The revenue from connection, transmission and system services is to a large extent regulated by the Office of Energy Regulation. Three regulatory mechanisms were used in 2008: revenue regulation for transmission activities on the 380 kV and 220 kV grid, yardstick regulation for transmission activities on the 150 kV and

110 kV grid, and budget regulation for system services.

In 2008, the Office of Energy Regulation’s Method Decision for the fourth regulatory period entered into effect. The decision applies to the period from 2008 to 2010 inclusive. During this regulatory period, the transmission activities on the 110 kV and 150 kV grids are subject to revenue regulation.

Since 1 January 2008, TenneT TSO has been in charge of managing all grids with a voltage level of 110 kV and higher, with the exception of grids encumbered by Cross Border Leases. The grids concerned are those of Delta N.V., Enexis B.V., Alliander N.V. (excluding Nuon Randmeren) and B.V. Transportnet Zuid-Holland (TZH). TZH is already a subsidiary of TenneT. In accordance with interim agreements concluded with Alliander N.V. and Enexis B.V. (stipulating that the grids have been operated on behalf of the relevant parties at their risk and expense), TenneT has not recognised the full regulatory revenue from these grids in its own revenue. Revenue from the grids of Alliander N.V. has not been recognised. Revenue from the grids of Enexis B.V. was recognised in the last two months of 2008. Revenue from the grids of Delta N.V. has been recognised in full.

The revenue from connection and transmission services includes the revenue from services to regional grid administrators (resolution of transmission restrictions and reactive power management) and income from the provision of cross-border interconnection capacity (cross-border tariffs).

The revenue from maintenance of the energy balance between supply and demand is equal to the cost of purchasing the associated energy and capacity. Any surplus in revenue is settled through the future system service charges and is not included in the revenue.

The revenue from market facilitation services consists of fees for authenticating electricity produced by environmentally friendly methods, operating subsidy schemes, and auctioning cross-border interconnection capacity.

The revenue from other services consists mainly of rent for the provision of sites and fibre-optic cable capacity for telecommunications and antenna sites.

The interest received relates mainly to securities and deposits associated with energy exchange activities.

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