Critical Contingency Management

Current

Changes to the Gas Governance (Critical Contingency Management) Regulations 2008 were made in December 2013 and are in force from 1 March 2014. Information about the Regulations and amendments can be found here.

Gas Industry Co appointed Core Group as the new Critical Contingency Operator (CCO) following the expiration of Vector Gas Limited's five year term. Core Group commenced their role as CCO on 1 March 2014. For more information regarding the role of the CCO click here.

Background

Gas Industry Co administers the Gas Governance (Critical Contingency Management) Regulations 2008. The purpose of the Regulations is to achieve the effective management of critical gas outages and other security of supply contingencies without comprising long-term security of supply. The Regulations achieve this principally through the appointment of a Critical Contingency Operator (CCO), which has a range of powers, particularly to curtail gas consumption during critical contingencies.

Details of the Regulations and the CCO role can be found under the CCM Regulations tab.

In November 2013, Gas Industry Co announced that, following the expiry of the first five-year term of the CCO appointment and following a competitive tender process, it selected New Plymouth-based Core Group to be the next Critical Contingency Operator. Stakeholders should be aware that Vector continues in the role of CCO until the handover is complete.

Further details of the appointment of Core Group can be found here.

Following the October 2011 critical contingency caused by a breach of the Maui Pipeline, Gas Industry Co has completed a substantial review of Regulations. In July 2013, Gas Industry Co recommended amendments to the Regulations, and associated amendments to the Gas Governance (Compliance) Regulations 2008, to the Minister of Energy and Resources under Part 4A of the Gas Act 1992. It is expected that these amendments will come into force in early 2014.

Details of the amendments and the associated review can be found here.

Information during a critical contingency

A critical contingency is determined and declared by the Critical Contingency Operator (CCO). The CCO maintains a website to assist in keeping affected parties informed. There are two types of information posted on the CCO website:

  1. Critical notices that pertain to the declaration or termination of a Critcal Contingency as well as notices directing gas consumers to cease using gas (curtailment directions).
  2. Information notices that provide background information.

The CCO website can be accessed by navigating to www.cco.org.nz

CCM Regulations

In this CCM Regulations tab, you will find the following:

  • Regulations - Access to the Regulations themselves, and a summary of their key elements.
  • CCO - Details of the CCO role fulfilled by Core Group
  • CCMPs - Access to the current Critical Contingency Management Plans approved by Gas Industry and summary of background details.
  • Designations - Information surrounding designation types, including application forms
  • CC Events - Details of previous critical contingency events, including associated reports and other publications.

Regulations

Following the six day Maui pipeline outage in October 2011 Gas Industry Co completed a substantial review of the Gas Governance (Critical Contingency Management) Regulations 2008 (the Regulations). Changes to the Regulations were made in December 2013 and come into force on 1 March 2014. The amendments to the Regulations resulted in many improvements including:

  • Prioritising gas supply to Critical Care Providers and Essential Service Providers during a gas critical contingency by changing the order in which gas consumers are curtailed and tightening the criteria for such designations;
  • Expanding the definition of critical processing, which allows certain gas consumers to defer their curtailment during a critical contingency to allow for processing to be finished if it would avoid certain undesirable outcomes;
  • Requiring retailers to send information about the CCM Regulations to their customers, which will improve knowledge about the Regulations and increase customer resilience;
  • Improving the incentives for gas consumers to comply with curtailment directives by including a new offence provision in the CCM Regulations; and
  • Improving communications by mandating minimum levels of information to be made available by the CCO and owners of assets giving rise to (or exacerbating) critical contingency events.

Information about this consultation and the changes made can be found here

The finalised regulations can be found here: Gas Governance (Critical Contingency Management) Regulations 2008 (as at 1 March 2014)

Determination regarding the definition for 'publish', under Regulation 5, can be found here.

The Gas Governance (Critical Contingency Management) Regulations 2008 (the Regulations) were originally published in the New Zealand Gazette on 6 November 2008. Parts 1, 2 and 5 came into force on 4 December 2008 and parts 3 and 4 came into force on 21 January 2010 (the go-live date).

The purpose of the Regulations is to achieve the effective management of critical gas outages and other security of supply contingencies without compromising long-term security of supply. The Regulations provide for:

  • The appointment of:
    • a critical contingency operator (CCO);
    • an expert adviser; and
    • an industry expert;
  • Funding of fees to cover the critical contingency development and ongoing costs;
  • The establishment of a critical contingency website;
  • Processes for:
    • the preparation, review, approval, publication and testing of critical contingency management plans (CCMPs) for each transmission system;
    • the preparation and publication of a communications plan and information guide; and
    • the declaration and termination of a critical contingency by the CCO, and the curtailment and restoration of gas consumption during a critical contingency;
  • The obligations of certain parties before, during and after a critical contingency; and
  • A methodology for the calculation of contingency imbalances and the determination of a critical contingency price.

Part 1 covers general provisions for the appointment of the CCO and terms of the CCO service provider agreement, the scope of the Regulations, funding of the development and ongoing fees, and the giving and receiving of notices.

Part 2 covers the obligations of certain parties prior to the critical contingency management go-live date (Go-Live Date), in relation to CCMPs, the communications plan and information guide, and the provision of transmission system and consumer information.

Part 2A contains information surrounding designation types and the process and administrative matters around applying for a designation

Part 3 sets out the processes for the determination, declaration and termination of a critical contingency and the role and obligations of certain parties during a contingency event.

Part 4 provides for obligations after critical contingency events, including reporting requirements, and processes for the appointment of an industry expert, determination of a critical contingency price and the determination and resolution of contingency imbalances.

Part 5 provides for miscellaneous activities such as audits, the treatment of critical contingencies occurring before the Go-Live Date and the separation of roles for the CCO.

Expert Adviser

For each proposed CCMP or amendment to a CCMP, an expert adviser must be appointed by Gas Industry Co to review the proposed plan or amendment and to make a recommendation on whether Gas Industry Co should approve the proposed plan or amendment. Gas Industry Co must appoint an expert adviser within 30 business days of the commencement date in the case of a proposed plan and, for a proposed amendment, within 5 business days of receiving the amendment from the TSO.

On 27 January 2009, Gas Industry Co appointed Concept Consulting Group Limited as the Expert Adviser to review the initial critical contingency management plans proposed by Vector Gas Limited and Maui Development Limited respectively.

Industry Expert

Gas Industry Co must appoint an independent industry expert to determine the critical contingency price within 10 business days of the termination of a critical contingency. Each TSO, interconnected party, and shipper who will be affected by the determination of a critical contingency price may nominate 1 person to be considered by Gas Industry Co when appointing the industry expert.

Determinations

The Contingency Management Regulations provide for the industry body (Gas Industry Co) to determine and publish certain matters regarding the operation of the regulations. Notice of these determinations is available by clicking on the link below:

Critical Contingency Management Determinations v1.0

Contingency Modelling - Interdependency of Gas and Electricity

Date Published: May/June 2008

Authors: Vector/Contact

In the lead-up to the Contingency Management Regulations being made, a group was convened by Contact Energy, and its role was to work towards a better understanding of the interdependencies between the electricity and gas sectors. Membership of the group was broad, covering gas transmission, electricity generation, electricity system operation (Transpower), the Electricity Commission and Gas Industry Co. Both Vector and Contact Energy undertook modelling work which was presented to that group and the outputs from that work are provided below.

Vector gas modelling
Covering Letter
Contingency Modelling

Contact electricity modelling
Covering Letter
Contingency Modelling

Go-Live Date

On 14 January 2010 Gas Industry Co published a notice in the New Zealand Gazette stating that it had approved critical contingency management plans covering the whole transmission system and announcing the go-live date, 21 January 2010, on which parts 3 and 4 of the regulations come into force. The text of this notice is available by clicking on the link below.

Extract from the New Zealand Gazette

The presentation below was developed by Gas Industry Co and the Critical Contingency Operator to highlight the key responsibilities of industry participants and consumers under the new contingency management arrangements and to summarise the communication protocols between the parties affected by contingency events.

CCM Regulations - Roles & Responsibilities

Critical Contingency Operator (CCO)

At the commencement of the CCM Regulations, Gas Industry Co was required to appoint the gas system operator (Vector Gas Limited) to the CCO role for a term of five years. In November 2013, following the expiry of the first five-year term of the CCO appointment and a competitive tender process, it selected Core Group to be the next Critical Contingency Operator. On 1 March 2014 the CCO was appointed by Gas Industry Co.

For the November 2013 update on the appointment of Core Group click here.

Service Provider Agreement - Core Group

Regional vs Non-Regional Guidelines

The Gas Governance (Critical Contingency Management) Regulations 2008 (the Regulations) were amended in 2013 following a recommendation to the Minister of Energy and Resources from Gas Industry Co. One of the amendments was to change the arrangements relating to regional critical contingencies.

In the design of the original regulations it was considered that it would be obvious to industry participants whether a critical contingency was regional or not. As a result, the CCM Regulations did not specify who would determine that status or when. Subsequent feedback showed that transmission system owners ("TSOs") wanted the status to be clarified as soon as possible during a critical contingency and that view was shared by a number of shippers. As a result, the 2013 amendments included the following requirements:

  • the industry body (Gas Industry Co) must prepare and publish guidelines to assist the critical contingency operator ("CCO") to determine whether a critical contingency is a regional critical contingency;
  • as soon as possible after determining a critical contingency, the CCO must determine whether it is a regional critical contingency and publish a notice of that determination; and
  • during a critical contingency, the CCO must also consider whether any event has occurred that would cause it to revise the CCO's determination and, if so, publish a notice to that effect.

Regional vs Non-Regional Guidelines

Transmission System Map

Regulation 10(3) of the Gas Governance (Critical Contingency Management) Regulations 2008 requires that the industry body publish a map depicting the transmission system based on information supplied by transmission system owners under regulation 10(1).

The transmission system map, along with the accompanying pipeline schematics, is available to view or download from the publications section of the CCO's website which can be accessed by clicking here.

Previous CCO - Vector Gas Limited (2008-2013)

The CCO (Vector Gas Limited) was appointed by Gas Industry Co on 28 November 2008.

This is in line with regulation 6 which requires Gas Industry Co to appoint the person that is the system operator of all of the transmission system as the CCO for an initial term of 5 years. Regulation 8 of the Contingency Management Regulations requires that Gas Industry Co publish the CCO service provider agreement. Accordingly, a copy of the service provider agreement is available by clicking on the link below.

Service Provider Agreement - Vector Gas Limited

Variation to ongoing fees

Critical Contingency Management Plans

Approved CCMPs

The following Critical Contingency Management Plans (CCMPs) were approved by Gas Industry Co on 11 September 2012.

MDL CCMP

Vector CCMP

Vector retailer and large consumer update template

Draft proposed CCMPs

Before submitting a proposed critical contingency management plan (CCMP) for approval, transmission system owners (TSOs) are required to consult on a draft of the proposed plan with persons representative of the interests of those likely to be affected by the CCMP.

Immediately before this consultation TSOs must provide a draft of the proposed CCMP to the industry body, which must be published on its website. Details of the draft plans and submissions thereon can be found below.

Maui Development Ltd

Cover Email

Revised MDL Critical Contingency Management Plan (track changes)

Revised MDL Critical Contingency Management Plan (clean)

Large Consumer Update Template

Vector Gas Transmission Ltd

Vector Draft Critical Contingency Management Plan (clean)

Vector Draft Critical Contingency Management Plan (track changes)

Retailer Update Template

Large Consumers Compliance Update

Previous consultations

MDL Draft Critical Contingency Management Plan (submissions closed 10 February 2009)

Vector Draft Critical Contingency Management Plan (submissions closed 10 February 2009)

Proposed CCMPs

Proposed CCMPs were submitted to Gas Industry Co for approval in February 2009. The plans were reviewed by the expert adviser, who gave notice on 27 March 2009 that the plans should not be approved by Gas Industry Co. Following revisions in accordance with the expert adviser's notice, the TSOs resubmitted proposed CCMPs for approval on 15 April 2009. The resubmitted plans are available to view or download by clicking on the links belows.

MDL Proposed CCMP 15/04/09

Vector Proposed CCMP 15/04/09

On 18 May 2009 the expert adviser notified Gas Industry Co that the two amended plans had not been recommended for approval as they were incomplete. TSOs were therefore given 10 further business days to amend their proposed plans in line with the expert adviser's notice.

MDL resubmitted an amended proposed CCMP on 26 May 2009, and Vector submitted on 4th June. The plans can be accessed by clicking on the links below.

MDL Proposed CCMP 26/05/09

Vector Proposed CCMP 04/06/09

Appendices to the Vector CCMP

On 3 July 2009 the expert adviser wrote to Gas Industry Co to recommend that the proposed CCMP submitted by MDL on 26 May 2009 not be approved. MDL subsequently submitted an amended proposed CCMP which can be accessed by clicking on the link below.

MDL Proposed CCMP 17/07/09

On 14 July 2009 the expert adviser wrote to Gas Industry Co to recommend that the proposed CCMP submitted by Vector on 4 June 2009 not be approved. Vector subsequently submitted an amended proposed CCMP which can be accessed by clicking on the link below.

Vector Proposed CCMP 28/07/09

On 17 August 2009 the expert adviser wrote to Gas Industry Co to recommend that the proposed CCMP submitted by MDL on 17 July 2009 not be approved. MDL subsequently submitted an amended proposed CCMP which can be accessed by clicking on the link below.

MDL Proposed CCMP 21/08/09

On 23 October 2009 the expert adviser wrote to Gas Industry Co to recommend that the proposed CCMP submitted by Vector on 23 September 2009 not be approved. Vector subsequently resubmitted an updated proposed CCMP which can be accessed by clicking on the link below.

Vector Proposed CCMP 09/11/09

Previously Approved CCMPs

On 9 September 2009 Gas Industry Co received a recommendation from the expert adviser to approve MDL's proposed CCMP. After considering the plan, Gas Industry Co agreed that it complies with regulation 25 and gives effect to the purpose of the regulations and the CCMP was therefore approved on 16 September. The approved CCMP can be viewed by clicking on the link below. The regulations referred to as Attachment 1 can be found here

MDL CCMP Approved 16/09/09

On 10 December 2009 Gas Industry Co received a recommendation from the expert adviser to approve Vector's CCMP. After considering the plan, Gas Industry Co agreed that it complies with regulation 25 and gives effect to the purpose of the regulations and the CCMP was therefore approved on 18 December 2009. The approved CCMP can be viewed by clicking on the link below.

Vector CCMP Approved 18/12/09

Critical Contingency Designations

Designations can provide a measure of priority to gas consumers who satisfy certain criteria. The existing designation categories of essential service provider and minimal load consumer have been replaced by four designations:

  • Critical Care, for consumer sites that provide:
    • Hospital care
    • Residential care
    • Primary health care
    • Dispensing medicines
    • Operating a prison
    • Essential support services for any of the above eg. laundry services, cleaning or catering
  • Essential Services, for consumer sites that provide:
    • Mortuary Services
    • Cremation of human remains
    • Treatment of biohazards to make them safe for disposal
    • Processing and supply of municipal drinking water
    • Treatment and processing of municipal sewage
    • Police, fire, and other emergency services
  • Critical Processing, for an installation where the following process is performed:
    • A commercial or industrial process that fits the following criteria:
      • the process is underway; and
      • the process can be shut down in less than 18 hours; and
      • an immediate shutdown would require
      • disposal of dangerous or toxic chemicals; or
      • extensive operations before the plant could resume operation
    • A process that requires gas for a defined period in order to:
      • avoid serious damage to plant; or
      • mitigate serious environmental damage; or
      • prevent inhumane or cruel treatment of animals already at an abattoir
  • Electricity supply, to allow an electricity generating unit to start up and switch to an alternative fuel or to provide ancillary support to the electricity system.

Click on the designation below to be taken to an application form for the respective designation. If you are wishing to apply for an Electricity Supply designation please contact Gas Industry Co directly via ccmdesignations[at]gasindustry.co[dot]nz

Gas Industry Co is now responsible for approving all applications for designations, and retailers are required to provide all reasonable assistance to consumers who are preparing designation applications. Please contact your retailer for more information regarding your designation.

Consumers with essential service provider or minimal load consumer designations continue to hold that designation until 1 December 2014. These consumers may apply for another designation, but must do so by 1 June 2014 if they wish their application to be determined before the existing designation expires. Successful applicants will receive a new designation; any unsuccessful applicants will continue to hold their existing designations until 1 December 2014.

Consumer Information regarding Critical Contingencies

Essential Services and Minimal Load Guidelines (Expired)

Gas Industry Co has published Guidelines as a means of ensuring a consistent approach to designations in respect of large consumers and in considering designation disputes from consumers generally. It is intended that retailers will refer to the Guidelines when processing applications from their customers. In this way, classifications could be expected to be reasonably consistent across retailers. The Guidelines are not legally binding and need to be read in conjunction with the Regulations. The general approach set out in these Guidelines in no way reduces the requirement upon participants to know and comply with their obligations under the Regulations.

Essential Services and Minimal Load Guidelines (Revised November 2012)

Essential Services and Minimal Load Guidelines (Supereseded)

Critical Contingency Ongoing Costs

Regulations 17 through 19 of the Contingency Management Regulations provide for ongoing fees to be paid by wholesale purchasers of gas on a monthly basis to meet the critical contingency ongoing costs. The critical contingency ongoing costs are the costs:

  • payable by Gas Industry Co to the critical contingency operator in respect of that year; and
  • payable to any person appointed by Gas Industry Co to carry out any obligations under the Contingency Management Regulations in respect of that year; and
  • of Gas Industry Co associated with critical contingency management and its obligations under the Contingency Management Regulations during that year.

Gas Industry Co has determined that the critical contingency ongoing costs should exclude any overhead costs or policy work resulting from operational activities under the Contingency Management Regulations. Any such work is to be funded from the Gas Industry Co Levy. The critical contingency ongoing costs therefore only relate to other direct external costs in connection with Gas Industry Co administering the Contingency Management Regulations.

For each year following the first year or part year of operation, Gas Industry Co must estimate and publish a breakdown of the estimated critical contingency ongoing costs for that year.

Ongoing costs for FY2014 (1 July 2013 to 30 June 2014)

Cost categories Estimated cost
Service provider fees $522,000
Event fee $71,000
Industry expert costs $20,000
Expert adviser costs $10,000
Total ongoing costs $623,000
Invoice month for gas consumed in CC ongoing cost ($/GJ)
July 2013 May 2013 $0.0032794584
August 2013 June 2013 $0.0034736812
September 2013 July 2013 $0.0032756354
October 2013 August 2013 $0.0031984312
November 2013 September 2013 $0.0035911155
December 2013 October 2013 $0.0036986924

Ongoing costs for FY2013 (1 July 2012 to 30 June 2013)

Cost categories Estimated cost Actual Cost
Service provider (establishment and base fees) $358,872 $298773
Service provider (event fee) $71,000
Industry expert costs $23,000
Expert adviser costs $10,000 $7599
Total ongoing costs $462,872 $306,372
Invoice month for gas consumed in CC ongoing cost ($/GJ)
July 2012 May 2012 $0.0027544186
August 2012 June 2012 $0.0028934490
September 2012 July 2012 $0.0025417437
October 2012 August 2012 $0.0024667746
November 2012 September 2012 $0.0025219509
December 2012 October 2012 $0.0028970302
January 2013 November 2012 $0.0029997012
February 2013 December 2012 $0.0030743533
March 2013 January 2013 $0.0028703370
April 2013 February 2013 $0.0032900215
May 2013 March 2013 $0.0025960549

Previous Ongoing Costs

Can be found here

Critical Contingency Events

Notices published by the Critical Contingency Operator (CCO) during a critical contingency event are available on the CCO's website click here

Following the termination of a critical contingency, the CCO is required to publish the following reports:

  • Incident Report (regulation 64), which outlines the cause and duration of the event, actions taken by the CCO and transmission system owner, the level of general compliance by retailers and consumers with directions issued during the event, and another other matters the CCO considers appropriate. The Incident Report must be issued as soon as reasonably practicable, but no later than five business days after the critical contingency is terminated.
  • Performance Report (regulation 65), which assesses the effectiveness of the critical contingency arrangements during the event, and identifies areas where those arrangements could be improved. This report must be issued no later than 20 business days following the termination of the critical contingency, or as otherwise agreed between the CCO and Gas Industry Co as the industry body.

In the case of a non-regional critical contingency, regulations 67-81 provide for a process for setting contingency imbalances.

Critical Contingency Management FAQs

Answers to some common questions about critical contingency events and gas user obligations can be found here.

3 March 2012 - Pohokura Production Station Outage

A critical contingency incident on the gas transmission system caused by an unplanned outage at the Pohokura Poduction station was declared at 12.48pm on Saturday 3 March 2012, and terminated at 11.39pm on the same day. The event resulted in a requirement for reduced consumption by large gas users. The Critical Contingency Operator (CCO) has issued an Incident Report and Performance Report. Documents and other information relating to this event are available at the CCO Information Exchange at www.oatis.co.nz

Under regulations 67 to 72, Gas Industry Co is required to engage an industry expert to determine a critical contingency price that will be applied to contingency imbalances sustained by interconnected parties and shippers during the event. Tim Denne of Covec was engaged for this work and his final price report is available below.

Final price report

25 October 2011 - Maui Pipeline Outage

A critical contingency incident on the gas transmission system caused by a gas escape from the Maui pipeline was declared at 1.25am on 25 October 2011, and terminated at midday on 30 October 2011. Documents and communications relating to this event are available below.

Review of Gas Critical Contingency Management

Gas Industry Co has engaged Concept Consulting Group to review the effectiveness of the critical contingency management processes and governance arrangements during the Maui outage. For more information click here.

Post Maui Pipeline Outage Review - Update 7 May 2012

Work in capturing lessons from the five-day Maui outage in October last year is well advanced.

Click here to read more.

CCO Reports

Incident Report

Performance Report Feedback Form

Performance Report

Compliance

Compliance Registration Form

Compliance Process FAQ

Media Advisories

25 Oct - Gas Industry Co Media Release: Gas Curtailment ordered following gas pipeline leak

26 Oct - Vector Media Advisory: Chain of Events

26 Oct - Vector Media Advisory: 1.00pm Update

26 Oct - Vector Media Advisory: 7.30pm Update

27 Oct - Vector Media Advisory: 1.00pm Update

28 Oct - Vector Media Advisory: 9.30am Update

28 Oct - Vector: Pipe Repair Photo

28 Oct - Vector Media Advisory: 5.00pm Update

29 Oct - Vector Media Advisory: 10.00am Update

29 Oct - Vector Media Advisory: 2.00pm Update

30 Oct - Vector Media Advisory: 7.00am Update

3 Nov - Gas Industry Co Media Release: Maui Pipeline Outage Review

13 July 2010

A critical contingency was declared at 19:36 on 13 July 2010 and was terminated at 22:34 on 13 July 2010.
Under the Gas Governance (Critical Contingency Management) Regulations 2008, a number of reports have been published in respect of this event:

  • Critical Contingency Incident Report, prepared by the critical contingency operator under regulation 64. This report outlines the events that occurred that day and the actions taken by the critical contingency operator and the transmission system owner.
  • Critical Contingency Operator Performance Report, prepared under regulation 65. The purpose of this report is to assess the effectiveness of the critical contingency arrangements during the event and identify areas where those arrangements could be improved.
  • Under regulations 67 to 72, Gas Industry Co is required to engage an industry expert to determine a critical contingency price that will be applied to contingency imbalances sustained by interconnected parties and shippers on a critical contingency day. Dr John Small of Covec has been engaged for this work.

Draft price report

Presentation slides

Final Price Report

Discussion Papers, Presentations and Reports

Previously Consulted On

Guidelines for the CCO in determining regional critical contingencies

Date Published: 12 February 2014

The Gas Governance (Critical Contingency Management) Regulations 2008 (CCM Regulations) were amended in 2013 following a recommendation to the Minister of Energy and Resources from Gas Industry Co. One of the amendments changes the arrangements relating to regional critical contingencies to ensure the status of an event (regional or otherwise) be determined as soon as possible during a critical contingency. As a result, the 2013 amendments included the following requirements:

  • the industry body (Gas Industry Co) must prepare and publish guidelines to assist the critical contingency operator (CCO) to determine whether a critical contingency is a regional critical contingency;
  • as soon as possible after determining a critical contingency, the CCO must determine whether it is a regional critical contingency and publish a notice of that determination; and
  • during a critical contingency, the CCO must also consider whether any event has occurred that would cause it to revise the CCO's determination and, if so, publish a notice to that effect.

Before Gas Industry Co can publish guidelines it is required to:

  • prepare and publish draft guidelines for consultation; and
  • consider submissions and make any necessary changes to the guidelines.

Accordingly, Gas Industry Co has released a brief document containing draft guidelines for consultation and seeks stakeholder feedback on those draft guidelines.

Submissions closed Wednesday, 26 February.

Revision of Essential Services and Minimal Load Guidelines

Date Published: 02 August 2012

The original set of Guidelines were issued in February 2009, with the aim of providing clarity and consistency in the designation process for ESPs and MLCs.

The purpose of this revision of the Guidelines is to reflect experience to date on the designation process, and particularly arising from the Maui Pipeline outage in October 2011. Gas Industry Co is undertaking a comprehensive review of the Gas Governance (Critical Contingency Management) Regulations 2008, and it may be that this review will lead to changes in how ESPs and MLCs are defined and designated. It can, however, be a lengthy process to make changes to regulations, and industry participants have indicated a desire for an interim measure. As such, Gas Industry Co considers it appropriate to provide greater clarity to industry participants through a revision of the current Guidelines, so that lessons from recent experiences are implemented in a timely fashion and as far as possible within the scope of the regulations as they are currently drafted.

Please note that the proposed revisions to the Guidelines relate only to ESPs, not MLCs. Also, future changes to the regulations may require a further revision of the Guidelines or may negate the need for them.

The latest Guidelines can be found here

Submissions received

Review of Gas Critical Contingency Management: Post Maui Pipeline Outage

Date Published: 08 June 2012

Gas Industry Co engaged Concept Consulting Group to review the effectiveness of the critical contingency management processes and governance arrangements during the Maui outage.

Their discussion paper, "Review of Gas Critical Contingency Management" Post Maui Pipeline Outage" and subsequent submissions, can be accessed below.

Gas Industry Co then analysed the submissions received on the Concept Consulting Group discussion paper, 'Review of Gas Critical Contingency Management: Post Maui Pipeline Outage', which can be found in the Submissions Analysis document.


While submitters supported most of the recommendations in the Review Report, the Submissions Analysis noted that there was more work to be done in the areas of:

  • Defining which, if any, customer categories would qualify for Essential Service Provider status beyond those providing critical care services,
  • Ensuring that sufficient incentives exist for gas users to make decisions, and any corresponding investment, to support fit-for-purpose resilience against gas outages,
  • Determining whether the regional/non-regional distinction continues to be needed and, if so, providing for clarification and notification in the CCM Regulations,
  • Ensuring that arrangements are in place (whether by way of agreement or regulation) so as to ensure that communications are timely and effective,
  • Strengthening the compliance arrangements so as to ensure the highest levels of compliance with curtailment directed by the Critical Contingency Operator.


Gas Industry Co next prepared a Statement of Proposal, which is the formal description of proposed amendments to the CCM Regulations.

It can be found here.

Submissions received

Presentation - Emergency Management Arrangements Workshop

Date Published: 29 May 2007

This presentation from an industry workshop in May 2007 contains an updated and revised approach to emergency management based on submissions analysis from the July 2006 discussion paper. The proposal given at the workshop is a combination of a mandatory framework based on regulations together with industry arrangements that provide the details. The presentation also highlights key design issues and explores how the proposed hybrid approach will interact with MPOC mechanisms and processes.

Discussion Paper - Review of Gas Emergency Arrangements

Date Published: 10 July 2006

This discussion paper reviews the current arrangements for dealing with gas outages and contingencies, recommends mandatory arrangements be put in place, and highlights the issues and design decisions that need to be addressed. Gas Industry Co will take into account feedback received on the paper when undertaking the detailed design of gas emergency arrangements.

Submissions received

Report - Emergency Management and Gas Outages: Economic Issues

Date Published: 07 March 2006

This report, prepared for Gas Industry Co by Farrier Swier Consulting in association with Johnson Winter & Slattery, advises on the commercial issues involved in updating the National Gas Outage Contingency Plan (NGOCP). The overall objective is to develop a soundly based policy for pricing under outage and contingency situations. The report sets out detailed background information and analysis to enable stakeholders to provide informed input as a basis for a decision by Gas Industry Co on the most appropriate approach.

Statement of Proposal, Supplementary Consultations and Analysis

Previously Consulted On

Statement of Proposal - amendments to the Gas Governance (Critical Contingency Management) Regulations 2008

Date Published: 12 November 2012

Analysis of Submissions

Second draft Amended Regulations (marked-up version compared against Original CCM Regs). This draft endeavours to reflect the proposals of the Statement of Proposal and the drafting changes suggested at the first drafting workshop held 13 March 2013. It shows all the changes to the original CCM regulations and is provided for discussion at the second drafting workshop. This document has not been subject to a full legal review. Participants should also note that the Parliamentary Counsel Office determines the final wording of any draft regulations recommended to Cabinet.

Second draft Amended Regulations (marked-up version compared against Initial draft CCM Regs). This draft endeavours to reflect the proposals of the Statement of Proposal and the drafting changes suggested at the first drafting workshop held 13 March 2013. It shows the changes since the Initial draft was circulated and is provided for discussion at the second drafting workshop. This document has not been subject to a full legal review. Participants should also note that the Parliamentary Counsel Office determines the final wording of any draft regulations recommended to Cabinet.

Initial draft Amended Regulations (marked-up version). In this draft we have endeavoured to reflect the proposals set out in the Statement of Proposal, as modified by the Analysis of Submissions. It addresses predominantly the operational matters canvassed in the consultation process and was provided for discussion at the first drafting workshop. This document has not been subject to a full legal review. Participants should also note that the Parliamentary Counsel Office determines the final wording of any draft regulations recommended to Cabinet.

Following the six day Maui pipeline outage in October 2011, Gas Industry Co and the Critical Contingency Operator (CCO) set out to capture critical contingency management lessons arising from the event. The CCO produced post-event Incident and Performance Reports, and made 19 recommendations for improvements. Many of these related to processes that have been addressed directly by the CCO and transmission system owners under existing provisions in the Gas (Critical Contingency Management) Regulations 2008 (CCM Regulations). Other recommendations involved potential changes to the CCM Regulations, and were referred to Gas Industry Co for consideration.

Having consulted widely, including commissioning a report by Concept Consulting and taking account of submissions on that report, we now issue a Statement of Proposal (SoP) setting out proposed changes to the CCM Regulations.

The Statement of Proposal can be found below.

Also below are the NZIER Report - Value added associated with gas demand and the Lowe Environmental Impact Report - Review of Methods for and Impacts of Raw Milk Disposal, both of which are referred to in the Statement of Proposal.

Submissions received

Presentation - Gas Outage and Contingency Management Arrangements Industry Forum

Date Published: 23 August 2008

This presentation on the draft outage and contingency management regulations introduces changes in terminology, proposes a framework and timetable for implementation and gives a breakdown of the draft regulations and supporting arrangements.

Short-form Consultation Paper - Gas Critical Contingency Management Arrangements

Date Published: 01 May 2008

This paper builds on the previous Statement of Proposal (August 2007) and Supplementary Consultation Paper (December 2007) and focuses on changes to the proposed regulations since the December 2007 paper. These changes are mainly in response to comments received from MED and PCO. The paper also outlines the role of the Contingency Management Implementation Group (CMIG), reports on the service provider contract to appoint Vector as the CCO, and provides a further opportunity for comment on the draft regulations before a recommendation is made to the Minister.

Submissions received

Report - Gas Outage and Contingency Management Arrangements - Supplementary Submissions Analysis

Date Published: 01 March 2008

This paper provides an analysis of the submissions in response to questions included in the supplementary consultation paper of December 2007. Next steps suggested in this paper include establishing an industry implementation group to help co-ordinate the preparation work for the new arrangements, and developing terms of reference for the critical contingency operator (CCO) service provider agreement.

Supplementary Consultation Paper - Gas Outage and Contingency Management Arrangements

Date Published: 01 December 2007

The supplementary consultation paper focuses on a number of issues that were raised in response to the statement of proposal issued in August 2007. Gas Industry Co has proposed ways of addressing the issues raised and seeks feedback on these. There are some additional issues that have been identified separately from the submissions process and these are also discussed together with solutions being presented. The paper includes a revised set of draft regulations.

Submissions received

Presentation - Gas Outage and Contingency Management Arrangements Stakeholder Workshop

Date Published: 27 November 2007

The purpose of the workshop was to review and discuss a number of proposed changes to the statement of proposal which was issued in August 2007. The agenda included:

  • a revised approach to cash-out of imbalances based on existing processes;
  • allocation of imbalances to shippers downstream of welded points;
  • derivation of gas contingency price and consideration of alternatives;
  • avoiding deadlocks in OCMP preparation & approvals;
  • standardising terminology across work streams;
  • funding and cost allocation; and
  • timetable and next steps.

Report - Gas Outage and Contingency Management Arrangements - Submissions Analysis and Next Steps

Date Published: 01 October 2007

A statement of proposal was released in August 2007 which put forward arrangements for the replacement of the NGOCP. The proposed hybrid approach is a combination of regulations under the Gas Act and industry-developed arrangements to meet the requirements of those regulations. Submissions were sought on the proposal and have been collated and analysed. This document sets out the submissions analysis, a summary of changes to the regulations in light of submissions and the next steps which include an industry workshop and further consultation on the revised draft regulations.

Statement of Proposal - Gas Outage and Contingency Management Arrangements

Date Published: 01 August 2007

Industry members have requested Gas Industry Co develop mandatory arrangements to replace the voluntary National Gas Outage Contingency Plan (NGOCP). This Statement of Proposal puts forward replacement arrangements which are a combination of regulations under the Gas Act and industry-developed arrangements to meet the requirements of those regulations.

Submissions received

Recommendations to the Minister of Energy

Recommendation to the Minister of Energy and Resources to amend the Critical Contingency Management Regulations

Gas Industry Co is recommending amendments to the Gas Governance (Critical Contingency Management) Regulations. The Recommendation seeks to implement lessons from the October 2011 outage of the Maui Pipeline. While the Maui outage showed that the CCM Regulations generally worked well, a number of areas were identified in which improvements could be made, most notably in the areas of deferred curtailment (customers who are given priority access to gas) and stakeholder communications. In developing the Recommendation, Gas Industry Co took into account industry stakeholder input on the Statement of Proposal and at a number of workshops.

Recommendation to the Minister of Energy and Resources to amend the Gas Governance (Critical Contingency Management) Regulations 2008

Recommendation to the Minister of Energy on Critical Contingency Amendments to Gas Compliance Regulations

Date Published: June 2008

Gas Industry Co is recommending regulations providing for the effective management of critical gas contingencies, called the Gas Governance (Critical Contingency Management) Regulations. The proposed regulations include mandatory processes for the management of critical contingencies, including compliance with curtailment instructions. An effective compliance regime is crucial to ensuring that the proposed regulations achieve their purpose. In a statement of proposal on critical contingency management arrangements issued in August 2007, Gas Industry Co proposed that the existing compliance regulations be amended to apply to the proposed contingency management regulations. This paper sets out the proposed amendments.

Recommendation to the Minister of Energy on Arrangements for the Effective Management of Critical Contingencies

Date Published: June 2008

This document recommends regulations to ensure effective and efficient management of a situation when gas is in short supply (whether due to a short-term production outage or physical problems with a transmission system) and the market proves unable to manage that situation through normal commercial operations.

Recommendation to the Minister of Energy on Arrangements for the Effective Management of Critical Contingencies