Electricity Industry Participation Code 2010

The purpose of this subpart and subpart 2 is to provide for the management and co-ordination of planned outages as an emergency measure during energy shortages.

• (1) The system operator must prepare and publish a system operator rolling outage plan.
• (2) [Revoked]
• (3) [Revoked]

• (1) The system operator rolling outage plan is incorporated by reference in this Code.
• (2) Clauses 7.13 to 7.22 apply to any amendment or replacement of the system operator rolling outage plan.

• A system operator rolling outage plan must—
  • (a) describe events that the system operator predicts will be likely to give rise to the need to make a supply shortage declaration; and
  • (b) set out thresholds that the system operator will apply in deciding whether to make a supply shortage declaration; and
  • (c) specify how the system operator intends to determine what directions to give to address the shortage of electricity supply or transmission capacity that gives rise to the declaration; and
  • (d) identify specified participants, or a class or classes of specified participants, who are required to develop participant rolling outage plans under clauses 9.6 to 9.13; and
  • (e) specify criteria, methodologies, and principles to be applied in implementing outages, or taking any other action, to be provided for in participant rolling outage plans; and
  • (f) specify criteria, methodologies, and principles to be applied by any specified participant who does not have an approved participant rolling outage plan in implementing outages, or taking any other action, in accordance with directions given by the system operator under clause 9.15.

• (1) This clause applies when a specified participant is identified under a system operator rolling outage plan as being required to develop a participant rolling outage plan.
• (2) The system operator must send notice in writing to that specified participant of that requirement, including—
  • (a) specifying the requirements that the participant rolling outage plan must comply with under this Part and the system operator rolling outage plan; and
  • (b) specifying a date by which the specified participant must submit that plan to the system operator.
• (3) The system operator must send the notice under subclause (2) as soon as practicable after the system operator publishes its system operator rolling outage plan.

• (1) Each specified participant who receives a notice under clause 9.6 must develop its participant rolling outage plan in accordance with the notice.
• (2) The specified participant must submit the plan to the system operator by the date specified under clause 9.6(2)(b).

• (1) Each participant rolling outage plan must—
  • (a) be consistent with the system operator rolling outage plan; and
  • (b) comply with the requirements specified in the notice sent under clause 9.6(2)(a); and
  • (c) specify the actions that the specified participant will take to achieve, or contribute to achieving, reductions in the consumption of electricity (including any target level of reduction of consumption of electricity in accordance with criteria, methodologies, and principles specified in the system operator rolling outage plan) to comply with a direction from the system operator given under clause 9.15.
• (2) This clause does not limit clause 9.6(2)(a).

• (1) The system operator must, as soon as practicable after receiving a participant rolling outage plan, by notice in writing to the specified participant who submitted the plan,—
  • (a) approve it; or
  • (b) decline to approve it.
• (2) The system operator may decline to approve the plan only if the system operator is not satisfied that the plan complies with clause 9.8.

• If the system operator declines to approve a participant rolling outage plan,—
  • (a) the system operator must—
    • (i) indicate the grounds on which it declines to approve the plan; and
    • (ii) direct the specified participant to submit a revised plan; and
  • (b) the specified participant must submit a revised plan to the system operator no later than—
    • (i) 15 business days after the date on which the specified participant received the direction from the system operator to submit a revised plan; or
    • (ii) any later date that the system operator may allow in any particular case.

• (1) As soon as practicable after receiving a revised participant rolling outage plan, the system operator must, by notice in writing to the specified participant who submitted the plan,—
  • (a) approve the plan; or
  • (b) decline to approve it.
• (2) If the system operator declines to approve the revised plan, clause 9.10 applies.

• A specified participant must make its participant rolling outage plan available to the public, at no cost, on an Internet site maintained by or on behalf of the specified participant, at all reasonable times, as soon as practicable after it is approved by the system operator.

• (1) Each specified participant who has had a participant rolling outage plan approved under clauses 9.6 to 9.12 must—
  • (a) keep the plan under review, and (if necessary) amend the plan to take account of any change of circumstances and to ensure that the plan continues to comply with clause 9.8; and
  • (b) as soon as practicable after amending the plan, but in any case no later than 20 business days after amending it, submit the plan to the system operator.
• (2) Despite subclause (1), not later than 2 years after the date on which a specified participant's participant rolling outage plan was last approved, the specified participant must resubmit the plan to the system operator for approval.
• (3) A plan submitted to the system operator under subclause (1)(b) is deemed to be approved by the system operator unless, no later than 20 business days after the system operator receives the plan, the system operator advises the specified participant who submitted the plan, by notice in writing, that it declines to approve the plan.
• (4) Clauses 9.9 to 9.12 apply to a plan that is submitted or resubmitted or declined under this clause, except as provided in subclause (3).

The purpose of this subpart is to provide for the urgent temporary removal of interconnection assets from service, or temporary reconfiguration of the grid, in order to improve security of supply.

• (1) The system operator may give notice in writing to Transpower requesting that Transpower temporarily remove 1 or more interconnection assets from service, or temporarily reconfigure the grid, if the system operator considers that—
  • (a) exceptional circumstances exist—
    • (i) that are likely to lead, for a period of at least 3 weeks, to—
      • (A) a shortfall in thermal fuel; or
      • (B) a shortfall of hydro inflows; or
      • (C) the loss of a large generating asset; and
    • (ii) that make it necessary or desirable in the public interest to temporarily remove 1 or more interconnection assets from service or temporarily reconfigure the grid; and
  • (b) the removal or reconfiguration would improve security of supply.
• (2) A notice given under subclause (1) must specify—
  • (a) the exceptional circumstances; and
  • (b) the reasons why temporarily removing assets from service or temporarily reconfiguring the grid would improve security of supply.
• (3) No later than 10 business days after giving notice to Transpower, the system operator must give a written report to the Authority setting out the basis on which the system operator requested that Transpower remove 1 or more interconnection assets from service or temporarily reconfigure the grid.
• (4) The system operator must ensure that the report given under subclause (3) includes—
  • (a) the matters specified in subclause (2)(a) and (b); and
  • (b) sufficient information to demonstrate that in developing its request to Transpower the system operator followed a robust process, including the options the system operator considered and the extent of any analysis and consultation undertaken by the system operator.
• (5) The Authority must publish the report.

• (1) The system operator may, after consultation with the Authority, make a supply shortage declaration.
• (2) The system operator may make a supply shortage declaration only if there is a shortage of electricity supply or transmission capacity such that the system operator considers—
  • (a) that the normal operation of the spot market for electricity is, or will soon be, unlikely to facilitate the adjustment of supply and demand necessary to ensure that supply matches demand; and
  • (b) that, if planned outages are not implemented, unplanned outages are likely.
• (2A) For the purposes of subclause (2), the spot market for electricity includes the processes for setting—
  • (a) [Revoked]
  • (b) forecast prices and forecast reserve prices:
  • (c) [Revoked]
  • (d)interim prices and interim reserve prices:
  • (e) final prices and final reserve prices:
  • (f) dispatch prices and dispatch reserve prices.
• (3) A declaration applies to—
  • (a) all of New Zealand; or
  • (b) the regions specified in the declaration.
• (4) In making a declaration under subclause (1), the system operator must have regard to the system operator rolling outage plan.
• (5) The system operator must publish the declaration as soon as practicable after it is made.

• (1) The system operator may, at any time in the period during which a supply shortage declaration is in force, give a written direction to specified participants to contribute to achieving reductions in the consumption of electricity by implementing outages or taking any other action specified in the direction.
• (2) A direction must—
  • (a) be consistent with the system operator rolling outage plan; and
  • (b) be given only after consultation with the Authority; and
  • (c) if the direction requires a specified participant to implement outages, specify the savings targets that the specified participant must achieve.
• (3) [Revoked]
• (4) The system operator must publish each direction as soon as practicable after it is given.
• (5) The system operator may—
  • (a) amend a direction; or
  • (b) revoke a direction and, if the system operator considers it appropriate, substitute a new direction.
• (6) Subclauses (1) to (4) apply to an amendment to a direction or a substitute direction—
  • (a) as if the amendment or substitute direction were the original direction; and
  • (b) with other necessary modifications.

• (1) Each specified participant must comply with a direction given to it by the system operator under clause 9.15.
• (2) Each specified participant must, in complying with the direction, apply, to the extent practicable, the criteria, methodologies, and principles specified in the system operator rolling outage plan.
• (3) Each specified participant must comply with a direction in accordance with its participant rolling outage plan, if it has a plan that has been approved under subpart 1.
• (4) If a specified participant does not have a participant rolling outage plan approved under subpart 1, the specified participant,—
  • (a) in complying with the direction, must apply, to the extent practicable, the criteria, methodologies, and principles specified in the system operator rolling outage plan; and
  • (b) as soon as practicable after the direction is given, must provide to the system operator information as to the steps the specified participant will take to comply with the direction (including any steps the specified participant has already taken to comply with the direction).

• (1) The system operator must revoke a supply shortage declaration when it is satisfied that the circumstances that gave rise to the declaration no longer apply.
• (2) The system operator must publish the revocation as soon as practicable after it is made.

• (1) The system operator may, by notice in writing to a participant who the system operator considers may have information relevant to any of the following, require the participant to provide the information to the system operator:
  • (a) the preparation by the system operator of the system operator rolling outage plan under clauses 9.1 to 9.5; and
  • (b) the need for a supply shortage declaration; and
  • (c) the need for a direction requiring outages under clause 9.15; and
  • (d) the number and extent of outages necessary under a direction; and
  • (e) monitoring compliance with a direction given under clause 9.15; and
  • (f) the system operator’s implementation of and compliance with the security of supply forecasting and information policy or emergency management policy.
• (2) Subclause (1) applies only to information that is—
  • (a) reasonably necessary for the system operator to undertake its functions under this Part, to implement or comply with the security of supply forecasting and information policy or emergency management policy, or to monitor compliance with a direction regarding outages; and
  • (b) in that participant's possession or that the participant can obtain without unreasonable difficulty or expense.
• (3) The system operator must specify in the notice given under subclause (1) the date by which the participant must provide the information required.
• (4) A participant who has received a notice under subclause (1) must provide the information required by the system operator by the date specified by the system operator in the notice.
• (5) The system operator may require specified participants to provide to the system operator contact information specified by the system operator that would enable the system operator to communicate with the specified participants.

This subpart provides a framework under which each retailer must have a customer compensation scheme for all of the retailer’s qualifying customers, including—

• • (a) a default customer compensation scheme that a retailer must have; and
  • (b) additional customer compensation schemes that a retailer may have; and
  • (c) determining when an official conservation campaign commences and ends, during which a retailer must make payments under its customer compensation schemes; and
  • (d) a process by which the Authority can require that a retailer’s compliance with this subpart is audited.

• (1) Each retailer who has 1 or more qualifying customers—
  • (a) must, at all times, have a default customer compensation scheme; and
  • (b) may, in addition to a default customer compensation scheme, have 1 or more additional customer compensation schemes.
• (2) Each of a retailer’s qualifying customers must be covered by the retailer’s default customer compensation scheme, unless the retailer’s qualifying customer has elected to be covered by 1 of the retailer’s additional customer compensation schemes (if any) in accordance with clause 9.27.
• (3) A retailer’s customer compensation scheme may cover a customer of the retailer who is not a qualifying customer.

• (1) A retailer’s qualifying customer is a person who, at any time during an official conservation campaign, —
  • (a) is a customer of the retailer; and
  • (b) has a contract with the retailer for the supply of electricity in respect of an ICP at which—
    • (i) there is a category 1 metering installation or a category 2 metering installation; and
    • (ii) there was consumption, in the 12 months immediately before the start of the official conservation campaign, of 3000 kWh or more.
• (2) Despite subclause (1), a person is not a qualifying customer if the price of all of the electricity provided under the person’s contract with the retailer for the supply of electricity is determined by reference to the final price at a GXP.
• (3) For the purposes of subclause (1)(b)(ii), if a qualifying customer’s consumption at the ICP in the 12 months immediately before the start of the official conservation campaign is not available to the retailer, the retailer must make a reasonable estimate of the consumption.
• (4) To avoid doubt, the retailer is not required to make payments under a customer compensation scheme to a qualifying customer at an ICP in respect of any period during an official conservation campaign, when—
  • (a) the premises to which the ICP is electrically connected are vacant; or
  • (b) the ICP is electrically disconnected.

• (1) A retailer must make payments to its qualifying customers, in respect of ICPs described in clause 9.21(1)(b), under its customer compensation schemes during an official conservation campaign.
• (2) Despite subclause (1), if the system operator has commenced an official conservation campaign under clause 9.23(1), a retailer must make payments under its customer compensation scheme to its qualifying customers only in respect of ICPs, as described in clause 9.21(1)(b), in the South Island.

• (1) The system operator must commence an official conservation campaign for the South Island—
  • (a) when a comparison of storage in the South Island hydro lakes with the South Island electricity risk curves, as that term is defined in the security of supply forecasting and information policy,—
    • (i) shows a risk of shortage for the South Island of 10% or more; and
    • (ii) forecasts that the risk of shortage for the South Island will be 10% or more for 1 week or more; or
  • (ab) when hydro storage in the South Island hydro lakes is, and the system operator forecasts will remain for 1 week or more, equal to or less than—
    • (i) that part of available hydro storage in the South Island hydro lakes that, as published by the system operator under the security of supply forecasting and information policy, may only be used during an official conservation campaign; plus
    • (ii) the buffer, as that term is defined in the security of supply forecasting and information policy; or
  • (b) despite paragraphs (a) and (ab), if it has agreed a date with the Authority for an official conservation campaign to commence for the South Island, on that date.
• (2) The system operator must commence an official conservation campaign for New Zealand—
  • (a) when a comparison of storage in New Zealand’s hydro lakes with the electricity risk curves, as that term is defined in the security of supply forecasting and information policy,—
    • (i) shows a risk of shortage for New Zealand of 10% or more; and
    • (ii) forecasts that the risk of shortage for New Zealand will be 10% or more for 1 week or more; or
  • (ab) when hydro storage in the New Zealand hydro lakes is, and the system operator forecasts will remain for 1 week or more, equal to or less than—
    • (i) that part of available hydro storage in the New Zealand hydro lakes that, as published by the system operator under the security of supply forecasting and information policy, may only be used during an official conservation campaign; plus
    • (ii) the buffer, as that term is defined in the security of supply forecasting and information policy; or
  • (b) despite paragraphs (a) and (ab), if it has agreed a date with the Authority for an official conservation campaign to commence for New Zealand, on that date.
• (3) The system operator must use reasonable endeavours to give each participant and the Authority at least 2 weeks’ notice of an official conservation campaign commencing.
• (4) During the period of an official conservation campaign, the system operator must regularly review the steps that it must take, and encourage participants to take, under the emergency management policy.
• (5) If the system operator and the Authority agree under subclause (1)(b) or (2)(b) that an official conservation campaign will commence, the system operator must publish the reasons for agreeing that the official conservation campaign will commence.
• (6) [Revoked]

• (1) If the system operator has commenced an official conservation campaign under clause 9.23, it must end the official conservation campaign—
  • (a) for an official conservation campaign for the South Island—
    • (i) when a comparison of hydro storage in the South Island hydro lakes with the South Island electricity risk curves, as that term is defined in the security of supply forecasting and information policy, shows a risk of shortage for the South Island of less than 8%; and
    • (ii) the amount of hydro storage in the South Island hydro lakes is greater than the amount of hydro storage determined under subparagraphs (i) and (ii) of clause 9.23(1)(ab); or
  • (b) for an official conservation campaign for New Zealand—
    • (i) when a comparison of hydro storage in the New Zealand hydro lakes with the New Zealand electricity risk curves, as that term is defined in the security of supply forecasting and information policy, shows a risk of shortage for New Zealand of less than 8%; and
    • (ii) the amount of hydro storage in the New Zealand hydro lakes is greater than the amount of hydro storage determined under subparagraphs (i) and (ii) of clause 9.23(2)(ab); or
  • (c) despite paragraphs (a) and (b), if it has agreed a date with the Authority for an official conservation campaign to end, on that date.
• (2) The system operator must, as soon as practicable after ending an official conservation campaign, give notice to each participant and the Authority of the date on which the official conservation campaign ended.

• (1) A retailer’s default customer compensation scheme must provide for the retailer—
  • (a) during an official conservation campaign for the South Island, to pay each of its qualifying customers in the South Island at least the minimum weekly amount of compensation determined by the Authority under clause 9.25, at a pro rata daily rate for each day of the official conservation campaign that the qualifying customer is the retailer’s customer; and
  • (b) at any other time during an official conservation campaign, to pay each of its qualifying customers at least the minimum weekly amount of compensation determined by the Authority under clause 9.25, at a pro rata daily rate for each day of the official conservation campaign that the qualifying customer is the retailer’s customer; and
  • (c) to pay at least the minimum weekly amount, at a pro rata daily rate, for each day of an official conservation campaign that the qualifying customer is the retailer’s customer—
    • (i) to each of its qualifying customers in the South Island or New Zealand (as the case may be), for each of the qualifying customer’s ICPs described in clause 9.21(1)(b):
    • (ii) no later than the end of 2 billing periods after the last day of an official conservation campaign.
• (2) [Revoked]
• (3) For the purposes of this clause—
  • (a) compensation includes—
    • (i) money:
    • (ii) a credit on the qualifying customer’s electricity account with the retailer; and
  • (b) the form of the compensation is to be determined by the retailer.

• (1) In determining the minimum weekly amount that each retailer must pay to its qualifying customers, the Authority must take into account—
  • (a) the estimated value, in dollars/MWh, of the savings that the Authority expects all qualifying customers in the South Island or New Zealand, as the case may be, of all retailers, will achieve during an official conservation campaign; and
  • (b) any other factors that the Authority considers relevant.
• (2) The Authority must—
  • (a) publish the minimum weekly amount; and
  • (b) review the minimum weekly amount—
    • (i) after each official conservation campaign ends; and
    • (ii) at least once every 3 years; and
  • (c) following a review under paragraph (b), ensure that it gives participants at least 3 months’ notice if it determines a new minimum weekly amount.

A retailer may have 1 or more additional customer compensation schemes.

• (1) If a retailer has 1 or more additional customer compensation schemes, each of the retailer’s qualifying customers is covered by—
  • (a) 1 of the retailer’s additional customer compensation schemes only if the qualifying customer elects to be covered by the additional customer compensation scheme; or
  • (b) in the absence of an election, the retailer’s default customer compensation scheme.
• (2) Before accepting a qualifying customer’s election, a retailer must ensure that it informs the qualifying customer of—
  • (a) the details of the additional customer compensation scheme; and
  • (b) the differences between the retailer’s default customer compensation scheme and the additional customer compensation scheme.
• (3) A retailer must keep a record of each qualifying customer’s election.
• (4) A qualifying customer’s election must not—
  • (a) be part of the contract between the qualifying customer and the retailer for the supply of electricity; or
  • (b) affect the tariff options that the retailer offers to the qualifying customer; or
  • (c) be affected by the tariff option in the qualifying customer’s contract with the retailer.

• A retailer who has 1 or more additional customer compensation schemes must—
  • (a) publish and keep published a description of its additional customer compensation schemes; and
  • (b) on request from one of the retailer’s customers, provide a written description of the additional customer compensation schemes.

• (1) Each retailer must certify to the Authority that—
  • (a) the retailer’s customer compensation scheme complies with this subpart; and
  • (b) the retailer has provided compensation to its qualifying customers, to the extent required by this subpart.
• (2) The certification provided under subclause (1) must be—
  • (a) [Revoked]
  • (b) in the form specified by the Authority; and
  • (c) signed and dated by a director of the retailer and either—
    • (i) another director of the retailer; or
    • (ii) the retailer’s chief financial officer, or a person holding an equivalent position; or
    • (iii) the retailer’s chief executive officer, or a person holding an equivalent position.
• (3) A retailer must provide certifications as follows:
  • (a) within 7 months of the end of an official conservation campaign:
  • (b) within 1 month of receiving a request to do so by the Authority.
• (4) [Revoked]

• (1) The Authority may, in its discretion, carry out an audit to determine whether a retailer has complied with this subpart.
• (2) If the Authority decides to audit a retailer under subclause (1), the Authority must require the retailer to nominate an appropriate auditor.
• (3) The retailer must nominate an auditor within a reasonable timeframe, and the Authority must appoint the nominated auditor.
• (4) If the retailer fails to nominate an appropriate auditor within a reasonable timeframe, the Authority may appoint an auditor of its own choice.

• (1) A retailer subject to an audit under this subpart must, on request from the auditor, provide the auditor with information relating to its compliance with this subpart in the previous 12 months or such other period specified by the auditor.
• (2) The retailer must provide the information within 20 business days after receiving a request from the auditor.

• (1) The retailer must ensure that the auditor provides the Authority with an audit report on the retailer’s compliance with this subpart that has been prepared in accordance with this clause.
• (2) The audit report must include any comments from the retailer on any non-compliance found by the auditor if the retailer provided the comments to the auditor within a time specified by the auditor.
• (3) [Revoked]
• (4) The audit report must not contain any of the information provided by the retailer to the auditor under clause 9.31 unless requested by the Authority.

• (1) If an audit establishes, to the Authority’s reasonable satisfaction, that a retailer has not complied with this subpart (whether or not the Authority appoints an investigator to investigate the alleged breach), the retailer must pay the auditor’s costs.
• (2) If the Authority considers that the retailer’s non-compliance is minor or relates to some (but not all) of the clauses in this subpart, the Authority may, in its discretion, determine the proportion of the auditor’s costs that the retailer must pay, and the retailer must pay those costs.
• (3) If an audit establishes to the Authority’s reasonable satisfaction that a retailer has complied with this subpart, the Authority must pay the auditor’s costs.