Reprioritising and working with industry in response to COVID-19 and the lockdown.

We are operating in a difficult and challenging environment.

The COVID-19 pandemic is an extraordinary event and like other sectors, the electricity industry is having to adapt and respond. More than ever, the sector needs to work closely together to address critical areas and continue to protect consumers, as well as those that work in the industry.

We are working closely with our service providers to ensure a reliable and secure supply of electricity.

We have increased our focus on monitoring the supply and reliability of electricity, including the performance of critical generation, transmission and distribution assets now operating under emergency response plans. We are confident the system is resilient and is operating well. We are keeping the machinery of the market going and continuing our focus on consumers, particularly medically dependent and vulnerable customers.

We are communicating regularly with industry representatives, government agencies, consumer representatives and individual companies. We appreciate more than ever the need for regulators and policy makers to listen and take a consistent approach. The Government has clearly set out its expectations and we are adapting the way we work and our focus to contribute to the national response.

We expect companies in the sector to prioritise customer and staff health and safety. The Authority is writing to retailers to reinforce their duty of care for domestic consumers during COVID-19 and to express support for the actions already taken.

Industry working group

We are focusing our resources on critical work and have organised an industry working group to enable timely identification and discussion of issues across the industry. The key priorities for the group are promoting consumer interests, ensuring the market continues to operate efficiently, and supporting the electricity industry as it responds to COVID-19 related issues. For example, an initial issue the group will be discussing is our collective response to the increased pressure customers are under to pay their bills during the COVID level 4 lockdown.

Many stakeholders have welcomed the initiative and are keen to take part. We appreciate the immediate interest and response from industry. The scope and objectives of this initiative are set out in the draft terms of reference on the Authority’s website.

Updated work programme

While prioritising urgent responses to COVID-related issues, we remain committed to delivering key aspects of our market development work programme, including major work streams which will contribute to ongoing certainty for the sector. We have reprioritised our existing work programme and paused some initiatives to focus our resources on critical work and reduce the requirement on the industry to continue to engage on development activities.

We will continue to devote significant resources to projects previously identified by stakeholders and the electricity price review as critical to market confidence, including hedge market enhancements (market making) and wholesale market information disclosure.

We will finish long-running projects which are nearly complete including the review of the transmission pricing methodology (TPM) and the proposed implementation of a default distributor agreement. Stakeholders have previously made it clear the TPM review needs to conclude.

We agree and still anticipate making our decision on the proposed TPM guidelines in the second quarter of 2020.

We will also continue to respond to significant requests for intervention or relief including the 2019 claim of an undesirable trading situation and Top Energy’s exemption request.

Other less critical projects have been paused and you can view the reprioritised market development work programme on our website. This will impact on the Authority achieving its published work programme targets, but we are satisfied that it is the right thing to do.

Compliance

The Authority does not want to add any unnecessary pressure to industry. We are taking a pragmatic approach to compliance. These are difficult circumstances and we are aware that some participants may face challenges complying with some of their obligations under the Code. We expect participants to continue to endeavour to meet the requirements, but we will review specific concerns as they are brought to our attention. For example, maintaining certification requirements for some metering installations.

We are also supporting a sensible and pragmatic approach to market making services during the restrictions. Without additional flexibility it is possible market makers could face the unreasonable choice of placing staff at risk, or breaching requirements.

The ASX proposed additional flexibility to market makers over the immediate future to provide for the inevitable IT and staff challenges market makers will face in the near term. We discussed the proposed changes with the ASX and agreed to their suggested changes to the voluntary scheme. These changes are effective immediately.

Keep in touch with us

We encourage you to keep in regular contact with us, send your emails to communications@ea.govt.nz.

Be kind, stay home and save lives.

Kia kaha

Useful links

COVID-19 NZ Government Info(external link) has the latest updates on the COVID-19 pandemic.
Ministry of Health
(external link)Transpower(external link)