This notice of a recommendation and assessment concerning the Electricity Governance Rules (“Rules”), Rule Amendment Proposal No. 72, is issued by the Electricity Commission (“Commission”), established under the Electricity Act 1992 (“Act”), pursuant to section 172E (2) (c) of that Act.
Section 172E (2) (c) provides that, no later than 10 working days after making a recommendation concerning the Rules to the Minister of Energy, the Commission must publicise the recommendation and the assessment completed under section 172F of the Act.
Recommendation
On 7 July 2005, the Commission made a recommendation that the existing Schedule C4 of Part C of the Rules, which contains the policy statement, be replaced in its entirety with a new Schedule C4.
Recommended Amendment to the Rules
The key changes from the existing Schedule C4 recommended by the Commission are set out below:
(a) Changes to system operator notifications in the following areas:
(i) system operator required to advise participants if it identifies any new credible events that may result in cascade failure;
(ii) system operator required to advise participants if new environmental or system conditions advised to system operator lead the system operator to believe the loss of a double circuit transmission line could be a contingent risk;
(iii) firmer commitments by system operator to publish details of new permanent and temporary constraints;
(iv) limiting system operator’s obligation to notify participants of changes in temporary constraints to those that the system operator believes will assist it to meet the principal performance objectives;
(v) new requirement for system operator to correctly apply constraints to SPD model; and
(vi) system operator required to advise participants if it identifies new techniques to address conflicts of interest.
(b) Requirement that the system operator maintains voltage stability during and following a contingent event or extended contingent event.
(c) Changes to the system operator’s requirements to schedule sufficient reserve where there is insufficient generation offers and/or reserve offers. Under these circumstances, instead of reducing the reserve requirements, the system operator will:
(i) zero the reserve requirement for a contingent event; and
(ii) reduce demand for an extended contingent event.
(d) Removal of the explicit margins added by the system operator to reserve requirements. These provisions have been replaced by an open provision for the system operator to add an adjustment factor based on its knowledge of the power system.
(e) New requirement for system operator to notify an asset owner if it has provided incomplete or unreliable asset capability information.
(f) Changes to demand step-change limits by purchasers. Limits are now expressed as ramping limits (40 MW per minute with no more than 75 MW in any
five-minute period). The system operator must
now advise the process by which a purchaser can agree a greater limit and publish existing and new agreements. The provision for system operator to change the step-change demand limits during the term of the policy statement has been removed.
(g) Allowance for the system operator to use any other measures that may mitigate the need to shed demand to manage events greater than those provided for by risk management policies.
(h) Rationalisation and clarification of the demand shedding policy.
(i) Provision for dynamic load distribution factors to
be used in the dispatch schedule once the system operator has implemented the software changes required.
(j) Removal of system operator reporting requirements to market administrator and board, which restate requirements set out elsewhere in the Rules.
(k) Removal of provisions for system operator to investigate or support an investigation into an asset owners’ non-compliance with the Rules, which restate requirements set out elsewhere in the Rules.
(l) Requirement that anyone connecting local networks in parallel with the grid to provide information requested by the system operator including evidence the grid owner has agreed to the parallel connection.
(m) Removal of specific future policy directions by the system operator, which are the Commission’s business.
(n) Requirement that the system operator produce a business performance charter that describes the manner in which the system operator intends to deliver the system operator services under the Rules.
(o) Removal of Part B explanatory notes from Schedule C4, which are instead to be published on the system operator’s web site.
A copy of the Commission’s recommendation and assessment is available, at no cost, on the Commission’s web site:
http://www.electricitycommission.govt.nz/rulesandregs/recommend
Dated at Wellington this 7th day of July 2005.
For and on behalf of the Electricity Commission:
PETER HARRIS, Commissioner.