A new regulation requires that gas storage (UGS) owners offer to the market the entire new storage capacity that will be operational after 2010. However, the owners have the right to reserve as much as 90% of this capacity for long-term agreements that may last up to 15 years, according to the Czech Energy Regulator (ERU). The long-term contracts are designed to protect the investor and promote new storage projects in the Czech Republic, according to ERU's gas department official. The long-term capacity will be allocated though auctions and, under the regulation, a company affiliated with the UGS holder will have restricted access to the capacity if it already holds more than 80% of capacity in the total storage capacity owned by the UGS holder. It will only be able to bid for the capacity if the auction price is not higher than the market price of similar storage capacity for annual agreements on gas storage in the Czech Republic. The remaining capacity will be made available to the market through auctions on a yearly and monthly basis, while allocation of daily and interruptible capacity will preserve the old system, when companies have to request and reserve capacity 25 to 10 days in advance and it is then allocated on a pro-rata basis.
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