The Authority’s statutory functions include monitoring, investigating and enforcing compliance with the Act, regulations and Code. This Compliance Monitoring Framework uses a risk-based framework to help us decide where to focus our monitoring efforts and therefore effectively allocate our available monitoring resources.

A proactive monitoring and compliance function is critical to maintaining and building trust and confidence in the electricity market. The Compliance Monitoring Framework strengthens the Authority’s monitoring and compliance capability, and we will leverage it to promote outcomes for consumers consistent with our statutory objectives.

The Compliance Monitoring Framework aligns with the Authority’s Strategy Reset 2020, the Statement of Intent 2021- 2025, and the new Compliance Strategy. The areas the Authority monitored under the previous strategy have remained largely unchanged since 2013 and it is timely to update these to reflect changes to the Code, industry developments, stakeholder expectations, and the future focus areas of the Authority.

The Compliance Monitoring Framework allows us to appropriately prioritise the areas we monitor, based on the level of harm from non-compliance and likelihood of undetected non-compliance occurring. The initial shortlist of high-priority areas for proactive compliance monitoring is set out below.

Priority area

Description

Trading conduct

 

Conduct in relation to generators’ offers and ancillary service agents’ reserve offers.

Reasonable and prudent system operator

 

System operator must carry out obligations to reasonable and prudent standard.

AUFLS readiness

North Island connected asset owners must ensure AUFLS readiness and systems in place; South Island grid owner must ensure AUFLS readiness; Asset owners must test AUFLS systems.

Wholesale market information disclosure

Wholesale market information disclosure; disclosure of misleading, deceptive, or incorrect information; requirement to provide complete and accurate information.

Risk management contract information disclosure

Parties to risk management contracts required to submit information and must annually certify that information submitted was correct.

Provision of internal transfer price information

Provision of internal transfer price information to Authority.

Distributor arm’s-length requirements

Distributors must act at arm’s length in relation to distributed generation and retail that it owns.

Grid emergency planning

Participants must plan for a grid emergency.

For more information, please refer to the document below: