(1) The Commission must appoint a person or persons to act as the following service providers:

• (a) a system operator:

• (b) a registry:

• (c) a reconciliation manager:

• (d) a pricing manager:

• (e) a clearing manager:

• (f) a market administrator.

(2) The Commission must appoint Transpower as the system operator.

(3) The Commission may also appoint a person or persons to act as any other type of service provider.

A service provider has the functions, rights, powers, and obligations set out in relation to that service provider under these regulations and the rules.

(1) A service provider's term of appointment, and the date on which the term begins, is as agreed between the Commission and the service provider.

(2) The Commission may at any time terminate, re-appoint, or change the appointment of any person as a service provider, subject to the terms of any agreement between that service provider and the Commission.

(3) Subclause (2) does not apply to the appointment of Transpower as the system operator.

(1) The remuneration of a service provider is as agreed between the Commission and the service provider.

(2) The Commission and the service provider may agree on any other terms and conditions, not inconsistent with the functions, rights, powers, and obligations of that service provider under these regulations and the rules.

The Commission must publicise every service provider agreement.

The Commission may appoint itself to carry out the role, or any part of the role, of any service provider.

Each service provider must at all times maintain any insurance cover that is required by the Commission, on terms and in respect of risks approved by the Commission, with an insurer approved by the Commission.

In regulations 38 to 41, force majeure event—

• (a) means an event or circumstance beyond the reasonable control of a service provider that results in, or causes, an inability by that service provider to perform any of its obligations under these regulations or the rules; and

• (b) includes (without limitation)—

  • (i) fire, flood, storm, earthquake, landslide, volcanic eruption, or other act of God:

  • (ii) explosion or nuclear, biological, or chemical contamination:

  • (iii) sabotage, terrorism, or act of war (whether declared or not); and

• (c) includes an act or omission by a party under an agreement with a service provider (not being the Commission) only if—

  • (i) that act or omission is a breach of an obligation under that agreement; and

  • (ii) that obligation is in all material respects the same as an obligation in the service provider's agreement with the Commission; and

  • (iii) that act or omission would have been a force majeure event if it had been done by the service provider and not by the third party; and

• (d) does not include the fact that a service provider or any other person—

  • (i) is unable or unwilling to pay any amount necessary to meet the obligations under these regulations or the rules; or

  • (ii) is unable to pay its debts; or

  • (iii) calls a meeting for the purpose of Part 14 of the Companies Act 1993; or

  • (iv) has been adjudicated bankrupt; or

  • (v) in the case of a company, society, or partnership, has a receiver or statutory manager or similar person appointed in respect of it or of all or any of its assets; or

  • (vi) is put into liquidation; and

• (e) does not include any event that could have been prevented by the service provider by the exercise of a reasonable standard of care.

(1) A service provider is relieved of an obligation under these regulations and the rules to the extent that, and for so long as, it is unable to perform the obligation as a result of a force majeure event.

(2) However, subclause (1) applies only if, and for so long as, the service provider—

• (a) promptly notifies the Commission in writing of—

  • (i) the full details of the force majeure event; and

  • (ii) the obligation that cannot be performed; and

  • (iii) the likely duration of the inability to perform the obligation; and

• (b) uses its reasonable endeavours to overcome the inability to perform the obligation and to remove or mitigate the effect of the force majeure event.

If a service provider is relieved of an obligation under regulation 38,—

• (a) the service provider is not liable for breach of these regulations or the rules in respect of that obligation during the period for which the relief applies under that regulation; and

• (b) any costs arising from the relief from the obligation lie where they fall, except that the Commission and the service provider may agree to adjust the remuneration of the service provider.

For the duration of a force majeure event, the Commission may contract with others for the performance of any obligation that the service provider fails to perform in accordance with these regulations, the rules, or the relevant service provider agreement.

(1) If the force majeure event results in a service provider being relieved of a material obligation for more than 30 continuous days, the Commission may terminate the relevant service provider agreement by written notice with immediate effect.

(2) Subclause (1) does not apply to the appointment of Transpower as system operator.

Each service provider is entitled to disclose to the Commission all information received by it from any person as part of its provision of services under these regulations and the rules.

The Commission and the relevant service provider (other than the system operator) must, at the beginning of each financial year, seek to agree on a set of performance standards against which the service provider's actual performance must be reported and measured at the end of the financial year.

(1) Each service provider must conduct, on a monthly basis, a self-review of its performance.

(2) The review must concentrate on the service provider's compliance with—

• (a) its obligations under these regulations and the rules; and

• (b) the operation of these regulations and the rules; and

• (c) any performance standards agreed between the service provider and the Commission; and

• (d) the provisions of the service provider's agreement.

(1) Each service provider must, within 10 working days of the end of each calendar month, provide a written report to the Commission on the results of the review carried out under regulation 44.

(2) The report must contain details of—

• (a) any circumstances identified by the service provider where it has failed, or may have failed, to comply with its obligations under these regulations and the rules; and

• (b) any event or series of events that, in the service provider's view, highlight any area where a change to a regulation or a rule may need to be considered; and

• (c) any other matters that the Commission, in its reasonable discretion, considers appropriate and asks the service provider, in writing within a reasonable time before the report is provided, to report on.

(1) At the end of each financial year, the Commission may review the manner in which each service provider (other than the system operator) has performed its duties and obligations under these regulations and the rules.

(2) The review must concentrate on the service provider's compliance with—

• (a) its obligations under these regulations and the rules; and

• (b) the operation of these regulations and the rules; and

• (c) any performance standards agreed between the service provider and the Commission; and

• (d) the provisions of the service provider's agreement.

(1) The Commission must review the performance of the system operator at least once in each financial year.

(2) The review must concentrate on the system operator's compliance with—

• (a) its obligations under these regulations and the rules; and

• (b) the operation of these regulations and the rules; and

• (c) any performance standards agreed between the system operator and the Commission; and

• (d) the provisions of the system operator's agreement.

The Commission must take into account the following matters when conducting the review under regulation 47:

• (a) the terms of the system operator agreement; and

• (b) the reports from the system operator to the Commission; and

• (c) the performance of the system operator over time in relation to Part C of the rules; and

• (d) the extent to which the acts or omissions of other persons have impacted on the performance of the system operator and the nature of the task being monitored; and

• (e) reports or complaints from any person; and

• (f) the fact that the real time co-ordination of the power system involves a number of complex judgments and inter-related incidents; and

• (g) any disparity of information between the Commission and the system operator; and

• (h) any other matter the Commission considers relevant to assess the system operator's performance.

(1) The Commission must publicise all self-review reports that are received from the system operator and that are required to be provided by the system operator to the Commission under regulation 45 or the rules.

(2) The Commission must publicise each report within 5 working days of receiving the report.

(1) Transpower's role as system operator under these regulations and the rules is distinct and separate from any other role or capacity that Transpower may have under these regulations and the rules, including as a grid owner or transmission provider.

(2) For this purpose, when assessing any aspect of the performance, or non-performance, of the system operator,—

• (a) the assessment must be made on the basis that the system operator had no other role or capacity; and

• (b) the system operator must be treated as if it did not have any knowledge or information that may be received or held by Transpower unless Transpower receives or holds that information or knowledge in its capacity as system operator.

(3) Subclause (2) applies, with necessary modifications, to any assessment of any aspect of the performance, or non-performance, of Transpower in any other role or capacity under these regulations or the rules.

(4) Transpower must report, in each self-review report provided under regulation 45 or the rules, on the extent to which its role as system operator under these regulations or the rules has, despite subclauses (1) to (3), been materially affected by—

• (a) any other role or capacity that Transpower has under these regulations or the rules; or

• (b) any agreement.

(1AA) This regulation, and regulations 52 and 53, apply only to software that the service provider agreement requires the service provider to use under the agreement.

(1) Unless otherwise agreed by the Commission in writing, the software specification for all software to be used by a service provider must be set out or described in the service provider agreement for that service provider.

(2) Each service provider must ensure that its software performs in accordance with the relevant software specification and the rules.

(3) Software specification means the user requirements and other information describing the software in respect of that service provider.

(1) Unless otherwise agreed by the Commission in writing, each service provider must arrange and pay for a suitably qualified independent person approved by the Commission to carry out—

• (a) before any software is first used by the service provider in connection with these regulations or the rules, an audit of all software and software specifications to be used by the service provider; and

• (b) an annual audit of all software used by the service provider, within 1 month of each anniversary of the date of commencement of the rules; and

• (c) an audit of any changes to the software or the software specification, before it is used by the service provider.

(2) The auditor must report to the Commission as to—

• (a) the performance (including likely future performance) of all of the software in accordance with the relevant software specification; and

• (b) any other matters that the Commission requires.

No service provider may use any software unless—

• (a) the service provider has provided to the Commission, in respect of that software, an auditor's report issued in accordance with regulation 52(2); or

• (b) the Commission has agreed that no audit is required under regulation 52(1).

In regulations 53A to 53C, force majeure event—

• (a) means an event or circumstance beyond the reasonable control of an ancillary service agent that results in, or causes, an inability by that ancillary service agent to perform any of its obligations under these regulations or the rules; and

• (b) includes (without limitation)—

  • (i) fire, flood, storm, earthquake, landslide, volcanic eruption, or other act of God:

  • (ii) explosion or nuclear, biological, or chemical contamination:

  • (iii) sabotage, terrorism, or act of war (whether declared or not); and

• (c) includes an act or omission by a party under an agreement with an ancillary service agent only if—

  • (i) that act or omission is a breach of an obligation under that agreement; and

  • (ii) that obligation is in all material respects the same as an obligation in the ancillary service agent's agreement with the system operator; and

  • (iii) that act or omission would have been a force majeure event if it had been done by the ancillary service agent and not by the third party; and

• (d) does not include the fact that an ancillary service agent or any other person—

  • (i) is unable or unwilling to pay any amount necessary to meet the obligations under these regulations or the rules; or

  • (ii) is unable to pay its debts; or

  • (iii) calls a meeting for the purpose of Part 14 of the Companies Act 1993; or

  • (iv) has been adjudicated bankrupt; or

  • (v) in the case of a company, society, or partnership, has a receiver or statutory manager or similar person appointed in respect of it or of all or any of its assets; or

  • (vi) is put into liquidation; and

• (e) does not include any event that could have been prevented by the ancillary service agent by the exercise of a reasonable standard of care.

(1) An ancillary service agent is relieved of an obligation under these regulations and the rules to the extent that, and for so long as, it is unable to perform the obligation as a result of a force majeure event.

(2) However, subclause (1) applies only—

• (a) if the ancillary service agent notifies the system operator, immediately after becoming aware of the existence of the force majeure event,—

  • (i) that the obligation cannot be performed; and

  • (ii) of the likely duration of the inability to perform the obligation; and

• (b) if, and for so long as, the ancillary service agent uses its reasonable endeavours to overcome the inability to perform the obligation and to remove or mitigate the effect of the force majeure event; and

• (c) if the ancillary service agent, as soon as practicable, notifies the system operator and the Commission in writing of the full details of the force majeure event.

(3) To avoid doubt, the relief in subclause (1) applies only if an ancillary service agent is acting in its capacity as an ancillary service agent under an ancillary service arrangement.

If an ancillary service agent is relieved of an obligation under regulation 53B,—

• (a) the ancillary service agent is not liable for breach of these regulations or the rules in respect of that obligation during the period for which the relief applies under that regulation; and

• (b) any costs arising from the relief from the obligation lie where they fall, except that the system operator and the ancillary service agent may agree to adjust the remuneration of the ancillary service agent.

If the Commission suspects or anticipates the development, or possible development, of an undesirable trading situation, the Commission may investigate the matter.

(1) An undesirable trading situation means any contingency or event—

• (a) that threatens, or may threaten, trading on the wholesale market for electricity and that would, or would be likely to, preclude the maintenance of orderly trading or proper settlement of trades; and

• (b) that, in the reasonable opinion of the Commission, cannot satisfactorily be resolved by any other mechanism available under the rules.

(2) Without limiting subclause (1), an undesirable trading situation includes—

• (a) manipulative or attempted manipulative trading activity:

• (b) conduct in relation to trading that is misleading or deceptive, or likely to mislead or deceive:

• (c) unwarranted speculation or an undesirable practice:

• (d) material breach of any law:

• (e) any exceptional or unforeseen circumstance that is at variance with, or that threatens or may threaten, generally accepted principles of trading or the public interest.

(1) If the Commission finds that an undesirable trading situation is developing or has developed, it may take any of the steps listed in subclause (2) in relation to the wholesale market for electricity that the Commission considers are necessary to correct the undesirable trading situation.

(2) The steps that the Commission may take include any 1 or more of the following:

• (a) suspending, or limiting or curtailing, an activity on the wholesale market for electricity, either generally or for a specified period:

• (b) deferring completion of trades for a specified period:

• (c) directing that any trades be closed out or settled at a specified price:

• (d) giving directions to any participant to act in a manner (not inconsistent with these regulations, the rules, or any other law) that will, in the Commission's opinion, correct or assist in overcoming the undesirable trading situation.

(3) The participant must comply promptly with any direction given to it in writing.

(4) Neither a participant nor the Commission is liable to any other participant in relation to the taking of any action, or any omission, that is reasonably necessary for compliance with a Commission direction under this regulation.

Every participant commits an offence who fails to comply with a direction given by the Commission under regulation 56(2), and is liable on summary conviction to a fine not exceeding $20,000.

(1) The Commission must consult with the system operator if the Commission is considering taking any action under regulation 56 to correct an undesirable trading situation and if it is possible that the action may have an effect on system security.

(2) The system operator must maintain procedures that are necessary to enable it to respond immediately to the Commission, and provide information as soon as reasonably practicable, if the Commission consults it under this regulation.

If the Commission finds that an undesirable trading situation is developing or has developed, the Commission must—

• (a) immediately notify all registered participants of its findings and of any actions that the Commission intends to take, or has taken, to correct the undesirable trading situation; and

• (b) unless the Commission considers that it is impractical to do so, consult with affected participants before taking the action.

The Commission must attempt to correct every undesirable trading situation and, consistently with section 172N of the Act, restore the normal operation of the wholesale market for electricity as soon as possible.

(1) Any person may complain, in writing, to a participant about any business activity of the participant that the person believes might constitute a breach of these regulations or the rules.

(2) The participant must ensure that the complaint is promptly, thoroughly, and fairly investigated by the participant, and that appropriate action is taken.

(3) The participant must promptly notify the person who made the complaint in writing of the result of the investigation and the action (if any) taken by the participant.

(4) The participant must also send a copy of the notification to the Commission.

(1) If any participant believes, on reasonable grounds, that another participant has breached these regulations or the rules, that participant must notify the Commission as soon as possible.

(2) The notice must be in writing and must specify—

• (a) the participant that is alleged to have breached these regulations or the rules; and

• (b) the regulation or rule allegedly breached; and

• (c) the circumstances relating to the alleged breach; and

• (d) the date and time on which the alleged breach occurred.

(3) This regulation does not limit any specific obligation to report a breach that is imposed on a participant elsewhere in these regulations or the rules.

(1) This regulation applies if a participant believes, on reasonable grounds, that it or another participant has breached any rule relating to quality and security in Part C, F, or G of the rules.

(2) The participant must notify the Commission as soon as practicable after the date that it became aware of the alleged breach.

(3) The notice must be in writing and must specify—

• (a) the participant that is alleged to have breached the rules; and

• (b) the rule allegedly breached; and

• (c) the circumstances relating to the alleged breach; and

• (d) the date and time on which the alleged breach occurred.

(4) This regulation does not limit any specific obligation to report a breach that is imposed on a participant elsewhere in these regulations or the rules.

Every person commits an offence who fails to comply with regulation 63(2), and is liable on summary conviction to a fine not exceeding $20,000.

Any person other than a participant may notify the Commission if the person believes, on reasonable grounds, that a participant has breached these regulations or the rules.

The Commission must keep confidential all information provided or disclosed to the Commission under this Part except to the extent that disclosure is required to enable the Commission to carry out its obligations and duties under the regulations or the rules or is otherwise compelled by law.

(1) The Commission may decline to pursue a notification of an alleged breach—

• (a) that relates to a matter that has been, or that the Commission considers is more properly, dealt with by any other person; or

• (b) if the Commission considers that the notifying participant has failed to establish a prima facie case for the alleged breach; or

• (c) that the Commission decides does not otherwise warrant any further action being taken.

(2) The Commission must then inform the notifying participant, or the person that notified the Commission under regulation 65, as the case may be,—

• (a) that the Commission intends to do no more in relation to the matter; and

• (b) of the reasons for that intention.

(1) The Commission may apply to the High Court for the grant of an interim injunction—

• (a) restraining a participant from doing, or omitting to do, anything that is in breach of these regulations or the rules; or

• (b) requiring a participant to do, or omit to do, something in accordance with these regulations or the rules.

(2) The court may grant the injunction if, in the opinion of the court, it is desirable to do so.

(3) Subclause (2) applies, in the case of an injunction under subclause (1)(a),—

• (a) whether or not the participant has done, or omitted to do, that thing; and

• (b) whether or not there is an imminent danger of substantial damage to any person if the participant does, or omits to do, that thing.

(4) The court may rescind or vary the injunction on application by the Commission or any participant affected by the injunction.

(1) If the Commission receives notice under regulation 62 or regulation 63 of any alleged breach, it must appoint a person (the investigator) to investigate the alleged breach.

(2) The Commission may appoint a person (also the investigator) to investigate any other alleged breach of which the Commission becomes aware by any other means.

(3) Subclause (1) is subject to regulation 67.

(1) The Commission may appoint any person who it thinks has the requisite skills and experience to carry out an investigation.

(2) The appointment must be made in writing and may be on a permanent or temporary basis.

In carrying out an investigation, the investigator may appoint any external auditor, technical expert, or other persons that the investigator thinks fit to give advice or assistance to the investigator.

In appointing an investigator or other person under regulations 69 to 71, the Commission and the investigator must take reasonable steps to ensure that the appointed person is free of conflicts of interest in carrying out the investigation.

(1) The investigator must keep, and must ensure that every person appointed by an investigator under regulation 71 keeps, confidential all information provided or disclosed to them, except to the extent that disclosure—

• (a) is required to enable the Commission or investigator or other person to carry out its obligations and duties under the regulations or the rules; or

• (b) is otherwise compelled by law.

(2) The investigator must require participants that provide or disclose information to the investigator to identify any information that the participant—

• (a) considers to be confidential; and

• (b) considers should not be included in the investigator's report under regulation 88.

(1) The investigator appointed under regulation 69 must promptly notify the participant alleged to have breached these regulations or the rules of the allegations that are being investigated.

(2) The notice must be in writing and must specify—

• (a) either the name of the notifying participant or, if the alleged breach is one of which the Commission became aware by any other means, that fact; and

• (b) the regulation or rule allegedly breached; and

• (c) the circumstances relating to the alleged breach; and

• (d) the date and time the alleged breach occurred.

(3) The investigator must use reasonable endeavours to give the notice within 5 working days of being appointed in relation to the breach.

(1) At the same time as the investigator sends any notice under regulation 74, the investigator must publicise the matter under investigation, including the content of the notice given under that regulation.

(2) Within 10 working days after the investigator publicises the matter under investigation under subclause (1), any participant may notify the investigator that it considers that it is affected by the matter being investigated and wishes to become a party to the investigation.

(3) The participant is then joined as a party to the investigation.

Within 10 working days of receiving a notice given under regulation 74 (or any longer period that the investigator may allow in writing), the recipient must respond to the allegations, in writing, to the investigator.

The investigator must, if the participant does not comply with regulation 76, proceed to—

• (a) conduct an investigation of the facts surrounding the notified alleged breach in accordance with regulation 78; and

• (b) provide to the Commission a report and recommendation sufficient to enable the Commission to decide whether a formal complaint should be laid under regulation 90.

The investigator must conduct an investigation of the facts surrounding the notified alleged breach.

(1) The investigator must endeavour to effect an informal resolution (a settlement) of every matter under investigation by agreement between—

• (a) the notifying participant; and

• (b) the Commission (if the Commission was notified of the alleged breach by a person other than a participant under regulation 65); and

• (c) the participant allegedly in breach; and

• (d) any other participants that have joined as parties under regulation 75.

(2) In effecting a settlement, the investigator may use any process that the investigator thinks fit, after consultation with the persons referred to in subclause (1).

(1) Every settlement must—

• (a) be in writing; and

• (b) specify the details of any breach of these regulations or the rules that is admitted by a participant; and

• (c) record the terms of the settlement.

(2) The persons referred to in regulation 82(1) must notify their acceptance of the terms of the settlement in writing to the investigator.

(1) The investigator must provide to the Commission—

• (a) a copy of the settlement; and

• (b) a report containing as much of the information specified in regulation 88 as the investigator reasonably considers relevant in the circumstances of the matter; and

• (c) a recommendation as to whether the Commission should approve the settlement.

(2) The Commission must either—

• (a) approve the settlement, in which case, subject to regulation 87, the settlement is final and binding on all participants and the Commission; or

• (b) reject the settlement.

(1) The Commission must publicise the terms of every settlement approved under regulation 84(2)(a).

(2) However, the Commission may decide not to publicise any part, or all, of any particular settlement if the Commission considers that there are special circumstances that justify the non-publication.

(1) If the Commission rejects a settlement under regulation 84(2)(b), it must decide whether a formal complaint should be laid.

(2) If the Commission decides that—

• (a) no complaint should be laid, it must either direct the investigator to further endeavour to effect a settlement under regulation 82 or to abandon the investigation; or

• (b) a complaint should be laid, it must direct the investigator to report to the Rulings Panel under regulation 93.

Any participant that was not a party to a settlement may make a further notification to the Commission under regulation 62 or regulation 63 in relation to the same matter only if it can demonstrate to the Commission's satisfaction—

• (a) that it was materially adversely affected by the events or consequences of the events that gave rise to the matter that was settled; and

• (b) that it could not reasonably have been expected to be aware of being affected at the time that the investigator publicised the matter under investigation under regulation 75.

(1) The investigator must provide to the Commission a report and recommendation sufficient to enable the Commission to decide whether a formal complaint should be laid under regulation 90 if the persons referred to in regulation 82(1) do not enter into a settlement—

• (a) within 30 working days (or any longer period that the investigator agrees in writing) of the investigator giving notice under regulation 74; or

• (b) if relevant, within 10 working days of the investigator further endeavouring to effect a settlement under a direction given under regulation 86(2)(a).

(2) That report must, to the extent reasonably practicable, specify or contain the following:

• (a) the rule or regulation allegedly breached; and

• (b) the participant against whom the formal complaint is laid; and

• (c) the estimated date and time the breach allegedly occurred; and

• (d) the relevant issues raised by the participant alleged to be in breach in response to the allegations of breach; and

• (e) the comments made to the investigator by any other person in response to the relevant issues raised by the participant alleged to be in breach; and

• (f) any additional information that the investigator considers relevant to the decision of the Rulings Panel as to how the matter may be dealt with by the Rulings Panel; and

• (g) the investigator's assessment of the impact of the conduct alleged to constitute the breach on the other participants; and

• (h) the investigator's assessment of the likelihood of the alleged breach recurring; and

• (i) details of any similar situations previously dealt with by the Commission or the Rulings Panel, including any settlement approved by the Commission under regulation 84 in response to those situations (if known by the investigator); and

• (j) a copy of all correspondence with the investigator or Commission relating to the alleged breach.

The investigator must ensure that the notifying participant, the Commission, the participant allegedly in breach, and all participants that are a party to the investigation are given a copy of the investigator's report under regulation 88.

(1) As soon as practicable after receiving a report under regulation 77 or regulation 88, the Commission must decide whether or not a formal complaint should be laid against the participant allegedly in breach.

(2) If the Commission decides that no formal complaint should be laid, the Commission must inform the notifying participant, any person that notified the alleged breach under regulation 65, the participant allegedly in breach, and any other participant that has joined as a party under regulation 75—

• (a) of the decision; and

• (b) of the effect of regulation 92.

(3) If the Commission decides that a formal complaint should be laid, the Commission must direct the investigator to report to the Rulings Panel under regulation 93.

(1) The Commission must publicise every decision made under regulation 86(2) or regulation 90(2) or regulation 90(3), together with the reasons for the Commission's decision.

(2) However, the Commission may decide not to publicise any part, or all, of a particular decision if the Commission considers that there are special circumstances that justify the non-publication.

(1) A notifying participant, or any participant that has joined as a party under regulation 75, may lay a formal complaint against the participant allegedly in breach if—

• (a) the Commission informs that participant that the Commission does not intend to lay a formal complaint; and

• (b) the participant proposing to lay the formal complaint has suffered loss as a result of the alleged breach.

(2) Subclause (1) does not apply to a person other than a participant who notified the alleged breach under regulation 65.

(3) The participant that proposes to lay a formal complaint under subclause (1) (now called the complainant) must lay the formal complaint in writing with the Rulings Panel—

• (a) within 10 working days after receiving the notice from the Commission under regulation 90; and

• (b) in accordance with regulation 94.

(1) This regulation applies if the Commission decides under regulation 86(2)(b) or regulation 90(3) that a formal complaint should be laid.

(2) The investigator must formulate a formal complaint and report it to the Rulings Panel in accordance with the following process:

• (a) the investigator must formulate a formal complaint, to which is attached the report given under regulation 88; and

• (b) the investigator must forward a copy of the formal complaint to each of the Rulings Panel, the notifying participant, the Commission, the participant alleged to be in breach, and any other participant that has joined as a party under regulation 75.

(3) The investigator must use reasonable endeavours to forward the report referred to in subclause (2)(b) within 5 working days of a decision that a formal complaint should be referred to the Rulings Panel.

(1) This regulation applies if the complainant under regulation 92(3) advises that it will lay a formal complaint.

(2) The complainant must formulate a formal complaint and report it to the Rulings Panel in accordance with the process in regulation 93, as if the complainant were the investigator.

(3) That formal complaint may contain any additional evidence or material that the complainant thinks fit.

(1) On receiving a complaint under regulation 93(2) or 94(2), the Rulings Panel must—

• (a) set a date for considering the formal complaint; and

• (b) give to the persons referred to in subclause (2) at least 20 working days written notice of the place, date, and time at which the Rulings Panel will consider the formal complaint.

(2) The following persons are entitled to be heard at the hearing or to provide written submissions and evidence if the matter is not set down for a hearing:

• (a) the Commission (whether or not it has laid the complaint):

• (b) the notifying participant and the complainant:

• (c) the participant allegedly in breach:

• (d) any participant that has joined as a party under regulation 75.

(1) The Rulings Panel may regulate its own procedures, except as otherwise provided in these regulations or the rules, and subject to the requirements of natural justice.

(2) The Rulings Panel must publicise a summary of its procedures.

(1) The Rulings Panel must set a matter that is being considered by the Rulings Panel down for a hearing—

• (a) if the Rulings Panel considers that it is appropriate for the Commission or any participant to be given an opportunity to be heard; or

• (b) if any participant or the Commission requests a hearing in respect of the matter.

(2) Hearings must be in public, unless the Rulings Panel directs otherwise.

(2A) Hearings must be held as soon as practicable.

(3) If a matter is not set down for a hearing, the Rulings Panel must consider and decide the matter on the basis of the written submissions and evidence that it has received.

(1) If a matter is set down for a hearing, the Rulings Panel must ensure that the notifying participant, the complainant, the Commission, and the participant alleged to be in breach have been provided with—

• (a) a statement of the matter under consideration; and

• (b) a copy of all relevant material collected or prepared during the course of the investigation of the matter up to the time the statement is provided.

(2) The Rulings Panel must comply with subsection (1)—

• (a) not less than 10 working days before the hearing; or

• (b) if the Rulings Panel, in its discretion, decides that an urgent hearing is desirable, as soon as practicable.

(1) If the Rulings Panel considers that a hearing should be private, it must notify all registered participants and the Commission of its decision and the grounds for that decision.

(2) If a participant or the Commission disagrees with this decision, it may make a written submission to the Rulings Panel setting out the reasons for its disagreement, within 5 working days of receiving the notification referred to in this regulation.

(3) The Rulings Panel must consider the submission and then notify all registered participants and the Commission of its decision and the grounds for that decision.

(1) The Rulings Panel, in carrying out any hearing, may receive in evidence any statement, document, or information that would not be otherwise admissible as evidence that may in its opinion assist it to deal effectively with the matter.

(2) This regulation is subject to section 172KC of the Act.

Subject to regulations 97 to 99, any person that is entitled to be heard under regulation 95(2) at any hearing of the Rulings Panel,—

• (a) is entitled to be represented:

• (b) must be given a reasonable opportunity to make written and oral representations:

• (c) is entitled to call witnesses and to cross-examine any witness called against it:

• (d) is entitled to make a plea to the Rulings Panel in mitigation of penalties:

• (e) is entitled to have any other person present to give evidence.

(1) The Rulings Panel may request the investigator to obtain any further information that the Rulings Panel requests if the Rulings Panel considers that, in relation to any matter before it, the Rulings Panel does not have sufficient information for it to determine what action to take under section 172KE of the Act.

(2) The Rulings Panel may make the request of its own initiative or following an application by any person referred to in regulation 95(2).

(3) Participants must provide any information reasonably requested by the Rulings Panel or the investigator under this regulation.

(4) Subclause (3) is subject to section 172KC of the Act.

In carrying out its functions, the Rulings Panel may employ or otherwise seek advice or assistance from any external auditor, technical expert, or other person that the Rulings Panel sees fit.

(1) Any person referred to in regulation 95(2) may make written submissions to the Rulings Panel on the subject of any penalty or order that the Rulings Panel may make in relation to that matter.

(2) Any submission under this regulation must be made by the date set by the Rulings Panel as the closing date for submissions.

This Part applies to any complaint or matter referred to the Rulings Panel in respect of an allegation that a participant has breached these regulations or the rules.

Every participant commits an offence, and is liable on summary conviction to a fine not exceeding $20,000, who breaches an order made under section 172KE(1)(g) of the Act.

(1) This regulation applies if the Rulings Panel is considering requiring a participant to pay a civil pecuniary penalty under section 172KE(1)(e) of the Act.

(2) The Rulings Panel must seek to order payment of a civil pecuniary penalty that is commensurate with the seriousness of the breach.

(3) The Rulings Panel must have regard to the following matters:

• (a) the severity of the breach:

• (b) the impact of the breach on other participants:

• (c) the extent to which the breach was inadvertent, negligent, deliberate, or otherwise:

• (d) the circumstances in which the breach occurred:

• (e) any previous breach of these regulations or the rules by the participant:

• (f) whether the participant disclosed the matter to the Commission:

• (g) the length of time the breach remained unresolved:

• (h) the participant’s actions on learning of the breach:

• (i) any benefit that the participant obtained, or expected to obtain, as a result of the breach:

• (j) any other matters that the Rulings Panel thinks fit.

(4) This regulation is subject to section 172KE(2) of the Act and to regulations 110 to 132 and the other provisions of this Part.

The Rulings Panel may not require a grid owner to pay a civil pecuniary penalty for a breach of an obligation that relates to metering standards, or to the provision of metering information.

(1) This regulation applies if the Rulings Panel is considering the liability of the system operator, or the imposition of any penalty or costs against the system operator, under this Part resulting from a breach of these regulations or the rules.

(2) The Rulings Panel must take into account—

• (a) any arrangements the Commission has made with the system operator, including the policy statement and the procurement plan; and

• (b) the extent to which the acts or omissions of other persons have impacted on the system operator's ability to comply with these regulations or the rules; and

• (c) the fact that the real time operation of the power system may involve a number of complex judgments and interrelated incidents.

The system operator is not liable under this Part for a sum in excess of—

• (a) $200,000 in respect of any one event or series of closely related events arising from the same cause or circumstance; or

• (b) $2 million in respect of all events occurring in any financial year.

(1) This regulation applies to any breach of a rule relating to metering standards or metering information (including failing to provide accurate information).

(2) No participant is liable under this Part for a sum in excess of $200,000 in respect of any one event or series of closely related events arising from the same cause or circumstance.

(1) This regulation applies if the Rulings Panel is considering the liability of an asset owner, or the imposition of any penalty or costs against an asset owner, under this Part resulting from a breach of these regulations or the rules.

(2) The Rulings Panel must take into account—

• (a) the extent to which the acts or omissions of other persons have impacted on the asset owner's ability to comply with these regulations or the rules; and

• (b) the fact that the real time operation of the power system may involve a number of complex judgments and interrelated incidents.

(3) In addition to the matters set out in subclause (2), if considering compensation for a breach of the outage protocol, the Rulings Panel must also take into account—

• (a) the extent to which an order for compensation would encourage Transpower and designated transmission customers to take steps to manage efficiently the risks of outages; and

• (b) the extent to which Transpower has operated the grid in accordance with good electricity industry practice; and

• (c) the extent to which other participants have acted in accordance with good electricity industry practice.

Transpower or a designated transmission customer is not liable under this Part in respect of any breach of section VI or VII of Part F of the rules for a sum in excess of—

• (a) $2 million in respect of any one event or series of closely related events arising from the same cause or circumstance; or

• (b) $6 million in respect of all events occurring in any financial year.

An asset owner is not liable under this Part in respect of any breach of Part C of the rules for a sum in excess of—

• (a) $2 million in respect of any one event or series of closely related events arising from the same cause or circumstance; or

• (b) $6 million in respect of all events occurring in any financial year.

(1) This regulation sets a limit on the liability of an ancillary service agent in respect of each type of ancillary service (as those types are defined in the rules) provided under an ancillary service arrangement.

(2) This regulation applies to any breach by an ancillary service agent, in its capacity as an ancillary service agent, of—

• (a) Part G of the rules; or

• (b) rule 8 of technical code B of Schedule C3 of Part C of the rules.

(3) An ancillary service agent is not liable under this Part in respect of the breach for a sum in excess of,—

• (a) in respect of any one event or series of closely related events arising from the same cause or circumstance, the lesser of $100,000 or 5% of the expected annual fees for the relevant type of ancillary service; and

• (b) in respect of all events occurring in the period of 12 months ending with the breach, the lesser of $300,000 or 20% of the expected annual fees for the relevant type of ancillary service.

(4) In this regulation, expected annual fees means an amount calculated by the Rulings Panel as follows:

• (a) the fees, including any constrained on amounts, paid or payable by the system operator to the ancillary service agent in respect of the relevant type of ancillary service during the 12 months before the date of the relevant breach of the rules; or

• (b) those fees calculated on a pro rata basis, if the ancillary service agent has provided the relevant type of ancillary service for less than 12 months; or

• (c) if calculation under paragraph (a) or paragraph (b), in the opinion of the Rulings Panel, is impracticable (for example, because too little historical data is available) or produces an unreasonable amount, an amount that, in the opinion of the Rulings Panel, is a reasonable amount, taking into account historical data from similar ancillary service agents providing similar ancillary services.

(5) Any amount for which an ancillary service agent is not liable under this regulation is treated as written off for the purpose of calculating the limit of liability in any period of 12 months ending with a subsequent breach of the rules.

(6) The reference in subclause (3) to “liable under this Part” includes a reference to liability imposed under section 172KE of the Act.

The Rulings Panel may not order compensation to be paid to any other person in respect of a breach of the rules by a participant if—

• (a) the breach is related to, or connected with, the inputs to, or the process of determining, final prices; or

• (b) the compensation sought would, but for this regulation, be determined by reference to recalculated final prices.

The reconciliation manager is not liable to any other party under or in relation to the rules except as expressly set out in regulations 118 to 120.

The reconciliation manager is liable, in respect of any financial loss that occurs as a result of any failure by the reconciliation manager to comply with its obligations under the rules, only to a generator or purchaser who suffers the loss.

The reconciliation manager is not liable under this Part for a sum in excess of—

• (a) $500,000 in respect of any one event or series of closely related events arising from the same cause or circumstance; or

• (b) $2 million in respect of all events occurring in any financial year.

The reconciliation manager is not liable to any participant who suffers financial loss, cost, or expenses, as a result of the reconciliation manager reasonably assessing information as required by the rules.

A person's recourse against the clearing manager for settlement money owing to that person is limited to those sums that the clearing manager actually receives and, by the rules, is obliged to hold on trust for that person, and is reasonably able to make payment of, in accordance with the rules.

(1) The clearing manager is liable, in respect of any financial loss that occurs as a result of any failure by the clearing manager to comply with its obligations under the rules, only to a generator, purchaser, system operator, or ancillary service agent who suffers the loss.

(2) The clearing manager is liable in respect of fraud or dishonesty only to the extent that is insured, and for which the clearing manager is liable, under regulation 124.

The clearing manager is not liable under this Part, except regulation 124, for a sum in excess of—

• (a) $5 million in respect of any one event or series of closely related events arising from the same cause or circumstance; or

• (b) $10 million in respect of all events occurring in any financial year.

(1) The clearing manager must, at all times, maintain any fidelity insurance cover that is required by the Commission, on terms and in respect of risks approved by the Commission, with an insurer approved by the Commission, in relation to any direct financial loss the clearing manager may sustain from any acts of fraud or dishonesty committed by it in its capacity as clearing manager or by any of its employees, contractors, or agents.

(2) The clearing manager is liable, in respect of any financial loss that is so insured, only for the amount insured under the policy.

(3) Despite subclause (2), if the clearing manager does not receive from the insurer the full amount insured solely as a result of the insurer's insolvency, the clearing manager's liability under this regulation is limited to the amount actually recovered from the insurer by the clearing manager.

(4) The clearing manager must take all practicable steps to recover the full amount insured.

The registry is not liable under this Part for a sum in excess of—

• (a) $50,000 in respect of any one event or series of closely related events arising from the same cause or circumstance; or

• (b) $1 million in respect of all events occurring in any financial year.

The market administrator is not liable under this Part for a sum in excess of—

• (a) $50,000 in respect of any one event or series of closely related events arising from the same cause or circumstance; or

• (b) $500,000 in respect of all events occurring in any financial year.

The pricing manager is not liable under this Part for a sum in excess of—

• (a) $200,000 in respect of any one event or series of closely related events arising from the same cause or circumstance; or

• (b) $5 million in respect of all events occurring in any financial year.

(1) This regulation applies if—

• (a) more than 1 participant suffers financial loss for which another participant is held to be liable by the Rulings Panel, or agreed to be liable under a settlement under these regulations, either in respect of any one event or series of closely related events arising from the same cause or circumstance, or in respect of all events occurring in any financial year; and

• (b) the total loss suffered by all participants exceeds the dollar amount to which the other participant's liability is limited by these regulations.

(2) The dollar amount must be divided by the Rulings Panel among the participants suffering loss in the proportion that their individual loss bears to the total loss.

A participant must make any payments to another participant that the Rulings Panel orders it to make, in order to provide for the division referred to in regulation 128.

(1) The limits on liability set out in this Part do not apply if the participant wilfully breached the rules or these regulations or fraudulently caused the loss in question.

(2) Subclause (1) does not apply to the limit on liability in regulation 124(2).

The reconciliation manager, the clearing manager, the registry, the market administrator, and the pricing manager must at all times maintain any professional indemnity insurance cover that is required by the Commission, on terms and in respect of risks approved by the Commission, with an insurer approved by the Commission.

Any civil pecuniary penalty under this Part is included in the calculation of any limits on liability set out in this Part.

(1) The Rulings Panel must use reasonable endeavours to make its final decision on each matter under its consideration within 40 working days of the date that it has received all written and oral submissions on the matter.

(2) The Rulings Panel must give the decision, in writing and together with the reasons for the decision, to the participants that were entitled to be heard under regulation 95(2).

(3) The Rulings Panel must notify the decision to the Commission as soon as practicable after it has made a final decision.

(1) The Commission must publicise the terms of every decision made by the Rulings Panel under this Part, together with the reasons for the Panel's decision, within 10 working days of receiving the decision from the Rulings Panel.

(2) However, the Commission must not publicise any part, or all, of any particular decision if the Rulings Panel advises the Commission that there are special circumstances that justify the non-publication.

(1) Every participant must comply with every order relating to it, including any direction or arrangement made by the Rulings Panel for the purpose of giving effect to the order.

(2) Every participant must perform any action, or make any payment, directed by the Rulings Panel within 10 working days of receiving notice of the direction, or any longer period that the Rulings Panel allows.

(1) Any sum due to be paid by a participant under these regulations is a debt due by the participant and is recoverable as such in court.

(2) A failure by a participant to pay a sum due to be paid under these regulations is a breach of these regulations or the rules.

(3) A sum that is not paid when due bears interest at the prescribed rate (within the meaning of section 87 of the Judicature Act 1908).

(1) The Rulings Panel may, at any time, terminate or suspend all or any of a participant's rights under the rules by making a termination order or a suspension order in any case where, in the opinion of the Rulings Panel, that participant—

• (a) has failed to comply with any order of the Commission or Rulings Panel; and

• (b) the failure has seriously prejudiced the operational or financial security of the wholesale market or transmission system for electricity.

(2) The Rulings Panel may, at any time,—

• (a) extend, suspend, or modify any conditions of any suspension order made by the Rulings Panel:

• (b) revoke any termination order or suspension order.

Every participant commits an offence, and is liable on summary conviction to a fine not exceeding $20,000, who breaches a termination order or a suspension order.

(1) This regulation applies before the Rulings Panel—

• (a) makes a termination order or a suspension order; or

• (b) extends, suspends, or modifies a condition of a suspension order; or

• (c) revokes a termination order or a suspension order.

(2) Those things are referred to as makes an order or a change.

(3) The Rulings Panel must—

• (a) give notice to the participant to whom the order relates, or may relate, in accordance with subclause (4); and

• (b) publicise the proposed order or change in accordance with subclause (5).

(4) The notice given to the participant must—

• (a) state the reasons for making the order or the change; and

• (b) state that the order or change will be made unless, by the date specified in the notice, the participant satisfies the Rulings Panel by notice in writing that the order or change should not be made.

(5) The notice that is publicised must specify—

• (a) the name of the participant to whom the order relates or may relate; and

• (b) the reasons for the order or change; and

• (c) the date by which any submission must be delivered to the Rulings Panel.

(6) That date must be not less than 20 working days after the date of the notice.

(7) However, that time limit does not apply if the Rulings Panel, in its discretion, decides that a suspension order may need to be made urgently.

(1) If the Rulings Panel makes a termination order or suspension order, it must give directions to, or make arrangements for, other participants (either generally or specifically) to give effect to its order.

(2) Unless any directions or arrangements are made by the Rulings Panel, any participant dealing with a participant that is subject to a termination order or suspension order may treat the participant subject to the termination or suspension as if the order had not been made.

(3) No participant is liable to any other participant in relation to the taking of any action, or any omission, that is reasonably necessary for compliance with a direction given, or arrangement made, by the Rulings Panel under this regulation.

Every participant commits an offence who fails to comply with a direction or arrangement made by the Rulings Panel under regulation 141, and is liable on summary conviction to a fine not exceeding $20,000.