System Operator Reports December Contents System Operator Monthly Operational Performance Report System Performance Report

Transcription

1 System Operator Reports December 2010 Contents Section 1 Section 2 System Operator Monthly Operational Performance Report System Performance Report

2 Operational Performance Report to the Electricity Authority December 2010 Purpose This report summarizes the results of the System Operator s review of its performance for December 2010, as required under Clause 3.14 of the Electricity Industry Participation Code An additional Operational Update is also provided for the information of the Authority.

3 Operational Performance Report December 2010 Page 1 of 6 Table of Contents 1. COMPLIANCE WITH RULE BOOK AND PART 7 AND Principal Performance Obligations (PPOs) Grid Emergencies System Events Connection Points System Operator Compliance with Code: PART 13 COMPLIANCE ANCILLARY SERVICES RECOMMENDATIONS FOR CHANGE TO CODE AND RELATED MATTERS: Code change proposals Exemption applications OPERATIONS UPDATE: Commissioning of generation assets CONFLICTS OF INTEREST: DEVELOPMENT AND RESOURCES CODE 7.10 STATEMENT:...6

4 Operational Performance Report December 2010 Page 2 of 6 1. C OMPLIANCE W ITH R ULE B OOK AND P ARTS 7 AND 8 : 1.1 PRINCIPAL PERFORMANCE OBLIGATIONS (PPOS) The Principal Performance Obligations (PPOs) of the System Operator are to act as a reasonable and prudent operator with the objective of meeting certain PPO outcomes. The System Operator s performance against the PPO outcomes, during December, was as follows: PPO No Description PPO Outcome 7.2(1)(a) Avoid cascade failure Met 7.2(1)(b)(i) Maintain frequency in the normal band Met 7.2(1)(b)(ii) Manage frequency during momentary fluctuation Met 7.2(1)(b)(iii) Limit rate of occurrences of momentary fluctuations Met 7.2(1)(b)(iv) Recover quickly from a fluctuation Met 7.2(1)(b)(v) Manage time error Met 7.2(1)(b)(vi) Eliminate time error once a day Met 7.2 Maintain other standards Met 8.5 Restoration objective Met 1.2 GRID EMERGENCIES There were eleven grid emergencies declared in the period. Grid Emergencies Date Time Summary Details Island 02-Dec-10 08:40 21-Dec-10 16:45 22-Dec-10 07:49 23-Dec-10 09:12 24-Dec-10 07:50 27-Dec-10 10:15 28-Dec-10 10:00 29-Dec-10 09:05 30-Dec-10 08:25 31-Dec-10 07:45 29-Dec-10 03:27 Grid Emergencies were declared for insufficient generation offers in the Upper North Island and insufficient transmission capacity in the Waikato region. The grid was re-configured at KIN to alleviate the situation. A Grid Emergency was declared to allow the temporary reconfiguration of the Upper South Island transmission system after the tripping of reactive plant during a planned outage resulted in high voltages. N S

5 Operational Performance Report December 2010 Page 3 of SYSTEM EVENTS There were two system events (frequency excursion) during the reporting period: Date Time Summary Details Island Freq (Hz) 02/12/10 15:05 Ohau A Power Station tripping resulted in a momentary drop in frequency in the South Island. S Hz 08/12/10 14:11 A tripping at Huntly Power Station resulted in a momentary drop in frequency in the North Island. N Hz 1.4 CONNECTION POINT EVENTS There were four connection point events during the reporting period: Date Summary Details Generation/L oad interrupted (MW) Restoration time (minutes) 02/12/10 06:26 20/12/10 9:26 20/12/10 22:48 25/12/10 05:38 Glenbrook 33 kv bus sections B and D tripped resulting in a partial loss of connection. Redclyffe 110 / 33 kv supply transformers tripped resulting in a loss of supply to Redclyffe. 50 kv Te Kaha Waiotahi Circuit 1 tripped resulting in a loss of supply to Te Kaha. Carrington St 110 / 33 kv supply transformers tripped resulting in a loss of supply to Carrington St SYSTEM OPERATOR COMPLIANCE WITH RULE BOOK: PARTS 7 AND 8 During December, the System Operator notified no breaches of Part 7 or Part PARTICIPANT COMPLIANCE During December, the System Operator notified no alleged Part 8 breaches against participants. 1.7 APPLICATIONS FOR DISPENSATIONS During December, one dispensation application was received by the System Operator. 2. P ART 13 C OMPLIANCE 2.1 SYSTEM OPERATOR COMPLIANCE During December, the System Operator notified one breach of Schedule G of Part G of the EGRs for failing to incorporate revised information from the Grid Owner about the AC transmission system configuration in formulating the dispatch schedule. This was a breach of the EGRs rather than the Code as the event occurred prior to the introduction of the Code on 1 November PARTICIPANT COMPLIANCE No participant breach of Part 13 was reported by the System Operator during the month of December 2010.

6 Operational Performance Report December 2010 Page 4 of 6 3. A NCILLARY S ERVICES 3.1 SUMMARY OF PROCURED ANCILLARY SERVICES The following is a summary of the contracted ancillary services, as at December 2010: Ancillary Service Agent FK IR OFR BS VS Contact Energy * * * Counties Power Energy Response * Genesis Power KCE Mangahao and Todd Mangahao * Meridian Energy * * * * Mighty River Power * * * * NZ Aluminium Smelters * NZ Steel * Nga Awa Purua Northpower * Norske Skog Powerco * Pan Pac TrustPower * Tuaropaki (Mokai) Unison Vector * WEL Networks * Wellington Electricity Networks Winstone Pulp International (1) FK - Frequency Keeping (4) BS - Black Start (2) IR - Instantaneous Reserves (5) VS - Voltage Support (3) OFR - Over Frequency Reserve *Longer term contract 3.2 PROCUREMENT PLAN The System Operator awarded a contract to Contact Energy for Zone 1 voltage support services from Otahuhu. The contract is for the period from 1 December 2010 to 30 November The contracts for ancillary services procured for the period came into effect on 1 December 2010.

7 Operational Performance Report December 2010 Page 5 of 6 4. R ECOMMENDATIONS F OR C HANGE T O C ODES A ND R ELATED M ATTERS 4.1 CODE CHANGE PROPOSALS No rule change proposals were made in December EXEMPTION APPLICATIONS No exemption applications were made during the month of December O PERATIONAL U PDATE : 5.1 COMMISSIONING OF GENERATION ASSETS The following table is a summary of active, publicly disclosed commissioning projects where the System Operator is involved: Summary of generator commissioning Generator Asset Owner Description Status Name Nga Awa Purua Mighty River Power A second geothermal power station at Rotokawa. Awaiting final ACS. Te Rere Hau NZ Windfarms A new wind farm development located in the Tararua Ranges. Assessing final ACS. West Wind Meridian Energy A new wind farm development located close to Wellington. Assessing final ACS. Stratford Peaking Plant Contact Energy Two 100MW gas fired peaking units to be located close to the existing Stratford power plant. Commissioning activities commenced during November Te Uku Meridian Energy A new wind farm connection at Te Kowhai Substation Commission activities commenced during November C ONFLICTS OF I NTEREST There were no new conflicts of interest arising during the month of December D EVELOPMENT AND R ESOURCES During December, in addition to routine operations, System Operator resources were applied as follows: Preparation for operations with SFT continued during December Transpower s HVDC Pole 3 project to define tool changes TASC projects Scarcity Pricing Dispatchable demand Normal frequency management Under frequency management AGC project scoping and costing

8 Operational Performance Report December 2010 Page 6 of 6 8. E LECTRICITY I NDUSTRY P ARTICIPATION C ODE P ART 7 Code 7.10 Separation of Transpower Roles In performing its role as System Operator, Transpower New Zealand Limited (Transpower) has not been materially affected by any other role or capacity Transpower has under the Electricity Industry Participation Code 2010 or under any agreement.

9 System Performance Report To the Electricity Authority December 2010 Purpose This System Performance Report summarises power system performance each month. The detailed reporting of system events is intended to provide an understanding of the nature of system events that occur in the normal course of the real time co-ordination of security and to identify emerging issues in system operation.

10 System Performance Report December 2010 Page 1 of 12 Table of Contents 1. SUMMARY OF SYSTEM PERFORMANCE PRINCIPAL PERFORMANCE OBLIGATIONS Avoid Cascade Failure Frequency OPERATIONAL MANAGEMENT Security Notices Grid Emergencies Customer Advice Notices (CANs) Standby Residual Check (SRC) notices Voltage Management Outage Management Constraints SYSTEM EVENTS Significant System Events System Events during reporting period System Events Trend

11 System Performance Report December 2010 Page 2 of S UMMARY OF S YSTEM P ERFORMANCE This system performance report covers the month of December Principal Performance Obligations The System Operator met the Principal Performance Obligations during the reporting period. Operational Management December was characterised by a number of problems affecting System Operator s tools and related systems. Commissioning of the Contact Energy peaker plants at Stratford continued but was halted over the holiday period. Commissioning is due to recommence in January. A tripping of HLY U2 on the 8th resulting in a frequency fall to also resulted in some IL tripping even though activation is expected at 49.2Hz. With the reduced generation over the holiday period the ongoing system management issues at Kinleith became prominent again, resulting in a number of declarations of Grid Emergency in order to reconfigure the grid to manage risk on the HAM_WKM circuits. The same low demand conditions also meant wind was scheduled off (due to price) on 2 days, the 24th and 25th. The CHC aftershock earthquake on the 26th of December caused little impact to NCC despite several Orion feeders tripping. Some minor effects to Transpower's equipment were found. System Events On 2 nd December at 06:26, Glenbrook 33 kv supply buses B & D tripped resulting in a partial loss of supply to Glenbrook. Supply was restored after 120 minutes. nd On 2 December at 15:05, Ohau B Power Station tripped, resulting in a momentary drop in South Island frequency to Hz and North Island frequency to Hz. th On 8 December at 14:11, Huntly Unit 2 tripped, resulting in a momentary drop in North Island frequency to Hz and South Island frequency to Hz. th On 19 December at 01:16, the Maraetai 220 kv bus tripped resulting in a loss of connection to Maraetai and Waipapa Power Stations. Connection was restored to Maraetai Power Station after 197 minutes and to Waipapa Power Station after 213 minutes. th On 20 December at 09:26, Redclyffe 110 / 33 kv supply transformers T1 and T2 tripped resulting in a loss of supply to Redclyffe. Supply was restored after 55 minutes. th On 20 December at 22:48, 50 kv Te Kaha Waiotahi Circuit 1 tripped resulting in a loss of supply to Te Kaha. Supply was restored after 1162 minutes. th On 25 December at 05:38, Carrington Street 110 / 33 kv supply transformers T2 and T4 tripped resulting in a loss of supply to Carrington Street. Supply was restored after 50 minutes. Other noteworthy events occurring during the reporting period: On 3 rd December at 15:00, Tuai 110 / 11 kv supply transformer T15 tripped resulting in a loss of supply to Tuai Substation. Supply was restored after 22 minutes;

12 System Performance Report December 2010 Page 3 of 12 On 13 th December at 13:57, the Mvar output of West Wind Power Station started to oscillate resulting in approx 4 kv swings on the West Wind 110 kv voltage. The oscillations continued for some 20 minutes before MW oscillations commenced, at which point the station was shut down; st On 21 December at 15:31, 110 kv Inangahua Murchison Kikiwa Circuit 1 tripped resulting in a loss of supply to Murchison. Supply was restored after 12 minutes. 2. P RINCIPAL P ERFORMANCE O BLIGATIONS 2.1 AVOID CASCADE FAILURE No instances of cascade failure occurred during the reporting period. 2.2 FREQUENCY Maintain frequency in normal band and recover quickly from a fluctuation The chart below shows the maximum or minimum frequency reached and length of each frequency excursion outside the normal band (49.8 to 50.2 Hz) during the reporting period. The majority of excursions are within 0.4 Hz of the normal band and frequency typically returns to within the normal band within 2 minutes. December 2010 Maximum/minimum momentary frequency value (Hz) Length of excurson (s)

13 System Performance Report December 2010 Page 4 of 12 Maintain Frequency and limit rate occurrences during momentary fluctuations The table below shows the total number of momentary fluctuations outside the frequency normal band, recorded in both Islands, over the last 12 months. The 12 month cumulative totals, grouped by frequency band, are compared to the frequency performance objective (PPO). Frequency Band >= Freq > >= Freq > >= Freq > >= Freq > >= Freq > >= Freq > >= Freq > >= Freq > >= Freq > >= Freq > Feb-10 Mar-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Annual rate PPO target Manage time error and eliminate time error once per day The time error performance criteria are: Time error must be managed within +/- 5 seconds. Time error must be eliminated at least once every day. Time Error Compliance Table Feb-10 Mar-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Time Error Management NI Yes Yes Yes No Yes Yes Yes No Yes Yes Yes Yes SI Yes Yes Yes Yes Yes Yes Yes No Yes Yes Yes Yes Time Error Elimination NI Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes SI Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

14 System Performance Report December 2010 Page 5 of O PERATIONAL M ANAGEMENT 3.1 SECURITY NOTICES The following table shows the number of Warning Notices, Grid Emergency Notices and Customer Advice Notices issued over the last 12 months. Notices issued Feb-10 Mar-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Grid Emergency Notice Warning Notice Customer Advice Notice GRID EMERGENCIES The following table shows grid emergencies declared by the System Operator in the reporting period. Grid Emergencies Date Time Summary Details Island 02-Dec-10 08:40 21-Dec-10 16:45 22-Dec-10 07:49 23-Dec-10 09:12 24-Dec-10 07:50 27-Dec-10 10:15 28-Dec-10 10:00 29-Dec-10 09:05 30-Dec-10 08:25 31-Dec-10 07:45 29-Dec-10 03:27 Grid Emergencies were declared for insufficient generation offers in the Upper North Island and insufficient transmission capacity in the Waikato region. The grid was re-configured at KIN to alleviate the situation. A Grid Emergency was declared to allow the temporary reconfiguration of the Upper South Island transmission system after the tripping of reactive plant during a planned outage resulted in high voltages. N S

15 System Performance Report December 2010 Page 6 of 12 A summary of grid emergencies that have occurred in the last 12 months is shown in the following table. Island Region Feb-10 Mar-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Total North Island South Island & HVDC Northland Auckland Zone Waikato Bay of Plenty 2 2 Hawkes Bay 0 Taranaki 1 1 Bunnythorpe 0 Wellington North Island (all) Nelson Marlborough 1 1 West Coast Christchurch 0 Canterbury 1 1 Zone 3 0 Otago 0 Southland 1 1 South Island (all) 1 1 HVDC CUSTOMER ADVICE NOTICES (CANS) Ten CANs (Customer Advice Notices) were issued in the reporting period: Four related to outages or changes in capability of HVDC Pole 1; One related to restrictions on HVDC transfer associated with planned transmission line work; Two related to the security of supply review; Three related to a telephone conference to discuss the Maui gas shutdown. 3.4 STANDBY RESIDUAL CHECK (SRC) NOTICES A total of nine SRC notices were issued during the reporting period based on the SDS (System Operator s own load forecasting tool). These SRC notices were in respect of trading periods on 2 nd and 3 rd of December.

16 System Performance Report December 2010 Page 7 of VOLTAGE MANAGEMENT Grid voltages did not exceed the Code voltage ranges during the reporting period. No contracted voltage support ancillary services were called upon during the reporting period. 3.6 OUTAGE MANAGEMENT The following table shows the number of outages over the last 12 months where operational measures (generation agreements, load management agreements or grid re-configurations) were required to allow the outage to proceed. Load agreements generally require the distributor to manage load at one or more grid exit points. Generation agreements are required to ensure that sufficient regional generation is available to provide energy or reactive support during the outage to maintain security standards. Grid re-configurations typically involve splitting the network during the outage to manage post contingency power flows. Security of supply is sometimes reduced by grid re-configuration. Island Region Feb-10 Mar-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Total Northland Auckland Waikato North Bay of Plenty Island Hawkes Bay Taranaki Bunnythorpe Wellington Total South Island Nelson Marlborough West Coast Christchurch Canterbury Otago Southland Total

17 System Performance Report December 2010 Page 8 of CONSTRAINTS SUMMARY: Security constraints binding during the month The following table shows the binding constraints during the reporting period. Additional information on security constraints can be found on the following website address: This information includes constraint equations and a brief summary of their purpose. Island Region Constraint Name Description North Island Hamilton ARI_HAM_1_and_2_ARI_RUNBACK _ENABLED_S_P_1 The effect of this constraint is to manage flows through Arapuni-Hamilton 1 and 2 for a contingency of Arapuni-Hamilton 2 or 1 during high ARI generation. Arapuni Runback Scheme enabled. KIN_TRK_1_S_P_1A_temp The effect of this constraint is to manage flows through Kinleith Tarukenga1 for a contingency of Hamilton-Whakamaru 1 when Auckland generation is low. HVDC DCNPole1Max The purpose of this constraint is to limit the flow on HVDC Pole 1 to the Asset Owner s offered capability. South Island & HVDC Otago NSY_ROX_1_S_P_z The effect of this constraint is to manage flows through Naseby-Roxburgh-1 for a contingency of Clyde-Twizel-1 during high Southland generation when all circuits are in service Southland ROX_T10_P_1_temp The effect of this constraint is to manage flows through Roxburgh T10 for a contingency of Gore-Roxburgh 1 during north transfer or high ROX 110kV generation.

18 System Performance Report December 2010 Page 9 of 12 Constraints binding during last 12 months The following table shows the binding constraints binding during the reporting period with a duration of more than 4 trading periods and those binding for more than 48 trading periods during the previous 12 months. Island Region Constraint Reporting period Previous 12 months Number of trading periods that constraint bound Percentage of trading periods Number of trading periods that constraint bound Percentage of Trading periods North Island Hamilton ARI_HAM_1_and_2_ARI_RUN BACK_DISABLED_S_P_ % % ARI_HAM_1_and_2_ARI_RUN BACK_ENABLED_S_P_ % % South Island West Coast WEST_COAST_SPLIT_O_ % % Otago NSY_ROX_1_S_P_z % % HVDC DCNPole1Max % % DCNPole1Min % % 4. S YSTEM E VENTS 4.1 SIGNIFICANT SYSTEM EVENTS The following table shows significant events (frequency excursions and connection point events) which occurred during the reporting period. Significant frequency excursions Date Time Summary Details Island Freq (Hz) 02/12/10 15:05 Ohau A Power Station tripping resulted in a momentary drop in frequency in the South Island. 08/12/10 14:11 A tripping at Huntly Power Station resulted in a momentary drop in frequency in the North Island. S N Hz Hz Connection point events Date Time Summary Details Generation/L oad interrupted (MW) Restoration time (minutes) 02/12/10 06:26 Glenbrook 33 kv bus sections B and D tripped resulting in a partial loss of connection. 20/12/10 9:26 Redclyffe 110 / 33 kv supply transformers tripped resulting in a loss of supply to Redclyffe. 20/12/10 22:48 50 kv Te Kaha Waiotahi Circuit 1 tripped resulting in a loss of supply to Te Kaha. 25/12/10 05:38 Carrington St 110 / 33 kv supply transformers tripped resulting in a loss of supply to Carrington St

19 System Performance Report December 2010 Page 10 of SYSTEM EVENTS DURING REPORTING PERIOD System events that occurred during the reporting period are summarised below: Contingent events Event Number Summary Loss of single AC transmission circuit 34 These related to trippings of Inangahua-Westport 2, Westport T2, Robertson Street T1 Bombay-Hamilton 1 & 2 (Auto Reclose) Owhata-Tarukenga-Te Matai 1 (Auto Reclose) Otahuhu 312 (Bombay-Otahuhu-Otahuhu 2) (Auto Reclose) Te Kaha-Waiotahi 1 (Auto Reclose) Bunnythorpe-Tokaanu 1 (Auto Reclose) x 2 Bunnythorpe-Mangahao 2 & Mangahao T4 Te Kaha-Waiotahi 1 (Auto Reclose) x 20 Inangahua-Kikiwa 1 (Auto Reclose) Islington-Kikiwa-Kikiwa 3, Waipara T13, & Culverden T23 Stratford 162 (Opunake-Stratford 1) Bunnythorpe-Tangiwai 1 (Auto Reclose) Masterton-Mangamaire 1 Loss of HVDC pole 0 Loss of single generation units Total during reporting period These related to trippings of Rangipo G6 Tekapo A G1 Huntly U1, U2, U4 & U6 Westwind generation Wairakei G15 Southdown ST1 x 4 Cobb G5 Wheao generation Rangipo G5 Kinleith G1 Extended contingent events Event Loss of both HVDC poles Number Summary 0

20 System Performance Report December 2010 Page 11 of 12 Other events Event Loss of multiple AC transmission circuits Loss of bus bar section Loss of interconnecting transformer Loss of grid reactive plant Loss of supply transformer Number Summary 0 These events related to trippings of GLN Buses B & D Ohau A station 5 Maraetai-Waipapa-Waipapa 1 Redclyffe T1 Carrington Street1062 (T2) & 1002 (T4) 0 These events related to trippings of Mount Maunganui C1 4 Otahuhu GT6 Kikiwa STC2A x 2 These events related to trippings of Tuai T15 4 Hamilton T8 (x 3) Demand change 0 Loss of multiple generation units 1 West Wind had issues with voltage regulation culminating in a forced station shutdown. HVDC Start/ Stop 0 Total during reporting period 14 Other disturbances Event Number Summary Feeder trippings 68 Various locations Total during reporting period 68

21 System Performance Report December 2010 Page 12 of SYSTEM EVENTS TREND Feb-10 Mar-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Total Average Events per month Contingent Event transmission Contingent Event generation Contingent Event - HVDC Extended Contingent Event Other Event AC transmission Other Event Busbar Other Event Demand Other Event Generation Other Event Interconnecting transformer Other Event Reactive plant Other Event Supply transformer

22 Ancillary Services Procurement Report December 2010 Purpose of Report This Ancillary Service Procurement Report is provided to the Electricity Authority, as required under Clause 8.43(3)(i) of the Electricity Industry Participation Code The report is designed to summarize the procurement of ancillary services as follows: Settlement volumes, prices, costs, and administrative costs where appropriate. Any issues arising with respect to cost allocation, liability and disputes. Other general procurement issues

23 Ancillary Services Procurement Report Page 2 of 9 December 2010 Table of Contents 1 Summary of Procurement Costs 3 2 Summary of Contracted Ancillary Services 8 3 System Operator Compliance to Procurement Plan 10/ Events Requiring Further Consideration for Regulation and or Rule Change 9

24 Ancillary Services Procurement Report Page 3 of 9 December Summary of Procurement Costs 1.1 Frequency Keeping (FK) Frequency Keeping Cost Constrained Off $261,949 Constrained On $823,024 Market offer $2,804,161 Total monthly frequency keeping cost $3,889,133 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- Frequency Keeping Feb-10 Mar-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 constrained off Constrained on Market Frequency Keeping (rolling 4 years) $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 constrained off Constrained on Market

25 Ancillary Services Procurement Report Page 4 of 9 December Instantaneous Reserve (IR) Instantaneous Reserve Cost Spinning reserve $619,155 Interruptible Load $529,657 Constrained On $ 20,306 Total monthly Instantaneous Reserve cost $1,169,117 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Instantaneous Reserve Feb-10 Mar-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Interrupt Load Spinning Reserve Constrained On Instantaneous Reserve (rolling 4 years) $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Interrupt Load Spinning Reserve Constrained On

26 Ancillary Services Procurement Report Page 5 of 9 December Over Frequency Reserve (OFR) Over Frequency Reserve Total monthly Over Frequency Reserve cost Cost $97,500 $120,000 Over Frequency Reserve $100,000 $80,000 $60,000 $40,000 $20,000 $- Feb-10 Mar-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Over Frequency Reserve (rolling 4 years) $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09

27 Ancillary Services Procurement Report Page 6 of 9 December Black Start (BS) Black Start Cost Total monthly Black Start cost $45,493 $46,000 Black Start $45,000 $44,000 $43,000 $42,000 $41,000 $40,000 $39,000 Feb-10 Mar-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Black Start (rolling 4 years) $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09

28 Ancillary Services Procurement Report Page 7 of 9 December Voltage Support (VS) Voltage Support Cost Total monthly Voltage Support cost $686,667 $700,000 $690,000 $680,000 $670,000 $660,000 $650,000 $640,000 $630,000 $620,000 $610,000 $600,000 $590,000 Voltage Support Feb-10 Mar-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Voltage Support (rolling 4 years) $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $- Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct Administrative Costs Nil

29 Ancillary Services Procurement Report Page 8 of 9 December Summary of Contracted Ancillary Services The table below provides a summary of contracted ancillary services as at December Ancillary Service Agent FK IR OFR BS VS Contact Energy * * * Counties Power Energy Response * Genesis Power KCE Mangahao and Todd Mangahao * Meridian Energy * * * * Mighty River Power * * * * NZ Aluminium Smelters * NZ Steel * Nga Awa Purua Northpower * Norske Skog Powerco * Pan Pac TrustPower * Tuaropaki (Mokai) Unison Vector * WEL Networks * Wellington Electricity Networks Winstone Pulp International (1) FK - Frequency Keeping (2) IR - Instantaneous Reserves (3) OFR - Over Frequency Reserve (4) BS - Black Start (5) VS - Voltage Support *Longer term contract

30 Ancillary Services Procurement Report Page 9 of 9 December System Operator Compliance to Procurement Plan 10/ Procurement Plan Summary of Procured Ancillary Services Voltage Support Zone 1 The System Operator awarded a contract to Contact Energy for voltage support services from Otahuhu. The contract is to provide reactive support in Zone 1 for the period from 1 December 2010 to 30 November Changes to Ancillary Service Procurement Contracts There were no changes to provider s contracts during the reporting period as contracts had been updated through the tendering and awarding process. 4 Events Requiring Further Consideration for Regulation and or Rule Change Nil Report Ends