Subject: Meeting with Rakowski, PSE
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked]
Date: Wed, 22 Nov 2000 07:40:00 -0800 (PST)

Just a short note.  Below, Philip Davies reports on his conversation with the 
head of energy balancing at the Polish grid company.  While this is only one 
person's view, it should be an informed view.  And that view is that a 
balancing market, which should lead to trading, should be in place for 1 
January 2001.  Even discounting for optimism, 1 April does not seem 
unrealistic.  There are still hard issues to be resolved regarding long-term 
PPAs and stranded costs, but given this informed, and bullish, view on when 
we might have a "market" in Poland, I wanted to provide you with this status 
report.   We can now see light at the end of the tunnel.  mcs  
---------------------- Forwarded by Mark Schroeder/LON/ECT on 22/11/2000 
15:23 ---------------------------

Philip Davies
22/11/2000 14:51
To: Poland
cc:  

Subject: Meeting with Rakowski, PSE

Jarek D., Tomasz and myself met yesterday with Jan Rakowski, PSE Director of 
"System Market Management" (ie, introduction of the balancing and settlement 
rules) and member of the Gielda Supervisory Board.  Highlights:

PSE is ready to begin negotiations on a transmission agreement with Enron.  
We were told to take up the issue with Mr Janiczek - director of Transmission 
Dept.  Rakowski was a bit vague on the nature of the contract (eg, OH or OHT) 
and timing but let's see how far and how quickly we progress with Janiczek.  
(Following the entry into force of the interconnection ordinance on 27 
October, we do have a right to such an agreement under conditions set out in 
the ordinance).
Rakowski asked us to send an application to be included in PSE's balancing 
market rollout programme.  They will give us a specific code number and 
include us in test programmes and balancing market implementation 
developments.
Rakowski characterised the Polish market as reaching "the point of no return" 
as of 1 January.  Certain key changes are introduced as of this date, notably:
 (i) distribution companies will become by definition "active" or "passive" 
participants in the balancing market.  Active will be those that have signed 
up to the new balancing market rules.  Passive  will be those that have not, 
who by default will be charged for their entire consumption at imbalance 
settlement prices (PSE will not recognise contracts notified by distribution 
companies that have  not signed up to the new rules; a few distcos anyway buy 
100% from PSE eg, Slupsk, Czestochowa).
 (ii) he is saying that hourly balancing & settlement will be introduced (in 
terms of the necessary IT being put in place), although at the same time 
hourly data will be for information only at the start.   Settlement will 
remain monthly for some transitional period but not past 1 July.
While he claims he recognises the limitations placed on traders (and the 
market's development) by the ("temporary") "balanced position" requirement on 
OHs, he offered no real justification besides PSE's desire to "control".
General tone was positive, he expressed happiness to meet with supporters of 
competition (in contrast to distco resistance).  But his underlying tone 
implied -as we knew- that PSE intends the transition to move at a pace deemed 
reasonable by PSE, rather than being driven by participants insisting on 
their legal rights or by PSE delivering on its obligations in a timely 
manner.  Thus the need to stay on the case of him and his team as of now.  

Justyna, Tomasz - let's see if we can find more precise details of the 
changes to be introduced on 1 January, try 
http://www.pse.pl/pl/osp/pre/index.html

 Philip