1. Pursuant to section 172I of the Electricity Act 1992 ("Act"), I notify the amendment of the Electricity Governance Rules 2003 ("Rules") under section 172H of the Act.
2. The empowering provisions for the Electricity Governance Regulations 2003 in relation to which the amendments to the Rules are made are sections 172D(1)(3) and 172D(1)(4) of the Act.
3. The procurement plan in Schedule C5 of Part C of the Rules is replaced in its entirety with a new Schedule C5. The changes contained in the new plan will:
(a) ensure the system operator can agree terms with ancillary service providers that are materially the same as those in the procurement plan;
(b) make it clear that:
(i) the obligation on the system operator to enter into ancillary service procurement contracts
is discretionary and is subject to the conditions of implementation detailed in paragraphs 4 to
7 of the procurement plan;
(ii) the system operator is to use reasonable endeavours to enter into ancillary service contracts which include the key contract terms and key technical requirements; and
(iii) the negotiated contract terms must not be materially inconsistent with the key contract terms;
(c) update information on frequency keeping initiatives the system operator is pursuing;
(d) record the system operator’s intention to explore options regarding changes to data monitoring resolution requirements for instantaneous reserve; and
(e) allow the system operator to agree to less frequent testing for over frequency reserve equipment.
4. Minor drafting amendments to various paragraphs have also been made, in reliance on section 172F(3) of the Act.
5. Pursuant to section 172Z(4) of the Act, the reasons for my decision to amend the Rules are that:
(a) this amendment updates the procurement arrangements and enhances the specification and procurement of ancillary services; and
(b) the new procurement plan complies with the requirement in the Rules to complete an annual review of the procurement plan.
6. These rules come into force on 1 December 2010.
7. Copies of the Rules may be inspected free of charge or purchased from the Electricity Commission, Level 7, ASB Bank Tower, 2 Hunter Street, Wellington.
8. The Rules can also be viewed on the Electricity Commission’s website
http://www.electricitycommission.govt.nz/rulesand
regs/rules
Dated at Wellington this 6th day of July 2010.
HON GERRY BROWNLEE, Minister of Energy and Resources.