLOCATION MECHANISMS, CONGESTION MANAGEMENT PROCEDURES

AND THEIR APPLICATION IN THE EVENT OF CONTRACTUAL CONGESTION

2.1. Principles underlying capacity allocation mechanisms and congestion management procedures

(1) Capacity allocation mechanisms and congestion management procedures shall facilitate the development of competi-
tion and liquid trading of capacity and shall be compatible with market mechanisms including spot markets and
trading hubs. They shall be flexible and capable of adapting to evolving market circumstances.

(2) These mechanisms and procedures shall take into account the integrity of the system concerned as well as security

of supply.

(3) These mechanisms and procedures shall neither hamper the entry of new market participants nor create undue
barriers to market entry. They shall not prevent market participants, including new market entrants and companies
with a small market share, from competing effectively.

(4) These mechanisms and procedures shall provide appropriate economic signals for efficient and maximum use of

technical capacity and facilitate investment in new infrastructure.

(5) Network users shall be advised about the type of circumstance that could affect the availability of contracted capa-
Information on interruption should reflect the level of information available to the transmission system

city.
operator.

(6) Should difficulties in meeting contractual delivery obligations arise due to system integrity reasons, transmission

system operators should notify network users and seek a non-discriminatory solution without delay.

Transmission system operators shall consult network users regarding procedures prior to their implementation and
agree them with the regulatory authority.

2.2. Congestion management procedures in the event of contractual congestion

(1) In the event that contracted capacity goes unused, transmission system operators shall make this capacity available
on the primary market on an interruptible basis via contracts of differing duration, as long as this capacity is not
offered by the relevant network user on the secondary market at a reasonable price.

(2) Revenues from released interruptible capacity shall be split according to rules laid down or approved by the relevant
regulatory authority. These rules shall be compatible with the requirement of an effective and efficient use of the
system.

(3) A reasonable price for released interruptible capacity may be determined by the relevant regulatory authorities

taking into account the specific circumstances prevailing.

(4) Where appropriate, transmission system operators shall make reasonable endeavours to offer at least parts of the

unused capacity to the market as firm capacity.

3. DEFINITION OF THE TECHNICAL INFORMATION NECESSARY FOR NETWORK USERS TO GAIN EFFECTIVE
ACCESS TO THE SYSTEM, THE DEFINITION OF ALL RELEVANT POINTS FOR TRANSPARENCY REQUIREMENTS
AND THE INFORMATION TO BE PUBLISHED AT ALL RELEVANT POINTS AND THE TIME SCHEDULE
ACCORDING TO WHICH THIS INFORMATION SHALL BE PUBLISHED

3.1. Definition of the technical information necessary for network users to gain effective access to the system

Transmission system operators shall publish at least the following information about their systems and services:

(a) a detailed and comprehensive description of the different services offered and their charges;

(b) the different types of transportation contracts available for these services and, as applicable, the network code and/or
the standard conditions outlining the rights and responsibilities of all network users including harmonised transpor-
tation contracts and other relevant documents;

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(c) the harmonised procedures applied when using the transmission system, including the definition of key terms;

(d) provisions on capacity allocation, congestion management and anti-hoarding and reutilisation procedures;

(e) the rules applicable for capacity trade on the secondary market vis-à-vis the transmission system operator;

(f) if applicable, the flexibility and tolerance levels included in transportation and other services without separate

charge, as well as any flexibility offered in addition to this and the corresponding charges;

(g) a detailed description of the gas system of the transmission system operator indicating all relevant points intercon-
necting its system with that of other transmission system operators and/or gas infrastructure such as liquefied
natural gas (LNG) and infrastructure necessary for providing ancillary services as defined by Article 2(14) of Direc-
tive 2003/55/EC;

(h) information on gas quality and pressure requirements;

(i) the rules applicable for connection to the system operated by the transmission system operator;

(j) any information, in a timely manner, on proposed and/or actual changes to the services or conditions, including the

items listed in points (a) to (i).

3.2. Definition of all relevant points for transparency requirements

Relevant points shall include at least:

(a) all entry points to a network operated by a transmission system operator;

(b) the most important exit points and exit zones covering at least 50 % of total exit capacity of the network of a given
transmission system operator, including all exit points or exit zones covering more than 2 % of total exit capacity of
the network;

(c) all points connecting different networks of transmission system operators;

(d) all points connecting the network of a transmission system operator with an LNG terminal;

(e) all essential points within the network of a given transmission system operator including points connecting to gas
hubs. All points are considered essential which, based on experience, are likely to experience physical congestion;

(f) all points connecting the network of a given transmission system operator to infrastructure necessary for providing

ancillary services as defined by Article 2(14) of Directive 2003/55/EC.

3.3. Information to be published at all relevant points and the time schedule according to which this informa-

tion should be published

(1) At all relevant points, transmission system operators shall publish the following information about the capacity
situation down to daily periods on the Internet on a regular/rolling basis and in a user-friendly standardised manner:

(a) the maximum technical capacity for flows in both directions,

(b) the total contracted and interruptible capacity,

(c) the available capacity.

(2) For all relevant points, transmission system operators shall publish available capacities for a period of at least 18
if new information

months ahead and shall update this information at least every month or more frequently,
becomes available.

(3) Transmission system operators shall publish daily updates of availability of short-term services (day-ahead and week-
ahead) based, inter alia, on nominations, prevailing contractual commitments and regular long-term forecasts of
available capacities on an annual basis for up to 10 years for all relevant points.

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(4) Transmission system operators shall publish historical maximum and minimum monthly capacity utilisation rates

and annual average flows at all relevant points for the past three years on a rolling basis.

(5) Transmission system operators shall keep a daily log of actual aggregated flows for at least three months.

(6) Transmission system operators shall keep effective records of all capacity contracts and all other relevant information
in relation to calculating and providing access to available capacities, to which relevant national authorities shall
have access to fulfil their duties.

(7) Transmission system operators shall provide user-friendly instruments for calculating tariffs for the services available

and for verifying on-line the capacity available.

(8) Where transmission system operators are unable to publish information in accordance with paragraphs 1, 3 and 7,
they shall consult with their relevant national authorities and set up an Action Plan for implementation as soon as
possible, but not later than 31 December 2006.

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STATEMENT OF THE COUNCIL'S REASONS

I. INTRODUCTION

1. On 12 December 2003, the Commission presented a proposal for a European Parliament and
Council Regulation on conditions for access to the gas transmission networks based on Article 95
of the EC Treaty.

2. The Economic and Social Committee delivered its Opinion on 2 June 2004.

3. The European Parliament adopted its Opinion at first reading on 20 April 2004, approving 41

amendments. The Commission will not present a modified proposal.

4. On 12 November 2004, the Council adopted its Common Position in accordance with Article 251

of the Treaty.

II. OBJECTIVE OF THE PROPOSAL

The proposal aims at completing the Internal Gas Market Directive (2003/55/EC) adopted last year by
setting fair and detailed rules for third party access to the gas transmission networks of Member States,
taking into account the specificities of national and regional markets. It can be seen as a parallel to
Regulation (EC) 1228/2003 on conditions for access to the network for cross-border exchanges in elec-
tricity, adopted as part of the internal market package. The proposal builds on a set of guidelines
agreed on a voluntary basis by the European Gas Regulatory Forum (Madrid Forum) which will receive
a binding character through the proposed Regulation.

III. ANALYSIS OF THE COMMON POSITION

1. GENERAL REMARKS

(a) Concerning the 41 amendments of the European Parliament, the Council has followed the Commis-

sion in

— accepting the following 22 amendments:

— fully (sometimes with redrafting): 7, 12, 15, 18 to 21, 23, 26, 32, 34 and 39 to 41;

— partly: 1, 4, 25;

— in principle: 3, 13, 29, 36 and 38, and

— rejecting the following 18 amendments: 2, 5, 8 to 11, 14, 16 and 17, 22, 24, 27, 30 and

31, 35, 37, 42 and 43, on grounds of substance and/or of form.

The Council also accepted implicitly amendment 33.

(b) Concerning the Commission proposal, the Council has introduced certain other modifications (of

substance and/or of form) which are reflected below.

All the changes which the Council has introduced to the Commission proposal have been accepted
by the Commission.

2. SPECIFIC REMARKS

(a) The main changes introduced by the Council in the draft Regulation concern the Guidelines
referred to in Article 9, the scope of which the Council has reduced; in particular the Commis-
sion's possibility to adopt new Guidelines through the committee procedure has been deleted
from the Commission proposal,
leaving for the Commission the competence to amend the
Guidelines laid down in the Annex of the draft Regulation; these Guidelines concern third party
access services, the principles of capacity allocation mechanisms and congestion management
procedures, and transparency requirements. The Council has also introduced an additional para-
graph to Article 9 where it is made clear that differences between national gas systems should
be reflected in the Guidelines and their application and future amendments.

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Moreover, the Council has introduced a new Article (Article 16) which confirms that the rele-
vant derogations and exemptions granted under Directive 2003/55/EC apply also to this Regu-
lation.

The Council has also delayed the date of application of the Regulation from 1 July 2005 to 1
July 2006 except for Article 9(2) for which the date of application is 1 January 2007 (Article
17).

(b) Other changes concern in particular

— Article 2(1(1)): the Council has slightly changed the definition of transmission to clarify to
which pipelines the definition applies; along with this change goes the introduction of recital
5;

— Article 2(1(4) and (18)): the Council has introduced two new definitions (of ‘unused capacity’

and of ‘firm services’);

— Article 2(1(23) and (24)): the Council has deleted the definitions of new market entrants and of
small player, considering that the Regulation should apply to all market actors in the same
way;

— Article 3(1) where the Council has introduced a new second subparagraph to ensure that the
use of auctions are a possible means to determine tariffs; along with this goes the introduc-
tion of recital 8;

— Article 5(4) and Article 7(6): the Council has reformulated these provisions for clarification

purposes;

— Article 6(4): the second sentence of this paragraph has been changed with a view to giving it
a more precise scope, and has been transferred to the Annex (point 3.2(b)), in particular
because of its level of detail;

— Article 11(2) to (5): the Council has deleted these paragraphs and subsequently also para-

graph 1 of Article 13;

— A number of cross-references to Directive 2003/55/EC have been introduced for clarification

purposes (Articles 1(2) (new); 3(1) and (2); 4(1); 10; 14; 15 (see amendment 36));

— The Council has also introduced a number of new recitals,

in addition to those already
mentioned, in particular to reflect changes in the Articles (recitals 4, 7, 10, 16 and 19 (corre-
sponding to amendment 3).

IV. CONCLUSIONS

The Council believes that to a large extent the common position meets the substance of most of the
wishes expressed by the European Parliament, and that it will contribute to the achievement and the
proper functioning of the internal gas market.