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CHAPTER 11 RING FENCING TABLE OF CONTENTS

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CHAPTER 11 RING FENCING TABLE OF CONTENTS

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									CHAPTER 11 RING FENCING
TABLE OF CONTENTS

                                                                                                              Page



11.1   PURPOSES AND AIMS ............................................................................. 11–1

11.2   INITIAL RING FENCING OBLIGATIONS ........................................... 11–1

11.3   REVIEW OF INITIAL RING FENCING OBLIGATIONS ................... 11–3

11.4   COMPLIANCE PROCEDURES AND COMPLIANCE
       REPORTING ................................................................................................ 11-3




TASMANIAN ELECTRICITY CODE                                                 JANUARY 2000DECEMBER 2001
CHAPTER 11 RING FENCING

11.1         PURPOSES AND AIMS

This Chapter of the Code:

(a)    establishes ring fencing obligations which must be complied with by all Network
       Users, Network Service Providers and the System Controller;

(b)    requires Network Service Providers to establish and maintain separate accounts for
       network services in accordance with guidelines issued by the Regulator from time
       to time;

(c)    requires Network Service Providers to allocate costs shared between different
       accounts in a fair and reasonable manner;

(d)    requires the System Controller to establish and maintain separate accounts for the
       System Control Fund in accordance with the Code and with guidelines issued by
       the Regulator from time to time;

(e)    requires the System Controller to allocate costs shared between different accounts
       that have been established for the control of the power system in a fair and
       reasonable manner;

(f)    requires the System Controller to perform its functions and obligations so that all
       Network Users and Customers are treated equitably;

(g)    ensures that confidential information provided by a Network User to a Network
       Service Provider or the System Controller is used only for the purposes for which
       it was provided and is not disclosed to any other person other than in accordance
       with the Code; and

(h)    requires Network Service Providers and the System Controller to establish
       procedures to ensure compliance with the ring fencing obligations as set out in this
       Chapter 11 and in accordance with guidelines issued by the Regulator from time to
       time.

11.2         INITIAL RING FENCING OBLIGATIONS

(a)    A Network Service Provider must comply with the following:

       (1)     establish and maintain a separate set of accounts in respect of network
               services;

       (2)     in respect of a Distribution Network Service Provider who is also an
               Electricity Retailer, establish and maintain a separate set of accounts in
               respect of its activities as an Electricity Retailer;

       (3)     establish and maintain a separate consolidated set of accounts in respect of
               its entire business;


TASMANIAN ELECTRICITY CODE                                  JANUARY 2000DECEMBER 2001
11– 2                                                                            CHAPTER 11
                                                                               RING FENCING


        (4)   allocate any costs that are shared between an activity that is covered by a set
              of accounts described in clause 11.2(a)(1) and 11.2(a)(2) and any other
              activity according to a methodology for allocating costs that is consistent
              with the principles in clauses 6.2.1, 6.2.2, 6.5.2 and 6.5.3 and is otherwise
              fair and reasonable;

(b)     In complying with clauses 11.2(a)(1), (2), (3) and (4) a Network Service Provider
        must:

        (1)   if the Regulator has published general accounting guidelines for Network
              Service Providers which apply to the accounts being prepared, comply with
              those guidelines; or

        (2)   if the Regulator has not published such guidelines, comply with guidelines
              prepared by the Network Service Provider and approved by the Regulator or,
              if there are no such guidelines prepared by the Network Service Provider,
              comply with such guidelines (if any) as the Regulator advises the Network
              Service Provider apply to that Network Service Provider from time to time.

        Such guidelines may, amongst other things, describe the principles for the
        allocation of cost between activities and require the accounts to contain sufficient
        information, and to be presented in such a manner, as would enable the Regulator
        to meet his objectives for the regulation of Electricity Retailers and network
        services.

(c)     The Regulator may determine that information provided by a Network User to a
        Network Service Provider or representative under this Chapter 11 is confidential
        information and the provisions of clause 12.6 shall apply to that information.

(d)     The System Controller must comply with the following:

        (1)   establish and maintain a separate set of accounts in respect of the functions,
              obligations and responsibilities of the System Controller in accordance with
              the Code and the requirements of the Regulator;

        (2)establish and maintain a separate set of accounts in respect of its activities as a
              Generator;

        (3)(2) establish and maintain a separate consolidated set of accounts in respect of
               its entire business;

        (4)(3) allocate any costs that are shared between an activity that is covered by a set
               of accounts described in clauses 11.2(d)(1) and 11.2(d)(2) and any other
               activity according to a methodology for allocating costs that is fair and
               reasonable;

        (5)(4) establish policies and procedures to ensure that the System Controller carries
               out its functions and obligations under the Code in a manner which is fair
               and equitable to all Code Participants and Customers;




JANUARY 2000DECEMBER 2001                                   TASMANIAN ELECTRICITY CODE
CHAPTER 11                                                                                11– 3
RING FENCING


(e)    In complying with clauses 11.2(d)(1), (2), and (3) and (4) the System Controller
       must:

       (1)    if the Regulator has published general accounting guidelines for the System
              Controller which apply to the accounts being prepared, comply with those
              guidelines; or

       (2)    if the Regulator has not published such guidelines, comply with guidelines
              prepared by the System Controller and approved by the Regulator or, if there
              are no such guidelines, comply with such guidelines (if any) as the Regulator
              advises the System Controller apply to the System Controller from time to
              time.

       Such guidelines may, amongst other things, describe the principles for the
       allocation of cost between activities and require the accounts to contain sufficient
       information, and to be presented in such a manner, as would enable the Regulator
       to verify that the System Controller Fees as provided for in clause 2.4 are fair and
       reasonable.

(f)    The Regulator may determine that information provided by a Network User to the
       System Controller or a representative of the System Controller under this Chapter
       11 is confidential information and the provisions of clause 12.6 shall apply to that
       information.

11.3         REVIEW OF INITIAL RING FENCING OBLIGATIONS

(a)    The Regulator may review and modify any guidelines referred to in clauses
       11.2(b) and 11.2(e) having regard to the following:

       (1)    the objectives and functions of the Regulator pursuant to the ESI Act and the
              objectives and functions of the Regulator set out in clause 1.5;

       (2)    ensuring that a Network Service Provider who is also an Electricity Retailer
              does not have regard to the interests of its business as an Electricity Retailer
              (if any) or an associate in priority to the interests of other Code Participants,
              other than the Regulator, with respect to the supply or purchase of services;

       (3)    ensuring that the System Controller does not have regard to the interests of
              its business as a Generator Transmission Network Service Provider or an
              associate in priority to the interests of other Code Participants, other than
              the Regulator with respect to the supply or purchase of services; and

       (4)    ensuring the ring fencing obligations do not impose unreasonable
              compliance costs on the Network Service Provider, the System Controller
              and any associates.

(b)    The effect of the review contemplated by clause 11.3(a) may include either the
       extension or limitation of the initial ring fencing obligations in clause 11.2 as
       applies to a Network Service Provider or the System Controller.




TASMANIAN ELECTRICITY CODE                                     JANUARY 2000DECEMBER 2001
11– 4                                                                              CHAPTER 11
                                                                                 RING FENCING


11.4          COMPLIANCE PROCEDURES AND COMPLIANCE REPORTING

(a)     Each Network Service Provider and the System Controller must establish and
        maintain appropriate internal procedures to ensure it complies with its obligations
        under this Chapter 11. The Regulator may require any Network Service Provider
        or the System Controller to demonstrate the adequacy of these procedures upon
        reasonable notice. However, any statement made or assurance given by the
        Regulator concerning the adequacy of any Network Service Provider’s or the
        System Controller’s compliance procedures does not affect their respective
        obligations under this Chapter 11.

(b)     The Regulator may appoint a “Reporter” to report to the Regulator on the
        compliance with and adequacy of the provisions of the Code and the guidelines to
        meet its objectives for the regulation of those services.

(c)     Each Network Service Provider and the System Controller must provide a report to
        the Regulator, at reasonable intervals determined by the Regulator, describing the
        measures each has undertaken to ensure compliance with its obligations under this
        Chapter 11, and providing an accurate assessment of the effect of those measures.

(d)     Each Network Service Provider and the System Controller must provide a report of
        any breach of any of its obligations under this Chapter 11 to the Regulator
        immediately upon becoming aware that the breach has occurred.

(e)     The Regulator and the Reporter may require a Network Service Provider and the
        System Controller to make their books available for inspection by the Regulator at
        all reasonable times and on reasonable notice so that the Regulator may determine
        whether the measures undertaken by the Network Service Provider and the System
        Controller to ensure compliance with its respective obligations under this Chapter
        11 are adequate.

(f)     The Regulator and the Reporter may:

        (1)    inspect, and may make copies of, or take extracts, from any of the books;

        (2)    take possession of any of the books; and

        (3)    retain possession of any of the books for so long as necessary.




JANUARY 2000DECEMBER 2001                                   TASMANIAN ELECTRICITY CODE

								
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