Assisting distribution networks with faster pricing reform
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Distribution pricing reform is an increasing area of focus for the Authority. We want to see faster progress with distribution pricing reform to realise consumer benefits and to facilitate an efficient transition to a low emissions economy.
Distribution pricing is important as it affects how consumers use electricity, how distributors and others manage load, when distributors invest in new (or replacement) poles and wires or network alternatives, and the timing, level and location of investments in new technology, such as distributed energy resources.
To better support distribution networks for faster pricing reform we have updated the Distribution Pricing Practice Note to provide more guidance on what good distribution pricing looks like, and to give clarity on the Authority’s expectations on pricing and urgency.
The Government announcement to remove the low fixed charge (LFC) tariff regulations over five years, starting from 1 April 2022, also gives distribution networks a clearer path for accelerating the pace of distribution pricing reform.
We encourage feedback on the draft updated Practice Note. The consultation period closes at 5pm on Wednesday 3 November and submissions should be sent to distribution.pricing@ea.govt.nz.
Our pricing work programme complements the Authority’s broader programme of distribution sector reform set out in the discussion paper Updating the regulatory settings for distribution networks: Improving competition and supporting a low emissions economy (currently out for consultation).
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Distribution pricing scorecards published
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The Authority has published the 2021 summary assessment of electricity distribution pricing and individual scorecards for each distributor.
The Authority introduced annual pricing scorecards in 2019, to monitor and evaluate distributors’ application of the Authority’s newly revised distribution pricing principles.
The aim of the assessment is to highlight good practice, identify weaknesses and gaps, and suggest opportunities for improvement.
The 2021 scorecards indicate that most distributors are still not looking hard enough at the cost drivers on their network, nor properly considering how to design more efficient pricing. Some distributors are making good progress, but others have made little real progress, and for many there appears to be little urgency towards reform.
Efficient pricing has significant benefits for consumers, and will enable an efficient transition to a low emissions economy. The Authority is actively working to better support distribution networks for faster pricing reform.
The summary assessment and scorecards are available on our website.
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New online Participant Register
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The Authority has released a new online Participant Register to replace the current spreadsheet system.
The Authority is committed to ongoing improvements in the way we receive and share information. The new Participant Register allows electricity industry participants to easily manage their own registration information and view key information about other participants. It will also provide a secure link for data to be shared with other Authority systems, for example the Wholesale Market Information Disclosure portal.
All participants registered with the Authority should have received an email to confirm their primary contact and gain access to the system.
Please note all participants have a statutory obligation to supply registration information to the Authority. Failure to register or to update information is an offence under section 31 of the Electricity Industry Act 2010.
If you have any questions please contact participantregister@ea.govt.nz
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Wholesale market review update
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The Authority’s review into competition in the wholesale market continues to progress.
The Authority will be consulting with and seeking feedback from interested parties on both the review’s observations and a preliminary issues paper which explores possible policy options.
The review paper was considered by the Authority’s Board last week and the issues paper will be considered by the Board in October.
Both papers will be publicly released together for feedback from interested parties. The release date for the review and issues paper is yet to be set, however, this is likely to be late October.
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System operator's draft 2021 Security of Supply Annual Assessment
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The system operator is now consulting on its draft 2021 Security of Supply Annual Assessment. This provides a ten-year view (2021 to 2030) of the balance between supply and demand in the New Zealand electricity system. It considers both energy and capacity risk and looks at four demand and supply scenarios. This year's assessment also looks at the impact on security of supply margins of increasing the proportion of renewable generation in 2030.
The consultation closes on 5 October and a final version of the report will be published before 29 October.
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Final day for nominations - four members of the Innovation and Participation Advisory Group
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The Authority is calling for nominations for four members to join the Innovation and Participation Advisory Group (IPAG).
The purpose of the IPAG is to provide independent advice to the Authority on issues in the Authority work programme that relate to evolving technology and business models and competition and consumer choice.
Experience in the electricity sector, evolving technologies and new business models is desired. We encourage applications from experienced professionals as well as young professionals who can bring a unique perspective to the issues IPAG consider.
The term for new members will start on 16 November 2021 and lasts for two years, ending 16 November 2023. More details are available by following the links to our website below. Nominations close today at 5pm. For more information on the role of the IPAG and how to submit your application please see the IPAG page.
You can see the charter and the terms of reference for advisory groups here.
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Updating the regulatory settings for distribution networks
Ending: 28/9/2021 5pm
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Assisting distribution networks with faster pricing reform
Ending: 3/11/2021 5pm
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Level 7, Harbour Tower, 2 Hunter Street, PO Box 10041, Wellington 6143, New Zealand
Tel: + 64 4 460 8860 Email: communications@ea.govt.nz
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