3756 NEW ZEALAND GAZETTE, No. 152 1 SEPTEMBER 2005

2. This amendment to the Rules is made pursuant to section
   172D (1) (3) of the Electricity Act 1992.

3. A brief description of the nature of the amendments is as
   follows:

The procurement plan set out in Schedule C5 of Part
C of the Rules is to be replaced in its entirety with a
new procurement plan. The key changes between the
existing procurement plan and the new procurement plan
are set out below:

(a) Changes to assessment methodology for instantaneous
reserve and frequency keeping and to the proposed
contracting process that increase the latitude for the
parties to negotiate terms and conditions as long as
none are inconsistent with the key contracting terms
set out in the procurement plan.

(b) Changes have been included for every ancillary
service to make provision for the system operator
to enter into ancillary service procurement contracts
with other providers at any time during the
procurement plan period.

(c) A number of the key contracting terms have been
inserted, largely relating to the monitoring and
compliance arrangements, including:

(i) new provision for the system operator to
terminate an ancillary service schedule if an
ancillary service agent (ASA) commits a
material breach of the contract in relation to
that service and such breach, if remediable,
is not remedied to the reasonable satisfaction of
the system operator within 10 business days
of the notice, or such longer period as the
system operator may determine;

(ii) new provision for the system operator to make
a claim that an ASA has failed or is unable to
meet a performance requirement in the ancillary
service procurement contract (ASPC) or cannot
comply with a dispatch instruction. If the claim
is accepted (either voluntarily or after dispute
resolution), the system operator will not be
liable to pay the ASA for the relevant period
and the ASA will take remedial action;

(iii) new provision that makes it clear that some
“baseline” tests may be required of ASAs for
some ancillary services at their own expense;

(iv) new provision for the system operator to
request ASAs carry out an “on-demand” test of
the equipment used to provide or monitor any
ancillary service and/or provide a statement of
the capability and operational limitations of the
equipment;

(v) new provision requiring the system operator
to pay an ASA’s reasonable costs of an
“on-demand” test unless the equipment fails the
test or the sole reason for the test was to verify
the success of any remedial action;

(vi) new provision that if any equipment used
to provide or monitor an ancillary service
except for non-mandatory frequency keeping
or instantaneous reserve) fails to meet any test,
the ASAs must re-test the equipment at their
own expense until the equipment passes
the test, unless otherwise agreed with the
system operator, and the ASAs will be deemed
incapable of providing the ancillary service
until the test is passed;

(vii) new provision for the system operator to inspect
any equipment used by ASAs to provide or
monitor an ancillary service upon at least five
days’ notice of the intention to inspect the

equipment, but may give less or no notice if
the system operator reasonably believes the
equipment is being used in a manner inconsistent
with the ASPC. The system operator must not
interfere unreasonably with the ASA’s business
in carrying out such an inspection; and

(viii) new provision for the system operator to assign
its interest in the ASPC to another party taking
over the role of system operator; otherwise,
assignment by either party must have the consent
of the other party.\n
(d) The frequency of system operator reporting of
ancillary service settlement volumes, prices, costs,
etc, which is currently unspecified, is to be carried
out monthly.

(e) A number of changes to the performance
requirements and technical specifications for various
ancillary services:

(i) New requirement for ASAs to maintain their
monitoring equipment in accordance with good
industry practice (all ancillary services);

(ii) new requirement that the measurement of
time error must be performed with a global
positioning system clock or agreed equivalent
(associated with provision of frequency
keeping);

(iii) new obligation on system operator to use
reasonable endeavours to dispatch frequency
keepers at least five minutes in advance of the
start or end of the relevant trading period, as
the case may be;

(iv) new requirement that the control maximum be
greater than, or equal to, the control minimum
plus twice the range of the offered MW band
for the frequency keeping site;

(v) description of the method the system operator
will use to assess whether or not the ASAs have
delivered a quantity of instantaneous reserve
following an under frequency event that is
consistent with the quantity dispatched;

(vi) new requirement that the relay equipment for
over frequency reserve must immediately arm or
disarm (as appropriate) when it receives a remote
arming or disarming signal from the system
operator’s co-ordination centre;

(vii) new requirement for the ASAs to provide
voltage support equipment that will be available
at all times to provide voltage support, is able
to respond when dispatched, and is maintained
in accordance with good industry practice;

(viii) new requirement for the ASAs to provide
monitoring equipment that is available at all
times and continuously monitors and transmits
the reactive power being produced by the
voltage support equipment to the designated
interface points;

(ix) new requirement for the ASAs to ensure the
black start equipment is able to start without
power being obtained from the grid or local
network at least once every six weeks unless
the black start equipment has been generating
for 66% or more of the time since the last test;

(x) new requirement that the system operator may
require the ASAs to conduct a baseline test of
the black start service no more than once during
the procurement plan period to confirm the
ASAs can meet the performance requirements;