1. Pursuant to section 172I of the Electricity Act
1992, I notify the amendment of the Electricity Governance Rules 2003 (“Rules”) under section 172H of the Electricity Act 1992.
2. The empowering provisions for the electricity governance regulations in relation to which the Rules are made are sections 172D (1) (4) and 172D (1) (6) (a) and (d) of the Electricity Act 1992.
3. Brief descriptions of the nature of the amendments are as follows:
The amendments are to insert the Grid Reliability Standards into the Rules and make other changes required to give effect to the Grid Reliability Standards. The amendments take the form of an integrated package which consists of:
? the insertion of a new schedule, Schedule F3 – Grid Reliability Standards, into Section III of Part F;
? amendments to Rules 4.4 and 5.2 of Section III of Part F to provide clarity around the content of the Grid Reliability Standards;
? amendments to Schedule F4 – Grid Investment Test, to ensure consistency with the proposed Schedule F3;
? the insertion of new Rules 5A and 5B into Section III of Part F to provide for a process to determine the “core grid” and for interested parties to request, or
the Electricity Commission (“Commission)” to initiate, a review of the core grid determination;
? the insertion of a new Rule 12A into Section III of Part F to provide for a process for Transpower to publish grid reliability reports which set out:
(i) a 10-year forecast of supply and demand at each grid injection point and each grid exit point; and
(ii) whether the power system is reasonably expected to meet the N-1 criterion, including in particular whether the power system would be in a secure state at each grid exit point, at all times over the next 10 years; and
(iii) planning proposals for addressing any matters identified in accordance with (ii) above;
? the amendment of the definitions of “economic investments” and “reliability investments” in Part A; and
? the insertion of the corresponding new defined
terms “core grid”, “core grid determination”, “grid reliability report”, “expected unserved energy”, “primary transmission equipment”, “N?1 criterion”, “secure state”, “satisfactory state”, “single credible contingency event”, “system instability”, “unacceptable overloading” and “unacceptable voltage conditions” into Part A of the Rules which completes the package of changes required to implement the Grid Reliability Standards.
4. Pursuant to section 172Z (4) of the Electricity Act 1992, the reasons for my decision to amend the Rules are that:
(i) I consider that the above amendments achieve the obligation on the Commission under Rule 4 of Section III of Part F to determine the most appropriate grid reliability standards; and
(ii) the amendments meet the requirements of Part F of the Rules to provide a basis for:
(a) the Board to publish statements of opportunities (other than the initial statement of opportunities);
(b) Transpower to prepare grid upgrade plans; and
(c) other parties to appraise opportunities for transmission investments and transmission alternatives.
5. These rules come into force on 13 May 2005.
6. Copies of the Rules may be inspected free of charge or purchased from the Electricity Commission, Level Seven, ASB Bank Tower, 2 Hunter Street, Wellington.
The Rules can also be viewed on the Electricity Commission web site:
http://www.electricitycommission.govt.nz/rulesandregs/rules
Dated at Wellington this 3rd day of April 2005.
TREVOR MALLARD, Minister of Energy.