2013/14 Appropriations: release of submissions and report to the Minister
The Authority has consulted on its proposed appropriations for 2013/14 and work priorities for 2013-2016. Consultation ran from 25 September to 2 November 2012.
The Authority has considered the submissions made and reported to the Minister of Energy and Resources with its proposed appropriations for 2013/14.
The Authority is seeking $0.5 million less than the amount it consulted on. The Authority will seek to make $0.5 million in savings from its own operations to meet the reduced appropriation request.
The Authority’s report to the Minister, including a summary of submissions, is available at:
www.ea.govt.nz/our-work/plans-and-reports/2013-16/
The submissions are available at:
www.ea.govt.nz/our-work/consultations/corporate/appropriations-2013-14/
For any questions about the above please contact the Authority’s Business Planning Manager, Torsten Baker, on (04) 460 8859 or torsten.baker@ea.govt.nz
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RAG report on arrangements to manage retailer default
The Authority has received and considered a report by the Retail Advisory Group (RAG) on its project to identify arrangements to facilitate the orderly resolution of a default situation when an electricity retailer becomes insolvent or otherwise exits the market and is unable to supply its customers. The group's main recommendation were:
- the Authority should amend the Code to establish a regulated process for ensuring the defaulting retailer’s customers are transferred to another retailer in a way that:
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facilitates a commercial solution to a retailer default
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maintains the confidence of consumers that their electricity supply will not be interrupted
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maintains the confidence of industry participants that a retailer default will be resolved in a finite time
- the regulated process should involve the following steps:
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a period for the failed retailer (or the receiver/liquidator) to seek a commercial solution, for example, a trade sale of the customer base or an equity injection. The RAG suggests 7 elapsed days
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a period for customers to switch to a new retailer. If a customer does not switch during this period they will be allocated a new retailer by the Authority. The RAG suggests 5 elapsed days
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a period for voluntary customer switches to be processed. The RAG wanted time for customer switching decisions to be processed. A mandated transfer could cause frustration by overriding customer decisions. The RAG suggests 5 elapsed days
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the event date for the mandated switch is day 17 of the process. Mandated switches should be completed over the next 10 days according to switching rules.
The Authority has decided to adopt the group's recommended approach to managing retailer default situations and will consult on detailed Code amendments in due course.
The Retail Advisory Group's report is available at:
www.ea.govt.nz/our-work/programmes/market/consumer-rights-policy/assuring-supply/
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Call for nominations for advisory group chairpersons
In April 2011, in accordance with the Electricity Industry Act 2010, the Authority established the Retail Advisory Group and the Wholesale Advisory Group to provide independent advice to the Authority on the development of the Code and market facilitation measures.
The terms for the existing Retail Advisory Group and Wholesale Advisory Group chairpersons are due to expire on 31 March 2013. In accordance with the advisory groups’ terms of reference, the Authority is calling for nominations for chairpersons of these advisory groups, for two-year terms starting on 1 April 2013.
Nominations close on Friday, 1 February 2013.
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Transmission pricing methodology: questions and answers workshop
The Authority will hold a questions and answers workshop on 7 February 2013 at Civic Suites 1 and 2, Wellington Town Hall, 111 Wakefield Street, Wellington starting at 10:30 am.
The workshop will provide an opportunity for interested parties to seek clarification on aspects of the Authority’s published proposal. To make the best use of time for all who attend the workshop, questions should be submitted to the Authority in advance and should focus on the proposal as it stands, rather than put forward potential alternatives. Parties will be given the opportunity to introduce and explain their question if required.
Anyone wishing to attend the workshop, or submit a question, should email conference@ea.govt.nz with ‘TPM Q&A workshop’ in the subject line no later than 5pm on 25 January 2013.
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IRD ruling on income tax treatment of financial transmission rights
Inland Revenue (IRD) has issued a product ruling relating to the treatment of financial transmission rights (FTRs) for income tax purposes. The Authority requested this ruling on behalf of participants to help provide clarity regarding the treatment of FTRs in tax returns. This ruling may save the need for participants to individually seek advice from the IRD. The ruling applies to FTR participants who prepare their accounts in accordance with International Financial Reporting Standards.
The ruling states that FTRs are not ‘the same as’ or ‘similar to’ other derivative instruments (with reference to a particular aspect of tax law). Therefore participants will not be required to use the same spreading method for FTRs as for other derivative instruments.
The ruling can be downloaded from the Authority’s FTR implementation page:
www.ea.govt.nz/our-work/programmes/priority-projects/locational-hedges/ftr-implementation/
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Authority approves clearing manager’s approach to FTR initial margin requirements
In December 2012 the Authority approved a variation to the clearing manager’s FTR Prudential Security Assessment Methodology. The variation provides details of the clearing manager’s approach to setting FTR initial margins. Pro forma values for the initial margin requirements for FTRs for the first six months of trading are included in the methodology.
The clearing manager has published the variation to the methodology and accompanying policies on its website at:
www.nzxgroup.com/energy/ftrs
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Update to the Code Amendment Register
The Authority has published an update of the register of Code amendment proposals.
The register tracks progress of proposals made by participants for changes to the Code.
The register is also used as an input to the planning process – proposals categorised as ‘future’ in the register are considered during development or review of the annual work programme.
The Code Amendment Register is available at:
www.ea.govt.nz/act-code-regs/code-regs/code-changes/
The current Work Programme is available at:
www.ea.govt.nz/our-work/plans-and-reports/2012-15/
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Part 10 implementation: Part 10 registry testing
Test registry available for participants’ system testing
The new Part 10 registry will be available in test mode from 16 January to 22 February 2013 to assist participants to complete their own system testing prior to formal user acceptance testing (UAT) of the new Part 10 registry. Information on how to access the test environment and notify any issues will be provided directly to Part 10 project contacts.
Draft participant test plan
The Authority is seeking feedback on a draft test plan for participant UAT of the new Part 10 registry. The draft test plan and scenarios are available at:
www.ea.govt.nz/our-work/programmes/priority-projects/part-10-review/part10-implementation/participant-uat/
Feedback should be provided to RegistryPart10UAT@assurity.co.nz and marketoperations@ea.govt.nz, by Friday, 8 February 2013.
Registrations for registry UAT
Organisations intending to participate in UAT of the new Part 10 registry should register with the Authority by 31 January 2013 by emailing the contact details of their Project Manager and Test Manager (or other primary/secondary contacts) to marketoperations@ea.govt.nz
Part 10 registry UAT is scheduled to start on 5 March 2013.
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New Zealand electricity hedge contracts: additional reports
The New Zealand electricity hedge contracts weekly report, which is a regular feature of the Market Brief, has been further developed to include some additional reports.
A document to explain the changes is available at:
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Current consultations
Transmission pricing methodology review; issues and proposal
The Authority is reviewing the transmission pricing methodology (TPM), which specifies the method for Transpower to recover costs of providing transmission services.
The consultation paper is available at:
www.ea.govt.nz/our-work/consultations/priority-projects/tpm-issues-oct12/
Started: 10/10/2012. Ending: 1/3/2013, 5pm.
Proposed Code amendments to the new metering rules and Part 11
The Authority is proposing amendments to the Electricity Participation Code 2010 to address various issues that have been identified in the process of preparing to implement the new metering rules.
The consultation paper is available at:
www.ea.govt.nz/our-work/consultations/priority-projects/tpm-issues-oct12
Started: 17/12/2012. Ending 15/02/2013, 5pm.
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