SETTLEMENT AGREEMENT

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1 SETTLEMENT AGREEMENT Regulation 24(1) of the Electricity Industry (Enforcement) Regulations 2010 DATED: BETWEEN: (1) Transpower New Zealand Limited as the grid owner of 96 The Terrace, Wellington (grid owner) (2) MainPower New Zealand Limited asset owner of 172 Fernside Road, Rangiora (MainPower) (3) Transpower New Zealand Limited as the system operator of 96 The Terrace, Wellington (system operator) (Collectively the parties). BACKGROUND: (A) On 23 November 2016, the grid owner reported to the Electricity Authority (Authority) that it had breached clauses 4(1), 4(4)(i) and 4(4)(ii) of Technical Code A of Schedule 8.3 of the Code. At the same time, the grid owner alleged that MainPower had breached clauses 4(1), 4(2), 4(4)(i) and 4(4)(ii) of Technical Code A of Schedule 8.3. (B) Clause 4(1) of Technical Code A of Schedule 8.3 requires each asset owner and grid owner to cooperate with the system operator to ensure that the protection systems for their assets are coordinated so that the main protection system disconnects a faulted asset first, and the other assets are not prematurely disconnected. (C) Clause 4(2) of Technical Code A of Schedule 8.3 requires the system operator and the relevant asset owner to agree a proposed grid interface, including the settings of any associated protection system, before implementing the grid interface. (D) Clauses 4(4)(i) and 4(4)(ii) of Technical Code A of Schedule 8.3 respectively require asset owners to provide protection systems for their gridconnected assets that support the system operator in planning to comply, and complying with, its principal performance obligations, and are designed, commissioned and maintained, and settings are applied, to achieve the following in a reliable manner: a) disconnect any faulted asset in minimum practical time (taking into account selectivity margins and industry best design practice) and minimum disruption to the operation of the grid or other assets 1

2 b) be selective when operating, so that the minimum amount of assets are disconnected. (E) On 24 February 2017, the Authority: appointed an investigator under regulation 12 of the Electricity Industry (Enforcement) Regulations 2010 (Regulations) to investigate the Alleged Breaches by the grid owner appointed an investigator under regulation 12 of the Enforcement Regulations to investigate the Alleged Breaches by MainPower. (F) The investigator gave notice of two separate investigations: one investigation relating to the grid owner's alleged breaches, and the other to MainPower's alleged breaches. (G) MainPower joined the investigation of the grid owner, and the system operator joined both investigations, as interested participants. (H) The parties have agreed to settle the Alleged Breaches of both investigations on the terms contained in this Agreement. IT IS AGREED: 1. Interpretation 1.1 In this Agreement, unless the context requires otherwise: (c) Agreement means this Settlement Agreement; Alleged Breaches means the alleged breaches of the Code arising from the Circumstances and described in clause 2; Approval Date means the date the parties to this Agreement are notified that the Electricity Authority has approved this Agreement under regulation 24(4) of the Regulations; (d) Circumstances means the circumstances set out in clause 3; (e) Code means the Electricity Industry Participation Code 2010; (f) Regulations means the Electricity Industry (Enforcement) Regulations Alleged Breaches 2.1 The grid owner self-reported breaches of clauses 4(1), 4(4)(i) and 4(4)(ii) of Technical Code A of Schedule 8.3. The grid owner also breached clause 4(2) of Technical Code A of Schedule The grid owner alleged that MainPower breached clauses 4(1), 4(2), 4(4)(i) and 4(4)(ii) of Technical Code A of Schedule

3 3. Circumstances of the Breaches 3.1 On 17 November 2015, the grid owner commissioned a new 66 kv feeder at its Southbrook substation providing supply to MainPower. 3.2 At 20:01 on 24 March 2016, the Islington Southbrook 1, Islington Southbrook 2, Ashley Southbrook 1 and Southbrook Waipara 1 circuits tripped, resulting in a loss of supply to the Southbrook and Kaiapoi substations. 3.3 Following an on-site inspection at Southbrook, the grid owner returned the two Islington Southbrook circuits to service at 21:39. The grid owner restored all of the remaining 66 kv circuits between Southbrook, Kaiapoi and Ashley by 22: The grid owner then proceeded to liven the 66 kv feeders supplying MainPower. When the grid owner closed the Southbrook circuit breaker 152 supplying the MainPower 66 kv Burnt Hill feeder, all of the incoming circuits to Southbrook tripped. 3.5 At that point, the grid owner determined that a fault on the MainPower Burnt Hill feeder had probably led to the initial and subsequent tripping. At 23:39, the grid owner returned to service the transmission circuits between Islington, Southbrook, Kaiapoi and Ashley, but left Southbrook circuit breaker 152 in the open position. 3.6 The fault analysis concluded that: a high resistance yellow-phase-to-earth fault on the MainPower 66 kv network caused the circuit trips the directional earth fault final time protection at the grid owner s Islington, Ashley, and Waipara substations cleared the fault indiscriminately. The grid owner s protection setting on the new Southbrook 66 kv feeder circuit breaker 152 supplying MainPower appeared to cause the circuit trips. 3.7 The grid owner had set the earth fault protection time delay for the new feeder to operate in three seconds, in accordance with its protection setting guide. The rest of the earth fault protection on the 66 kv Southbrook bus was set to operate in one second. These settings meant that the 66 kv circuits into Southbrook tripped before feeder circuit breaker 152 could trip. 3.8 MainPower confirmed to the grid owner that its line differential protection elements, which should have operated for this high resistance fault, were disabled because MainPower had not yet commissioned its protection signalling between Southbrook and Burnt Hill. 3.9 MainPower had previously advised commissioning staff on site that the protection signalling would not be available when MainPower commissioned the new feeder on 17 November The grid owner believes this information was not relayed to the grid owner s protection designer or the protection and automation engineers The grid owner has advised that, because MainPower s feeder was commissioned without protection signalling, MainPower considered the grid 3

4 owner s earth fault protection on the feeder would be time graded with other earth fault protection in the vicinity. However, the grid owner has advised that the grid owner s protection operated indiscriminately because: the discriminative protection element on the MainPower-owned Southbrook feeder protection equipment was unavailable the time grading of the grid owner s earth fault protection relay was unsuitable The grid owner advised that, for a high resistance earth fault such as that which occurred at Southbrook, the normal distance protection elements are not sensitive enough to detect the fault. It is usual to rely on earth fault protection elements to provide backup protection in these circumstances. For transmission protection, the grid owner does not normally specify that timedelayed earth fault protection elements be time graded, as the distributor normally installs communication-assisted line differential unit protection MainPower had incorporated communication-assisted line differential unit protection relays in its design, but at the time of commissioning the new feeder circuit breakers, the communications circuits had not themselves been commissioned. The grid owner advised that MainPower did not make it clear to the grid owner at any stage of the project that MainPower s protection scheme would not have the communication-assisted line differential unit protection scheme operating when the new feeders were commissioned The grid owner's understanding of MainPower's design was that, because MainPower had communication-assisted line protection installed on the new Southbrook feeders, there was no need for the grid owner to incorporate time grading of its earth fault elements into the protection design The grid owner s earth fault time delay settings at Islington, Waipara, Ashley and Southbrook are time graded to discriminate in favour of high-impedance earth faults when protection signalling is not in service. With time-graded protection settings at these sites, the grid owner should have also time graded its protection settings for the two new Southbrook feeders On the morning of 25 March 2016, the grid owner agreed with MainPower to reduce the grid owner s earth fault protection time-delay setting from 3.0 seconds to 0.6 seconds on its feeder circuit breakers (CB152 and CB202) On the evening of 25 March 2016, the grid owner applied new protection settings and returned the two new Southbrook feeders to service. 4. Impact of the Breaches 4.1 The incident caused a loss of supply of 44 MW from Southbrook and Kaiapoi substations. 5. Steps taken to prevent recurrence 5.1 To prevent recurrence, the grid owner will: 4

5 a) investigate and identify whether there are any other feeders that need to be time graded with other earth fault time delay settings in the area b) update its protection design guides to include the requirement to timegrade earth fault time delay settings with other earth fault time delay settings in the relevant area c) ensure that protection design consultants it engages are aware of the time-grading requirement when commissioning new feeders in areas where asset owners have not installed (and do not propose to install) differential line protection with protection signalling d) discuss with protection design consultants the importance of confirming protection requirements at the grid interface with asset owners prior to designing any new protection systems e) discuss with asset owners the obligations that the grid owner and asset owners both have under clause 4 of Technical Code A of Schedule 8.3 regarding their asset protection systems f) discuss with the grid owner s design consultants and with asset owners the need to time-grade protection time delay settings for when differential protection is removed from service for maintenance and testing when the feeder remains in service. The grid owner will take the relevant feeder out of service if earth fault time-delay settings in the relevant area are not, or cannot be, time graded. 5.2 In September 2016, MainPower completed installation of the protection signalling between Southbrook and Burnt Hill. 6. Guiding Principles 6.1 The parties agree the following guiding principles in relation to this Agreement: it is essential participants have a clear understanding of protection coordination compliance requirements to ensure reliable supply of electricity to consumers. commissioning activity introduces risk that requires careful project management to ensure reliable and efficient operation of the electricity industry. 5

6 7. Settlement 7.1 The grid owner agrees to complete the steps to prevent recurrence outlined in clause 5.1 of this Agreement. 7.2 The grid owner and Mainpower agree to the following procedure to ensure cooperation with the system operator and to obtain agreement from the system operator to meet the requirements of clause 4(1) and 4(2) of Technical Code A of Schedule 8.3. The grid owner and asset owners will each separately notify the system operator by , to the generic address compliance@transpower.co.nz, of any new or changes to existing protection systems at the grid interface prior to commissioning of the equipment. The system operator, subject to evaluation, will then provide its agreement in writing to the parties prior to the go live date of the proposed changes. 7.3 The grid owner will arrange for this procedure in clause 7.2 to be publicised on the relevant sections of Transpower s website. 7.4 The grid owner agrees to complete its settlement actions by 30 September Confidentiality 8.1 If the Authority decides under regulation 25(2) of the Regulations not to publicise any part of this Agreement, each party will treat that part of the Agreement as confidential information and will not disclose it other than: (c) (d) (e) to the party s employees or contractors who need to know the confidential information to implement or monitor the implementation of this Agreement; to the party s professional advisers, auditors and bankers; as required by law or for the purposes of judicial proceedings; as required by any securities exchange or regulatory or governmental body to which the party is subject or submits; or as authorised in writing by the other parties. 8.2 A party must not disclose confidential information under clause 8.1 or unless the party obtains a confidentiality undertaking from the person to whom the confidential information is to be disclosed on terms no less onerous than those set out in this clause 8 before disclosing the confidential information. Any confidential information to be disclosed in the circumstances set out in clause 8.1(c) or (d) may only be disclosed after written notice to the other parties (unless the disclosing party is prevented from notifying the other parties by law). 6

7 9. Agreement Subject to Approval 9.1 Subject to clause 9.2, this Agreement will come into effect on the Approval Date. 9.2 Clause 8 is binding on the parties as from the date of this Agreement. Pending the Authority s approval of this Agreement under regulation 24(4) of the Regulations, clause 8 will apply as if the Authority has decided under regulation 25(2) of the Regulations not to publicise any part of this Agreement or the existence of this Agreement. 10. Settled Breaches 10.1 This Agreement is in full and final settlement of all claims, actions and demands against any party (under the Regulations, the Code or otherwise) in relation to: the Alleged Breaches; and any other breaches of the Regulations or Code involved in or arising from the Circumstances that the claiming party ought reasonably to have known about at the date of this Agreement, (the Alleged Breaches and such other breaches together the Settled Breaches) Subject to regulation 26 of the Regulations, this Agreement is also binding on the Authority and all participants who are not a party to this Agreement to the effect that: the Authority may not on its own initiative instigate a further breach investigation, or take any enforcement action in respect of, the Settled Breaches; and a participant who is not a party to this Agreement may, in accordance with regulation 26 of the Regulations, make a further notification under regulation 7 or 8 of the Regulations in relation to a Settled Breach, and the Authority may then take all or any of the steps provided for in the Regulations despite this Agreement. 11. General 11.1 Each party will execute all documents and do, or refrain from doing, all other reasonable things necessary or desirable to give full effect to the provisions of this Agreement, including to secure the Authority s approval of this Agreement under regulation 24(4) of the Regulations This Agreement is the whole and only agreement between the parties relating to the settlement of claims, actions and demands arising from the Circumstances. Each party acknowledges that it has not been induced to enter into this Agreement by any representation made by or on behalf of the other party that is not repeated in this Agreement. 7

8 11.3 This Agreement may be signed in any number of counterparts. SIGNED: For Transpower New Zealand Limited as the grid owner Name: Position: SIGNED: For MainPowerNew Zealand Limited Name: Position: SIGNED: For Transpower New Zealand Limited as the system operator Name: Position: 8

NIGERIAN ELECTRICITY REGULATORY COMMISSION REGULATIONS FOR EMBEDDED GENERATION 2012

NIGERIAN ELECTRICITY REGULATORY COMMISSION REGULATIONS FOR EMBEDDED GENERATION 2012 1 P a g e REGULATION NO: 0112 NIGERIAN ELECTRICITY REGULATORY COMMISSION In exercise of its powers to make Regulations