Update on 9 August review
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The Authority is in the final stages of phase one of the review into the 9 August electricity cuts.
Phase one of the review will seek immediate assurance that any systemic and process issues that led to the Monday 9 August power cuts are urgently corrected. In particular, the review is around the system operator’s demand allocation tool and communications.
The Authority has worked closely with Transpower and interviewed a variety of industry participants to secure more information about the event and the impact on consumers. The Authority would like to thank the participants who have cooperated with the review.
The Authority’s Board will consider the draft report later this week and we will look to publish the report shortly after.
Phase two of the review will be scoped based on the findings of phase one but it will be wider than the system operator’s role.
The terms of reference for the review and FAQs are available on our website.
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Update on review of competition in the wholesale market
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The Electricity Authority is currently working through its review into competition in the wholesale market for the period 2018 to early 2021, including analysis of spot and forward prices.
The Authority notes MEUG’s Economic Profit Analysis of Meridian Energy’s last 20 financial years, released last week, and their comment that their analysis would assist the Authority with its wholesale market review.
The Authority’s review is progressing at pace, with its observations being considered by the Authority’s Board in September and subsequently publicly released. The Authority will be publishing the review and an issues paper – and will be seeking input from the industry on both. We will be encouraging MEUG and other interested parties to participate in that feedback process.
The Authority’s review applies to every large gentailer in New Zealand - not just Meridian - and considers all relevant businesses to explore whether there is a market issue that needs to be addressed. It also looks at key events, for example the 2018 Pohokura outage, the conclusion of negotiations of the contract for supply at Tiwai and the 2021 dry year event, which have coincided with elevated wholesale prices for extended periods.
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Internal transfer pricing and segmented profitability reporting decision released
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The Authority is working to strengthen trust and confidence in the competitive operation of the electricity market by improving information disclosure by integrated generator retailers and retailers more generally.
The Authority is mandating the annual disclosure of mass market internal transfer prices (ITPs) by large integrated generator retailers, the methodology used to derive them and the disclosure of retail gross margin reports by certain retailers.
More information disclosure will provide greater transparency for market participants to better understand the ITPs of the integrated generator retailers and the methodologies used to derive them. Through the disclosure of retail gross margins, the Authority and market participants will have better access to information on the pricing practices used by retailers.
Consumers will benefit in the long-term through more information being available to participants buying electricity on the wholesale market. Over time, better access to information can lead to more efficient pricing and encourages better and more innovative product offerings for consumers to choose from.
This decision addresses the Electricity Price Review recommendation for the Authority to enhance reporting on retail and generation profitability.
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Consumer care under COVID 19 lockdowns
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The Authority reminds all electricity retailers of the Authority’s expectations under the consumer care guidelines.
The consumer care guidelines recommend disconnections for non-payment of installations containing domestic consumers, of both post-pay and pre-pay customers, should not occur at a time which could endanger the wellbeing of a customer or anyone in their household. The Authority considers pandemic-related lockdowns fit these criteria.
The Authority appreciates the immediate actions retailers have already taken to support their customers since the Alert Level 4 lockdown came into effect.
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Exemption under section 90(1)(b) granted to Tania Simpson
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We have granted an exemption under section 90(1)(b) of the Electricity Industry Act 2010 (Act) to Tania Simpson in relation to her appointment as a director of Meridian Energy Limited while also a director of Auckland International Airport Limited. Section 90 permits the Authority to grant exemptions from obligations in Part 3 of the Act, which relate to the separation of distribution from certain generation and retailing activities. Ms Simpson has been exempted from compliance with sections 75, 77 to 79 and 88 of the Act, on the conditions set out in the Gazette notice.
The exemption came into force on 24 August 2021. Applications and Gazette notices for exemptions made under Section 90 are available on our website.
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Consultation extended 2 weeks - updating regulatory settings for distribution networks
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The Authority is extending the consultation period to collect feedback on its 'Updating the Regulatory Settings for Distribution Networks' discussion document until 5pm Tuesday 28 September.
Extending the deadline will allow stakeholders more time to send in feedback while dealing with additional challenges during the changes in Covid alert levels.
The Authority is looking at a range of potential issues on distribution networks and potential regulatory options that may be needed to support New Zealand’s transition to a low-emissions economy and ensure long-term benefits to consumers.
After assessing all stakeholder feedback, specific options will be assessed in detail and a preferred option will be identified and released for consultation.
You can read the discussion document on our website.
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Call 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 at 5pm on Tuesday 21 September 2021.
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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Distribution networks workshop - expressions of interest sought
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Distribution networks have a critical role to play in supporting New Zealand’s transition to a low emissions economy through their infrastructure that connects electricity users with electricity producers and maintaining the reliability of electricity supply.
The Authority is hosting a distribution networks hui in Wellington on 12 October 2021 to share information on developments and trials as the electricity industry evolves.
Further details and the focus of the hui is set out in the draft agenda and will include:
- non network alternatives
- EV trials
- microgrids.
Please register if you wish to attend this event.
This workshop is part of the Authority’s wider programme of work with distribution networks to better support the electricity sector’s transition to a low-emissions economy, while continuing to provide long-term benefits to consumers.
This hui was deferred from 29 June 2021 due to the Covid alert level in Wellington that week.
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Submissions published: Improving the framework for the Authority's information gathering
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In July 2021 the Authority consulted on improving the framework for its information gathering. We sought feedback on a proposed approach to amend the Code and put in place a standardised framework for the ongoing provision of information to the Authority to inform its monitoring function.
Thank you to everyone who provided feedback on the proposal. The submissions have now been published.
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SRC papers from 27 May 2021 meeting published
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The meeting pack from the Security and Reliability Council (SRC) meeting held on 27 May 2021 has been published.
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MDAG papers from 11 August 2021 meeting published
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The meeting pack and minutes from the Market Development Advisory Group (MDAG) meeting 30 on 11 August 2021 has been published. This includes the seven presentations MDAG received from expert consultants in relation to the 100% renewables problem definition.
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Proposal to increase the interruption reason field and unique request identifier
Ending: 14/9/2021 5pm
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Updating the regulatory settings for distribution networks
Ending: 28/9/2021 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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