Overview

The CCM Regulations manage critical gas outages and other security of supply contingencies without compromising long-term security of supply.

The 2008 Government Policy Statement on Gas Governance requires the industry to have sound arrangements for the management of critical contingencies. This provision is met through the Gas Governance (Critical Contingency Management) Regulations 2008 (CCM Regulations), which set out how industry participants plan for, and respond to, a serious incident affecting gas supply via the gas transmission pipelines.

The purpose of the CCM 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 CCM Regulations came into force on 21 January 2010. They were again reviewed following an extended supply disruption on the Maui Pipeline in 2011. Amendments strengthening and clarifying aspects of the regulatory arrangements took effect on 1 March 2014.

 

The Current Arrangements section contains information on the following:

  • CCM Regulations and related arrangements
  • Critical Contingency Operator
  • Regional/Non-regional Guidelines
  • Critical Contingency Management Plans
  • Determinations
  • Market Fees
  • Contingency Designation Applications
  • Information for Consumers regarding Critical Contingency Events

The Critical Contingency Events section contains information on critical contingency incidents. The most recent critical contingency caused by a system imbalance at the Kapuni Gas Treatment Plant occurred on 23 May 2017.

The Background section contains historical information on the Regulations review (2012 - 13), and it's original development (2006 - 08).

Below you will find the CCM Regulations.

Current Arrangements

The 2008 Government Policy Statement on Gas Governance (GPS) requires the industry to have sound arrangements for the management of critical contingencies. This provision is met through the Gas Governance (Critical Contingency Management) Regulations 2008 (CCM Regulations), which set out how industry participants plan for, and respond to, a serious incident affecting gas supply via the gas transmission pipelines.

The purpose of the CCM 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 CCM Regulations were reviewed following an extended supply disruption on the Maui Pipeline in 2011. Amendments strengthening and clarifying aspects of the regulatory arrangements took effect on 1 March 2014. Details of the amendments and the associated review can be viewed in Regulations Review under Background

Under the CCM Regulations, Gas Industry Co has appointed Core Group to the role of Critical Contingency Operator (CCO), which has the responsibility for declaring and managing critical contingencies.

On the left-hand navigation of this section, you will find:

  • The current Critical Contingency Management Regulations
  • Information on the Critical Contingency Operator
  • Information on Regional/Non-regional critical contingencies
  • Information on the Critical Contingency Management Plans of First Gas
  • Determinations that have been made in relation to the operation of the CCM Regulations
  • The annual market fees collected by Gas Industry Co under the Critical Contingency Management Work Programme
  • Information and various materials relating to Contingency Designation Applications

Key Areas

The 2008 Government Policy Statement on Gas Governance requires the industry to have sound arrangements for the management of critical contingencies. This provision is met through the Gas Governance (Critical Contingency Management) Regulations 2008 (CCM Regulations), which set out how industry participants plan for, and respond to, a serious incident affecting gas supply via the gas transmission pipelines. The purpose of the CCM 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 CCM Regulations came into force on 21 January 2010. They were reviewed following an extended supply disruption on the Maui Pipeline in 2011. Amendments strengthening and clarifying aspects of the regulatory arrangements took effect on 1 March 2014.

Related Documents

  • Gas Governance (Critical Contingency Management) Regulations 2008 - March 2014
    1.8 MB Adobe Acrobat PDF file

Under the Gas Governance (Critical Contingency Management) Regulations 2008 (CCM Regulations), Gas Industry Co appoints a Critical Contingency Operator (CCO).

New Plymouth-based Plant and Platform Limited has been appointed Critical Contingency Operator under the Gas (Critical Contingency Management) Regulations 2008 (Regulations).  

The appointment takes effect from 1 March 2022, following a hand-over from the current Critical Contingency Operator. The existing Critical Contingency Operator, Core Group, continues in the role until then.   

The CCO:

  • Determines and declares the onset of a Critical Contingency;
  • Calls for load curtailment as required to balance the system;
  • Continuously monitors the supply/demand balance and adjusts load curtailment directions as necessary, and
  • Determines when it is safe to terminate a Critical Contingency. 

The CCO maintains a website of publicly available information that is updated continually during a critical contingency. Under Current CC Events on the CCO's website you can find notices:

  • Declaring or terminating a critical contingency;
  • Directing gas consumers to cease using gas (curtailment directions); and
  • In cases of extended outages, informational notices concerning the status and expected duration of the critical contingency (where possible).

The CCO website also includes planning documents and reports under its Publications section, including:

  • Critical contingency management plan, which sets out how the transmission system operator, First Gas, will respond during and after a critical contingency;
  • Transmission system map; and
  • Consultation documents.

Critical notices that pertain to the declaration or termination of a Critical Contingency as well as notices directing gas consumers to cease using gas (curtailment directions).

In June 2020 the CCO at the time was audited against the CCO Service Provider Agreement and the CCM Regulations. No areas of non-conformance were identified. A summary of this audit is found below. 

 

Related Information

Previous Critical Contingency Operator
Request for Proposals: Appointment of a Critical Contingency Operator under the CCM Regulations

Related Documents

  • Service Provider Agreement Plant and Platform 2022
    2.8 MB Adobe Acrobat PDF file
  • News Bulletin Critical Contingency Operator appointment 2021
    105 KB Adobe Acrobat PDF file
  • Appointment of Core Group - November 2013
    197 KB Adobe Acrobat PDF file
  • Extension Letter - August 2018
    65 KB Adobe Acrobat PDF file
  • Summary of the CCO Audit - June 2020
    107 KB Adobe Acrobat PDF file
  • Service Provider Agreement Core Group - November 2013
    1.7 MB Adobe Acrobat PDF file

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.

Related Information

Previous Consultation

Related Documents

  • Regional vs Non-regional Guidelines
    282 KB Adobe Acrobat PDF file

The Critical Contingency Management Plan (CCMP) is a document that defines pressure thresholds for the transmission system, outlines how curtailment will be implemented, describes the communications between the transmission system owner and the critical contingency operator, and includes contact details for parties connected to or who use the transmission system. The current CCMP was approved by Gas Industry Co on 30 September 2020.

The Transmission System Map shows the location of the transmission pipelines and gas gates. Both of these documents are available on the CCO's website under Publications.

The Contingency Management Regulations provide for Gas Industry Co to determine and publish certain matters regarding the operation of the regulations. Notice of these determinations are available in Related Documents below.

Frequency of Consumer Notifications of the Contingency Management Regulations

Retailers are required to notify their non-domestic consumers of the existence of the Contingency Management Regulations (and their obligations under the regulations) at intervals specified by Gas Industry Co, which must be between 1-3 years (r44(2)(ii)).

Following consultation, Gas Industry Co has decided that retailers should notify their non-domestic consumers of the regulations (specifically the matters in r44(1)) on a two-yearly basis.

Gas Industry Co also encourages retailers to notify ‘newly gained’ customers of the matters in r44(1) of the CCM regulations at the time of acquisition.

The summarised Consultation Paper, submissions received, and Analysis of Submissions are all contained within the Final Decision Paper which can be viewed below in Related Documents.

Related Documents

  • Determination regarding the definition of 'publish' under regulation 5 - February 2014
    37 KB Adobe Acrobat PDF file
  • Final Decision Paper - Frequency of Consumer Notifications under the CCM Regulations - May 2016
    297 KB Adobe Acrobat PDF file
  • Critical Contingency Management Determinations v1.0 - December 2008
    77 KB Adobe Acrobat PDF file

The critical contingency market fees are monthly fees that cover the costs of the Critical Contingency Management (CCM) arrangements. 

These costs are:

  • The costs payable to the Critical Contingency Operator (CCO).
  • The costs payable to any person appointed by Gas Industry Co to carry out any obligations under the CCM Regulations.
  • The costs of Gas Industry Co associated with Critical Contingency Management and its obligations under the CCM Regulations.

Every person who purchases gas directly from a gas producer during a month is liable to pay the critical contingency market fees for that month.

Gas Industry Co estimates the costs prior to each financial year, collects market fees in monthly installments throughout the year, and then performs an end-of-year wash-up once the actual costs are known.

Ongoing costs for previous years costs are found on the left-hand navigation of this page. 

 

Ongoing Costs for FY2023 (1 July 2022 to 30 June 2023)

Cost Category

Estimate

Service Provider – Base Fee

$491,000

Total Ongoing Costs

$491,000

 

Ongoing Costs for FY2022 (1 July 2021 to 30 June 2022)

Cost Category

Estimate

Service Provider – Base Fee

$419,000

Total Ongoing Costs

$419,000

 

Ongoing Costs for FY2021 (1 July 2020 to 30 June 2021)

Cost Category

Estimate

Service Provider – Base Fee

$419,000

Service Provider – Event Fee

$47,000

Industry Expert

$20,000

Expert Adviser

$20,000

Other External Advice

$20,000

Total Ongoing Costs

$526,000

 

Ongoing Costs for FY2020 (1 July 2019 to 30 June 2020)

Cost Category

Estimate

Actual

Service Provider – Base Fee

$419,000

$418,800

Service Provider – Event Fee

$47,000

-

Industry Expert

$20,000

-

Expert Adviser

$20,000

-

Other External Advice

$20,000

$17,8670

Total Ongoing Costs

$526,000

$436,670

Over-Recovery $89,330

   

 

Ongoing Costs for FY2019 (1 July 2018 to 30 June 2019)

Cost Category

Estimate

Actual

Service Provider – Base Fee

$419,000

$418,800

Service Provider – Event Fee

$47,000

-

Expert Adviser

$10,000

-

Industry Expert

$20,000

-

Other External Advice

$60,000

-

Total Ongoing Costs

$556,000

$418,800

Over-Recovery $137,200

Related Information

Previous Market Fees

Under the CCM Regulations, gas consumers who satisfy certain criteria may qualify for a designation that provides a measure of priority access to gas in a critical contingency, subject to availability and the directions of the Critical Contingency Operator (CCO). Details for each designation category can be found below. Applications for designations may be made to Gas Industry Co using the forms in the left hand navigation.

Critical Care, for consumer sites that provide:

  • Hospital care (within the meaning of the Health and Disability Services (Safety) Act 2001)
  • Residential care, or support, of people with disabilities or people who are frail (whether because of their age or for some other reason) (please see guidance note below)
  • Primary health care
  • Dispensing medicines (within the meaning of the Medicines Act 1981)
  • Operating a prison (within the meaning of the Corrections Act 2004)
  • 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.

Related Information

Application Forms
Guidance for completing applications
Active Designations

This section contains information for consumers regarding Critical Contingency Events

 

Related Documents

  • Critical Contingency Management FAQs
    40 KB Adobe Acrobat PDF file
  • Consumer Information Regarding Critical Contingencies
    133 KB Adobe Acrobat PDF file

Compliance Process FAQ

Answers to some common questions about Critical Contingency events and gas user obligations can be found below.

FAQs for gas users interested in potential breaches of Critical Contingency Regulations during Maui gas outage

This FAQ deals specifically with matters related to compliance with the Gas Governance (Critical Contingency Management) Regulations 2008 and issues arising from the October outage on the Maui transmission pipeline.

For information about a ‘critical contingency’, see the second FAQ below.

What is a breach of the regulations?

A breach may arise where there appears to have been non-compliance with any provision of the Gas Governance (Critical Contingency Management) Regulations 2008. These regulations govern the management of serious pressure events or outages on the gas transmission system. An example of a potential breach is failure to stop using gas when directed.

You can find the regulations by clicking the ‘Legislation’ link under the ‘About Us’ tab.

After the October outage on the Maui pipeline, are breaches of the critical contingency regulations likely?

It is unclear how many breaches will arise out of the Maui gas outage. The Critical Contingency Operator must allege a breach if it believes, on reasonable grounds, that a participant has breached the regulations. Other people may also allege breaches.

Am I allowed to allege a breach?

Any person who believes, on reasonable grounds:

  • that a participant has breached the rules; and
  • that person is affected by that alleged breach,

may notify that alleged breach.

You can allege a breach by completing the notice of breach form on this webpage

Compliance and sending to [email protected] .

How do I become aware of breaches arising out of the Maui gas outage?

Please fill in the “Compliance Registration” form to register to receive breach notices. You must be a non-residential gas user to receive such notices (ie, a business or other sort of organisation). Residential gas users are not entitled to receive such notices.

I registered to receive breach notices – what happens when I receive one?

If you register to receive breach notices, the Market Administrator will ensure that you receive any notifications of the breaches relating to the Maui gas outage and any other future gas outages. (See below for more information about the Market Administrator).

The information the Market Administrator sends you will enable you to consider whether the alleged breach has impacted your organisation, and therefore whether you consider that you have been affected by the alleged breach. If you consider that your organisation has been affected, then you may wish to join the breach by sending a return email to the Market Administrator.

Who is entitled to become a party to a breach?

All participants who consider that they are affected by the alleged breach may join as a party to the breach notice. 

Participants, in this context, include consumers (other than residential consumers). 

What happens if I join as a party to an alleged breach?

By joining as a party to an alleged breach:

  • you will be kept informed at key stages of the breach process (for example when the materiality of the breach is determined you will be sent an email);
  • you may be asked to provide information to allow the breach to be assessed; and
  • you may participate in any settlement proceedings or hearings.

Joining as a party to a breach notice is NOT an application for compensation. It is possible that a participant who is found to have breached the regulations may be required to pay a fine or some form of compensation, but joining a breach is no guarantee of entitlement to compensation.

What are the roles of the Market Administrator, Investigator, and Rulings Panel?

The Market Administrator, Investigator, and Rulings Panel are appointed under the Gas Governance (Compliance) Regulations 2008 to undertake a range of functions in relation to alleged breaches.

  • The Market Administrator
    • receives breach allegations,
    • refers material allegations to the Investigator, and
    • attempts to settle non-material allegations.
    • The Market Administrator function is currently performed by Gas Industry Co.
  • The Investigator
    • is independent from Gas Industry Co;
    • has a range of powers to investigate and report on breach allegations; and
    • is able to effect settlements, which must be referred to the Rulings Panel for approval or rejection.
  • The Rulings Panel
    • is an independent body appointed by the Minister of Energy.
    • The current Rulings Panel is a retired High Court Judge. 
    • In a quasi-judicial process, the Rulings Panel has jurisdiction to approve or reject settlements and to determine breach allegations and impose sanctions.

How long does the Compliance process take?

The Market Administrator must make determinations of materiality expeditiously. If a breach is found not material by the Market Administrator, then the compliance process is complete.

If a breach is found material and referred to the Investigator, the Investigator has 30 business days (or longer by agreement) to reach a settlement.

If the Investigator is unable to reach a settlement then the breach is referred to the Rulings Panel. The Rulings Panel must use reasonable endeavours to make its final decision on a breach within 40 business days of the date by which it has received all written and oral submissions on that matter.

Why are residential consumers not invited to receive notification of breaches?

The compliance process allows gas users who believe they are affected by an alleged breach to join the process. 

Residential gas users are not covered by the Regulations and were not subject to curtailment notices.

In the case of the recent Maui gas outage, no residential customers were required to stop using gas.  However, as with the Maui gas outage, a critical contingency may be of such severity that domestic users may be asked to decrease their gas use on a voluntary basis during a critical contingency.

What are the Gas Governance (Compliance) Regulations 2008?

The Gas Governance (Compliance) Regulations 2008 provide for the monitoring and enforcement of gas governance rules including the Gas Governance (Critical Contingency Management) Regulations 2008. 

Critical Contingency FAQ

What is a critical contingency?

A critical contingency generally occurs when gas supply is disrupted to all or part of the natural gas transmission system. Such a disruption can be caused by an outage in a gas production station that prevents gas from being injected into the transmission system or a fault (e.g. a leak or breakage) in a transmission pipeline that prevents gas from being delivered into or from the pipeline.

The pressure in the transmission system needs to be kept within a specific range, and a mismatch between gas demand and gas supply can cause gas pressures to drop. If the gas pressure drops to a level that jeopardises the safe delivery of gas, this in turn triggers a critical contingency to be declared under the Gas Governance (Critical Contingency Management) Regulations 2008 (the Regulations). The Regulations provide for specific gas pressure threshold limits to be set by the transmission system owner.

What happens during a critical contingency?

The Critical Contingency Operator (CCO) has the responsibility under the Regulations for declaring and managing critical contingency situations. Once a critical contingency has been declared by the CCO, his objective is to stabilise pressures and gas supply on the affected parts of the transmission system. Stabilising pressure is important, because if gas pressure drops too low – if the pipeline is effectively sucked dry of gas – then restoring full gas supply to the affected downstream networks can take a very long time (possibly months). 

The main tool that the CCO has in managing pipeline pressure is the ability to require industrial and commercial gas users to stop using gas on the affected parts of the transmission pipeline. The CCO’s directions are relayed to retailers, who in turn instruct their customers to cease their gas usage as soon as possible.

The CCO manages pipeline pressure so that, when the fault causing the critical contingency is repaired, the supply of gas can be restored as quickly as possible.

Gas Industry Co has appointed Core Group to fulfil the role of the CCO.

What was the recent Maui gas outage?

The large Maui gas transmission pipeline, which is the main pipeline transporting gas from the fields in Taranaki to the upper North Island, was shut down on 25 October 2011 following a reported gas escape in the White Cliffs area of North Taranaki. A pipe seam weld was found to have a 120mm long split that required a significant repair, including the isolation and depressurisation of a 24 kilometre section of the pipeline and the removal and replacement of the damaged section of pipe.   Normal pipeline operations resumed on 30 October. The pipeline Operator is conducting a thorough investigation into the circumstances of the pipeline failure.

What are the Gas Governance (Critical Contingency Management) Regulations 2008?

The Gas Governance (Critical Contingency Management) Regulations are intended to ensure that any gas outages are managed effectively. 

Some of the ways the regulations do this is by providing for:

  • the appointment of a critical contingency operator;
  • the development of critical contingency management plans; and
  • processes for managing a critical contingency.

Critical Contingency Events

Notices published by the Critical Contingency Operator (CCO) during a Critical Contingency Event are available on the CCO's website 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 any areas where those arrangements could be improved. This report must be issued no later than 30 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 a critical contingency price that is used to settle contingency imbalances arising from the event.

Key Areas

A Critical Contingency was declared by the Critical Contingency Operator (CCO) at 10:50 on Tuesday 23 May 2017. 

The cause of the event was low linepack due to downstream delivery points taking significantly more gas than was being injected into the pipeline, which was exacerbated during a planned outage of the Pohokura Production Station.  During the period of this outage, the imbalance between supply and demand caused pipeline linepack and pressures to fall to the point where the critical contingency threshold of 3 hours to 37.5 barg at the Kapuni Gas Treatment Plant was breached.

The Critical Contingency was terminated at 18:15 the same day, after Pohokura returned to expected flows and the CCO considered that the supply of gas into the system was sufficient to meet expected demand. Further information on the event can be found on the CCO website here.

PERFORMANCE REPORT

The CCO is required to produce a performance report that assesses the effectiveness of the critical contingency arrangements and, where applicable, identifies any improvements. On 30 June, a draft report was released for public comment, as well as a feedback form for submissions. The draft report can be found below. The final performance report can be found on the CCO website here 

RESOLVING CONTINGENCY IMBALANCES

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

Under regulation 77, Gas Industry Co is required to publish the contingency imbalances incurred during an event, and a table setting out this information is available below

Related Documents

  • Critical Contingency Price Workshop Slides
    237 KB PowerPoint presentation
  • Final Critical Contingency Price Report
    725 KB Adobe Acrobat PDF file
  • Draft Critical Contingency Price Report
    231 KB Adobe Acrobat PDF file
  • Contingency Imbalance Volumes and Values
    81 KB Adobe Acrobat PDF file
  • Draft Performance Report
    1.4 MB Adobe Acrobat PDF file

At 6:30pm on 24 May 2016 the Critical Contingency Operator (CCO) declared a Critical Contingency. The underlying causes of the Critical Contingency were an unplanned trip of PPS at 4:20pm combined with the large gas demand on the day and depleting linepack. At 6:05pm, once the Critical Contingency threshold of 3 hours to 37.5 barg at the Kapuni Gas Treatment Plant was breached, the conditions for determining a Critical Contingency had been met. The CCO was required to determine and declare a Critical Contingency.

The Incident Report and Performance Report can be found on the CCO website here.

Critical Contingency Price

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 a Critical Contingency event.  Tim Denne of Covec was engaged as the independent expert for this work.  His final Critical Contingency price report is available below.

Performance report

Pursuant to regulation 65 of the Gas Governance (Critical Contingency Management) Regulations 2008, the CCO issued a draft Performance Report which can be found below along with the submission received.

 

 

Related Documents

  • Draft Critical Contingency Performance Report - 13 July 2016
    1.9 MB Adobe Acrobat PDF file
  • Submission on Draft Performance Report - Greymouth Gas NZ Ltd
    552 KB Adobe Acrobat PDF file
  • Determination of Critical Contingency Price for 24 May 2016
    667 KB Adobe Acrobat PDF file

Gas Industry Co has issued a report ‘Potential Critical Contingency on 15th April 2015 – Analysis of Data’. The report can be found under Related Documents below.

Maui linepack on 14 and 15 April 2015 fell to levels that caused the Critical Contingency Operator (CCO) to issue a ‘Notification of Potential Critical Contingency’. Gas Industry Co was concerned that the situation was triggered by market operations behaviour rather than a physical supply problem.  The Report was conducted in response to broad stakeholder interest in the event, and limited public visibility of data surrounding it. 

In summary, the Report concludes the linepack fall was caused mainly by a steep decline in Running Operational Imbalance (ROI) at transmission pipeline welded points, and that this was attributable principally to shippers on Vector’s North and South-Kapuni-Frankley Road (SKF) Pipelines drawing more gas from the Maui pipeline than they had contracted for.

The event highlighted the ineffectiveness of the current Imbalance Limit Overrun Notice (ILON) process. The report notes that the introduction of daily cash-outs under the new Maui pipeline market-based balancing regime to take effect from 1 October 2015 will prevent such imbalance accumulations at welded points and incentivise all pipeline users to improve primary balancing.

To assist its analysis, Gas Industry Co formally requested gas transaction information from relevant participants under the Information Gathering Protocol. This was not wholly effective and the investigation was hindered because two retailers declined to provide the data requested. Consequently, Gas Industry Co will review the information gathering arrangements, in particular the role of the Protocol. 

Related Documents

  • Potential Critical Contingency on 15th April 2015 - Analysis of Data
    1.1 MB Adobe Acrobat PDF file

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) issued an Incident Report and Performance Report. Documents and other information relating to this event are available on the CCO website here

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.

Related Documents

  • Final Price Report - April 2012
    582 KB Adobe Acrobat PDF file

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 engaged Concept Consulting Group to review the effectiveness of the Critical Contingency Management processes and governance arrangements during the Maui outage. 

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.

See Related Documents below.

Related Documents

  • Gas Industry Co Media Release: Maui Pipeline Outage Review - 3 November 2011
    218 KB Adobe Acrobat PDF file
  • Vector Media Advisory: 10.00am Update - 29 October 2011
    78 KB Adobe Acrobat PDF file
  • Vector Media Advisory: 1.00pm Update - 27 October 2011
    79 KB Adobe Acrobat PDF file
  • Vector Media Advisory: Chain of Events - 26 October 2011
    92 KB Adobe Acrobat PDF file
  • Performance Report Feedback Form (CC)
    198 KB Adobe Acrobat PDF file
  • CCM Review Report (Concept Consulting) - June 2012
    2.2 MB Adobe Acrobat PDF file
  • Vector Media Advisory: 2.00pm Update - 29 October 2011
    78 KB Adobe Acrobat PDF file
  • Vector Media Advisory: 9.30am Update - 28 October 2011
    78 KB Adobe Acrobat PDF file
  • Vector Media Advisory: 1.00pm Update - 26 October 2011
    119 KB Adobe Acrobat PDF file
  • Performance Report (Vector) - 21 December 2011
    573 KB Adobe Acrobat PDF file
  • Post Maui Pipeline Outage Review update (GIC) - 7 May 2012
    49 KB Adobe Acrobat PDF file
  • Vector Media Advisory: 7.00am Update - 30 October 2011
    79 KB Adobe Acrobat PDF file
  • Vector Media Advisory: 5.00pm Update - 28 October 2011
    65 KB Adobe Acrobat PDF file
  • Vector Media Advisory: 7.30pm Update - 26 October 2011
    81 KB Adobe Acrobat PDF file
  • Gas Industry Co Media Release (Gas Curtailment ordered following gas pipeline leak) - 25 October 2011
    201 KB Adobe Acrobat PDF file
  • Incident Report (CCO) - 4 November 2011
    105 KB Adobe Acrobat PDF file

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.

Related Documents

  • Presentation Slides - August 2010
    327 KB Adobe Acrobat PDF file
  • Critical Contingency Operator Performance Report - August 2010
    77 KB Adobe Acrobat PDF file
  • Draft price report - August 2010
    523 KB Adobe Acrobat PDF file
  • Final Price Report - September 2010
    535 KB Adobe Acrobat PDF file
  • Critical Contingency Incident Report - July 2010
    83 KB Adobe Acrobat PDF file

Proposal for amending CCM Regulations

The purpose of the Gas Governance (Critical Contingency Management) Regulations 2008 (CCM 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 CCM Regulations underwent extensive review and were amended after the October 2011 Maui pipeline outage. Since then, there have been additional critical contingencies, test exercises and market changes. This more recent experience has identified further areas where the CCM Regulations could be amended to improve their operation.

Gas Industry Company released its consultation paper Statement of Proposal for amending the Critical Contingency Management Regulations in May 2020. In July 2020, at the end of our consultation period, we received eleven submissions. There was broad agreement on many of the proposals, however, the submissions did raise areas that we considered warranted further analysis.

We have since carried out this analysis, engaged external consultants where required, and have now released a Summary of Submissions and Next Steps for Amending the Critical Contingency Management Regulations. Although we are not requesting formal submissions on this paper, we encourage anyone with a view to get in touch.

Gas Industry Company is now working towards publishing a final Statement of Proposal which will provide a further opportunity for stakeholders to make submissions. Once we have considered these final submissions, we intend to make a Recommendation to the Minister to change the CCM Regulations.

Related Documents

  • Consultation Paper SOP for amending CCM Regulations 220520.pdf
    1.1 MB Adobe Acrobat PDF file
  • Summary of Submissions and Next Steps for Amending the Critical Contingency Management Regulations
    3.5 MB Adobe Acrobat PDF file

Submissions

  • Greymouth Gas New Zealand Limited
    Submissions template for CCM consultation paper Greymouth 166 KB Adobe Acrobat PDF file
  • Firstgas Group
    Firstgas response to GIC SoP for CCMP Amendments 307 KB Adobe Acrobat PDF file
  • Major Gas Users Group
    2020 07 MGUG Submission on SOP for Amending CCM Regulations 792 KB Adobe Acrobat PDF file
  • emsTradepoint Limited
    emsTradepoint GIC Critical Contingency Submission 186 KB Adobe Acrobat PDF file
  • Transpower
    TP Sub Critical Contingency Management Regs Questions 24July2020 77 KB Adobe Acrobat PDF file
  • Nova Energy Ltd
    Nova Submission CCM Review 107 KB Adobe Acrobat PDF file
  • Vector Limited
    Vector Submission SoP for Amending the CCM Regulations 258 KB Adobe Acrobat PDF file
  • Fonterra
    Fonterra Submission on CCM Consultation 24 July 2020 133 KB Adobe Acrobat PDF file
  • OMV New Zealand
    OMV Submission on CCM Consultation 24 July 2020 1.1 MB Adobe Acrobat PDF file
  • Methanex
    MX Submission to GIC Critical Contingency Management Regulations July 2020 v2 1.2 MB Adobe Acrobat PDF file
  • Haast Energy
    Haast Submission on CCM Consultation 24 July 2020 209 KB Adobe Acrobat PDF file

Recommendation to Minister

On 21 July 2021, Gas Industry Co recommended that the Minister of Energy and Resources make new gas governance regulations to replace regulations 82A and 82B of the Gas Governance (Critical Contingency Management) Regulations 2008 (CCM Regulations) that will be revoked by the Gas (Information Disclosure and Penalties) Amendment Act.

The new regulations would enable the High Court to impose civil pecuniary penalties of up to $200,000 on consumers who are not industry participants (other than domestic consumers) for specific breaches of the CCM Regulations.

The recommendation follows Gas Industry Co’s issue of a Statement of Proposal and consultation with industry participants on a broader package of reforms to the CCM Regulations. This proposal is being progressed ahead of other proposed changes to align with the amendments to the Gas Act and avoid any possible regulatory gap.

We anticipate a further recommendation on proposed amendments to the CCM Regulations relating to other aspects of our consultation following the completion of our consultation and assessment process on those proposed amendments.

The recommendation to the Minister can be found below. Gas Industry Company’s consultation on its Statement of Proposal for amending the CCM Regulations can be found here.

Related Documents

  • Recommendation to Minister Amendments to CCM Regulations Penalties
    313 KB Adobe Acrobat PDF file

Background

This section contains historical information on:

  • The Regulations Review 
  • The Original Development 

 

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