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Brussels, 16.7.2009

COM(2009) 363 final

2009/0108 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

concerning measures to safeguard security of gas supply

and repealing Directive 2004/67/EC

{SEC(2009) 977}

{SEC(2009) 978}

{SEC(2009) 979}

{SEC(2009) 980}

EXPLANATORY MEMORANDUM

1. Context of the proposal

The Commission proposes a Regulation which will repeal the existing Directive 2004/67/EC concerning measures to safeguard security of natural gas supply [1]. This Directive is no longer sufficient in a context of growing import dependence and increased supply and transit risks in third countries as well as increasing gas flows and the development of the internal gas market within the Community.

In response to the Russian-Ukrainian gas crisis in January 2009 causing an unprecedented disruption of gas supplies to the Community via Ukraine, the European Council and the European Parliament have called for an accelerated revision of the existing Directive. Another major gas supply disruption cannot be excluded and may even occur in the near future. The Community therefore has to prepare for the event of future gas supply disruptions.

The January crisis demonstrated to need to define more clearly the roles of the gas industry, Member States and the Community institutions to deal with a supply disruption in the short term and to provide for the necessary infrastructure in the longer term. A lesson from the crisis is that for measures to be consistent and effective, they have to be prepared well in advance and to be coordinated at Community level.

This proposal for a Regulation is consistent with the objective of the Union, especially those concerning the establishment of a functioning internal market for gas and the security of energy supply.

2. Consultations with interested parties and impact assessment

Public consultations

On 13 November 2008, the Commission published a Communication on the implementation of the existing Directive - COM(2008) 769. The publication was followed by the public consultation of the interested parties (Member States, industry, regulators, and citizens) which took place between November 2008 and March 2009. Detailed consultations on a revised legislation for security of gas supply have also taken place in the Gas Coordination Group, consisting of the representatives of Member States, the gas industry and customers through their European associations (Eurogas, OGP, GIE, IFIEC, BEUC, Eurelectric) at its meeting on 23 February, 2 April, and 13 May. Member States gave their views at the Energy Council on 12 January and 19 February 2009 and several Member States have subsequently submitted written observations to the Commission.

Impact assessment

The impact assessment has considered five policy options: 1) No new Community action; 2) Better enforcement of the 2004/67/EC Directive; 3) Voluntary approach by industry; 4) A revised directive; 5) A new regulation.

With regard to option 1 and 2 the Commission carried out an evaluation of the implementation of the existing Directive. It concluded that the existing Directive is insufficient given the growing import dependence and increased supply and transit risks in third countries as well as, increasing gas flows and the development of the internal gas market within the Community. With regard to option 3, a major disadvantage of a voluntary approach is that participation of all players in a consistent manner cannot be guaranteed. Moreover, the extra capacity to ensure security of supply is not necessarily provided for by market forces. With regard to options 4 and 5 (choice of legal instrument) the Commission considers that a Regulation is a more appropriate instrument than a Directive for the following main reasons: A Regulation is directly applicable to the competent authorities in the Member States, to natural gas undertakings and to customers; it does not require lengthy transposition; it ensures clarity and coherence of standards and obligations across the Community and it defines directly the involvement of Community institutions.

3. Legal elements of the proposal

Legal basis

The legal basis for the proposal is Article 95 of the Treaty establishing the European Community. The main objective of the proposal is to increase the security of gas supply by creating the incentives to invest in necessary interconnections to meet the N-1 indicator, as well as the reverse flows. Those interconnections are at the same time necessary for the proper functioning of the internal gas market.

The Regulation places the main emphasis on the role of the internal gas market to ensure the security of gas supply. The provisions aim at enabling natural gas undertakings to supply their customers across the Community for as long as possible and without restrictions at national level. The Regulation allows the recourse to non-market based measures decided by the competent authority only as the last resort in emergency situations when all market based measures are exhausted and the natural gas undertakings are no longer able to deal with a supply disruption. The Commission is also given a stronger role to ensure that the internal market works for as long as possible and that measures decided at national level are compatible with this principle.

Subsidiarity principle

This proposal aims at strengthening Community security of supply. With the realisation of the internal energy market and as illustrated by the gas supply disruption of January 2009, the security of gas supply is a concern whose Community dimension is becoming more and more important, therefore justifying the involvement of Community institutions and the Commission in particular. In a Community emergency situation, the Commission is best placed to coordinate the actions of the Competent Authorities of the Member States and to facilitate the dialogue with third countries. To prevent and prepare for gas supply disruption, the best guarantee for security of supply is a large, well interconnected and competitive internal market, offering diverse supply sources and routes and dispersing the impact of a supply disruption on individual Member States or supply undertakings.

Proportionality principle

The proposal complies with the proportionality principle; it does not go beyond what is necessary in order to achieve the objectives. Member States will continue to be responsible for their security of supply and will enjoy considerable flexibility in the choice of arrangements and instruments to ensure security of supply, taking into account their national characteristics in the field of gas.

4. Budgetary implications

The proposal will have a limited impact on the Community budget, in particular to cover the costs of meetings of the Gas Coordination Group and, in the case of deployment, the costs of the monitoring task force which can be deployed to monitor and report the gas flows within and outside the Community. Missions outside the Community in the moments of crisis may draw on funds from the Instrument for Stability.

2009/xxxx (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

concerning measures to safeguard security of gas supply

and repealing Directive 2004/67/EC

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 95 thereof,

Having regard to the proposal from the Commission [2],

Having regard to the opinion of the European Economic and Social Committee [3],

Having regard to the opinion of the Committee of the Regions [4],

Acting in accordance with the procedure laid down in Article 251 of the Treaty [5],

Whereas:

(1) Natural gas (hereinafter: gas) is an essential component in the energy supply of the Community, constituting one quarter of primary energy supply and contributing mainly to power generation, heating, feedstock for industry and fuel for transportation.

(2) Gas consumption in Europe has increased rapidly during the last ten years. With decreasing domestic production, gas imports have increased even more rapidly, thus creating a higher import dependence and the need to address security of supply aspects.

(3) Council Directive 2004/67/EC established for the first time a legal framework at Community level to safeguard security of natural gas supply and to contribute to the proper functioning of the internal gas market also in the case of supply disruptions. It established the Gas Coordination Group which has shown to be useful to exchange information and define common actions between Member States, the Commission, the gas industry and consumers. The Network of Energy Security Correspondents (NESCO) endorsed by the European Council in December 2006 has improved the capacity to collect information and has provided early warning of potential threats to the security of energy supply. The new internal energy market legislation adopted by the Council in June 2009 constitutes an important step to complete the internal energy market and has an explicit objective to enhance the Community's security of energy supply.

(4) However, under the current measures regarding the security of gas supply that have been taken at Community level, Member States still enjoy a large margin of discretion as to the choice of measures. Where the security of supply of a Member State is threatened, there is a clear risk that measures developed unilaterally by that Member State may jeopardise the proper functioning of the internal gas market. Recent experience has demonstrated the reality of that risk. To allow the internal gas market to function even in the face of a shortage of supply, it is therefore necessary to provide for a more coordinated response to supply crises, both concerning preventive action and the reaction to concrete disruptions of supply.

(5) Gas routes and sources for the Community should support the security of supply of the Community as a whole and its Member States individually. Security of supply will depend in the future on the evolution of the fuel mix, the development of production in the Community and in third countries supplying the Community, investments in storage facilities and in routes within and outside the Community including Liquefied Natural Gas facilities.

(6) A major disruption of gas supply to the Community can affect all Member States and Contracting Parties of the Energy Community Treaty and lead to severe economic damages across the Community economy. Likewise, the disruption of gas supply can have severe social impacts in particular on vulnerable groups of customers.

(7) The December 2008 report on the implementation of the European Security Strategy highlights the growing reliance on imported energy as a significant additional risk for the Community's security of energy supply and stresses energy security as one of the new challenges for security policy. The internal gas market is a central element to increase the security of energy supply in the Community and to reduce the exposure of individual Member States to the harmful effects of supply disruptions.

(8) The failure of the largest single gas infrastructure or gas supply source, the so-called N-1 principle, is a realistic scenario. Using the failure of such infrastructure or supply source as a benchmark of what Member States should be able to compensate is a valid starting point for ensuring their security of gas supply.

(9) Sufficient gas infrastructure within a Member State and across the Community is essential for tackling supply interruptions. Common minimum criteria on security of gas supply should ensure a level playing field for security of gas supply and should create significant incentives to build the necessary infrastructure and to improve the level of preparedness in case of crisis. Demand side measures such as fuel switching may have a valuable role to play in ensuring energy security where they can be applied quickly and reduce demand appreciably to react to a supply disruption.

(10) Investments in new gas infrastructure should be strongly promoted. They should enhance the security of gas supply while ensuring the proper functioning of the internal market in natural gas. Where an infrastructure investment is of cross-border nature the Agency for the Cooperation of Energy Regulators established by Regulation (EC) No .../… of the European Parliament and of the Council ("ACER") and the European Network of Transmission System Operators for Gas ("ENTSO-G") should be closely involved in order to take better account of the cross-border implications.

(11) Different sources of Community funding are available to support Member States to finance the necessary investment in indigenous production and infrastructure, notably loans and guarantees from the European Investment Bank or funding from regional, structural or cohesion funds. The European Investment Bank as well as the Community external instruments such as ENPI, IPA and DCI can also finance actions in third countries in order to improve security of energy supply.

(12) This Regulation should enable natural gas undertakings and customers to rely on market mechanisms for as long as possible when coping with disruptions. It should also provide for emergency mechanisms to be used when markets are no longer able to deal adequately with a gas supply disruption. Even in an Emergency, market based instruments should be given priority to mitigate the effects of the supply disruption.

(13) Following the adoption of the third internal energy market package [6], new provisions will apply to the gas sector, creating clear roles and responsibilities for Member States, regulators, transmission system operators and ACER, as well as improving the transparency of the market for the benefit of its well-functioning and the security of supply.

(14) The completion of the internal gas market and effective competition within that market offer the Community the highest level of security of supply for all Member States, provided that the market is allowed to work fully in case of disruption of supply affecting a part of the Community, whatever the cause of the disruption. To this end, a comprehensive and effective common approach to security of supply is required, particularly through transparent and non-discriminatory policies compatible with the requirements of the market, avoiding market distortions and undermining of market responses to disruptions.

(15) The precise definition of the roles and responsibilities of all natural gas undertakings and Competent Authorities is therefore crucial in maintaining the well-functioning of the internal market, particularly in supply disruptions and crisis situations.

(16) Sufficiently harmonised security of supply standards covering at least the situation that occurred in January 2009, taking into account the difference between Member States, should be defined, without imposing unreasonable and disproportionate burdens on natural gas undertakings including new entrants and small undertakings.

(17) It is essential for the well-functioning of the market that the necessary investments in indigenous production and infrastructures, such as interconnections, equipment allowing physical bidirectional flows on pipelines, storage, and LNG re-gasification facilities, are made by the natural gas undertakings in time, bearing in mind possible supply disruptions such as the one that occurred in January 2009.

(18) It is important that gas supply is maintained, particularly as regards household customers, as well as other protected customers such as schools and hospitals, in cases in which the market cannot continue to supply them. It is essential that the measures to be taken during a crisis are defined in advance of any crisis.

(19) A large choice of instruments is available to comply with security of supply obligations. These instruments should be used in a national, regional and Community context, as appropriate, to ensure that they deliver a consistent and cost-effective result.

(20) The security of supply aspects of long-term planning of investments in sufficient cross-border capacities and other infrastructures, ensuring the long-term ability of the system to guarantee security of supply and meet reasonable demands, are addressed by Directive .../…/EC of the European Parliament and of the Council [concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC] [7]. Meeting the security of supply standards may require a transitional period to allow the necessary investments to be made. The 10-year network development plan drawn up by the ENTSO-G and supervised by ACER is a fundamental tool to identify the required investments needed at Community level.

(21) The ENTSO-G and ACER, as members of the Gas Coordination Group, should be fully involved in the process of cooperation and consultations at Community level.

(22) In order to ensure the highest level of preparedness in case of supply disruption, Emergency Plans should be established by all natural gas undertakings together with the Competent Authorities. Such plans should be mutually consistent. Their content should follow best practices among existing plans and should define clear roles and responsibilities for all concerned natural gas undertakings and Competent Authorities. Joint emergency plans at regional level, should be established where possible and necessary.

(23) To strengthen the solidarity between Member States in the case of a Community Emergency and in particular to support Member States which are exposed to less favourable geographical or geological conditions, Member States should devise specific measures to exercise solidarity, including measures such as commercial agreements between natural gas undertakings, compensation mechanisms, increased gas exports or increased releases from storages. Solidarity measures may be particularly appropriate between Member States for which the Commission recommends the establishment of joint preventive actions plans or emergency plans at regional level.

(24) European solidarity should also, where needed, take the form of civil protection assistance provided by Community and its Member States. Such assistance should be facilitated and coordinated by the Community Civil Protection Mechanism established by Council Decision 2007/779/EC, Euratom [8].

(25) The sovereign rights of Member States over their own natural resources are not affected by this Regulation.

(26) Council Directive 2008/114/EC of 8 December 2008 on the identification and designation of European critical infrastructures and the assessment of the need to improve their protection [9] lays down a process with a view to enhancing the security of designated European Critical Infrastructures, including certain gas infrastructures, in the Community. Directive 2008/114/EC together with the present Regulation contribute to creating a comprehensive approach to the energy security of the Community.

(27) Emergency Plans should be updated regularly and published. They should be subject to peer review and tested.

(28) The Gas Coordination Group, established by Directive 2004/67/EC of 26 April 2004 concerning the measures to safeguard security of natural gas supply [10], should act as adviser to the Commission to facilitate the coordination of security of supply measures in the case of a Community emergency. It should also monitor the adequacy and appropriateness of measures to be taken according to this Regulation.

(29) This Regulation aims at empowering natural gas undertakings and Competent Authorities of the Member States to ensure that the internal gas market works effectively for as long as possible in the case of a supply disruption, prior to measures being taken by Competent Authorities to address the situation in which the market can no longer deliver the required gas supplies. Such exceptional measures should be fully compliant with Community rules and should be notified to the Commission.

(30) Since gas supplies from third countries are central to the security of gas supply of the Community, the Commission should coordinate the actions with regard to third countries, working with producer and transit countries on arrangements to handle crisis situations and to ensure a stable gas flow to the Community. The Commission should be entitled to deploy a task force to monitor gas flows in crisis situations within and, in consultation with the third countries involved, outside the Community and, where a crisis arises due to difficulties in a third country, to assume a mediation and facilitation role.

(31) In February 2009, the Energy Council concluded that transparency and reliability should be increased through meaningful exchange of information between the Commission and Member States level on energy relations, including long term supply arrangements, with third countries while preserving commercially-sensitive information.

(32) Since the objectives of the action to ensure the security of gas supply in the Community cannot be sufficiently achieved by the Member States only and can therefore, by reason of the scale or effects of the action, better be achieved at Community 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 principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.

(33) Directive 2004/67/EC should be repealed.

HAVE ADOPTED THIS REGULATION:

Article 1

Subject-matter

This Regulation establishes measures aimed at safeguarding the security of gas supply so as to ensure the proper and continuous functioning of the internal market for gas by providing for a clear definition and attribution of responsibilities and for a coordination of the response at the level of the Member States and the Community regarding both preventive action and the reaction to concrete disruptions of supply.

Article 2

Definitions

For the purpose of this Regulation the definitions of Directive 2009/xxx/EC [11] (the "Gas Directive") and the Regulation 2009/xxx/EC [12] (the "Agency Regulation") shall apply.

In addition the following definitions shall apply:

(1) "protected customers" means all household customers already connected to a gas distribution network, and, if the Member State concerned so decides, can also include small and medium-sized enterprises, schools and hospitals provided that they are already connected to a gas distribution network;

(2) “Competent Authority” means the national regulatory authority or national governmental authority designated by the Member States to be responsible for security of gas supply. This is without prejudice to the choice of Member States to allocate certain tasks in this Regulation to other authorities than the Competent Authority. These tasks shall be performed under the supervision of the Competent Authority and shall be specified in the plans referred to in Article 4.

Article 3

Responsibility for security of gas supply

1. Security of gas supply is a task of the natural gas undertakings, Competent Authorities of the Member States, the industrial gas customers, and the Commission within their respective areas of responsibility. It requires a high degree of cooperation between them.

2. Each Member State shall designate a Competent Authority responsible for the implementation of the security of gas supply measures provided in this Regulation. The measures shall include the biennial risk assessment, the establishment of the Preventive Action Plans, the establishment of the Emergency Plan, and the continuous monitoring of security of gas supply at national level. Competent Authorities shall cooperate with each other to prevent a supply disruption and to limit damages in case it occurs.

3. Each Member State shall notify to the Commission the designated Competent Authority by [30 June 2010; 3 months from entry into force] at the latest.

4. The Commission shall coordinate the Competent Authorities at the Community level through the Gas Coordination Group in particular in the case of a Community Emergency.

5. The measures to ensure the security of supply shall be clearly defined, transparent, proportionate, non-discriminatory, verifiable, and shall not unduly distort competition and the effective functioning of the internal market.

Article 4

Establishment of Preventive Action Plan and Emergency Plan

1. By [31 March 2011; 12 months from entry into force] at the latest, the Competent Authority, after consultation of the natural gas undertakings, of the relevant organisations representing the interests of household and industrial customers and of the regulatory authority, where it is not the Competent Authority, shall establish:

(a) A Preventive Action Plan containing the measures needed to mitigate the risks identified; and

(b) An Emergency Plan containing the measures to be taken to mitigate the impact of a gas supply disruption.

2. Before adopting those Plans the Competent Authorities shall exchange information and consult each other and the Commission to ensure that their Plans and measures are mutually consistent at the appropriate regional level. These consultations shall cover, as a minimum, interconnections, cross-border supplies, storage across borders and the physical capacity to transport gas in both directions.

3. During the process mentioned in paragraph 2 the Commission may recommend at which regional level the exchange of information and consultations shall take place. The Commission, after consultation of the European Network of Transmission System Operators for Gas ("ENTSO-G") and the Agency for the Cooperation of Energy Regulators ("ACER"), may also recommend the establishment of a joint Plan at regional level.

4. Member States may also decide to establish joint Plans at regional level, instead of or in addition to separate national Plans.

5. The Competent Authority shall publish its Plans, including amended versions according to paragraph 6, and notify them to the Commission without delay.

6. Within six months after the notification of the Plans by the Competent Authorities, the Commission shall assess the Plans of all Member States. The Commission shall consult ENTSO-G, ACER, the Gas Coordination Group and other concerned stakeholders on those plans. Where the Commission considers that a Plan is not effective to mitigate the risks as identified in the risk assessment or inconsistent with the risk scenarios or the Plans of other Member States, or that it does not comply with the provisions of this Regulation or other provisions of Community law, it shall require the revision of the Plan.

Within 2 months from notification of the Commission's request, the Competent Authority concerned shall amend its Plan and notify the amended Plan to the Commission or shall set out to the Commission why it does not agree with the request. In that case, the Commission may amend or withdraw its request.

If within 2 months the Commission decides not to amend or withdraw its request, the Competent Authority shall comply with the Commission's request within 3 months after notification of the Commission's decision.

Article 5

Content of the Preventive Action Plan

1. The Preventive Action Plan shall contain:

(a) the measures to fulfil the infrastructure and supply standards, as laid down in Articles 6 and 7; these measures shall include at least the planning to meet the N-1 standard, volumes and capacities needed to supply the protected customers in the defined high demand periods, the demand side measures and obligations imposed on natural gas undertakings and other relevant bodies;

(b) the risk assessment as laid down in Article 8;

(d) information on the relevant Public Service Obligations.

2. The Preventive Action Plan, in particular the actions to meet the infrastructure standard as laid down in Article 6, shall be based on and consistent with the ten year network development plan to be elaborated by the ENTSO-G [13].

3. The Preventive Action Plan shall take into account economic effectiveness, effects on the functioning of the internal energy market and environmental impact.

4. The Preventive Action Plan shall be updated every two years.

Article 6

Infrastructure standard

1. By [31 March 2014; 3 years after entry into force] at the latest, the Competent Authority shall ensure that in the event of a disruption of the largest gas supply infrastructure, the remaining infrastructure (N-1) has the capacity to deliver the necessary volume of gas to satisfy total gas demand of the calculated area during a period of sixty days of exceptionally high gas demand during the coldest period statistically occurring every twenty years.

2. Following the recommendation of the Commission referred to in Article 4(3) or in situation referred to in Article 4(4), the obligation set out in paragraph 1 may be fulfilled at the regional level. The N-1 standard shall also be considered to be fulfilled where the Competent Authority demonstrates in the Preventive Action Plan referred to in Article 5 that a supply disruption may be sufficiently and timely compensated for by demand side measures.

3. The methodology for calculating the N-1 standard as provided in Annex I shall be used. It should take into consideration the network configuration and actual gas flows as well as the presence of production and storage capacities. The calculated area as referred to in Annex I shall be extended to the appropriate regional level, where necessary.

4. Each Competent Authority shall report to the Commission without delay any non-compliance with the N-1 standard.

5. The transmission system operators shall enable permanent physical capacity to transport gas in both directions on all interconnections within two years from the entry into force of this Regulation, except in cases where at the request of a Competent Authority, the Commission decides that the addition of a bi-directional flow capacity would not enhance the security of supply of any Member State. Such decision may be reviewed if circumstances change. The level of the bi-directional flow capacity shall be reached in a cost efficient way and at least take into account the capacity required to meet the supply standard set in Article 7. Within that two year period, the gas transmission system operator shall adapt the functioning of the transmission system as a whole so as to enable bi-directional gas flows.

6. Member States shall ensure that any new transmission infrastructure provides for the security of supply by means of sufficient number of entry and exit points, and contributes to the development of a well connected infrastructure.

7. National Regulatory Authorities shall take into account the costs of fulfilling the N-1 standard and the costs of enabling the permanent physical capacity to transport gas in both directions in their approval of tariffs in line with Article 41(8) of Directive […/…EC]. In the case of costs incurred in more than one Member State, the national regulatory authorities of all Member States concerned shall jointly decide on cost allocation. Article 8(1) of Regulation (EC) No …/… shall apply.

Article 7

Supply standard

1. The Competent Authority shall take the measures to ensure the gas supply to the protected customers of the Member State in the case of:

a) extremely cold temperatures during a seven days peak period statistically occurring once every twenty years; and

b) any period of sixty days of exceptionally high gas demand during the coldest weather periods statistically occurring every twenty years.

2. The Competent Authority shall take the measures to ensure the gas supply to the protected customers for the period of sixty days also in the event of an Emergency as defined in Article 9(2). The Competent Authority shall endeavour to maintain the supply for the protected customers as long as necessary.

3. The obligations imposed on natural gas undertakings for the fulfilment of the supply standard as laid down in paragraph 1 and 2 , shall be non-discriminatory and shall not impose an undue burden on market entrants and small undertakings.

4. The Competent Authority shall allow the natural gas undertakings to meet these criteria on a regional or Community level and shall not require that these standards are met based on infrastructure located only within its territory.

5. The Competent Authority shall ensure that conditions for supplies to protected customers are established without prejudice to the proper functioning of the internal gas market and at a price respecting the market value of the commodity.

Article 8

Risk assessment

1. By [30 September 2010; 6 months after entry into force] each Competent Authority shall fully assess the risks affecting the security of gas supply in its Member State by:

a) using the standards specified in Articles 6 and 7;

b) taking into account all relevant national and regional circumstances;

c) running various scenarios of exceptionally high demand and supply disruption, such as failure of main transmission infrastructures, storages, LNG terminals, and disruption of supplies from third country suppliers;

d) identifying the interaction and correlation of risks with other Member States.

2. The natural gas undertakings, the relevant organisations representing the interests of household and industrial customers and the regulatory authority, where it is not the Competent Authority, shall cooperate and provide all necessary information for the risk assessment.

3. The risk assessment shall be repeated every two years before 30 September of that year.

Article 9

Emergency Plan and Crisis Levels

1. The Emergency Plan shall:

(1) Build upon the crisis levels according to paragraph 2;

(2) Define the role and responsibilities of the natural gas undertakings and of the industrial customers, and their interaction with the Competent Authority and where appropriate with the regulatory authority;

(3) Define the role and responsibilities of the Competent Authority;

(4) Establish detailed procedures to be followed for each crisis level, including the corresponding schemes on information flows;

(5) Designate a crisis manager or team and define its role;

(6) Identify the contribution of the market based measures listed in Annex II for coping with the situation in the Alert level and mitigating the situation in the Emergency level;

(7) Identify the contribution of the non-market based measures planned or to be implemented for the Emergency level listed in Annex III and assess the degree to which the use of non-market based measures is necessary to cope with the crisis, assess their effects and define the procedures to implement them;

(8) Describe the mechanisms used to cooperate with other Member States for each crisis level;

(9) Detail the reporting obligations imposed on the natural gas undertakings in the Alert and Emergency level;

(10) A list of predefined actions to make gas available in the case of an Emergency, including the compensation mechanisms and commercial agreements between the parties involved in such actions. Such actions may involve cross-border agreements between Member States and/or natural gas undertakings.

2. The three main crisis levels shall be as follows:

(1) Early warning level (Early Warning): when there is concrete, serious and reliable information, possibly triggered by an Early Warning Mechanism, that an event may occur which will deteriorate the supply conditions;

(2) Alert level (Alert): when a supply disruption or exceptionally high demand occurs but the market is still able to resolve the situation without the intervention of the Competent Authority;

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