This Model Contract established between an Electricity Generation Company (EGC) and an Electricity Transmission Company (ETC), which usually sets out the terms and conditions according to which the EGC provides ancillary services. It consists of the services necessary to support the transmission of electric power from the electricity generation facilities of the EGC (also known as the Seller) to the given ETC's transmitting area, within which the Bulk Electricity Purchaser (also known as the Bulk Electricity Trading Company or Bulk Electricity Trader) shall pay for delivered electricity. This agreement provides all the necessary obligations of control areas and related transmitting utilities to maintain reliable operations of the interconnected transmission system. It also defined clearly all the necessary services that generally consist of the following six (6) major different types of ancillary services: 1) scheduling and dispatch, 2) reactive power and voltage control, 3) loss compensation, 4) load following, 5) system protection, and 6) energy imbalance.
This contract is generally applicable for all types of Electric Power Stations or Electricity Generation Facility, including Gas Power Plant (GPP), Coal Power Plant (CPP), Solar Power Plant (SPP), Wind Power Plant (WPP), Hydroelectric Power Plant (HPP) and Nuclear Power Plant (NPP) that generate up to regulated allowable evacuation or transmission capacity of electric energy to national grid. It is very important and necessary that each shall know its rights and limits to secure a sustainable and efficient supply of electric energy to the consumers as required by the relevant electricity regulator. If this contract does not clearly define the key services, which generally consist of frequency control, spinning reserves and operating reserves, including all the technical and legal duties and responsibilities of the parties to facilitate and support the permanent flow of electricity to continually meet demand, then the electricity generation, transmission and distribution companies, including other businesses will definitely be financially and economically affected.