Authority to study retailer saves and win-backs
The Authority has recently added a project to its 2013-14 work programme. The project will investigate the effects (positive or negative) on competition from retailer practices known as saves and win-backs, whereby an incumbent retailer offers incentives to retain or regain a customer who has switched or intends to switch.
The retailer win-backs project seeks to answer the following questions:
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To what extent are saves and win-backs currently being employed by retailers?
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Are these strategies consistent with enhancing retail market competition?
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What, if any, are the most appropriate interventions for the Authority to consider in addressing any problems identified?
In undertaking this project, the Authority will also assess the effectiveness of interventions undertaken by regulators in other markets and jurisdictions; for example the prohibition of saves by the incumbent provider in the telecommunications sector in New Zealand ( Code for Transfer of Telecommunications Services (“Customer Transfer Code”) 2012 s42 and s43 PDF).
The project is expected to take six to nine months to complete.
The Authority will also be undertaking a market performance enquiry into current retailer practices regarding saves (see Information on the Market). The enquiry is being undertaken in response to a complaint from a retailer about the practices some retailers employ to obtain saves.
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Review of the liability arrangements set out in the Enforcement Regulations
A priority project under the Authority’s Statement of Intent is to review the Electricity Industry (Enforcement) Regulations 2010. A key component of this work is a first principles review of the liability arrangements set out in the Enforcement Regulations.
The Authority has engaged a consultancy firm, TDB Advisory, to prepare a report on the most appropriate liability arrangements for market operation service providers, ancillary service agents, asset owners, and in respect of (electricity) metering standards and metering information, to assist with achieving the Authority’s statutory objective.
TDB Advisory’s report will address whether having liability limits in place for each of the industry participants covered by the liability provisions in the Enforcement Regulations is consistent with the Authority’s statutory objective, and if so:
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the optimal approach to structuring the liability limits
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whether the liability limits should be in regulation or in contract between, relevant parties and the Authority
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an appropriate level of liability for each relevant party.
As part of its work, TDB Advisory intends to meet with a selection of the parties covered by the liability arrangements in the Enforcement Regulations. |
Operational review of Part 6 of the Code - second consultation
The Authority is undertaking a second consultation on the operational review of Part 6 of the Code. Part 6 relates to the connection of distributed generation. After consideration of the submissions received on the first consultation paper, the Authority has revised a small number of the proposals and now seeks submissions on these revised proposals.
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Exemptions granted by the Authority
The Authority has granted and gazetted two new exemptions, which are listed below.
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The Authority has granted Contact Energy Limited an exemption (No. 183) from complying with the obligation in clause 11 of Schedule 15.3 of the Code to maintain a distributed unmetered load database for an ICP.
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The Authority has granted Contact Energy Limited an exemption (No. 184) from complying with the obligation in clause 10.14(2)(b) of the Code to ensure that unmetered load is not greater than the relevant unmetered load threshold, in respect of eight ICPs.
The full Gazette notices, including reasons for the approval of each, have been published on the Authority’s website. The exemptions came into force on 29 November 2013 and can be found on the exemptions page.
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Electricity information exchange protocols
The electricity information exchange protocols (EIEPs) provide a set of formats that distributors and traders use when electronically exchanging operational business information. Earlier this year the Authority consulted on a Code amendment proposal to require compliance with EIEPs 1, 2, and 3. The Authority Board has approved the Code amendment and it will come into force on 16 December 2013, with an effective date of 1 November 2014.
Drafts of EIEPs 1, 2 and 3 will be available on the Authority’s website on 6 December 2013. Final versions will be made available after the Code amendment comes into force. |
Decision not to take further action on breaches by the market administrator
On 22 November 2013, the Compliance Committee considered a report, and made a decision, on breaches of the Code by the market administrator.
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Appointment of investigator
On 22 November 2013, the Compliance Committee appointed an investigator to investigate a self-reported breach of clause 13.82 of the Electricity Industry Participation Code 2010 by Mighty River Power Limited. Mighty River Power Limited failed to comply with a dispatch instruction while operating under a block security constraint.
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First quarter report on progress against the work programme
The Authority has published its first quarter report against the 2013/14 work programme.
The 2013/14 work programme is also available at the same webpage. |
Current consultations
Under Frequency Management initiatives – second consultation
The Authority is consulting for a second time on an under-frequency management initiative that will require participants to provide fast instantaneous reserves information to resolve data issues.
Started: 29/10/2013, Ending: 10/12/2013 5pm
Retail Advisory Group – options paper on domestic contracting arrangements
The Retail Advisory Group (RAG) is seeking feedback on options for addressing issues with the operational effectiveness of domestic contracting arrangements.
Started: 05/11/2013, Ending: 17/12/2013 5pm
Transmission Pricing Methodology (TPM): Avoided cost of transmission payments for distributed generation
The Authority is consulting on the working paper on avoided cost of transmission payments (ACOT) for distributed generation, which sets out to understand the efficiency implications of any changes to the TPM in relation to ACOT payments.
Started: 19/11/2013, Ending: 31/01/2014 5pm |
Information on the Market
 The Authority frequently produces graphs and analyses of interest utilising the various industry datasets that are becoming available. Information on the Market provides an insight into a particular area of focus. This edition focuses on retailer activity aimed at convincing their customers to cancel decisions to switch to another retailer. These cancellations are called ‘saves’ as the incumbent retailer is able to save itself from losing a customer.
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NZ electricity hedge contract - 29 November 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 contacts as a standard section of its weekly Market Brief.
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