Network Services Agreement

for Tarrone Terminal Station

Australian Energy Market Operator Ltd

and

[name of tenderer]

Australian Energy Market Operator Ltd

Level 12, 15 William Street

MELBOURNE VIC 3000

TEL: 03 9648 8777

FAX: 03 9648 8778

Contents

1Definitions and Interpretation

2Conditions Precedent

3Term

4Network Services

5Compliance

6Emergencies and Safety

7Records

8Price and Charges

9Billing & Payment

10Security for payment

11Augmentation

12AEMO’s Functions

13Third Party Agreements

14Extent of Liability

15Loss or Damage and Insurance

16Plant Information and Documentation

17Confidentiality

18Force Majeure

19Performance Management

20Breach and Termination

21Step-In

22Acquisition of Network Facilities

23Disconnection and Dismantling

24Dispute Resolution Procedure

25Representations and Warranties

26Assignment etc

27Terms implied by Statute

28Governing Law and Jurisdiction

29Notices

30General

Attachment 1 – Network Services

Attachment 2 – Performance Criteria

Attachment 3 – Transmission Charge

Attachment 4 – Transmission Performance Requirements

Network Services AgreementPage 1

DETAILS

Date:
Parties: / 1Australian Energy Market Operator Limited
ABN 94 072 010 327
of Level 22, 530 Collins Street, Melbourne VIC 3000 (“AEMO”)
and
2#1#
ABN #2#
of #3# (“TNSP”).
Network Facilities: /
All apparatus, plant, equipment and buildings used by TNSP to provide the Network Services under this Agreement, and includes the Project (as defined in the Project Agreement) and any variation or augmentation to these.
Proponent: / AGL HP1 Pty Limited (ABN 86 080 429 901), AGL HP2 Pty Limited (ABN 75 080 810 546) and AGL HP3 Pty Limited (ABN 22 080 735 815) as partners in the AGL Hydro Partnership (ABN 86 076 691 481)
Term: / 30 years from the Network ServicesCommencement Date
Parent Company: / [Insert]
Reference Date: / [Insert]
Project Representatives: / AEMO:
TNSP:
Austraclear Accounts: / AEMO:
TNSP:
Address for Service of Notices: / To AEMO:
#10#
Facsimile: #11#
Attention: #12#
cc:
Level 22, 530 Collins Street, MELBOURNE VIC 3000
Facsimile: 03 9648 8653
Attention: #13#, Senior Manager, Legal
To the Proponent:
#14#
Facsimile: #15#
Attention: #16#

Recitals

  1. A Project Agreement to be entered into between AEMO and TNSP sets out the terms on which TNSP will design, construct and commission works that will facilitate delivery of the Network Services required under this Agreement.
  2. TNSP agrees to supply Network Services on the terms and conditions of this Agreement.
  3. The parties intend that payment by AEMO to TNSP under this Agreement will commence only after practical completion under the Project Agreement has been achieved.

Operative Provisions

1Definitions and Interpretation

Defined Terms

1.1In this Agreement, unless the context requires otherwise:

AEMO Event of Force Majeure means a circumstance that satisfies all of the following criteria:

(a)the circumstance is beyond the reasonable control of AEMO;

(b)the circumstance is not the result of:

(i) a breach of this Agreement;

(ii)an intentional act or omission (other than an act or omission expressly required by, and carried out in accordance with, this Agreement) by AEMO; or

(iii)a negligent act or omission of AEMO,

in the exercise of AEMO’s declared network functions in respect of the Victorian Transmission Network;

(c)the circumstance results in AEMO’s being unable to observe or perform on time and as required any obligation (not being an obligation to pay money) under this Agreement; and

(d)the circumstance involves one or more of the following:

(i)acts of God, lightning strikes, earthquakes, floods, droughts, storms, tempests, mudslides, washaways, explosions, fires and any natural disaster;

(ii)acts of war, acts of public enemies, terrorism, riots, civil commotions, malicious damage, sabotage, blockade and revolution;

(iii)acts or omissions of any Authority;

(iv)(A) acts or omissions (other than a failure to pay money) of a person (including any Relevant Generator) other than AEMO whohas facilities Connected to, or that use, the High Voltage Grid or has facilities directly or indirectly Connected to, or that use, a system for the supply of electricity, which in turn, is Connected to the High Voltage Grid;

(B)where those acts or omissions affect the ability of AEMO to perform it obligations under this Agreement by virtue of that direct or indirect Connection to, or use of, the High Voltage Grid; or

(vi) acts or omissions of SPI PowerNet, TNSP or any other owner of any part of the Victorian Transmission Network that affect the ability of AEMO to perform its obligations under this Agreement.

AEMO Functions means the following functions in respect of the Victorian Transmission Network: the declared network functions, the planning functions under section 49(2) of the National Electricity Law, functions conferred by jurisdictional electricity legislation or an application Actand all related functions.

Affected Party means:

(a)TNSP in the case of an TNSP Event of Force Majeure; and

(b)AEMO in the case of an AEMO Event of Force Majeure.

Assignment Deed means an assignment deed substantially in the form set out in Attachment 12 under which AEMO assigns its rights to make a claim against the Parent Company and the Proponent in relation to an outstanding amount under the Use of System Agreement in the circumstances contemplated in clause 10.6.

Approvals means all planning, environmental and building approvals, authorisations, permits, consents, licences, exemptions and the like required to be issued by or obtained from any Authority in connection with the Site, the operation of the Network Facilitiesor the performance by TNSP of its obligations under this Agreement.

Augmentation Connection Agreement meansthe agreementbetween TNSP and SPI PowerNetentitled “Augmentation Connection Agreement for Tarrone Terminal Station”.

Authority means any government department, local government council, government or statutory authority, body, instrumentality, minister, agency or other authority exercising administrative or regulatory functions, excluding AEMO.

Bank Bill Ratemeans:

(a)on any day, the average bid rate (expressed as a percentage yield to maturity per annum rounded upwards, if necessary, to the nearest 0.01%) displayed on the page of the Reuters Monitor System, designated “BBSY” at or about 10.30am on that day (or if that day is not a Business Day on the Business Day immediately preceding that day) for the purchase of bills of exchange (as defined in the Bills of Exchange Act 1909 (Cth)) bearing the acceptance of a bank licensed under sections 8 or 9 of the Banking Act 1959 (Cth) and for a term to maturity of 90 days; or

(b)if there is manifest error in the calculation of that average rate, or that average rate is not displayed at or about 10.30am on that day, or if that average rate becomes clearly inappropriate, unfair or incapable of application, the “Bank Bill Rate” for that day is as agreed between the parties in good faith to be representative of the rate at which such bills are being purchased by such banks at or about 10.30am on that day.

Business Day means a day (not being a Saturday or Sunday) on which banks are open for general banking business in Melbourne.

Claim includes any claim or demand for losses, liabilities, costs or expenses of whatever naturein connection with this Agreement,the Network Services, the Related Agreements, or otherwise at Law, including negligence.

Connection means the contact between the electrical systems of two persons such as will allow the supply of electricity between those systems and a reference to an indirect Connection to a particular electrical system means Connection to an electrical system which is in turn connected to the particular electrical system.

Connection Agreement meansthe agreement between TNSP and Proponententitled “Connection Agreement for Tarrone Terminal Station”.

Control means the possession, directly or indirectly, of the power to direct the business activities of a person, whether through ownership, statutory authority, contract or otherwise.

Corporations Actmeans the Corporations Act 2001 (Cth).

DefaultEvent means:

(a)TNSP displays an intention to abandon the Network Facilities or a material part of the NetworkFacilities;

(b)TNSP Disposes, or attempts to Dispose, of the NetworkFacilities or its interest in this Agreement or a Related Agreement, other than in accordance with the relevant agreement;

(c)a failure by either party to pay any amount under this Agreement or a Related Agreement; or

(d)any other breach of this Agreement or a Related Agreementby a party.

Defaulting Party means the party subject to a Default Event.

Documentation means all drawings, plans, reports, computer records, models and specifications (whether in hard copy or electronic form) in relation to the Network Facilities.

Dismantle means to remove or alter assets (other than through the operation of switching equipment) so that electricity cannot be supplied.

Dispose meansassign, transfer or otherwise dispose of any estate in Law, whether by sale, lease, declaration or creation of trust or otherwise.

Disputemeans:

(a)a disagreement or difference of opinion between the parties as to any matter in connection with this Agreement, including any breach, termination, validity or its subject matter; or

(b)a failure of the parties to reach agreement on a matter where this Agreement requires agreement or requires the parties to negotiate in good faith with a view to reaching agreement.

Emergency has the meaning given in clause 6.1.

Event of Force Majeure means:

(a)an TNSP Event of Force Majeure in relation to TNSP; and

(b)an AEMO Event of Force Majeure in relation to AEMO.

Financial Year means the period commencing on 1 July of any calendar year and ending on 30 June of the following calendar year.

High Voltage Grid means the electrical system for the Transmission of electricity together with associated protection, control, alarm, communication equipment, metering and operation systems, including the Victorian Transmission Network.

Interface Works means the Project Works to be constructed under the SPI Project Agreement.

Insolvency Event means, in relation to a company, any of the following events:

(a)a receiver, manager, receiver and manager, trustee, administrator, controller (as those terms are defined in the Corporations Act) or similar officer is appointed in respect of the company or any asset of the company;

(b)a liquidator or provisional liquidator is appointed in respect of the company;

(c)any application (not being an application withdrawn or dismissed within 5 Business Days) is made to a court for an order, or an order is made, or a meeting is convened, or a resolution is passed, for the purpose of:

(i)appointing a person referred to in paragraph (a) or (b);

(ii)winding up the company; or

(iii)proposing or implementing a scheme of arrangement in respect of the company;

(d)a moratorium of any debts of the company or an official assignment or a composition or an arrangement (formal or informal) with the company's creditors or any similar proceeding or arrangement by which the assets of the company are subjected conditionally or unconditionally to the control of the company’s creditors is ordered, declared or agreed to, or is applied for and the application is not withdrawn or dismissed within 5 Business Days;

(e)the company becomes, admits that it is, is declared to be, or is deemed under any applicable Law to be, insolvent or unable to pay its debts;

(f)any writ of execution, garnishee order, mareva injunction or similar order, attachment, distress or other process is made, levied or issued against or in relation to a substantial proportion of the assets of the company; or

(g)anything that has a substantially similar effect to any of the events set out in paragraphs (a) to (f).

Law means Commonwealth, State, or local legislation, judicial, administrative, or regulatory decrees, judgments, awards or orders and all common laws and principles of equity and, for the avoidance of doubt, includes any Regulatory Instrument.

Lease means the lease between Proponent and TNSP in relation to the Site.

National Electricity Law means the National Electricity Law set out in the Schedule to the National Electricity (South Australia) Act 1996(SA), having force as a law of Victoriaunder section 6 of the National Electricity (Victoria) Act 2005 (Vic).

Native Title Application means any claim or application under any Law relating to native title, including any application under:

(a) section 61 of the Native Title Act 1993 (Cth);

(b) the Aboriginal and Torres Strait Islander Heritage Act 1984 (Cth);

(c) the Land Titles Validation Act 1994 (Vic); or

(d) any future Law in respect of the same subject matter,

that, if successful, would substantially derogate from TNSP’s ability to perform its obligations under this Agreement.

Network Services means those services to be provided by TNSP under this Agreement as described in the Attachments.

Network Services Commencement Date means the “Date of Practical Completion”, as determined in accordance with the Project Agreement.

Non-Defaulting Party meansthe party not subject to a Default Event.

Operator means aperson appointed by TNSP to operate and maintain the NetworkFacilities.

Parent Company Guarantee means a deed of guarantee substantially in the form set out in Attachment 11in respect of the obligations of the Proponent under the Use of System Agreement.

Performance Criteriaare defined in Attachment 2.

Permanent TNSP Event of Force Majeure means the occurrence of one or more of the circumstances contemplated in the definition of TNSP Event of Force Majeure that causes TNSP to be incapable of providing the Network Services at the levels of performance specified in this Agreement for a period of 12 months or such further period as may be agreed between the parties as the period reasonably necessary to cure or otherwise rectify TNSP’s inability to provide the Network Services because of the TNSP Event of Force Majeure.

Project Agreement means the agreement between the parties entitled “Project Agreement for Tarrone Terminal Station”.

Project Co-ordination Deed means the deed between TNSP, Proponent, SPI PowerNet and AEMO entitled “Project Co-ordination Deed for Tarrone Terminal Station”.

Reference Date means [to be inserted].

Regulatory Instrumentincludes:

(a)the National Electricity Law and Rules; and

(b)in respect of a party, any licence the party holdsregulatingits activities in respect of the electricity industry.

Related Agreements means the Project Agreement, Project Co-ordination Deed, Tri-Partite Deed, the Lease, the Connection Agreement and the Augmentation Connection Agreement.

Related Body Corporate is as defined in section 9 of the Corporations Act.

Relevant Generator means the Generator in respect of agenerating system Connected to the Victorian Transmission Network by means of the Network Facilities.

Rules means the National Electricity Rules under the National Electricity Law.

Security Interest means any bill of sale (as defined in any statute), mortgage, charge, lien, pledge, hypothecation, title retention arrangement, trust or power, as or in effect as security for the payment of a monetary obligation or the observance of any other obligation.

Shared Network Augmentation means an augmentation to the Victorian Transmission Network to be used to provide shared network capability services to AEMO.

Siteis described inAttachment5.

SPI Network Services Agreement means the agreement between SPI PowerNet and AEMO entitled “Network Services Agreement for Tarrone Interface Works”.

SPI PowerNet means SPI PowerNet Pty Ltd ABN 78 079 798 173.

SPI Project Agreement means the agreement between SPI PowerNet and AEMO entitled “Project Agreement for Tarrone Interface Works”.

Step-in Expenditureis defined in clause 21.1.

Tax means any duty (including stamp duty) and other tax (including GST), levy, impost, deduction or similar charge or withholding plus interest and penalties, charges, fees or other amounts made on or in respect of it, including any carbon tax or any such amount that relates to, or is imposed because of environmental matters, but does not include any income tax.

TNSP Event ofForce Majeure means a circumstance that satisfies all of the following criteria:

(a)the circumstance is beyond the reasonable control of TNSP;

(b)the circumstance is not the result of:

(i)a breach of this Agreement or any relevant Law by TNSP;
(ii)an intentional act or omission (other than an act or omission expressly required by, and carried out in accordance with, this Agreement) by TNSP; or
(iii)a negligent act or omission by TNSP; or

(c)the circumstance results in TNSP’s being unable to observe or perform on time and as required any obligation (not being an obligation to pay money) under this Agreement; and

(d)the circumstance involves one or more of the following:

(i)acts of God, lightning, earthquakes, floods, droughts, storms, tempest, mudslides, washaways, explosions, fires and any other natural disaster;
(ii)acts of war, acts of public enemies, terrorism, riots, civil commotions, malicious damage, sabotage, blockade and revolution;
(iii)acts or omissions of any Authority;
(iv)acts or omissions of SPI PowerNet in respect of the construction, operation or maintenance of the Interface Works where those acts or omissions affect the ability of TNSP to perform its obligations under this Agreement; or
(v)(A)acts or omissions (other than a failure to pay money) of a person (not including any Relevant Generator) who has facilities that are Connected to, or use, the High Voltage Grid, or are directly or indirectly Connected to, or use, a system for the supply of electricity, which in turn, is Connected to the High Voltage Grid;

(B)where those acts or omissions affect the ability of TNSP to perform its obligations under this Agreement by virtue of that direct or indirect Connection to, or use, of the High Voltage Grid.

TOC means the person who is responsible for authorising the switching of equipment on the Victorian Transmission Network.

Transmission means the transfer of electricity in bulk at 66kV and above.

Transmission Chargemeans all charges payable under this Agreement.

Transmission Line means [any 500kV circuit entering or exiting the Network Facilities].

Tripartite Agreement means the agreement between TNSP, Proponent and AEMO entitled “Tripartite Agreement for Tarrone Terminal Station”.

Use of System Agreement means the agreement between Proponentand AEMO entitled “Use of System Agreement for Victorian Transmission Network Services for Tarrone Generation”.

Victorian Transmission Networkmeans the declared transmission system for Victoria, and includes the Network Facilities.

Wilful Breach means an intentional or reckless breach of this Agreement and not a breach resulting from an error of judgement or mistake made in good faith.

Capitalised terms not otherwise defined in this clause 1.1 are defined in the Details and italicised terms are defined in the National Electricity Law or the Rules.

Construction

1.2Unless a contrary intention appears in this document, a reference to:

(a)this Agreement includes any schedules and Attachments;

(b)a document (including this Agreement) includes the document as novated, varied, or replaced, and despite any change in the identity of the parties;

(c)a clause, paragraph, schedule, or Attachment is a reference to a clause, paragraph, schedule, or Attachment to this Agreement;

(d)a clause is a reference to all its subclauses;

(e)legislation (including the Rules) includes subordinate legislation and other instruments under them, and consolidations, amendments, re-enactments or replacements of any of them;