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Recommendations to Minister for regulation change

Under s172E(2)(c) of the Electricity Act 1992, no later than 10 working days after making a recommendation, the Commission must publicise the recommendation and the assessment completed under s172F.

The recommendations are available below and notice of the documents are also published in the Gazette.

Electricity Governance (Security of Supply) Amendment Regulations 2009

The Electricity Governance (Security of Supply) Regulations (Outage Regulations), referred below, were made on 11 August 2008 in reliance on the urgency provisions in section 172E(3) of the Electricity Act 1992 (Act).

When regulations are made under urgency, section 172E(3) of the Act provides that the Commission must, within six months, carry out consultation and an assessment and make a recommendation to the Minister on whether or not the regulations should be revoked, replaced, or amended.

On 14 November 2008, the Commission reviewed and published a consultation paper, which proposed to retain the Outage Regulations, although a number of amendments were proposed.

Following receipt of feedback the Commission concluded that, with further changes, the Outage Regulations should be retained. The following material includes the recommendation and a track changed copy of the Outage Regulations, showing the amendments recommended to the Minister of Energy and Resources.

Electricity Governance (Security of Supply) Regulations

The Electricity Commission is tasked with ensuring that electricity is produced and delivered in a reliable manner, and that risks relating to security of supply are properly and efficiently managed.

The Government Policy Statement (May 2008) requires the Commission to put in place contingency arrangements to provide for the scheduling of outages, including rolling outages in the extreme event that blackouts are required to ensure a balance between supply and demand. The Commission is invited to recommend regulations and rules if required.

The Commission developed and consulted on draft regulations and an associated “Security of Supply Outage Plan” during 2005 and 2006. However, that work was not completed and no recommendation for regulations was made to the Minister of Energy at the time.

Hydro storage has remained below the Commission’s “minzone” level for some time. Various measures have been taken to maximise thermal generation capability and increase transmission capability. A national energy savings campaign is in place and some industrial users have voluntarily restrained demand.

On 26 June 2008, in case extremely low inflows occurred and/or a critical plant failed, the Commission recommended regulations (based on the draft regulations prepared in 2005 and 2006) to the Minister as a prudent measure so that the Commission is in a better position to manage rolling outages should they be required.