Electricity Governance Connection of Distributed Generation Regulations 2007

Reprintas at 1 November 2010

Electricity Governance(Connection of DistributedGeneration) Regulations 2007

(SR 2007/219)Electricity Governance (Connection of Distributed Generation) Regulations2007: revoked, on 1 November 2010, by section 166 of the Electricity IndustryAct 2010 (2010 No 116).

Dame Sian Elias, Administrator of the Government

Order in Council

At Wellington this 30th day of July 2007

Present:Her Excellency the Administrator of the Government in Council

Pursuant to sections 172D(1)(10) and 172J(1)(aa) of the ElectricityAct 1992, Her Excellency the Administrator of the Government, act-

NoteChanges authorised by section 17C of the Acts and Regulations Publication Act 1989have been made in this reprint.A general outline of these changes is set out in the notes at the end of this reprint, togetherwith other explanatory material about this reprint.These regulations are administered by the Ministry of Economic Development.

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Electricity Governance (Connection ofDistributed Generation) Regulations 2007

Reprinted as at1 November 2010

ing on the advice and with the consent of the Executive Council,makes the following regulations.

ContentsPage

1 Title 32 Commencement 33 Purpose 34 Outline 35 Interpretation 36 Distributors must make information publicly available 67 Process for obtaining approval to connect 78 Connection contract outside regulated terms 79 Connection on regulated terms 710 Extra terms 811 Dispute resolution 812 Pricing principles 913 Application of regulations to persons other than

distributors and generators9

14 Distributors must act at arms length 915 Regulations do not affect rights and obligations under

rules10

Consequential amendments16 Amendments to Electricity Governance Regulations 2003 10

Transitional provisions17 Regulations do not apply to earlier connections 10

Schedule 1 11Process for obtaining approval to connect

Schedule 2 31Regulated terms for connection of distributed

generation

Schedule 3 46Default dispute resolution process

Schedule 4 48Pricing principles

Schedule 5 52Prescribed maximum fees

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Electricity Governance (Connection ofDistributed Generation) Regulations 2007 r 5

Regulations1 Title

These regulations are the Electricity Governance (Connectionof Distributed Generation) Regulations 2007.

2 CommencementThese regulations come into force on the 28th day after thedate of their notification in the Gazette.

3 PurposeThe purpose of these regulations is to enable connection of dis-tributed generation where connection is consistent with con-nection and operation standards.

4 OutlineThese regulations specify(a) a framework to enable connection of distributed gen-

eration where connection is consistent with connectionand operation standards; and

(b) in Schedule 1, processes (including time frames) underwhich generators may apply to distributors for approvalto connect distributed generation (including the infor-mation to be exchanged and the criteria for approval);and

(c) in Schedule 2, the regulated terms that apply to the con-nection of distributed generation in the absence of con-tractually agreed terms; and

(d) in Schedule 3, a default dispute resolution process fordisputes related to these regulations; and

(e) in Schedule 4, the pricing principles to be applied forthe purposes of these regulations; and

(f) in Schedule 5, prescribed maximum fees.

5 Interpretation(1) In these regulations, unless the context otherwise requires,

Act means the Electricity Act 1992

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r 5Electricity Governance (Connection of

Distributed Generation) Regulations 2007Reprinted as at

1 November 2010

business day means any day of the week other than Satur-day, Sunday, or a public holiday (within the meaning of theHolidays Act 2003)capacity, in relation to a distribution network, means the cap-ability of the network to convey electricity under a range ofload and generation conditions in accordance with reasonableand prudent operating practicecongestion management policy means the policies, rules, orconditions referred to in regulation 6(2)(d)connect, in relation to distributed generation, means to be con-nected to a distribution network or to a consumer installationthat is connected to a distribution networkconnection and operation standards, in relation to a distribu-tor or distributed generation,(a) means requirements, as amended from time to time by

the distributor, that(i) are set out in written policies and standards of the

distributor; and(ii) relate to the connection of distributed generation

and the operation of the distribution network, in-cluding requirements relating to the planning, de-sign, construction, testing, inspection, and oper-ation of assets that are, or are proposed to be, con-nected to the distribution network; and

(iii) are made publicly available in accordance withregulation 6; and

(iv) reflect, or are consistent with, reasonable andprudent operating practice; and

(b) includes the following, as amended from time to timeby the distributor:(i) the distributors congestion management policy,

as referred to in regulation 6(2)(d); and(ii) the distributors emergency response policies;

and(iii) the distributors safety standards

consumer installation includes(a) an electrical installation; and(b) any fittings that are used, or designed or intended for

use, by any person in or in connection with the gener-

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ation of electricity so that electricity can be injected intoa distribution network

distributed generation means equipment used, or proposedto be used, for generating electricity that(a) is connected, or proposed to be connected, to a distribu-

tion network, or to a consumer installation that is con-nected to a distribution network; and

(b) is capable of injecting electricity into that distributionnetwork

distribution network means the electricity lines, and associ-ated equipment, owned or operated by a distributor, but doesnot include(a) the national grid; or(b) an embedded network that is used to convey less than

2.5 GWh per annumdistributor has the same meaning as electricity distributor insection 2(1) of the Actgenerator means a person who owns or operates distributedgenerationreasonable and prudent operating practice, in relation todistributed generation, includes(a) the industry operating standards; and(b) measures to avoid the injection of electricity from dis-

tributed generation that(i) exceeds the capacity of the distribution network

at the point of injection; or(ii) results in excessive power flow at feeder points

or a significant adverse effect on voltage levels;or

(iii) results in a significant adverse effect on the qual-ity and reliability of supply to other users of thedistribution network; and

(c) the use or proposed use of reasonable and prudent meas-ures to enable the connection of distributed generation

regulated terms means the terms set out in Schedule 2retailer has the same meaning as electricity retailer in section2(1) of the Act

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rules means the rules called the Electricity Governance Rulesmade by the Minister of Energy under section 172H of the Actby notice published in the Gazette, as amended from time totime.

(2) Any term that is defined in the rules and used, but not defined,in these regulations has the same meaning as in the rules.

(3) Any term that is defined in the Act and used in these regula-tions, but not defined in these regulations or the rules, has thesame meaning as in the Act.

6 Distributors must make information publicly available(1) The purpose of this regulation is to require distributors tomake

certain information publicly available to enable connection ofdistributed generation where consistent with connection andoperation standards.

(2) Each distributor must make publicly available, free of charge,from its office and Internet site,(a) application forms for connection of distributed gener-

ation; and(b) the distributors connection and operation standards;

and(c) a copy of the regulated terms, together with an explan-

ation of how the regulated terms will apply if(i) approval to connect distributed generation is

granted; and(ii) the distributor and the generator do not enter into

a connection contract outside the regulated terms;and

(d) a statement of the policies, rules, or conditions underwhich distributed generation is, or may be, curtailed orinterrupted from time to time in order to ensure that thedistributors other connection and operation standardsare met; and

(e) the application fees specified by the distributor in re-spect of applications for connection of distributed gen-eration.

(3) The application forms referred to in subclause (2)(a) mustspecify the information (including any supporting documents)that must be provided with an application.

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7 Process for obtaining approval to connect(1) Schedule 1 applies if a generator wishes to apply for approval

to connect distributed generation (whether on the regulatedterms or outside the regulated terms).

(2) Distributors must grant approval to connect distributed gener-ation if and as required to do so by Schedule 1.

(3) Distributors cannot contract out of the provisions of Schedule1.

8 Connection contract outside regulated termsIf the distributor and the generator enter into a connectioncontract outside the regulated terms for the connection of dis-tributed generation,(a) their rights and obligations in respect of the connection

of the distributed generation are governed by that con-tract, and accordingly the regulated terms do not apply:

(b) a breach of the terms of that contract is not a breach ofthese regulations.

9 Connection on regulated terms(1) Schedule 2 sets out the regulated terms for the connection of

distributed generation.(2) These terms apply if the distributor and the generator do not

enter into a connection contract outside the regulated terms bythe expiry of the period for negotiating a connection contractunder clause 9 or 24 of Schedule 1.

(3) If the regulated terms apply,(a) the parties rights and obligations in respect of the con-

nection of the distributed generation are governed bythe regulated terms; and

(b) a breach of the regulated terms is not a breach of con-tract.

(4) Despite this regulation, the distributor and the generator mayat any time, by mutual agreement, enter into a connection con-tract outside the regulated terms that will apply instead of theregulated terms.

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10 Extra terms(1) The parties rights and obligations in respect of a connection

on the regulated terms are also governed by any other termsand conditions (extra terms) that(a) were made publicly available under regulation 6(2)(d)

in a statement of the terms and conditions that wouldapply to distributed generation if there is congestion onthe distribution network; or

(b) cover any other incidental matters (for example, invoic-ing procedures) if(i) the matters are not covered by the regulated

terms; and(ii) the other matters are reasonable terms and con-

ditions that either were proposed by the distribu-tor during the 30-business-day negotiation periodas part of a connection contract outside the regu-lated terms or are terms that would be implied bylaw if the connection was under a contract out-side the regulated terms; and

(iii) the other terms and conditions do not contradictany of the regulated terms.

(2) In these regulations, if the parties have agreed to change all orany part of 1 or more of the regulated terms as part of a bindingcontract, the resulting contract is, in total, a contract outsidethe regulated terms for the purposes of these regulations.

11 Dispute resolution(1) Schedule 3 applies

(a) to disputes between the generator and the distributorarising from an allegation that a party has breached anyof the regulated terms that apply under regulation 9(2);and

(b) if there is any other dispute between a distributor anda generator about an alleged breach of any of the otherprovisions of these regulations.

(2) However, Schedule 3 does not apply to disputes between thegenerator and the distributor

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(a) arising from an allegation that a party has breached anyof the terms of a connection contract outside the regu-lated terms; or

(b) arising from an allegation that a party has breached anyof the extra terms referred to in regulation 10(1); or

(c) that the generator and the distributor have agreedshould be determined by any other agreed method (forexample, under any complaints resolution system thatis approved under section 158G of the Act).

12 Pricing principlesSchedule 4 applies in accordance with(a) clause 20 of Schedule 2; and(b) clause 4 of Schedule 3.

13 Application of regulations to persons other thandistributors and generators

(1) These regulations also apply, in so far as they are applicable,to(a) a retailer with whom a distributor or a generator has

entered into a contract (for example, a use of systemsagreement) that provides for the retailer to have any ofthe applicable rights, or carry out any of the obligations,that are regulated by these regulations; and

(b) any person to whom any of the distributors or the gen-erators obligations under the regulated terms are trans-ferred, or any person who assumes any of those obliga-tions.

(2) These regulations apply to the other persons referred to in sub-clause (1)(a) and (b) in the same way in which they apply tothe distributor or the generator, as the case may be.

(3) This regulation does not limit the rights and obligations of thedistributor and the generator under these regulations.

14 Distributors must act at arms lengthA distributor must use, in respect of all generators, the samereasonable efforts in processing and considering applicationsfor connection of distributed generation, and in connecting dis-tributed generation, regardless of whether

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(a) the distributor owns or has a beneficial interest in thegenerator; or

(b) the proposed generation is owned by the distributorsassociate or by another generator.

15 Regulations do not affect rights and obligations underrulesThese regulations do not affect any rights or obligations of adistributor or a generator under the rules.

Consequential amendments16 Amendments to Electricity Governance Regulations 2003(1) This regulation amends the Electricity Governance

Regulations 2003.(2) Regulation 3(1) is amended by revoking paragraph (b) and

substituting the following paragraphs:(b) other miscellaneous matters related to those rules, in-

cluding liability, appeals, and exemptions; and(c) the functions of the Rulings Panel, including functions

in relation to regulations made under section 172D ofthe Act.

(3) Regulation 161(a) is amended by inserting or any other regu-lations made under section 172D of the Act after of theseregulations.

(4) Regulation 161(e) is amended by inserting or any other regu-lations made under section 172D of the Act after these regu-lations.

Transitional provisions17 Regulations do not apply to earlier connections(1) These regulations do not apply in relation to, or affect, any

distributed generation that was connected under a contract en-tered into before the date on which these regulations come intoforce, except to the extent that the contract has expired.

(2) Expired does not include cancelled by the distributor beforethe date on which the contract would otherwise have expired.

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Electricity Governance (Connection ofDistributed Generation) Regulations 2007 Schedule 1

Schedule 1 r 7Process for obtaining approval to connect

ContentsPage

Part 1Applications for connection and operation of distributed

generation 10 kW or less in total1 Outline of Part 1 12

Application process2 Generator wishing to connect must apply 123 Distributors decision on application 144 Extension of time by mutual agreement for distributor

to process application15

5 Generator must give notice of intention to proceed 15

Connection process6 Thirty business days to negotiate connection contract if

generator notifies intention to proceed16

7 Testing and inspection 168 Connection of distributed generation outside regulated

terms if contract negotiated17

9 Connection of distributed generation on regulated termsif contract not negotiated

17

Part 2Applications for connection and operation of distributed

generation above 10 kW in total10 Outline of Part 2 18

Initial application process11 Generator wishing to connect must make initial

application and provide information18

12 Distributor must provide information to generator 2013 Other matters to assist with decision making 2114 Distributor and generator must make reasonable

endeavours regarding new information22

Final application process15 Generator must make final application 2216 Application for connection 2217 Priority of final applications 2318 Distributors decision on application 24

11

Schedule 1Electricity Governance (Connection of


1 November 2010

19 Time within which distributor must decide finalapplications

25

20 Generator must give notice of intention to proceed 25


generator notifies intention to proceed26

22 Testing and inspection 2723 Connection of distributed generation outside regulated

terms if contract negotiated27


27

Part 3General provisionsConfidentiality

25 Confidentiality of information provided before connection 28

Annual reporting and record keeping26 Distributors must report annually to Electricity

Commission29

27 Electricity Commission must make information fromdistributors publicly available

30

28 Distributors must keep records 30

Part 1Applications for connection and operation ofdistributed generation 10 kW or less in total

1 Outline of Part 1(1) This Part applies only to distributed generation that is only

capable of generating electricity at a rate of 10 kW or less intotal.

(2) This Part provides for a 1-stage application process.

Application process2 Generator wishing to connect must apply(1) A generator who wishes to connect distributed generation that

is only capable of generating electricity at a rate of 10 kW orless in total must apply to the distributor.

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Part 1continued

(2) The generator must apply by(a) using the application form provided by the distributor

that is publicly available under regulation 6(2)(a); and(b) providing any information in respect of the distributed

generation proposed to be connected that is(i) referred to in subclause (3); and(ii) specified by the distributor under regulation 6(3)

as being required to be provided with the appli-cation.

(3) The information may include the following:(a) the full name and address of the owner or operator of

the distributed generation and the contact details of aperson whom the distributor may contact regarding thedistributed generation:

(b) whether the proposed connection is a new connection oran increase in capacity for an existing connection andevidence of the size (nominal capacity) of the gener-ating unit, including the name plate rating (if known)or other suitable evidence that the generating unit is orwill be only capable of generating electricity at a rate of10 kW or less, including,(i) if the proposed connection is a new connection,

the size (nominal capacity) of the total gener-ation:

(ii) if the application is for an increase in capacityfor an existing connection, both the size (nominalcapacity) of the additional generation and the ag-gregate size (nominal capacity) of all devices atthe point of connection:

(c) type of distributed generation (for example, solar photo-voltaic):

(d) proposed location of the distributed generation andwhen the distributed generation is likely to be con-nected:

(e) technical specifications of the distributed generationand associated equipment, including

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1 November 2010

Part 1continued

(i) technical specifications of equipment that allowsthe distributed generation to be disconnectedfrom the network on loss of mains voltage:

(ii) manufacturers rating of equipment:(iii) number of phases:(iv) proposed point of connection to the distribution

network (for example, installation control pointnumber and street address):

(v) details of either or both of any inverter and bat-tery storage:

(vi) details of any load at the proposed point of con-nection:

(vii) details of the connected voltage (for example,415 V or 11 kV):

(f) information showing how the distributed generationcomplies with the distributors connection and oper-ation standards:

(g) any additional information or documents that are rea-sonably required.

(4) The application must be accompanied by the application feespecified by the distributor, which must not exceed the maxi-mum fee prescribed in Schedule 5.

(5) The distributor must, within 5 business days of receivingan application, give written notice to the applicant advisingwhether or not the application is complete.

3 Distributors decision on application(1) A distributor must, within 30 business days after the date of

receipt of a completed application made in accordance withclause 2, give notice in writing to the applicant stating whetherthe application is approved or declined.

(2) A distributor must approve an application to connect dis-tributed generation if(a) the application has been properly made in accordance

with these regulations; and(b) the information provided in the application would rea-

sonably support an assessment by the distributor that

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Part 1continued

(i) the generator will comply at all times withthe requirements of the Health and Safety inEmployment Act 1992; and

(ii) the distributed generationwill comply at all timeswith the Act, and the regulations and rules madeunder the Act; and

(iii) the connection of the distributed generationwould be consistent with the distributors con-nection and operation standards.

(3) A notice stating that an application is declined must be accom-panied by the following information:(a) detailed reasons of why the application has been de-

clined and, if the generator makes a new application,the steps that the applicant can take to ensure connec-tion; and

(b) the default process under Schedule 3 for the resolutionof disputes about an alleged breach of the regulatedterms or any other provision of the regulations.

4 Extension of time by mutual agreement for distributorto process application

(1) The distributor may seek an extension of the time specified inclause 3(1) by which the distributor must give notice in writingstating whether the application is approved or declined.

(2) The distributor must do this by notice in writing to the gener-ator specifying the reasons for the extension.

(3) The generatormay grant an extension of up to 20 business daysand must not unreasonably withhold consent to an extension.

5 Generator must give notice of intention to proceed(1) If the distributor advises that the generators application to

connect distributed generation is approved, the generator mustprovide written notice to the distributor confirming whether ornot the generator intends to proceed with the connection and,if so, confirming the details of the generation to be connected.

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Part 1continued

(2) The generator must give that notice within 10 business daysafter the day on which the distributor gives notice of approvalto connect distributed generation, or within a longer period oftime mutually agreed between the distributor and the gener-ator.

(3) The distributors duties under these regulations arising fromthe application for connection of distributed generation nolonger apply if the generator fails to give notice to the dis-tributor within the time limit specified in subclause (2).

(4) Subclause (3) does not prevent the generator making a new ap-plication for connection of distributed generation under theseregulations.


generator notifies intention to proceed(1) If a generator gives notice under clause 5, the distributor and

the generator have 30 business days (starting on the date onwhich the distributor receives the notice) during which theymust, in good faith, attempt to negotiate a connection contract.

(2) The distributor and the generator may, by mutual agreement,extend the time specified in subclause (1) for negotiating aconnection contract.

7 Testing and inspection(1) The generator must test and inspect its distributed generation.(2) The generator must give adequate notice of the testing and

inspection to the distributor.(3) The distributor may send qualified personnel to the site to ob-

serve the testing and inspection.(4) The generator must provide the distributor with a written test

report when testing and inspection is complete, including suit-able evidence that the metering installation complies with themetering standards in the rules.

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Part 1continued

(5) The generator must pay any fee specified by the distributor forobserving the testing and inspection, up to the maximum feeprescribed in Schedule 5.

8 Connection of distributed generation outside regulatedterms if contract negotiatedIf the distributor and the generator enter into a connection con-tract before the period for negotiating a connection contractunder this Part expires,(a) the distributor must connect the distributed generation

in accordance with that contract as soon as practicable;and

(b) the generator must complete the testing and inspectionunder clause 7.

9 Connection of distributed generation on regulated termsif contract not negotiatedIf the distributor and the generator do not enter into a connec-tion contract before the period for negotiating a connectioncontract under this Part expires,(a) the distributor must connect the distributed generation

on the regulated terms as soon as practicable after theexpiry of that period; and


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Part 2Applications for connection and operation ofdistributed generation above 10 kW in total

10 Outline of Part 2(1) This Part applies only to distributed generation that is capable

of generating electricity at a rate above 10 kW in total.(2) This Part provides for a 2-stage application process.(3) In this Part, unless the context otherwise requires,

final application means an application made under clause 15initial application means an application made under clause11.

Initial application process11 Generator wishing to connect must make initial

application and provide information(1) A generator who wishes to connect distributed generation that

is capable of generating electricity at a rate above 10 kW intotal must first make an initial application to the distributor.

(2) The generator must make the initial application by(a) using the application form provided by the distributor

that is publicly available under regulation 6(2)(a); and(b) providing any information in respect of the distributed

generation proposed to be connected that is(i) referred to in subclause (3); and(ii) specified by the distributor under regulation 6(3)

as being required to be provided with the appli-cation.

(3) The information may include the following:(a) the full name and address of the owner or operator of

the distributed generation and the contact details of aperson whom the distributor may contact regarding thedistributed generation:

(b) whether the proposed connection is a new connection oran increase in capacity for an existing connection andevidence of the size (nominal capacity) of the gener-ating unit, including the name plate rating (if known),including,

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Part 2continued

(i) if the proposed connection is a new connection,the size (nominal capacity) of the total gener-ation:

(ii) if the application is for an increase in capacityfor an existing connection, both the size (nominalcapacity) of the additional generation and the ag-gregate size (nominal capacity) of all devices atthe point of connection:

(c) type of distributed generation (for example, solar photo-voltaic):

(d) proposed location of the distributed generation andwhen the distributed generation is likely to be con-nected:

(e) technical specifications of the distributed generationand associated equipment, including(i) technical specifications of equipment that allows

the distributed generation to be disconnectedfrom the network on loss of mains voltage:

(ii) manufacturers rating of equipment:(iii) number of phases:(iv) proposed point of connection to the distribution

network (for example, installation control pointnumber and street address):

(v) details of either or both of any inverter and bat-tery storage:

(vi) details of any load at the proposed point of con-nection:

(vii) details of the connected voltage (for example,415 V or 11 kV):

(f) information showing how the distributed generationcomplies with the distributors connection and oper-ation standards:

(g) the maximum active power injected (MW max):(h) the reactive power requirements (MVArs) (if any):(i) resistance and reactance details of the generating unit:(j) fault level contribution (kA):(k) method of voltage control:

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Part 2continued

(l) single line diagram of proposed connection:(m) means of synchronisation and connection and discon-

nection to the network, including the type and ratingsof circuit breaker proposed:

(n) details of compliance with frequency and voltage sup-port requirements as specified in the rules (if applic-able):

(o) proposed periods and amounts of electricity injectionsinto, and offtakes from, the distribution network (ifknown):

(p) any other information that is required by the system op-erator:

(q) any additional information or documents that are rea-sonably required.

(4) The application must be accompanied by the application feespecified by the distributor, which must not exceed the maxi-mum fee prescribed in Schedule 5.

(5) The distributor must, within 5 business days of receiving aninitial application, give written notice to the applicant advisingwhether or not the application is complete.

12 Distributor must provide information to generatorThe distributor must provide the generator with a copy of thefollowing within 30 business days of receiving a completedinitial application:(a) information about the capacity of the distribution net-

work, including both the design capacity (includingfault levels) and actual operating levels; and

(b) information about the extent to which connection andoperation of the distributed generation may result ina breach of the relevant standards for safety, voltage,power quality, and reliability of supply to other con-nected parties; and

(c) information about any measures or conditions (includ-ing modifications to the design and operation of the dis-tribution network or to the operation of the distributed

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Part 2continued

generation) that may be necessary to address the mat-ters referred to in paragraphs (a) and (b); and

(d) the approximate costs of any network-related measuresor conditions identified under paragraph (c) and an es-timate of time constraints or restrictions that may delaythe connecting of the distributed generation; and

(e) information about any further detailed investigativestudies that the distributor reasonably considers arenecessary to identify any potential adverse effects onthe system resulting from the proposed connection,together with an indication of(i) whether the distributor agrees to the generator, or

a suitably qualified agent of the generator, under-taking those studies; or

(ii) if not, whether the distributor could undertakethose studies and, if so, the reasonable estimatedcost of the studies that the generator would becharged; and

(f) information about any obligations to other parties thatmay be imposed on the distributor and that could affectthe distributed generation (for example, obligations toTranspower, in respect of other networks, or under therules); and

(g) any additional information or documents that the dis-tributor considers would assist the generators applica-tion; and

(h) information about the extent to which planned and un-planned outages may adversely affect the operation ofthe distributed generation.

13 Other matters to assist with decision making(1) A distributor must provide, if requested by a generator making

an initial application, further information that is reasonablynecessary to enable the generator to consider and act on theinformation given by the distributor under clause 12.

(2) The information that the distributor must provide under sub-clause (1) may include single line diagrams, equipment rat-

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Part 2continued

ings, normal switch configurations (including fault levels), andprotection system details relevant to the proposed point of con-nection of the distributed generation to the distribution net-work.

(3) The distributor must provide the further information under thisclause within 10 business days of the request being received.

14 Distributor and generator must make reasonableendeavours regarding new informationIf a distributor or generator has given information under thisPart and subsequently becomes aware of new information thatis relevant to the application, the party who becomes aware ofthe new information must use reasonable endeavours to pro-vide the other party with the new information.

Final application process15 Generator must make final application(1) The generator must make a final application, within 12 months

after receiving the information under clauses 12 and 13, if thegenerator intends to proceed to connect to the distribution net-work.

(2) The generator must make the final application by(a) using the final application form provided by the dis-

tributor that is publicly available under regulation6(2)(a); and

(b) providing the results of any investigative studies thatwere identified by the distributor under clause 12(e)(i)as to be undertaken by the generator or the generatorsagent.

16 Application for connectionA distributor who receives a final application must use reason-able endeavours to notify in writing(a) all persons who have made an initial application for

connection of distributed generation to the particularpart of the distribution network that the distributor con-

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Part 2continued

siders would be affected by the connection of the dis-tributed generation that is the subject of the final appli-cation; and

(b) all generators who have distributed generation above10 kW in total connected on the regulated terms to theparticular part of the distribution network that the dis-tributor considers would be affected by the connectionof the distributed generation.

17 Priority of final applications(1) This regulation applies if

(a) a distributor receives a final application for connectionto a distribution network (the first application); and

(b) the distributor receives another final application, within10 business days after receiving the first application,for connection to a particular part of the distributionnetwork that the distributor considers would be affectedby the connection of the distributed generation that isthe subject of the first application.

(2) The distributor(a) may consider the 2 or more final applications together

as if they were competitive bids to use the same part ofthe network; and

(b) must consider the final applications in light of the pur-pose of these regulations; and

(c) in giving reasons under clause 18 in the case of any finalapplication that is declined, must set out the criteria usedin making any decision that relates to paragraph (a) or(b).

(3) In any other case in which a distributor receives more than 1final application for connection to a similar part of the distri-bution network, the distributor must consider an earlier finalapplication in priority to other final applications.

(4) Subclause (3) does not limit clause 19.

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Part 2continued

18 Distributors decision on application(1) A distributor must, within the time limit specified in clause 19,

give notice in writing to the applicant stating whether the finalapplication is approved or declined.

(2) A distributor must approve a final application to connect dis-tributed generation, subject to any conditions specified by thedistributor that are reasonably required, if(a) the application has been properly made in accordance

with these regulations; and(b) the information provided in the application would rea-

sonably support an assessment by the distributor that(i) the generator will comply at all times with

the requirements of the Health and Safety inEmployment Act 1992; and

(ii) the distributed generationwill comply at all timeswith the Act and the regulations and rules madeunder the Act; and

(iii) the connection of the distributed generationwould be consistent with the distributors con-nection and operation standards (assuming thatthe generator performs the conditions (if any)referred to in subclause (3)).

(3) A notice stating that an application is approved subject to con-ditions must be accompanied by the following information:(a) a detailed description of the conditions (or other meas-

ures) that are conditions of connection, and what thegenerator must do to comply with them; and

(b) detailed reasons for those conditions (or other meas-ures); and

(c) a detailed description of the charges payable by the gen-erator; and

(d) the default process for resolution of disputes underSchedule 3, if the generator disputes all or any of theconditions (or other measures) or charges payable.

(4) A notice stating that an application is declined must be accom-panied by the following information:

24
http://www.legislation.govt.nz/pdflink.aspx?id=DLM278828http://www.legislation.govt.nz/pdflink.aspx?id=DLM278828



Part 2continued

(a) detailed reasons as to why the application has been de-clined and, if the generator makes a new application, thesteps that the applicant can take to ensure connection;and

(b) the default process for resolution of disputes underSchedule 3.

19 Time within which distributor must decide finalapplications

(1) The written notice required by clause 18 must be providedwithin(a) 45 business days after the date of receipt of the final

application, in the case of an application for distributedgeneration that is not capable of generating electricityat a rate of at least 1 MW; or

(b) 60 business days after the date of receipt of the finalapplication, in the case of an application for distributedgeneration that is capable of generating electricity at arate of at least 1 MW but is not capable of generatingelectricity at a rate of at least 5 MW; or

(c) 80 business days after the date of receipt of the finalapplication, in the case of an application for distributedgeneration that is capable of generating electricity at arate of at least 5 MW or above.

(2) The distributor may seek 1 or more extensions of the time spe-cified in subclause (1).

(3) The distributor must do this by notice in writing to the gener-ator specifying the reasons for the extension.

(4) The generatormay grant an extension of up to 40 business daysand must not unreasonably withhold consent to an extension.

20 Generator must give notice of intention to proceed(1) If the distributor advises that the generators final applica-

tion to connect distributed generation is approved, the gener-ator must provide written notice to the distributor confirmingwhether or not the generator intends to proceed with the con-nection and, if so, confirming

25



1 November 2010

Part 2continued

(a) the details of the distributed generation to be connected;and

(b) that the generator accepts all of the conditions (or othermeasures) that have been specified by the distributorunder clause 18 as conditions of the connection.

(2) The generator must give that notice within 30 business daysafter the day on which the distributor gives notice of approvalto connect distributed generation, or within a longer period oftime mutually agreed between the distributor and the gener-ator.

(3) If the generator does not accept all of those conditions, butdoes intend to connect distributed generation, the generatormust(a) give notice of the dispute within 30 business days after

the day onwhich the distributor gives notice of approvalto connect distributed generation; and

(b) give a notice under subclause (1) within 30 businessdays after the dispute is resolved.

(4) The distributors duties under these regulations arising fromthe application for connection of distributed generation nolonger apply if the generator fails to give notice to the dis-tributor of an intention to proceed with the connection withinthe time limits specified in this clause.

(5) Subclause (4) does not prevent the generator making a new ap-plication for connection of distributed generation under theseregulations.


generator notifies intention to proceed(1) If a generator gives notice under clause 20, the distributor and

the generator have 30 business days (starting on the date onwhich the distributor receives the notice) during which theymust, in good faith, attempt to negotiate a connection contract.

26



Part 2continued

(2) The distributor and the generator may, by mutual agreement,extend the time specified in subclause (1) for negotiating aconnection contract.

22 Testing and inspection(1) The generator must test and inspect its distributed generation.(2) The generator must give adequate notice of the testing and

inspection to the distributor.(3) The distributor may send qualified personnel to the site to ob-

serve the testing and inspection.(4) The generator must provide the distributor with a written test

report when testing and inspection is complete, including suit-able evidence that the metering installation complies with theappropriate metering standards in the rules.

(5) The generator must pay any fee specified by the distributor forobserving the testing and inspection, up to the maximum feeprescribed in Schedule 5.

23 Connection of distributed generation outside regulatedterms if contract negotiatedIf the distributor and the generator enter into a connection con-tract before the period for negotiating a connection contractunder this Part expires,(a) the distributor must connect the distributed generation

in accordance with that contract as soon as practicable;and



(1) If the distributor and the generator do not enter into a connec-tion contract before the period for negotiating a connectioncontract under this Part expires,

27



1 November 2010

Part 2continued

(a) the distributor must connect the distributed generationon the regulated terms as soon as practicable after thelater of(i) the expiry of that period; and(ii) the date on which the generator has fully com-

pliedwith any conditions (or other measures) thatwere specified by the distributor under clause 18as conditions of the connection; and


(2) However, to the extent that those conditions (or other meas-ures) were the subject of a dispute under clause 20(3), or ofnegotiation during the period for negotiation of the connec-tion contract, the distributor must connect the distributed gen-eration on the regulated terms, as soon as practicable after thelater of(a) the dates referred to in subclause (1); and(b) the date on which the dispute about the conditions or

other measures is finally resolved or negotiated and thegenerator has performed those conditions (or other mat-ters).

Part 3General provisionsConfidentiality

25 Confidentiality of information provided before connection(1) All information provided with an application made under this

schedule, or otherwise provided by the generator under thisschedule, must be kept confidential by the distributor except asagreed otherwise by the person who provides the information.

(2) Despite subclause (1), the distributor(a) may, in response to an application for connection of dis-

tributed generation, disclose to the applicant that an-other generator has made an application to connect dis-tributed generation to the distribution network (withoutidentifying who that other generator is); and

28



Part 3continued

(b) may, in the case of an application for connection of dis-tributed generation that is only capable of generatingelectricity at a rate of 10 kW or less in total, generallyindicate the location of the possible connection; and

(c) may, in the case of an application for connection of dis-tributed generation that is capable of generating electri-city at a rate above 10 kW, disclose the size and locationof the proposed distributed generation.

(3) The obligation to keep information confidential includes(a) an obligation not to use the information for any purpose

other than enabling the connection of the distributedgeneration; and

(b) an obligation to destroy the information as soon as isreasonably practicable after the later of(i) when the information is no longer required for

the purpose of the connection of the distributedgeneration; and

(ii) 5 years after receiving the information.

Annual reporting and record keeping26 Distributors must report annually to Electricity

CommissionEach distributor must supply a report to the Electricity Com-mission on or before 1 April each year stating, in relation tothe preceding calendar year,(a) the number of applications the distributor has received

under Part 1:(b) the number of initial applications the distributor has re-

ceived under Part 2:(c) the number of final applications the distributor has re-

ceived under Part 2:(d) the number of those applications that have required an

extension of time for processing:(e) the numbers of those applications approved and de-

clined:

29



1 November 2010

Part 3continued

(f) the number of connections completed in that precedingyear as a result of those applications and, in relation toeach of those connections,(i) the date of the original application and the date

of connection; and(ii) whether the distributed generationwas connected

in accordance with a contract outside the regu-lated terms, or on the regulated terms; and

(iii) the rated capacity of the generation that was con-nected:

(g) the number of connections of distributed generation thatwere disconnected in that preceding year and, in relationto each of those connections,(i) the date of the disconnection; and(ii) whether the distributed generationwas connected

in accordance with a contract outside the regu-lated terms, or on the regulated terms; and

(iii) the rated capacity of the generation that was dis-connected.

27 Electricity Commission must make information fromdistributors publicly available

(1) The Electricity Commission must publicise the informationprovided by distributors under clause 26.

(2) Publicise means to make available to the public, free ofcharge,(a) on the Commissions website at all reasonable times;

and(b) in any other manner that the Commission may decide.

28 Distributors must keep recordsA distributor must maintain, for 5 years, records of all applica-tions received under this schedule and the resulting outcomes(including records of how long it took to connect or decline anapplication, and justification for these outcomes).

30



Schedule 2 r 9Regulated terms for connection of

distributed generationContents

PageGeneral

1 Overview of regulated terms 322 Interpretation 323 General obligations 32

Meters4 Installation of meters and access to metering information 33

Access5 Right of distributor to access generators premises 336 Process if distributor wants to access generators premises 347 Distributor must not interfere with generators equipment 358 Generator must not interfere with, and must protect,

distributors equipment35

9 Obligation to notify if interference with distributorsequipment or theft of electricity is discovered

35

Interruptions and disconnections10 General rule about interruptions 3611 Circumstances allowing distributor to temporarily

disconnect distributed generation36

12 Obligations if distributed generation temporarilydisconnected by distributor

36

13 Adverse operating effects 3714 Interruptions by generator 3715 Permanent disconnections 38

Confidentiality16 Meaning of confidential information 3917 General rule about confidentiality 3918 When confidential information can be disclosed 3919 Disclosures by employees, agents, etc 41

Pricing20 Pricing principles 41

Liability21 General rule about liability 41

31



1 November 2010

22 Exceptions to general rule about liability 4123 Limits on liability 4224 Liability clauses do not apply to fraud, wilful breach, and

breach of confidentiality43

25 Indemnity 4326 Force majeure 43

General1 Overview of regulated terms

This schedule sets out the regulated terms for connectionof distributed generation that apply to the connection ofdistributed generation that is connected in accordance withregulation 9 and Schedule 1.

2 InterpretationThese regulated terms must be interpreted(a) in light of the purpose of these regulations; and(b) so as to give business efficacy to the relationship be-

tween the distributor and the generator created by theseregulations.

3 General obligations(1) The distributor and the generator must perform all obligations

under these regulated terms in accordance with connection andoperation standards (where applicable).

(2) The distributor and the generator must each construct, inter-connect, operate, test, and maintain their respective equipmentin accordance with(a) these regulated terms; and(b) connection and operation standards (where applicable);

and(c) the rules.

(3) The generator must, subject to subclause (2), construct, inter-connect, operate, test, and maintain its distributed generationin accordance with(a) reasonable and prudent operating practice; and

32



(b) the applicable manufacturers instructions and recom-mendations.

(4) The distributor and generator must each be fully responsiblefor the respective facilities they own or operate.

(5) The distributor and generator must each ensure that their re-spective facilities adequately protect each others equipment,personnel, and other persons and their property, from damageand injury.

(6) The generator must comply with any conditions that were spe-cified by the distributor under clause 18 of Schedule 1 as con-ditions of the connection (or, to the extent that those condi-tions were the subject of a dispute under clause 20(3) of thatschedule, or of negotiation during the period for negotiationof the connection contract, the conditions or other measuresas finally resolved or negotiated).

Meters4 Installation of meters and access to metering information(1) The generator must ensure that 1 or more metering installa-

tions are installed that(a) separately record any inflows of electricity from the dis-

tribution network and any electricity injected into thedistribution network; and

(b) fully comply with the rules.(2) The generator must provide to the distributor, at the distribu-

tors request, the interval data and cumulative data recordedby those metering installations.

(3) The distributor may require that reactive metering be installedfor meters that are category 2 or above (as defined in the rules).

(4) The distributors requirements in respect of meteringmeasure-ment and accuracy must be consistent with the rules.

Access5 Right of distributor to access generators premises(1) The generator must provide the distributor, or a person ap-

pointed by the distributor, with safe and unobstructed accessonto the generators premises at all reasonable times

33



1 November 2010

(a) for the purpose of installing, testing, inspecting, main-taining, repairing, replacing, operating, reading, or re-moving any of the distributors equipment and for anyother purpose related to these regulated terms; and

(b) for the purpose of verifying metering information; and(c) for the purpose of ascertaining the cause of any interfer-

ence to the quality of delivery services being providedby the distributor to the generator; and

(d) for the purpose of protecting, or preventing danger ordamage to, persons or property; and

(e) for the purposes of reconnecting or disconnecting thedistributed generation; and

(f) for any other purpose relevant to either or both of(i) the distributor connecting distributed generation

in accordance with connection and operationstandards:

(ii) maintaining the integrity of the distribution net-work.

(2) The rights of access conferred by these regulated terms are inaddition to any right of access the distributor may have underany statute or regulation or contract.

6 Process if distributor wants to access generators premises(1) The distributor must exercise its right of access under clause

5 by,(a) wherever practicable, giving to the generator reasonable

notice of its intention and of the purpose for which itwill exercise its right of access; and

(b) causing as little inconvenience as practicable to the gen-erator in carrying out its work; and

(c) observing reasonable and prudent operating practice atall times; and

(d) observing any reasonable security or site safety require-ments that are made known to the distributor by the gen-erator.

(2) However, the distributor may take all reasonable steps to gainimmediate access where it reasonably believes there is imme-diate danger to persons or property.

34



7 Distributor must not interfere with generators equipment(1) The distributor must not interfere with the generators equip-

ment without the prior written consent of the generator.(2) However, if emergency action has to be taken to protect the

health and safety of persons, or to prevent damage to property,the distributor(a) may interfere with the generators equipment without

prior written consent; and(b) must, as soon as practicable, inform the generator of the

occurrence and circumstances involved.

8 Generator must not interfere with, and must protect,distributors equipment

(1) The generator must not interfere with the distributors equip-ment without the prior written consent of the distributor.

(2) However, if emergency action has to be taken to protect thehealth and safety of persons, or to prevent damage to property,the generator(a) may interfere with the distributors equipment without

prior written consent; and(b) must, as soon as practicable, inform the distributor of

the occurrence and circumstances involved.(3) The generator must protect the distributors equipment against

interference and damage.

9 Obligation to notify if interference with distributorsequipment or theft of electricity is discovered

(1) If the distributor or the generator discover evidence of interfer-ence with the distributors equipment, or evidence of theft ofelectricity, the party discovering the interference or evidencemust notify the other party within 24 hours.

(2) If interference with the distributors equipment at the gener-ators installation is suspected, the distributor may itself carryout an investigation and present the findings to the generatorwithin a reasonable period.

(3) The cost of the investigation(a) must be borne by the generator if it is discovered that

interference by the generator, or by its subcontractors,

35



1 November 2010

agents, or invitees, has occurred, or if the interferencehas been by a third party, and the generator has failedto provide reasonable protection against interference tothe distributors equipment; and

(b) must be borne by the distributor in any other case.

Interruptions and disconnections10 General rule about interruptions

The distributor must make reasonable endeavours to ensurethat the connection of the distributed generation is not inter-rupted.

11 Circumstances allowing distributor to temporarilydisconnect distributed generationDespite clause 10, the distributor may interrupt the connectionservice, or curtail either the operation or output of the gener-ation, or both, and may temporarily disconnect the distributedgeneration in any of the following cases:(a) in accordance with the distributors congestionmanage-

ment policy:(b) if reasonably necessary for planned maintenance, con-

struction, and repairs on the distribution network:(c) for the purpose of protecting, or preventing danger or

damage to, persons or property:(d) if the generator fails to allow the distributor access as

required by clause 5:(e) if the generator modifies its distributed generation,

without prior authorisation from the distributor, in sucha way that it has a material effect on the generatorsinjection of electricity into the network:

(f) in accordance with clause 13 (adverse operating ef-fects).

12 Obligations if distributed generation temporarilydisconnected by distributor

(1) The distributor must make reasonable endeavours to(a) notify the generator before any interruption under

clause 11; and

36



(b) co-ordinate with the generator to minimise the impactof the interruption.

(2) The distributor and the generatormust co-operate to restore thedistribution network and the distributed generation to a normaloperating state as soon as is reasonably practicable followingtemporary disconnection.

(3) In the case of a forced outage, the distributor must, subject tothe need to restore the distribution network, make reasonableendeavours to restore service to the generator and to advise thegenerator of the expected duration of the outage.

13 Adverse operating effects(1) The distributor must notify the generator as soon as is reason-

ably practicable if it reasonably considers that operation of thedistributed generation may(a) adversely affect the service provided to other distribu-

tion network customers; or(b) cause damage to the distribution network or other facil-

ities; or(c) present a hazard to any person.

(2) If, after receiving that notice, the generator fails to remedy theadverse operating effect within a reasonable time, the distribu-tor may disconnect the generation upon reasonable notice (orwithout notice when reasonably necessary in the event of anemergency or hazardous situation).

14 Interruptions by generator(1) This clause applies to any connected distributed generation

above 10 kW in total.(2) The generator must notify the distributor of any planned out-

ages and must make reasonable endeavours to advise the dis-tributor of any event that affects network operations.

(3) The generator must make reasonable endeavours to notify thedistributor of the interruption and to co-ordinate with the dis-tributor to minimise the impact of the interruption.

37



1 November 2010

15 Permanent disconnections(1) Despite clause 10, the distributor may permanently disconnect

distributed generation in the following circumstances:(a) on receipt of a request from a generator:(b) without notice, if a generator has failed to comply with

either the connection or safety requirements of the dis-tributor and there is an ongoing risk to persons or prop-erty:

(c) without notice, on receipt of the registry inactive statuswith reason De-energisedready for decommission-ing where the trader has de-energised a site, attemptedto recover the meters, and updated the registry to thatstatus:

(d) on at least 10 business days notice of intention to dis-connect, if(i) the generator has not injected electricity into the

network at any time in the preceding 12 months;and

(ii) the distributor has not been notified by the gen-erator of reasons for the non-injection; and

(iii) the distributor has reasonable grounds for believ-ing that the generator has ceased to operate thedistributed generation.

(2) If the point of connection is to remain as a consumption point,where applicable the generator must cancel any seller con-tracts and ensure the trader decommissions the embedded gen-eration network service point with the reconciliation manager.The site must revert to a standard ICP.

(3) If the point of connection is to be disestablished in its entirety, apermanent disconnection must be performed by means of iso-lation of generation by removal of all electrical connections todistributors lines. The distributor must notify the generatorwithin 2 business days of the work having been completed.Where applicable, the generator must cancel any seller con-tracts, ensure that the retailer decommissions the embeddedgeneration network service point with the reconciliation man-ager, and that the retailer arranges decommissioning of theICP.

38



(4) Once having the status of decommissioned on the registry, theICP must not be used again. The process for new connectionsin Part 1 or 2, as the case may be, of Schedule 1 must befollowed if generation is to be connected again at this pointof connection.

(5) Both the distributor and the generator (through notification toa retailer where selling to a retailer) must ensure that the regis-try is correctly updated throughout this process in accordancewith the rules.

Confidentiality16 Meaning of confidential information

In this schedule,confidential information means all data and other informa-tion of a confidential nature provided by one party (A) to theother (B) under these regulated terms, but excludes(a) information known to B before the date it was provided

to B byA and that was not obtained directly or indirectlyfrom A:

(b) information obtained bona fide from another personwho is in lawful possession of the information and whodid not acquire the information directly or indirectlyfrom A under an obligation of confidence.

17 General rule about confidentiality(1) Each party must preserve the confidentiality of confidential

information, and must not directly or indirectly reveal, report,publish, transfer, or disclose the existence of any confidentialinformation, except as permitted in subclause (2).

(2) Each party must only use confidential information for the pur-poses expressly permitted by these regulated terms.

18 When confidential information can be disclosedEither party may disclose confidential information in any ofthe following circumstances:(a) if the generator and distributor agree in writing to the

disclosure of information:

39



1 November 2010

(b) if disclosure is expressly provided for under these regu-lated terms:

(c) if, at the time of receipt by the party, the confidentialinformation is in the public domain or if, after the timeof receipt by either party, the confidential informationenters the public domain (except where it does so asa result of a breach by either party of its obligationsunder this clause or a breach by any other person of thatpersons obligation of confidence):

(d) if either party is required to disclose confidential infor-mation by(i) any statutory or regulatory obligation, body, or

authority; or(ii) any judicial or arbitration process; or(iii) the regulations of any stock exchange upon

which the share capital of either party is fromtime to time listed or dealt in; or

(iv) the rules:(e) if the confidential information is released to the officers,

employees, directors, agents, or advisors of the party,provided that(i) the information is disseminated only on a need-

to-know basis; and(ii) recipients of the confidential information have

been made fully aware of the partys obligationsof confidence in relation to the information; and

(iii) any copies of the information clearly identify itas confidential information:

(f) if the confidential information is released to a bona fidepotential purchaser of the business or any part of thebusiness of a party, subject to that bona fide potentialpurchaser having signed a confidentiality agreement en-forceable by the other party in a form approved by thatother party, and that approval may not be unreasonablywithheld.

40



19 Disclosures by employees, agents, etcTo avoid doubt, a party is responsible for any unauthoriseddisclosure of confidential information made by that partys of-ficers, employees, directors, agents, or advisors.

Pricing20 Pricing principles

Connection charges that are payable by the generator must bedetermined in accordance with the pricing principles set out inSchedule 4.

Liability21 General rule about liability(1) If a distributor or generator breaches any of the regulated terms

(whether by act or omission), that party is liable to the other.(2) The generators and the distributors liability to each other is

limited to damages for any direct loss caused by that breach.(3) This clause does not limit the liability of either party to pay all

charges and other amounts due under these regulations or theregulated terms.

22 Exceptions to general rule about liability(1) Neither the distributor nor the generator, nor any of its officers,

employees, directors, agents, or advisors, are in any circum-stances liable to the other party for(a) any indirect loss, consequential loss (including, but not

limited to, incidental or special damages), loss of profit,loss of revenue (except any liability under clause 21(3),loss of use, loss of opportunity, loss of contract, or lossof goodwill; or

(b) any loss resulting from the liability of the other party toanother person; or

(c) any loss or damage incurred by the other party if, andto the extent that, this results from any breach of theregulated terms or any negligent action.

(2) The distributor is not liable, except to the extent caused orcontributed to by the distributor in circumstances where the

41



1 November 2010

distributor was not acting in accordance with the regulations(including these regulated terms), for(a) any momentary fluctuations in the voltage or frequency

of electricity conveyed to or from the distributed gener-ations point of connection or nonconformity with har-monic voltage and current levels; or

(b) any failure to convey electricity to the extent that(i) the failure arises from any act or omission of the

generator or other person, excluding the distribu-tor and its officers, employees, directors, agents,or advisors; or

(ii) the failure arises from(A) a failure to convey or a reduction of injec-

tion or supply of electricity into the distri-bution network; or

(B) an interruption in the conveyance of elec-tricity in the network, at the request of thesystem operator or under a nationally or re-gionally co-ordinated response to an elec-tricity shortage; or

(iii) the failure arises from any defect or abnormalconditions in or about the generators premises;or

(iv) the distributor was taking any action in accord-ance with the regulations or regulated terms; or

(v) the distributor was prevented frommaking neces-sary repairs (for example, by Police at an accidentscene).

(3) The generator is not liable for(a) any failure to perform any obligation under these regu-

lated terms caused by the distributors failure to complywith the obligation; or

(b) any failure to perform any obligation under these regu-lated terms arising from any defect or abnormal condi-tions in the distribution network.

23 Limits on liabilityThe maximum total liability of each party, as a result of abreach of these regulated terms, must not in any circumstances

42



exceed, in respect of a single event or series of events arisingfrom the same event or circumstance, the lesser of(a) the direct damage suffered or the maximum total liabil-

ity that the party bringing the claim against the otherparty has at the time that the event (or, in the case of aseries of related events, the first of such events) givingrise to the liability occurred; or

(b) $1,000 per kW of installed capacity up to a maximumof $5 million.

24 Liability clauses do not apply to fraud, wilful breach, andbreach of confidentialityThe exceptions in clause 22, and the limits on liability in clause23, do not apply(a) if a distributor or generator, or any of its officers, em-

ployees, directors, agents, or advisors, has acted fraudu-lently or wilfully in breach of these regulated terms; or

(b) to a breach of confidentiality under clause 17 by eitherparty.

25 Indemnity(1) Each party (the indemnifying party) must indemnify the

other for damages claimed by third parties to the extent thatthe loss is caused by a breach of these regulated terms by theindemnifying party, where the loss is materially caused byany action or omission of the indemnifying party.

(2) The indemnity in this clause is subject to the limits on liabilityspecified in clauses 21 to 24.

26 Force majeure(1) A failure by either party to comply with or observe any pro-

visions of these regulated terms (other than payment of anyamount due) does not give rise to any cause of action or liabil-ity based on default of the provision if(a) the failure is caused by

(i) any event or circumstance occasioned by, or inconsequence of, any act of God, being an eventor circumstance

43



1 November 2010

(A) due to natural causes, directly or indirectlyand exclusively without human interven-tion; and

(B) that could not reasonably have been fore-seen or, if foreseen, could not reasonablyhave been resisted:

(ii) a strike, lockout, other industrial disturbance,act of public enemy, war, blockade, insurrection,riot, epidemic, aircraft, or civil disturbance:

(iii) the binding order or requirement of any court,government, local authority, the Rulings Panel,or the Electricity Commission, and the failure isnot within the reasonable control of the affectedparty:

(iv) the partial or entire failure of supply or availabil-ity of electricity to the distribution network:

(v) any other event or circumstance beyond the con-trol of the party invoking this clause; and

(b) the party could not have prevented such failure by theexercise of the degree of skill, diligence, prudence,and foresight that would reasonably and ordinarily beexpected from a skilled and experienced distributoror generator engaged in the same type of undertak-ing under the same or similar circumstances in NewZealand at the time.

(2) If a party becomes aware of a prospect of a forthcoming forcemajeure event, it must notify the other party as soon as is rea-sonably practicable of the particulars of which it is aware.

(3) If a party invokes this clause, it must as soon as is reasonablypracticable notify the other party that it is invoking this clauseand of the full particulars of the force majeure event relied on.

(4) The party invoking this clause must(a) use all reasonable endeavours to overcome or avoid the

force majeure event; and(b) use all reasonable endeavours to mitigate the effects or

the consequences of the force majeure event; and(c) consult with the other party on the performance of the

obligations referred to in paragraphs (a) and (b).

44



(5) Nothing in subclause (4) requires a party to settle a strike,lockout, or other industrial disturbance by acceding, againstits judgement, to the demands of opposing parties.

45



1 November 2010

Schedule 3 r 11Default dispute resolution process

ContentsPage

1 Application of this schedule 462 Notice of dispute 463 Complaints to be treated under Electricity Governance

Regulations 200346

4 Application of pricing principles to disputes 475 Orders that Rulings Panel can make 47

1 Application of this schedule(1) This schedule applies in accordance with regulation 11.(2) To avoid doubt, this schedule applies to disputes about either

of the following:(a) the conditions specified by the distributor under clause

18 of Schedule 1:(b) whether a party is attempting to negotiate in good faith

under clause 6 or 21 of Schedule 1.

2 Notice of dispute(1) A party must give written notice to the other party of the dis-

pute.(2) The parties must attempt to resolve the dispute with each other

in good faith.(3) If the parties are unable to resolve the dispute, either party may

complain in writing to the Electricity Commission.

3 Complaints to be treated under Electricity GovernanceRegulations 2003

(1) A complaint made under clause 2(3) must be treated as if itwere a notification given under regulation 62 of the ElectricityGovernance Regulations 2003.

(2) The following provisions of the Electricity GovernanceRegulations 2003 apply to the complaint:(a) Part 4, except regulations 61, 63, 64, 65, 75, and the

reference in regulation 92 to regulation 75; and

46
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(b) Part 5; and(c) Part 6, except regulations 111 to 133; and(d) Part 8.

(3) Those provisions apply(a) to the dispute that is the subject of the complaint in the

same way as those provisions apply to a notification ofan alleged breach of the rules; and

(b) as if references to a participant in those provisions werereferences to a party under these regulations; and

(c) with any further modifications that the Electricity Com-mission or the Rulings Panel, as the case may be, con-siders necessary or desirable for the purpose of applyingthose provisions to the complaint.

4 Application of pricing principles to disputes(1) The Electricity Commission and the Rulings Panel must apply

the pricing principles set out in Schedule 4 to determine anyconnection charges payable.

(2) Subclause (1) applies if(a) there is a dispute under these regulations; and(b) in the opinion of the Electricity Commission or the Rul-

ings Panel it is necessary or desirable to apply subclause(1) in order to resolve the dispute.

5 Orders that Rulings Panel can makeIf a complaint is referred to it, the Rulings Panel may makeany order, or take any action, that it is able to make or take inaccordance with section 172KE of the Act.

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1 November 2010

Schedule 4 r 12Pricing principles

1 This schedule sets out the pricing principles to be applied forthe purposes of these regulations in accordancewith regulation12 (which relates to clause 20 of Schedule 2 and clause 4 ofSchedule 3).

2 The pricing principles areCharges to be based on recovery of reasonable costsincurred by distributor to connect the generator andto comply with connection and operation standardswithin the network, and must include consideration ofany identifiable avoided or avoidable costs

(a) subject to paragraph (i), connection charges in respectof distributed generation must not exceed the incremen-tal costs of providing connection services to the dis-tributed generation. For the avoidance of doubt, incre-mental cost is net of transmission and distribution coststhat an efficient service provider would be able to avoidas a result of the connection of the distributed gener-ation:

(b) costs that cannot be calculated (eg, avoidable costs)must be estimated with reference to reasonable esti-mates of how the distributors capital investment de-cisions and operating costs would differ, in the future,with and without the generation:

(c) estimated costs may be adjusted ex post. Ex-post ad-justment involves calculating, at the end of a period,what the actual costs incurred by the distributor as a re-sult of the distributed generation being connected to thedistribution network were, and deducting the costs thatwould have been incurred had the generation not beenconnected. In this case, if the costs differ from the costscharged to the generator, the distributor must notify andrecover or refund those costs after they are incurred (un-less the distributor and the generator agree otherwise):

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Capital and operating expenses(d) where costs include distinct capital expenditure, such as

costs for a significant asset replacement or upgrade, theconnection charge attributable to the generators actionsor proposals is payable by the generator before the dis-tributor has committed to incurring those costs. Whenmaking reasonable endeavours to facilitate connection,the distributor is not obliged to incur those costs untilthat payment has been received:

(e) where incremental costs are negative, the generator isdeemed to be providing network support services to thedistributor, and may invoice the distributor for this ser-vice and, in that case, the generator must comply withall relevant obligations (for example, obligations underthese regulations and in respect of tax):

(f) where costs relate to ongoing or periodic operating ex-penses, such as costs for routine maintenance, the con-nection charge attributable to the generators actions orproposals may take the form of a periodic charge ex-pressed in dollars per annum:

(g) before the connection of distributed generation, the dis-tributor must notify the generator in writing of the con-nection charges that will be payable, and explain howthe connection charges have been calculated:

(h) after the connection of the distributed generation, thedistributor may review the connection charges payableby a generator not more than once in any 12-monthperiod. Following a review, the distributor must notifythe generator in writing of any change in the connec-tion charges payable, and the reasons for any change,not less than 3 months before the date the change is totake effect:Share of generation-driven costs

(i) if multiple generators are sharing an investment, theportion of costs payable by any one generator(i) must be calculated so that the charges paid or

payable by each generator take into account therelative expected peak of each generators in-jected generation; and

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1 November 2010

(ii) may also have regard to the percentage of assetsthat will be used by each generator, the percent-age of capacity used by each generator, the rela-tive share of expected maximum combined peakoutput, and whether the combined peak gener-ation is coincident with the peak load on the net-work:

(j) in order to facilitate the calculation of equitable connec-tion charges under paragraph (i), the distributor mustmake and retain adequate records of investments for aperiod of 5 years, provide the rationale for the invest-ment in terms of facilitating distributed generation, andindicate the extent to which the associated costs havebeen or are to be recovered through generation connec-tion charges:Repayment of previously funded investment

(k) if a generator has paid connection charges that include(in part) the cost of an investment that is subsequentlyshared by other generators, the distributor must refundto the generator all connection charges paid

Electricity Governance Connection of Distributed Generation Regulations 2007

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