Actions for establishing a Single Auction Office for CSE

8th IG Meeting

 

Milan, 3rd June 2008

AGENDA

Legal study

Missions, Perimeter & indicative Implementation

Legal Study (1)

The Study was performed in two major steps:

Benchmarking Study of Company Law and Taxation Perspective for AT, FR, GR,IT and CH, focusing on Limited Liability Companies

Selection of most suitable Company Form for each of above Countries, plus Liechtenstein (on swissgrid initiative)

Main Targets of the Study:

Comparison of Legal Forms and Taxation in relevant Countries

Ascertain of significant differences of Legal Forms and Taxation

Identification of ‘no goes’ for any Legal Forms

Recommendation of best suited Legal Form for each Country

The best suited Legal Form for each Country:

Austria: GmbH

France: SAS

Italy: S.p.A.

Greece: S.A.

Switzerland: Corporation Ltd. (Aktiengesellschaft)

Liechtenstein: Corporation Ltd. (Aktiengesellschaft)

Legal Study (2)

Legal Study (3)

What was investigated by the Legal Study?

Distinction between one-tier system and two-tier system

Corporate Governance

Share Capital / Shares

Allocation of Profits

Minority shareholder’s Rights

Tax Study Corporate Taxes VAT on activities of the Company Wage Taxes Withholding Taxes

Legal Study (4)

Relevant Results of the Legal Study:

For each participating Country the best suited Company Form has been evaluated and recommended

There are differences in the organizational structure of preferred Company Forms, however they are of minor importance from operational business point of view of the SAO

Taxation is very similar in AT, FR, GR and IT, where CH and LI have advantages in this issue. Caused by the fact, that the SAO will operate as a Non Profit Company (NPC), this issue should be also of minor priority.

The detected differences between the recommended Company Forms mainly concern the organizational structure (MD, SB or BoD, GA) and their flexibility (=> Contractual Issues, By-Law’s,…)

Independent of the country chosen, each legal form recommended per country is suitable for the needs of the SAO!

AGENDA

Legal study

Missions, Perimeter & indicative Implementation

Missions, Perimeter & indicative Implementation (1)

Mission:

SAO of CSE Region is acting as a Service Provider for TSOs

SAO will act on regulated cross border capacity allocation on the Italian borders

Perimeter of SAO:

Long and mid term explicit auctions (yearly, monthly)

Daily explicit auctions

Intraday Capacity Allocation (to de decided further)

Secondary Market activities

Clearing and Settlement

Auction Income Distribution

Publication of Data for Market

Reporting to TSOs

Shareholders could agree on committing to SAO further activities.

Main activities to be further performed by TSOs :

As a general principle, taking into account the similar experience on the other Regional Initiatives, all sensitive issues shall stay within the activities of TSOs (NTC, ATC, products, market design, rules, Income Sharing…)

Customer Relationship can further be done by relevant single TSOs on strategic and sensitive activities

Claims handling and ‘new’ services have to be elaborated in detail in the relevant documents

Decentralized Nomination is proposed (at least for the beginning)

Decentralized Matching is proposed and recommended

Relation with Regulators

Missions, Perimeter & indicative Implementation (2)

Governance – possible structure:

Joint APG, ELES, HTSO and swissgrid insist on equal shares and

voting rights for all participating TSOs. For Terna and RTE also other ways of distribution of shares are imaginable.

Independency

Transparency

Single Auction Office „SAO-CSE “

Managing Director(s)

General Assembly

Supervisory Board or Board of Directors

Articles of Association and/or By-laws for the Supervisory Board or

Board of Directors

Articles of Association and/or By-laws and/or

minutes of the BoD for the Management/MD

A possible Governance Structure

Missions, Perimeter & indicative Implementation (3)

Contractual Issues:

Operational Contractual Activities:

Service Level Agreement

Inter TSO Agreement

Auction Rules

Company Agreements:

Articles of Association

Shareholders Agreement

By-Law’s

Missions, Perimeter & indicative Implementation (4)

Indicative Implementation

An indicative Project Plan, in their different Project Phases (Orientation, Implementation, Operation) is as follows:

2008 2009 2010

Q1Q2 Q3Q4 Q1Q2 Q3Q4 Q1Q2 Q3Q4

SAO – activities            

Orientation X X X

Implementation X X

Operation X X X

NoteThe statements above show the current status of internal discussions and are for information only. So far no items have been formally approved by the involved TSOs and/or their shareholders.

Missions, Perimeter & indicative Implementation (5)