SRAS Agreement updated for all contracts

Ancillary Service Contract Spinning Reserve Wholesale Electricity Market

Australian Energy Market Operator Limited

and

##

Australian Energy Market Operator Limited

Level 22, 530 Collins Street

MELBOURNE VIC 3000

TEL: 03 9609 8000

FAX: 03 9609 8080

Invitation to Tender Spinning Reserve for the Wholesale Electricity Market 2018/19 Financial Year

Proposed Contract

TABLE OF CONTENTS

DETAILS3

OPERATIVE PROVISIONS4

1.Interpretation4

2.Term7

3.Provision of Spinning Reserve7

4.Spinning Reserve Availability7

5.Tests9

6.Maintenance and reliability10

7.Records, audits and inspections11

8.Payments12

9.Extent of Liability13

10.Default14

11.Assignment and sub-contracting15

12.Dispute resolution15

13.Warranties15

14.Compliance with Law and requirements of Authority16

15.Change in Law16

16.General17

Schedule 1 -## Spinning Reserve20

DETAILS

Parties:

Australian Energy Market Operator Limited

ABN 94 072 010 327

of Level 22, 530 Collins Street, MELBOURNE VIC 3000 (AEMO)

and

##

ABN ##

of ## (Spinning Reserve Provider)

Commencement Date

1 July 2018

Expiry Date

30 June 2019

Governing law

Western Australia

Address for Service

AEMO:

Attention: Group Manager Legal

Address: GPO Box 2008 MELBOURNE VIC 3001

Email: Reception.Melbourne@aemo.com.au

Spinning Reserve Provider:

Attention: ##

Address: ##

Email: ##

OPERATIVE PROVISIONS

Interpretation Definitions general

Capitalised terms used in this Agreement are defined in clause 1.2, in the Details or in the Schedule.

Terms in italics have the meaning given to them in the WEM Rules.

Dictionary

Active Power Output, in respect of a Designated Facility at any time, means the output (in MW) as measured by AEMOs SCADA system (or where AEMO considers the SCADA reading to be inaccurate, a substituted reading determined by AEMO, acting reasonably).

Agreement means this agreement, including the Details and all schedules and annexures.

Ancillary Services PSOP means the Power System Operation Procedure: Ancillary Services published under clauses 3.11.14 and 3.11.15 of the WEM Rules.

Authority means any Commonwealth, State, Territory or local government or regulatory department, body, instrumentality, minister, agency or other authority, other than AEMO.

Available, in respect of Spinning Reserve at any time, means that Spinning Reserve is, or under this Agreement is taken to be, capable of being provided by Spinning Reserve Equipment at the Contract Performance Level while meeting the Minimum Technical Requirements (see clause 4).

Change in Law means any change in legislation that has a material adverse effect on the rights or obligations of a party under this Agreement (including the cost of providing Spinning Reserve) other than a change in legislation:

(a) the operation of which is excluded under clause 16.7; or

(b) relating to income tax (or state equivalent tax), a tax on capital gains, or taxes, imposts or charges of a similar nature.

Claim means a claim, loss, liability, cost or expense, whether arising in contract, tort (including negligence), equity or otherwise.

Communication means any notice, demand, approval, consent, request or other communication required or given by a party to the other party under this Agreement.

Contract Performance Level is specified in item 3 of the Schedule.

Contract Price Discount Percentage is specified in item 7 of the Schedule.

Contract Quantity is specified in item 1 of the Schedule.

Contract Year means:

0. the period from the Commencement Date to the next 30 June;

each subsequent period from 1 July to 30 June during the Term; and

if the Term ends other than on 30 June in any year, the period ending on the last day of the Term and commencing on the preceding 1 July.

Corporations Act means the Corporations Act 2001 (Cth).

Designated Facility is specified in item 1 of the Schedule.

Electricity Industry Act means the Electricity Industry Act 2004 (WA).

Electricity Networks Access Code means the Electricity Networks Access Code 2004 made under the Electricity Industry Act.

Good Electricity Industry Practice has the meaning given in the Electricity Networks Access Code.

GST has the meaning given in the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

Insolvency Event, in relation to a party, means the happening of any of these events:

(a) it is (or states that it is) insolvent or under administration; or

(b) it has a controller (as defined in the Corporations Act) appointed, is in liquidation, in provisional liquidation, under administration or wound up or has had a receiver (or receiver and manager) appointed to any part of its property;

(c) it is subject to any arrangement, assignment, moratorium or composition, protected from creditors under any statute or dissolved (in each case, other than to carry out a reconstruction or amalgamation while solvent on terms approved by the other party);

(d) an application or order has been made (and, in the case of an application, it is not stayed, withdrawn or dismissed within 30 days), resolution passed, proposal put forward, or any other action taken, in each case in connection with that party, which is preparatory to or could result in any of the events detailed in paragraphs (a) to (c);

(e) it is otherwise unable to pay its debts when they fall due; or

(f) something having a substantially similar effect to the events detailed in paragraphs (a) to (e) happens in connection with that party under the law of any jurisdiction.

Law means Commonwealth, state, or local legislation, judicial, administrative, or regulatory decrees, judgments, awards or orders and all common laws and equity.

Maximum Generation Quantity, in relation to a Designated Facility that is a generation system, means the maximum sent out capacity (expressed in MW) as specified in Standing Data for the purposes of Appendix 1(b)(iii) of the WEM Rules. The Maximum Generation Quantity is specified in item 1 of the Schedule.

Maximum Stable Load Quantity, in relation to a Designated Facility that is a generation system, means the minimum stable loading level (expressed in MW) as specified in Standing Data for the purposes of Appendix 1(b)(xiii) of the WEM Rules. The Maximum Stable Load Quantity is specified in item 1 of the Schedule.

Minimum Availability Requirement is specified in item 4 of the Schedule.

Minimum Load Quantity, in relation to a Designated Facility that is a Load, means the minimum load minimum consumption that cannot be interrupted to meet a Spinning Reserve requirement (expressed in MW) as agreed between AEMO and the Spinning Reserve Provider. The Minimum Load Quantity is specified in item 1 of the Schedule.

Minimum Technical Requirements are specified in item 5 of the Schedule.

Monthly Contract Price is specified in item 7 of the Schedule.

Relevant Period means the period from the Commencement Date to the following 30 June, and each period of 12 months ending at the end of each subsequent month (rolling 12 month periods).

Representative, in relation to a party, means any officer, employee, agent, adviser, trustee, permitted assignee, liquidator, administrator, or third party contractor of that party or of a related body corporate (as that term is defined in the Corporations Act) of that party.

Spinning Reserve means spinning reserve that meets the requirements of a Spinning Reserve Service for the purposes of the WEM Rules.

Spinning Reserve Equipment is specified in item 2 of the Schedule.

Technical Rules means the technical rules made under chapter 12 of the Electricity Networks Access Code.

Term means the period during which this Agreement is in effect under clause 2.

Test means a Spinning Reserve test conducted in accordance with the Spinning Reserve Providers test procedure (which must be approved by AEMO for the purposes of this Agreement).

Unavailable, in respect of Spinning Reserve at any time, means that Spinning Reserve is not, or under this Agreement is taken not to be, capable of being provided by Spinning Reserve Equipment at the Contract Performance Level while meeting the Minimum Technical Requirements (see clause 4).

WEM Regulations means the Electricity Industry (Wholesale Electricity Market) Regulations 2004 made under the Electricity Industry Act.

WEM Rules means the Wholesale Electricity Market Rules.

Interpretation

Unless otherwise specified, a reference in this Agreement to:

0. a document (including this Agreement) includes the document as novated, varied, or replaced;

a clause, paragraph, schedule, or annexure is a reference to a clause, paragraph, schedule, or annexure in this Agreement;

a clause is a reference to all its subclauses;

legislation includes subordinate legislation and other instruments under them, and consolidations, amendments, re-enactments or replacements of any of them;

the singular includes the plural and vice versa and a gender includes all genders;

the word person includes a firm, a body corporate, a partnership, joint venture, trust, an unincorporated association and any authority and any successor entity to those persons;

the word includes and the words including or such as are not references of limitation, and when introducing an example, do not limit the meaning of the words to which the example relates to examples of a similar kind;

a person includes a reference to the persons executors, administrators, successors, substitutes (including persons taking by novation) and assigns;

a party includes, where the context requires it, that persons directors, officers, employees, contractors, agents and any other persons authorised by that party and, in the case of AEMO, includes any System Operator acting on AEMOs behalf;

a thing (including an amount) is a reference to the whole and each part of it and a reference to a group of persons is a reference to all of them collectively, to any two or more of them collectively, and to each of them individually;

dollars or $ means Australian dollars;

writing includes any mode of representing or reproducing words in tangible and permanently visible form, and includes facsimile transmissions;

a month is a reference to a calendar month;

a day is a reference to a period of time commencing at midnight and ending the following midnight; and

a period of time from a given day or the day of an act or event is to be calculated exclusive of that day, and a period of time commencing on a given day or the day of an act or event is to be calculated inclusive of that day.

Construction

0. Headings are inserted for convenience and do not affect the interpretation of this Agreement.

If a word or phrase is defined in this Agreement, other parts of speech and grammatical forms of that word or phrase have corresponding meanings.

No rule of construction will apply to a clause to the disadvantage of a party merely because that party put forward the clause or would otherwise benefit from it.

An agreement, representation or warranty:

in favour of two or more persons is for the benefit of them jointly and each of them severally; and

by two or more persons binds them jointly and each of them severally.

Schedules

If a Schedule contains any provisions that impose additional obligations to those set out in the Operative Provisions, the provisions in the Schedule apply in respect of the Spinning Reserve the subject of that Schedule, as if the provision was an Operative Provision.

TermTerm

0. This Agreement comes into effect at 8.00 am on the Commencement Date.

Subject to earlier termination in accordance with this Agreement, this Agreement continues until 8.00 am on the Expiry Date.

Provision of Spinning Reserve

0. The Spinning Reserve Provider must use its reasonable endeavours to ensure that Spinning Reserve is Available at all times during the Term.

At any time during the Term, AEMO may require the Spinning Reserve Provider to provide Spinning Reserve in accordance with item 6 of the Schedule.

The Spinning Reserve Provider must use all reasonable endeavours to provide Spinning Reserve in accordance with this Agreement when required by AEMO.

Spinning Reserve Availability Determining Availability

Spinning Reserve is Unavailable:

0. for any period notified to AEMO under clause 4.2(a); and

0. for any periods when Spinning Reserve is taken to be Unavailable under clause 4.2(b) and clause 4.2(c),

and at all other times Spinning Reserve is taken to be Available.

Inability or failure to provide Spinning Reserve

0. If at any time the Spinning Reserve Provider considers that Spinning Reserve is, or will become, Unavailable for any reason other than a Planned Outage, it must notify AEMO immediately specifying:

which Spinning Reserve the notice applies to;

when Spinning Reserve became, or will become, Unavailable;

how long the Spinning Reserve Provider expects the Unavailability to continue; and

the cause of the Unavailability,

and the Spinning Reserve Provider must notify AEMO when Spinning Reserve becomes Available again.

Spinning Reserve is taken to be Unavailable for the period determined in clause 4.2(c) if any of the following occurs:

the Spinning Reserve Provider fails to provide Spinning Reserve in accordance with this Agreement when required by AEMO, and has not previously notified AEMO of its Unavailability during the Term under clause 4.2(a);

the Spinning Reserve Equipment fails a Test; or

the Spinning Reserve Provider fails to provide a test report within the period specified in clause 5.3, or fails to demonstrate to AEMOs reasonable satisfaction that Spinning Reserve remains Available within the period specified in clause 5.4.

In any case under clause 4.2(b), Spinning Reserve is taken to be Unavailable for the period commencing on one of the following dates (as applicable):

the date when Spinning Reserve ceased to be Available, if the Spinning Reserve Provider can establish that date to AEMOs reasonable satisfaction; or

otherwise, commencing on the date that is halfway between the date of the relevant failure and the most recent to occur of:

the last date the Spinning Reserve Equipment was successfully Tested or Spinning Reserve was provided to AEMO in accordance with this Agreement; and

the Commencement Date,

and concluding when the Spinning Reserve Provider demonstrates to AEMOs reasonable satisfaction that Spinning Reserve is Available.

Requirement for remedial action

If Spinning Reserve is Unavailable for any reason other than a Planned Outage, the Spinning Reserve Provider must:

0. diligently and at its own expense take the necessary remedial action to ensure that the relevant Spinning Reserve Equipment can meet the Minimum Technical Requirements and provide Spinning Reserve in accordance with the Contract Performance Level;

promptly advise AEMO of the proposed timetable for implementing the remedial action and keep AEMO informed of progress;

after taking the remedial action, submit such evidence as AEMO may require to demonstrate to AEMOs reasonable satisfaction that Spinning Reserve is Available; and

pay AEMOs reasonable costs incurred in relation to any Test required by AEMO for the purposes of clause 4.3(c), or in reviewing any other evidence concerning the remedial action.

Minimum Availability Requirement

0. For the purposes of determining whether the Minimum Availability Requirement for Spinning Reserve has been met, and the extent of any shortfall, the Availability of the Spinning Reserve is measured over each Relevant Period in accordance with clause 4.4(b).

Availability for a Relevant Period is calculated as A B x 100, expressed as a percentage, where:

A = the number of Trading Intervals during which the Spinning Reserve is Available (or Unavailable in connection with a Planned Outage) during the Relevant Period (as at the date of the Availability calculation); and

B = the total number of Trading Intervals in the Relevant Period (as at the date of the Availability calculation).

TestsTypes and frequency of Tests

0. The purpose of a Test is to determine whether the Spinning Reserve Equipment meets the Minimum Technical Requirements and is capable of providing Spinning Reserve at the Contract Performance Level.

The Spinning Reserve Provider must conduct a Test:

within 20 Business Days after the end of any maintenance (including a Planned Outage) that has caused any major component of the Spinning Reserve Equipment identified in item 2 of the Schedule to be out of service for a period of 7 Trading Days or more; and

at a time specified by AEMO on not less than 5 Business Days notice to the Spinning Reserve Provider, not more than once in any Contract Year.

AEMO may request the Spinning Reserve Provider to conduct a Test at any other time if AEMO reasonably believes that the Spinning Reserve Equipment may not meet the Minimum Technical Requirements, or is incapable of providing Spinning Reserve at the Contract Performance Level, and the Spinning Reserve Provider must conduct that Test within a reasonable time after receiving the request.

AEMO may, by written notice to the Spinning Reserve Provider before the time of a post-maintenance Test has been agreed under clause 5.2(a)(ii), waive the requirement to conduct that Test.

Provided Spinning Reserve remains Available, the Spinning Reserve Provider may conduct any other tests on the Spinning Reserve Equipment at any time during the Term.

Notification of Tests

0. Before conducting a post-maintenance Test under clause 5.1(b)(i), the Spinning Reserve Provider must:

notify AEMO of its intention to conduct the Test at least 20 Business Days before the proposed date of the Test, unless a shorter notice period is agreed with AEMO; and

unless AEMO waives the requirement to conduct the Test under clause 5.1(d), agree with AEMO on the timing and duration of the Test (which agreement must not be unreasonably withheld).

AEMO may, on not less than 5 Business Days notice to the Spinning Reserve Provider before any Test, designate a Representative to witness the Test.

The Spinning Reserve Provider must provide sufficient access to permit AEMOs Representative to witness any Test in order to verify that it is carried out correctly.

AEMO must ensure that its Representative:

does not interfere with the conduct of the Test;

does not cause any loss or damage to the Spinning Reserve Providers assets;

does not interfere with the operation of the Spinning Reserve Provider's business;

observes the Spinning Reserve Providers requirements relating to occupational health and safety and industrial relations matters that apply to all invitees; and

does not ask any question, or give any direction, instruction, or advice, to any representative of the Spinning Reserve Provider other than the Representative designated by the Spinning Reserve Provider for this purpose.

Test reports

Unless otherwise agreed between the parties, if the Spinning Reserve Provider conducts a Test, the Spinning Reserve Provider must provide a test report (in a form specified by AEMO for the purposes of this Agreement) within 2 Business Days after the Test is conducted.

Failure to conduct Tests

If the Spinning Reserve Provider does not conduct a Test as required by clause 5.1, AEMO may, by notice to the Spinning Reserve Provider, request an explanation of why the Test was not carried out and the Spinning Reserve Provider must respond within 5 Business Days, setting out:

0. the reasons why the Test was not conducted;

when the Test will be conducted; and

evidence demonstrating that the Spinning Reserve remains Available.

Failure of Test

0. If the Test results indicate a material failure to provide the Contract Quantity substantially at the Contract Performance Level, the Spinning Reserve Equipment will have failed the Test and Spinning Reserve is taken to have been Unavailable for the period determined under clause 4.2(c).

At any time after a Test and up to 5 Business Days after receiving a test report under clause 5.3, AEMO may notify the Spinning Reserve Provider, in AEMOs reasonable opinion:

whether the Test results indicate that Spinning Reserve was Available or Unavailable; and

if Unavailable, whether any identified non-compliance with the Contract Performance Level or the Minimum Technical Requirements would have materially affected the ability to provide Spinning Reserve,

provided that if clause 5.5(a) does not apply and AEMO does not give notice under this clause 5.5(b) within 5 Business Days after receiving the test report, the Spinning Reserve is taken to have passed the Test (Available).

If AEMOs notice under clause 5.5(b) indicates that the non-compliance with the Contract Performance Level or the Minimum Technical Requirements would not have materially affected the ability to provide the Spinning Reserve, then the Spinning Reserve is taken to have failed that Test if, and only if:

the result of a repeat Test conducted within 10 Business Days after the date of AEMOs notice also indicates that the Spinning Reserve is Unavailable (whether or not for the same reason); or

a repeat test is not conducted within 20 Business Days after the date of AEMOs notice.

Cost of Testing

The Spinning Reserve Provider must pay all costs relating to Tests conducted under clause 5.1, including any Test conducted for the purposes of clause 4.3.

Maintenance and reliabilityScheduling maintenance

The Spinning Reserve Provider must:

0. maintain the Spinning Reserve Equipment in accordance with Good Electricity Industry Practice; and

0. notify AEMO as soon as the Spinning Reserve Provider becomes aware of any requirement for unplanned maintenance affecting the operation of the Spinning Reserve Equipment.

Information and assessment of Spinning Reserve Equipment reliability

The Spinning Reserve Provider must notify AEMO promptly after changing or modifying any Spinning Reserve Equipment in a way that reduces or could reasonably be expected to reduce the Availability of Spinning Reserve. AEMO may require the Spinning Reserve Provider to conduct a Test of the Spinning Reserve Equipment under clause 5.1(c).

Records, audits and inspectionsMaintenance of records

0. The Spinning Reserve Provider must compile and maintain reasonable records concerning this Agreement, including the provision of Spinning Reserve under this Agreement, the operation, maintenance and testing of Spinning Reserve Equipment, any procedures used in the performance of this Agreement and all notices given or received by telephone in relation to this Agreement.

Records may be maintained in writing or electronically, and each must be retained for at least 7 years from the date it was created.

Right to inspect records

0. AEMO may request a copy of any of the records maintained under clause 7.1(a) or any other information in connection with Spinning Reserve at any time during the period referred to in clause 7.1(b).

The Spinning Reserve Provider must comply with a request from AEMO under clause 7.2(a) within 5 Business Days after receipt.

Audits by AEMO

0. AEMO may audit any of the records maintained under clause 7.1(a) by giving the Spinning Reserve Provider at least 5 Business Days notice. A notice under this clause 7.3(a) must include the following information:

the nature of the audit;

the Spinning Reserve concerned;

the name of any Representative appointed by AEMO to conduct the audit; and

the date on which the audit will commence.

Unless the Spinning Reserve Provider agrees otherwise, an audit may only occur during normal business hours on a Business Day.

Conduct of audit

Audits will occur at the site at which the relevant records are maintained by the Spinning Reserve Provider. The Spinning Reserve Provider must provide AEMOs Representatives conducting the audit with all reasonable assistance they may require to conduct it, including access to all relevant records (including computer records or systems) and any interpretation or explanation required.

Inspections

0. At a date and time convenient to both parties, AEMO may inspect any of the Spinning Reserve Equipment to determine whether the Spinning Reserve Provider is complying with this Agreement.

At least 5 Business Days before the date on which AEMO wishes to make an inspection, AEMO must deliver a notice to the Spinning Reserve Provider specifying the following information:

the Spinning Reserve Equipment to be inspected and the scope of the inspection;

the Representatives who will be conducting the inspection on behalf of AEMO; and

the date and time when AEMO proposes to commence the inspection and the expected date and time when the inspection will conclude.

The Spinning Reserve Provider must not unreasonably refuse access and must procure that all necessary third party consents to the access required by AEMO to conduct the inspection are obtained in time for the inspection to commence as agreed between the parties.

If AEMO conducts an inspection under clause 7.5(a), the Spinning Reserve Provider must designate Representatives to accompany AEMOs Representatives and answer any questions and assist with the conduct of the inspection.

Conduct of inspection

0. AEMO must not carry out any inspection of Spinning Reserve Equipment under clause 7.5 within 6 months of a previous inspection of the same Spinning Reserve Equipment under this Agreement.

Unless otherwise agreed by the Spinning Reserve Provider, an inspection under this clause 7.6 may take as long as reasonably necessary, but no longer than 24 hours. Any agreement to extend the period of the inspection must not be unreasonably withheld, considering the extent of the inspection proposed.

Whilst carrying out an inspection, AEMO must ensure that its Representatives:

do not cause any loss or damage to the Spinning Reserve Providers assets;

do not interfere with the operation of the Spinning Reserve Provider's business (provided that the inspection itself does not constitute interference);

observe the Spinning Reserve Providers requirements relating to occupational health and safety and industrial relations matters that apply to all invitees of the Spinning Reserve Provider; and

do not ask any question or give any direction, instruction, or advice to any of the Spinning Reserve Providers personnel other than the Representative designated by the Spinning Reserve Provider for this purpose.

PaymentsCalculation of payments

The Monthly Contract Price is to be determined in accordance with item 7 of the Schedule.

Reduced payment if Spinning Reserve not Available

0. The Monthly Contract Price is only payable to the Spinning Reserve Provider in respect of Trading Intervals during which Spinning Reserve is Available or taken to be Available under this Agreement.

The Spinning Reserve Provider must repay to AEMO any amount previously paid for Spinning Reserve in respect of a Trading Interval when that Spinning Reserve was, or was taken to be, Unavailable under this Agreement.

AEMO may elect to set off any repayment amount against an amount due to the Spinning Reserve Provider by AEMO.

Settlement

The Monthly Contract Price is to be paid in accordance with the WEM Rules.

Measurement

0. Spinning Reserve quantities must be measured in accordance with AEMOs records (including SCADA readings) and any relevant information provided by the Spinning Reserve Provider at AEMOs request.

Clause 8.4(a) does not prevent the Spinning Reserve Provider from disputing the accuracy of AEMOs records.

GST

Clause 9.1.2 of the WEM Rules applies with respect to amounts payable by or to AEMO under this Agreement.

Extent of LiabilityAEMO liability cap

0. Subject to clause 9.1(b), and other than in respect of any unpaid Monthly Contract Price amounts, the total amount recoverable from AEMO in respect of any and all Claims arising out of any one or more events during the Term with respect to, arising from, or in connection with, this Agreement or the provision of Spinning Reserve is limited to the prescribed maximum amount for the purposes of section 126 of the Electricity Industry Act and regulation 52 of the WEM Regulations.

Regardless of the nature of any Claim, AEMO is not liable in any circumstances for any:

damages or losses that are not direct and do not flow naturally from a breach of this Agreement, even if they may reasonably be supposed to have been in the contemplation of both parties as a probable result of the breach at the time they entered into this Agreement;

loss of market, opportunity or profit (whether direct or indirect); or

damages or losses to the extent that a Claim results from the Spinning Reserve Providers failure to act in accordance with this Agreement, a Law (including the WEM Rules) or Good Electricity Industry Practice.

Spinning Reserve Provider liability cap

0. Subject to clause 9.2(b), and other than in respect of any amounts repayable by the Spinning Reserve Provider in respect of Monthly Contract Price amounts, the total amount recoverable from the Spinning Reserve Provider in respect of any and all Claims arising out of any one or more events during the Term with respect to, arising from, or in connection with, this Agreement or the provision of the Spinning Reserve is limited to a maximum aggregate amount of $5,000,000.

Regardless of the nature of any Claim, the Spinning Reserve Provider is not liable in any circumstances for any:

damages or losses that are not direct and do not flow naturally from a breach of this Agreement, even if they may reasonably be supposed to have been in the contemplation of both parties as a probable result of the breach at the time they entered into this Agreement;

loss of market, opportunity or profit (whether direct or indirect); or

damages or losses to the extent that a Claim results from AEMOs failure to act in accordance with this Agreement, a Law (including the WEM Rules) or Good Electricity Industry Practice.

To avoid doubt and without limitation, the following are damages or losses arising directly from a breach of this Agreement by the Spinning Reserve Provider, for which the Spinning Reserve Provider will be liable if they arise:

AEMOs costs and expenses incurred in conducting a tender under the WEM Rules and the Ancillary Services PSOP to procure an additional or replacement Spinning Reserve Service (replacement Spinning Reserve), to the extent that service would not have been required but for the Spinning Reserve Providers breach;

the amount payable for replacement Spinning Reserve between the commencement date of the replacement Spinning Reserve and the Expiry Date (as at the date the Spinning Reserve Provider was notified of the breach under clause 10), to the extent that amount exceeds the amount that would have been payable to the Spinning Reserve Provider under this Agreement during the same period but for the Spinning Reserve Providers breach; and

damages or losses incurred by AEMO in connection with a Claim by a third party.

Default Termination

A party (terminating party) may immediately terminate this Agreement by notice to the other party (defaulting party) if:

0. the defaulting party does not pay any money due under this Agreement on the due date and the defaulting party does not pay the money within a further period of 20 Business Days after the terminating party serves notice on the defaulting party requiring payment;

subject to clause 10.2, the defaulting party does not carry out or meet any other material obligation under this Agreement and, in the case of a default that is capable of remedy, does not remedy that default within 20 Business Days after the terminating party serves notice on the defaulting party requiring it to be remedied;

any representation or warranty given by the defaulting party under clause 13 is materially inaccurate or untrue; or

an Insolvency Event occurs in relation to the defaulting party.

Termination by AEMO

0. AEMO may immediately terminate this Agreement by giving notice to the Spinning Reserve Provider if:

the Spinning Reserve Provider fails twice within a 12-month period to provide Spinning Reserve when required by AEMO in accordance with the Contract Performance Level and while meeting the Minimum Technical Requirements;

the Spinning Reserve has been Unavailable for a continuous period of more than 1 month; or

the Spinning Reserve Provider fails to meet the Minimum Availability Requirement in respect of Spinning Reserve for any Relevant Period.

A termination notice given under clause 10.2(a)(iii) must set out how compliance with the Minimum Availability Requirement was measured.

Termination notices

A notice to terminate issued under clause 10.1 or 10.2 takes effect on the later of:

0. the time it is given; and

the time specified in the notice.

Survival

Expiry or termination of this Agreement for any reason does not affect:

0. any rights of either party against the other that:

arose before the time at which expiry or termination occurred; and

otherwise relate to or might arise at any future date from any breach of this Agreement occurring before the expiry or termination; or

0. the rights and obligations of the parties under clauses 7, 8, 9, 12 and 16.

Reduction of Spinning Reserve

If AEMO is entitled to terminate this Agreement under clause 10.1 or 10.2, AEMO may instead elect to reduce the quantity of Spinning Reserve it purchases under this Agreement by specifying a revised Contract Quantity in a notice to the Spinning Reserve Provider that complies in all other respects with clause 10.1 or 10.2 (as applicable). On and from the effective date of that notice, the revised Contract Quantity will apply for the purposes of this Agreement.

No other termination

Subject to any written Law to the contrary, a party must not terminate this Agreement other than for a reason provided for under this Agreement.

Assignment and sub-contractingAssignment

0. The Spinning Reserve Provider must not dispose of its rights in this Agreement or the Spinning Reserve Equipment without first obtaining AEMOs consent, which must not be unreasonably withheld or delayed.

AEMO must give its consent for the purposes of clause 11.1(a) if:

the Spinning Reserve Provider disposes of the Spinning Reserve Equipment to one person or a group of persons (assignee);

the assignee executes and delivers to AEMO a deed (in form and substance satisfactory to AEMO) before the disposal by which the assignee agrees to assume obligations that are substantially equivalent to the Spinning Reserve Providers obligations under this Agreement; and

the assignee is a Registered Participant.

In this clause 11.1, the words dispose of and disposal refer to an assignment, transfer or other means of disposing of all or part of a legal or equitable interest, whether by sale, lease, declaration or creation of trust or otherwise.

Sub-contracting

0. The Spinning Reserve Provider must not sub-contract the performance of any of its obligations under this Agreement without first obtaining AEMOs consent, which must not be unreasonably withheld or delayed.

If the Spinning Reserve Provider sub-contracts the performance of obligations under this Agreement, the Spinning Reserve Provider remains responsible for the performance of this Agreement.

Dispute resolution

0. If a dispute arises in relation to this Agreement or its subject matter, the parties agree that the Notice of Disagreement provisions or the Notice of Dispute processes in the WEM Rules, as applicable, apply to the dispute.

Unless otherwise agreed by the parties, or determined under the applicable processes in the WEM Rules, the parties must continue to perform their obligations under this Agreement despite the existence of a dispute.

Warranties

0. The Spinning Reserve Provider represents and warrants to AEMO as at the date of this Agreement and at all times after the date of this Agreement that:

it will provide Spinning Reserve with due care and skill;

it and its representatives are duly qualified and skilled to provide Spinning Reserve;

it will provide Spinning Reserve in accordance with all relevant Law, Good Electricity Industry Practice and relevant Australian Standards and codes of practice;

it will ensure that data of Spinning Reserve Availability and provision provided to AEMO for AEMOs use in calculating payments and issuing statements in accordance with clause 8 will be in a form suitable for use in AEMOs systems, and will accurately reflect the level of Availability and provision of Spinning Reserve under this Agreement;

the Spinning Reserve Providers obligations under this Agreement are enforceable in accordance with their terms; and

the Spinning Reserve Provider is entitled to carry out its obligations under this Agreement.

AEMO represents and warrants to the Spinning Reserve Provider as at the date of this Agreement and at all times after the date of this Agreement that AEMOs obligations under this Agreement are enforceable in accordance with their terms.

Compliance with Law and requirements of Authority

0. Each party must comply with its obligations under any Law (including the WEM Rules) in any way affecting this Agreement.

Each party must procure that all notices required to be given, all consents required to be obtained and any form of authorisation, registration or certification required by Law for the purpose of complying with its obligations under this Agreement are given or obtained.

Each party must pay all fees and bear all costs connected with such notices, consents, authorisations, registrations and certifications.

Each party must, upon demand by the other party (requesting party) at any time, provide all information necessary to establish to the requesting partys reasonable satisfaction that the requirements of clause 14(b) have been complied with.

Change in LawChange in Law notice

0. If a Change in Law occurs during the Term, a party (notifying party) may give notice to the other party (notified party) of the Change in Law.

Any notice given by a notifying party under clause 15.1(a) must:

be given by within 3 months of the commencement of the relevant Change in Law, otherwise this clause 15 does not apply; and

include full details of impact of the Change in Law and any supporting information reasonably necessary to enable the notified party to verify its impact.

Negotiations

On receipt of a notice under clause 15.1, the parties must negotiate in good faith such amendments to this Agreement as are necessary or appropriate on the basis of the following principles:

0. the amendments will endeavour to preserve the economic and legal effect of this Agreement as at the Commencement Date to the extent practicable, except any change in the Monthly Contract Price will be limited to the actual change in the cost of providing Spinning Reserve arising from the Change in Law; and

the amendments will otherwise be fair and reasonable in the circumstances.

Dispute

If the parties are unable to agree on the amendments in accordance with clause 15.2 within 2 months after receipt of the notice received under clause 15.1, the dispute must be resolved in accordance with clause 12. Any third party appointed under clause 12 to assist in the resolution of the dispute must take into account the principles detailed in clause 15.2.

GeneralNotices

0. Subject to clause 16.1(b), all Communications to a party must be:

in writing;

marked to the attention of the person named in respect of that party in the Details; and

left at, sent by pre-paid express post (registered air-mail if posted to or from a place outside Australia), or sent by electronic mail, to the postal or electronic mail address of the addressee specified for that party in the Details.

Subject to the WEM Rules, any:

Communications given in the course of the day-to-day running of the Wholesale Electricity Market by or on behalf of a party to the other; or

notification of a requirement for Spinning Reserve made by AEMO,

may be made by automated electronic process, telephone or other instantaneous means of communication.

Unless Communications under clause 16.1(b) are recorded in some other way satisfactory to both parties, the parties must ensure that logs are kept in which persons or electronic systems giving and receiving those Communications record brief details of their substance and timing.

Unless a later time is specified in it, a Communication takes effect from the time it is received.

A Communication is taken to be received:

in the case of a hand-delivery, immediately upon being delivered to the address of the recipient party;

in the case of a posted letter, on the 2nd (10th, if posted to or from a place outside Australia) Business Day after posting;

in the case of electronic mail:

on the date and at the time when the sender receives an automated message confirming delivery; or

4 hours after the time the notice was sent (as recorded on the device from which the sender sent the notice) unless the sender receives an automated message advising that the electronic mail has not been delivered,

whichever occurs first;

in the case of Communications under clause 16.1(b), instantaneously.

Except for Communications under clause 16.1(b), if a Communication is received, or deemed to be received, on a day that is not a Business Day, or after 5:00pm on a Business Day, it is taken to be received on the next Business Day.

A party may at any time by notice given to the other party designate a different person, address or electronic mail address for the purposes of this clause 16.1 and the Details.

Exercise of rights

Subject to the express provisions of this Agreement, a party may exercise a right, power or remedy at its discretion, and separately or concurrently with another right, power or remedy. A single or partial exercise of a right, power or remedy by a party does not prevent a further exercise of that or of any other right, power or remedy. Failure by a party to exercise or delay in exercising a right, power or remedy does not prevent its exercise.

No waiver or variation

A right may only be waived in writing, signed by the party giving the waiver and:

0. no other conduct of a party (including a failure to exercise, or delay in exercising, the right) operates as a waiver of the right, or otherwise prevents the exercise of the right;

a waiver of a right on one or more occasions does not operate as a waiver of that right if it arises again; and

the exercise of a right does not prevent any further exercise of that right or of any other right.

Amendment

An amendment to this Agreement will be effective only if made in writing and signed by the parties.

Approvals and consents

Subject to the express provisions of this Agreement, a party may give conditionally or unconditionally or withhold its approval or consent in its absolute discretion.

Further assurances

Each party agrees, at its own expense, on the request of the other party to:

0. do everything reasonably necessary to give effect to this Agreement and the transactions contemplated by it (including the execution of documents); and

use reasonable endeavours to cause relevant third parties to do likewise if necessary or desirable.

Supervening Law

Subject to clause 15, any present or future Law that operates to vary an obligation, right, power or remedy of a person in connection with this Agreement is excluded to the extent permitted by Law.

Severability

If a provision of this Agreement is void, unenforceable, or illegal in a jurisdiction, it is severed for that jurisdiction. The remainder of this Agreement remains effective and the validity or enforceability of that provision in any other jurisdiction is not affected. This clause 16.8 has no effect if the severance alters the basic nature of this Agreement or is contrary to public policy.

Entire agreement

This Agreement is required by the WEM Rules and the Ancillary Services PSOP, and operates in accordance with them. Subject to this requirement, it constitutes the entire agreement of the parties in connection with the provision of Spinning Reserve, and any previous agreements, understandings and negotiations on that subject matter cease to have any effect.

Confidential information

Any information of a commercially sensitive nature exchanged between the parties under this Agreement or during the negotiations preceding this Agreement is confidential information. The Spinning Reserve Provider consents to the use or disclosure of that information by AEMO to the extent reasonably necessary for the purposes of carrying out its functions, or complying with its obligations, under the WEM Regulations and the WEM Rules.

No other representations or warranties

Each party acknowledges that, in entering into this Agreement, it has not relied on any representations or warranties about its subject matter except as set out in this Agreement.

Counterparts

This Agreement may consist of a number of copies, each signed by one or more parties to this Agreement. If so, the signed copies make up one document and the date of this Agreement will be the date on which the last counterpart was signed.

Governing Law and jurisdiction

This Agreement and the transactions contemplated by this Agreement are governed by the laws in force in the jurisdiction referred to in the Details. Each party submits to the non-exclusive jurisdiction of the courts of that place.

No partnership, agency or trust

Except as expressly provided in this Agreement, nothing contained or implied in this Agreement:

0. constitutes or may be deemed to constitute a party the partner, agent or legal representative of the other party for any purpose whatsoever, or create or be deemed to create any partnership; or

creates or may be deemed to create any agency or trust.

EXECUTED as an agreement

## Spinning Reserve

Item 1: Designated Facility and Contract Quantity

Designated Facility

##

Contract Quantity

##

Maximum Generation Quantity (if Designated Facility is generation system)

##

Minimum Stable Load Quantity (if Designated Facility is generation system)

##

Minimum Load Quantity (if Designated Facility is Load)

##

Item 2: Spinning Reserve Equipment

Spinning Reserve Equipment

Major components: ##

Other components:##

Item 3: Contract Performance Level

Performance Requirement

Contract Performance Level (for individual contingency event SWIS frequency is below 49.8 HZ)

If Designated Facility is generation system

Increase Active Power Output by Contract Quantity

Within 6 seconds

Sustain or exceed Contract Quantity

For 15 minutes or until SWIS frequency is above 49.8 Hz (whichever occurs first)

If Designated Facility is Load

Reduce Active Power Output by Contract Quantity

Reduction starts within 500 ms (or as otherwise specified by AEMO from time to time)

Rate of reduction is ## (or as otherwise specified by AEMO from time to time)

Sustain or exceed Contract Quantity

For 15 minutes

To avoid doubt, these Contract Performance Levels do not vary or exclude the operation of the Technical Rules.

Item 4: Minimum Availability Requirement

The Minimum Availability Requirement (clause 4.4) is 95%.

Item 5: Minimum Technical Requirements

0. The Designated Facility must comply with the requirements specified in steps 2.2.6, 2.2.7 and 2.2.8 of the Ancillary Services PSOP.

0. The Designated Facility must be technically capable of providing the Contract Quantity.

0. The Designated Facility must be technically capable of having its Active Power Output verified by AEMO at all times (including, without limitation, in response to an individual contingency event) by real-time telemetry in a manner agreed between AEMO and the Spinning Reserve Provider.

0. (If the Designated Facility is a Load) The time delay before the Designated Facilitys Active Power Output starts to reduce in response to an individual contingency event, and the rate at which the Active Power Output reduces in response to an individual contingency event, must be configurable by the Spinning Reserve Provider (as specified by AEMO from time to time).

Item 6: Spinning Reserve process

The following Spinning Reserve process applies for the purposes of this Agreement.

0. If the Designated Facility is a generation system:

the Spinning Reserve Provider must ensure that quantities specified in its Balancing Submission that are required for the provision of the Contract Quantity are priced at the Maximum STEM Price or the Alternative Maximum STEM Price, as applicable, to reflect that these quantities are generally not available in the Balancing Market; and

the Spinning Reserve Equipment must respond to an individual contingency event by way of droop governor response or AGC.

If the Designated Facility is a Load:

the Spinning Reserve Provider must ensure that a sufficient quantity is available (having regard to the Minimum Load Quantity) to enable it to respond to an individual contingency event; and

the Spinning Reserve Equipment must respond by way of automated under-frequency relay if the SWIS frequency reduces below 49.5 Hz.

Item 7: Contract Price Discount Percentage and Monthly Contract Price

0. The Contract Price Discount Percentage is ##%.

0. The Monthly Contract Price for Spinning Reserve provided under this Agreement is the sum of the Availability Charges for all Trading Intervals in a Trading Month.

0. The Availability Charge for a Trading Interval is:

0.5 Margin Value Max (0, Balancing Price) Spinning Reserve Quantity (100% - Contract Price Discount Percentage)

where:

Balancing Price is the Balancing Price for the Trading Interval (determined by AEMO under clause 7A.3.10 of the WEM Rules);

Margin Value is the Margin Peak Value or the Margin Off-Peak Value applicable to the Trading Interval (determined by the Economic Regulation Authority under clause 3.13.3A of the WEM Rules); and

Spinning Reserve Quantity is:

if Spinning Reserve is Unavailable in the Trading Interval 0 MW;

if the Spinning Reserve is Available in the Trading Interval and the Designated Facility is a generation system:

IF (Active Power Output Minimum Stable Load Quantity) and IF (Active Power Output Maximum Generation Quantity - Contract Quantity) THEN the Contract Quantity; OTHERWISE 0 MW

if the Spinning Reserve is Available in the Trading Interval and the Designated Facility is a Load:

IF Minimum (Active Power Output - Minimum Load Quantity, Contract Quantity) 0 MW THEN Minimum (Active Power Output - Minimum Load, Contract Quantity); OTHERWISE 0 MW

SIGNING PAGE

SIGNED by ## as authorised representative for AUSTRALIAN ENERGY MARKET OPERATOR LIMITED in the presence of:

(signature of witness)

(signature of authorised representative)

(print name of witness)

By executing this agreement the signatory warrants that the signatory is duly authorised to execute this agreement on behalf of Australian Energy Market Operator Limited

(address of witness)

(Date signed)

(occupation of witness)

SIGNED by [insert name] as authorised representative for ## in the presence of:

(signature of witness)

(signature of authorised representative)

(print name of witness)

By executing this agreement the signatory warrants that the signatory is duly authorised to execute this agreement on behalf of ##

(address of witness)

(Date signed)

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