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—
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.
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.