Market Brief

The Authority is amending the Code to allow a trader (retailer) to opt-in to be protected from saves initiated by the losing retailer. A ‘save’ is defined as a losing retailer attempting to persuade a customer that has chosen to switch, to cancel the switch before the switch is completed. Saves occurring because the customer has contacted the losing retailer are not prohibited. Furthermore, a losing retailer can initiate contact with its departing customer for reasons other than making a save, for example, as part of a general marketing campaign.

The Authority has decided that win-backs will not be restricted. A win-back occurs when a losing retailer convinces a customer to switch back to them.

The Authority became concerned in late 2013 that saves and win-backs might have a negative effect on retail competition by reducing the ability and incentives for small and growing retailers to acquire residential customers. The Authority consulted in June 2014 on options to support retail competition by restricting saves and early win-backs. The Authority received 18 submissions on the consultation paper.

The save-protection regime will be in force from 12 January 2015. More information about implementation will be available from the Authority’s Market Service Group in due course.

The clearing manager, NZX, has published an information sheet to assist participants to transition to the new hedge settlement agreement (HSA) regime, due to come into effect from 24 March 2015. All existing HSAs will expire on 23 March 2015 and will need to be renewed and validated by the clearing manager before the effective date. The information sheet sets out the transition arrangements. The clearing manager has also published the template forms for participants to use when submitting new and renewed HSAs.

The information sheet and forms are available on NZX’s Settlement and Prudential Security project implementation page

The information sheet is the first of a series of information papers to be published by the clearing manager in the last quarter of 2014, to assist participants to prepare for the new settlement and prudential security arrangements that come into effect on 24 March 2015.

The Authority has granted and gazetted two new exemptions, listed below.

Vector Limited for an exemption (No. 213) from complying with the requirement in clause 12A.5(2) of the Code to ensure that the total value of additional security specified in its use-of-system agreement with Hunet Limited is not more than Vector's reasonable estimate of the line function services charges that Hunet is required to provide to Vector for any two month period.
Ecotricity Limited for an exemption (No. 215) from complying with the obligation in clause 15.38 of the Code to obtain and maintain certification.

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Contents

Decision on saves and win-backs

Renewing and setting up future Hedge Settlement Agreements

New exemptions granted and gazetted

Rulings Panel’s Annual Report 2013/14 published

Current consultations

Transmission pricing methodology: Problem definition relating to interconnection and HVDC assets—working paper