Consultation

The proposed amendment would change how industry participants negotiate a distributor agreement for a retailer to use a distributor’s network to on-sell electricity to consumers. Each distributor will be required to develop and make available for use a DDA to trade on its network. The distributor’s DDA will be based on a DDA template provided by the Authority in the Code. The DDA is designed to act as a backstop agreement that contains more balanced terms between industry participants.

If one or both industry participants opts for the DDA to apply as the distributor agreement, then the DDA applies. At any time, the parties can agree to replace their DDA with an alternative agreement. We have also updated the proposal to include some default terms for additional services, such as: the exchange of consumer consumption data and payment of trust income to beneficiaries.

The benefits of the proposal include a lower cost and easier process to negotiating and entering into contracts, and also creating a more level-playing field to enable more innovation and participation in the retail and related-services markets.

We will host industry workshops to help interested parties prepare their submissions.

Submissions should be received by 5pm on Tuesday 15 October 2019.

On 26 January 2016, we published a consultation paper, Default agreement for distribution services, describing a proposal to amend the Electricity Industry Participation Code 2010 (Code) to introduce a default distributor agreement (DDA). The period for making submissions on that consultation paper ended on 19 April 2016. 

The consultation paper contained five questions, but the table of questions in Appendix A on page 56 of the consultation paper showed question 2 twice (with a minor variation to the wording) and omitted question 3.

The majority of submitters appear to have realised this error and responded to question 3. However, some submitters may have missed question 3. Therefore, we have decided to allow a further period of two weeks for interested parties to respond to this question.

We have published a consultation paper describing a proposal to amend the Code to introduce a default distributor agreement (DDA).

At present, each distributor has a contract with the retailers trading on its network recording the terms on which the distributor provides distribution services to the retailer (often referred to as a use-of-system agreement – UoSA). As a monopoly provider of services, distributors are often in a strong position to dictate the terms of those contracts. 

The proposed amendment would require each distributor, if it uses interposed distribution arrangements, to have a DDA with core terms prescribed by the Code. The DDA will also include operational terms (for example the management of fault calls) developed by the distributor and consulted with retailers.   

Once DDAs are finalised, retailers will be able to insist on the DDA being the contract they have with the distributor if they are unable to reach agreement on an alternative arrangement. 

Note: We have extended the submission period for this consultation paper by two weeks. The extension was requested by the Electricity Networks Association.

Submissions should now be received by 5 pm on Tuesday, 19 April 2016.

The Authority is seeking feedback on a proposal to establish a default use-of-system agreement that can be varied by mutual agreement between a distributor and a retailer. The purpose of the proposal is to reduce transaction costs for retailers and distributors, leading to enhanced retail competition across more network areas in New Zealand.