Amendment to the National Electricity Rules to clarify that the requirements for the timing of physical testing of facilities to provide System Restart Ancillary Services (SRAS) are to be carried out after NEMMCO has awarded contracts to successful tenderers.

Background

On 1 August 2007, the Commission received a Rule change proposal from NEMMCO seeking amendments to the National Electricity Rules to clarify that the requirements for the timing of physical testing of facilities to provide System Restart Ancillary Services (SRAS) is to be carried out after NEMMCO has awarded contracts to successful tenderers.

NEMMCO requested that the proposal be treated as urgent as:

• it believed the Rules, as currently framed, impacted on the effective operation and administration of the wholesale exchange operated and administered by it; and
• the current contracts for SRAS expired on 30 June 2008, and NEMMCO would either need to extend these contracts to a date that would permit the AEMC to conduct a standard Rule making process or run an expression of interest/ invitation to tender process on the basis of its current interpretation of the Rules, which it did not consider appropriate.

On 23 August 2007, the Commission published a notice under sections 95 and 96 of the NEL commencing initial consultation on the Rule change proposal to clarify that the requirements for the timing of physical testing of facilities to provide SRAS is to be carried out after NEMMCO has awarded contracts to successful tenderers. The Commission also advised of its intention to expedite the Rule making process on the grounds that it is urgent, subject to written submissions.

The Commission considered this proposal to be urgent as without adequate SRAS contracts in place from 30 June 2008, there may be a significant risk to the safety, security and reliability of the national electricity system.

The Commission invited interested parties to provide submissions on the Rule change proposal by 24 September 2007. Any objections to the expedited Rule making process were required to be submitted by 6 September 2007.

On 9 October 2007, the Commission sought stakeholder submissions on a specific issue relating to this proposal. The Commission was considering substituting the term ‘excluded services’ in clause 3.11.5(f)(2) of the National Electricity Rules with the defined term ‘negotiable services’. The clause relates to the costs recovered by a Network Service Provider in relation to testing for system restart ancillary services. Further details on the issue can be found below in the Commission’s explanatory note on its request for submissions. Submissions were required by 5pm 17 October 2007.

On 25 October 2007, the Commission published a notice under sections 102 and 103 of the NEL making the National Electricity Amendment (Timing of System Restart Ancillary Services Testing) Rule 2007 No.9 and the corresponding final Rule determination. This Rule was made under an expedited process.

The Commission has adopted the substance of NEMMCO’s proposal, but made some amendments to the proposed Rule to link the timing of physical testing of SRAS to the Non-Market Ancillary Services (NMAS) tender guidelines. The Commission has also:

• amended the clause that requires the physical testing of relevant SRAS facilities to make it clear that the timing for testing of SRAS facilities will be provided for in the NMAS tender guidelines;
• separated out the requirements to test in relation to NMAS and SRAS, to improve clarity and understanding of these requirements;
• amended the clause that relates to the transmission network service provider’s role in SRAS testing to improve its application and recognise the consequential change in timing of the testing of SRAS facilities; and
• amended the clause that relates to the costs recovered by a network service provider in relation to testing for SRAS by substituting the term ‘excluded services’ with the term ‘negotiable services’.

The Rule commenced on 25 October 2007.