New metering rules (Part 10) now operational
On Thursday 29 August, the new Part 10, and related amendments to Parts 11 and 15 of the Electricity Industry Participation Code 2010 (Code) came into effect. The amendments represent a fundamental review of the electricity market’s metering rules, to enable a contestable metering market, provide for the rapidly increasing uptake of advanced metering infrastructure (AMI, or “smart” meters) and ensure clear and robust processes around responsibilities and compliance for electricity meters.
The changes, that have included a significant upgrade to the registry, influence the operation of most industry participants in the retail market. The Authority also welcomes metering equipment providers (MEPs) as a new class of industry participant that has been created by the changes. The new Code is expected to provide net present value benefits of around $19 million over the next 10 years.
The new metering rules benefited from a significant amount of industry input and coordination in developing them, as well as the data clean-up process, and the implementation of the changes into market and participant systems. The ‘go-live’ of the new Code on Thursday was the culmination of a process that began in 2008, with implementation starting in late 2011 following the gazetting of the new Code. The Authority thanks the industry participants who have contributed to the successful implementation of the new rules, as well as the registry manager (Jade Software Corporation), and the various consultants who have provided support during the project, and looks forward to the successful, on-going operation of the new Code. |
Transmission pricing methodology: cost benefit analysis
The Authority is seeking feedback on its proposed approach to cost benefit analysis of the transmission pricing methodology proposal. The Authority has published a working paper discussing best practice to economic cost benefit studies and outlining the proposed methodology for the cost benefit analysis in a second issues paper, which is due to be released next calendar year. Submissions on this paper are due by 5 pm on 15 October 2013.
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Investigation of value of lost load
The Authority published the results of its investigation of the value of lost load (VoLL) in July 2013. The Authority considers that there is a long-term benefit for consumers if decisions about investment and use of electricity infrastructure are informed by VoLLs estimated using the survey-based approach identified through the project.
The Code specifies the use of a VoLL for variations to transmission services and reliability, and the VoLL is also relevant to the grid reliability standards and the core grid determination which are made under the Code.
Beyond those Code provisions, however, the Authority has a limited role in regulating decisions about investment and use of electricity infrastructure. In particular, the Code does not require Transpower or distributors to use VoLLs estimated using the survey-based approach in investment decision-making processes. Adopting the survey-based approach and further VoLL research depends on decisions by the Commerce Commission, Transpower and distributors.
The Authority believes that further work is desirable to assess the costs and benefits of amending the Code to require the use of VoLL estimated using the survey-based approach for existing Code-related purposes (eg variations to transmission services and reliability). However, the Authority will consider the timing of this work when developing the 2014/15 work programme and after taking other priorities into account.
The Authority is very happy to discuss the VoLL research with any interested party and would encourage parties who undertake VoLL research to provide the results to the Authority in order to establish a comprehensive VoLL research dataset available for all.
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Call for nominations for Retail Advisory Group (RAG) membership
The Authority is calling for nominations for a member of the Retail Advisory Group (RAG). The Authority is seeking one new member of the RAG following a resignation in May 2013. The membership term is up to two years. The Authority is particularly interested in nominations from people with retailer experience. The role of the RAG is to provide the Authority with independent advice on the development of the Electricity Industry Participation Code and on market facilitation measures relating to retail matters. The Authority invites nomination of people who:
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can provide impartial advice
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have a high level of integrity
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possess a sense of public duty
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are highly credible to people within the electricity industry
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are able to speak with a considerable level of authority.
Nominations should be emailed to info@ea.govt.nz, with ‘RAG nomination’ in the subject-line. Nominations are requested by 5.00 pm Friday, 6 September 2013.
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Arrangements to manage a retailer default situation
Submissions on the consultation paper ‘Arrangements to manage a retailer default situation’ have been published.
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Settlement and Prudential Security Review Code amendment
Submissions on the consultation paper ‘Settlement and Prudential Security Review Code amendment’ have been published.
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Current consultations
Removal of the in-band frequency keeping constrained on and off compensation
The current method for selecting the frequency keeper does not always allow the lowest priced provider or providers to be selected. The Authority is proposing a Code amendment to address this issue.
Starting: 05/08/13; Ending: 17/09/13, 5pm.
Part 10 implementation: amended guidelines for reconciliation participant and distributor audits
The Authority is seeking feedback on the proposed amendments to the guidelines for reconciliation participant and distributor audits.
Started: 27/08/13; Ending: 08/10/13, 5pm. |
NZ electricity hedge contracts - 30 August 2013
 Information plays an important part in building market confidence and strength.
To assist interested parties in tracking market development, the Authority publishes NZ electricity hedge contracts as a standard section of its weekly Market Brief.
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