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NERA Economic Consulting Announces Results from the Fifth CESUR Energy Auction in Spain

18 June 2008

Madrid/18 June 2008 -- NERA Economic Consulting, a leading global provider of economic advice and analysis in business, legal, and regulatory matters, completed the fifth in a series of electricity auctions (CESUR auctions) for the supply of electricity to distributors in Spain and Portugal. The auction, held on 17 June 2008, was designed to procure electricity on behalf of the Spanish and Portuguese distribution companies for delivery during the second half of 2008. NERA was commissioned by the Comisión Nacional de Energía (CNE), the Spanish energy regulator, to design and manage the implementation of the auction.

The CESUR auctions have a descending-clock price format, with multiple rounds. The auction concludes at the round where the total bid volume equals the target volume that must be acquired for energy supply. In the June auction, the distribution companies purchased a total of 2,700 MW of base load, divided between two products (1,800 MW for a three-month base load product and 900 MW for a six-month base load product). The auction began with the same starting price (85€/MWh) for both products, with 25 domestic and international sellers participating in the bidding. The auction closed after 12 bidding rounds, at a price of 65.15 €/MWh for the three-month product and 65.79 €/MWh for the six-month product, which were awarded to a total of 21 winning suppliers (including retailers, generators, and traders). The CNE validated its competitive results on the same night the auction took place.

The auction volume assigned to each winning bidder is to be converted into bilateral energy contracts with each of the main distribution companies. The contract quantities that electricity distributors enter into as a result of the auction are determined according to the pre-established percentages as per the current Spanish legislation (Endesa 29%, Iberdrola 40%, EDP 12%, Fenosa 6%, Hidrocantábrico 12%, Viesgo 1%).

The resulting auction price and contract quantities are recognized as part of the authorized energy costs of the distribution companies, leading to clear benefits as they isolate a good part of their procurement from the volatility of the spot markets.

To obtain further information about the CESUR Auctions, please visit: www.subastacesur.eu.

About NERA
NERA Economic Consulting is an international firm of economists who understand how markets work. We provide economic analysis and advice to corporations, governments, law firms, regulatory agencies, trade associations, and international agencies. Our global team of more than 600 professionals operates in over 20 offices across North America, Europe, and Asia Pacific.

NERA provides practical economic advice related to highly complex business and legal issues arising from competition, regulation, public policy, strategy, finance, and litigation. Our more than 45 years of experience creating strategies, studies, reports, expert testimony, and policy recommendations reflects our specialization in industrial and financial economics. Because of our commitment to deliver unbiased findings, we are widely recognized for our independence. Our clients come to us expecting integrity and the unvarnished truth.

NERA Economic Consulting (www.nera.com ), founded in 1961 as National Economic Research Associates, is a unit of the Oliver Wyman Group, an MMC company.