Electricity Governance Amendment Regulations 2005

  • revoked
  • Electricity Governance Amendment Regulations 2005: repealed, on 1 November 2010, pursuant to section 166 of the Electricity Industry Act 2010 (2010 No 116).

Reprint
as at 1 November 2010

Electricity Governance Amendment Regulations 2005

(SR 2005/337)

  • Electricity Governance Amendment Regulations 2005: revoked, on 1 November 2010, pursuant to section 166 of the Electricity Industry Act 2010 (2010 No 116).


Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this eprint.

A general outline of these changes is set out in the notes at the end of this eprint, together with other explanatory material about this eprint.

These regulations are administered by the Ministry of Economic Development.


Pursuant to subpart 2 of Part 14 of the Electricity Act 1992, Her Excellency the Governor-General, acting on the advice and with the consent of the Executive Council and on the recommendation of the Minister of Energy made in accordance with section 172E of that Act, makes the following regulations.

1 Title
2 Commencement
  • These regulations come into force on the 28th day after the date of their notification in the Gazette.

3 New Part 2A inserted
  • The principal regulations are amended by inserting, after regulation 53, the following Part:

    Part 2A
    Force majeure provisions relating to ancillary service agents

    53A Meaning of force majeure event in regulations 53A to 53C
    • In regulations 53A to 53C, force majeure event

      • (a) means an event or circumstance beyond the reasonable control of an ancillary service agent that results in, or causes, an inability by that ancillary service agent to perform any of its obligations under these regulations or the rules; and

      • (b) includes (without limitation)—

        • (i) fire, flood, storm, earthquake, landslide, volcanic eruption, or other act of God:

        • (ii) explosion or nuclear, biological, or chemical contamination:

        • (iii) sabotage, terrorism, or act of war (whether declared or not); and

      • (c) includes an act or omission by a party under an agreement with an ancillary service agent only if—

        • (i) that act or omission is a breach of an obligation under that agreement; and

        • (ii) that obligation is in all material respects the same as an obligation in the ancillary service agent's agreement with the system operator; and

        • (iii) that act or omission would have been a force majeure event if it had been done by the ancillary service agent and not by the third party; and

      • (d) does not include the fact that an ancillary service agent or any other person—

        • (i) is unable or unwilling to pay any amount necessary to meet the obligations under these regulations or the rules; or

        • (ii) is unable to pay its debts; or

        • (iii) calls a meeting for the purpose of Part 14 of the Companies Act 1993; or

        • (iv) has been adjudicated bankrupt; or

        • (v) in the case of a company, society, or partnership, has a receiver or statutory manager or similar person appointed in respect of it or of all or any of its assets; or

        • (vi) is put into liquidation; and

      • (e) does not include any event that could have been prevented by the ancillary service agent by the exercise of a reasonable standard of care.

    53B Relief of obligation because of force majeure
    • (1) An ancillary service agent is relieved of an obligation under these regulations and the rules to the extent that, and for so long as, it is unable to perform the obligation as a result of a force majeure event.

      (2) However, subclause (1) applies only—

      • (a) if the ancillary service agent notifies the system operator, immediately after becoming aware of the existence of the force majeure event,—

        • (i) that the obligation cannot be performed; and

        • (ii) of the likely duration of the inability to perform the obligation; and

      • (b) if, and for so long as, the ancillary service agent uses its reasonable endeavours to overcome the inability to perform the obligation and to remove or mitigate the effect of the force majeure event; and

      • (c) if the ancillary service agent, as soon as practicable, notifies the system operator and the Board in writing of the full details of the force majeure event.

      (3) To avoid doubt, the relief in subclause (1) applies only if an ancillary service agent is acting in its capacity as an ancillary service agent under an ancillary service arrangement.

    53C Effect of relief
    • If an ancillary service agent is relieved of an obligation under regulation 53B,—

      • (a) the ancillary service agent is not liable for breach of these regulations or the rules in respect of that obligation during the period for which the relief applies under that regulation; and

      • (b) any costs arising from the relief from the obligation lie where they fall, except that the system operator and the ancillary service agent may agree to adjust the remuneration of the ancillary service agent.

4 New heading and regulation 115A inserted
  • The principal regulations are amended by inserting, after regulation 115, the following heading and regulation:

    Liability of ancillary service agents

    115A Limit of liability of ancillary service agents
    • (1) This regulation sets a limit on the liability of an ancillary service agent in respect of each type of ancillary service (as those types are defined in the rules) provided under an ancillary service arrangement.

      (2) This regulation applies to any breach by an ancillary service agent, in its capacity as an ancillary service agent, of—

      • (a) Part G of the rules; or

      • (b) rule 8 of technical code B of Schedule C3 of Part C of the rules.

      (3) An ancillary service agent is not liable under this Part in respect of the breach for a sum in excess of,—

      • (a) in respect of any 1 event or series of closely related events arising from the same cause or circumstance, the lesser of $100,000 or 5% of the expected annual fees for the relevant type of ancillary service; and

      • (b) in respect of all events occurring in the period of 12 months ending with the breach, the lesser of $300,000 or 20% of the expected annual fees for the relevant type of ancillary service.

      (4) In this regulation, expected annual fees means an amount calculated by the Rulings Panel as follows:

      • (a) the fees, including any constrained on amounts, paid or payable by the system operator to the ancillary service agent in respect of the relevant type of ancillary service during the 12 months before the date of the relevant breach of the rules; or

      • (b) those fees calculated on a pro-rata basis, if the ancillary service agent has provided the relevant type of ancillary service for less than 12 months; or

      • (c) if calculation under paragraph (a) or paragraph (b), in the opinion of the Rulings Panel, is impracticable (for example, because too little historical data is available) or produces an unreasonable amount, an amount that, in the opinion of the Rulings Panel, is a reasonable amount, taking into account historical data from similar ancillary service agents providing similar ancillary services.

      (5) Any amount for which an ancillary service agent is not liable under this regulation is treated as written off for the purpose of calculating the limit of liability in any period of 12 months ending with a subsequent breach of the rules.

      (6) The reference in subclause (3) to liable under this Part includes a reference to liability imposed under section 172KE of the Act.

Diane Morcom,

Clerk of the Executive Council.


Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on the 28th day after the date of their notification in the Gazette, make amendments to the Electricity Governance Regulations 2003 relating to ancillary service agents appointed by the system operator under a procurement contract. This is part of the provision made under section 172D(1), (3) and (4) of the Electricity Act 1992 in respect of common quality and minimum real-time security on the national grid, and quality and security standards for the transmission system.

The amendments have 2 principal effects.

First, the amendments relieve ancillary service agents from certain obligations in the case of force majeure events that are beyond their reasonable control.

Secondly, the amendments set a cap on the liability of ancillary service agents for certain breaches of the rules relating to the provision of ancillary services. A separate cap applies to each type of ancillary service defined in the rules.

The cap is the lesser of—

  • a percentage of the expected annual fees to be paid under the contract for the type of ancillary service in question; and

  • a set dollar amount.

The relevant breaches of the rules that are subject to the cap are—

  • breaches of Part G, which provides for trading arrangements:

  • breaches of rule 8 of technical code B of Schedule C3 of Part C of the rules, which requires independent action of ancillary service agents during grid emergencies.

Example

The system operator contracts with Company A for 2 types of ancillary services, namely voltage support and instantaneous reserve.

Between February and June, Company A breaches a relevant rule on 3 separate occasions, while providing instantaneous reserve. On each occasion, Company A's expected annual fees for providing this service are $3,000,000 per annum. Company A's liability is capped at $100,000 per breach, even though the liability would otherwise be larger.

In August, Company A breaches, for the fourth time, a relevant rule while providing instantaneous reserve. Company A does not incur any further liability, because its annual liability is capped at $300,000, and Company A has already reached that cap as a result of the breaches between February and June.

In October, Company A breaches a relevant rule while providing voltage support during a grid emergency. Company A's annual fees for providing this service are $2,500,000 per annum. Company A's liability is capped at $100,000. No account is taken of the liability for breaches mentioned above when calculating the cap, because the previous breaches were in respect of a different type of ancillary service.


Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 15 December 2005.


Contents

  • 1General

  • 2About this eprint

  • 3List of amendments incorporated in this eprint (most recent first)


Notes
1 General
  • This is an eprint of the Electricity Governance Amendment Regulations 2005. The eprint incorporates all the amendments to the regulations as at 1 November 2010. The list of amendments at the end of these notes specifies all the amendments incorporated into this eprint since 3 September 2007.

    Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the eprint are also included, after the principal enactment, in chronological order.

2 About this eprint
3 List of amendments incorporated in this eprint (most recent first)

  • 1 SR 2003/374