About Us
The Electricity Authority (Authority) is an independent Crown entity responsible for regulating the New Zealand electricity market.
Although independent, the Authority is required to have regard to Government Policy Statements presented in Parliament by the Minister of Energy and Resources (Minister). The Authority is free to adopt its own approach to matters covered by any such Statements, but must pursue the statutory objective set for it in the Electricity Industry Act 2010 (Act).
The Act states that the Authority’s objective is to promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers.
Authority functions
The core functions of the Authority are to:
- make and administer the Electricity Industry Participation Code 2010 (Code) governing the New Zealand electricity market;
- undertake market-facilitation measures (such as providing education, guidelines, information, and model arrangements) and monitor the operation and effectiveness of market- facilitation measures;
- monitor and enforce compliance with the Code, various regulations, and the Act;
- proactively monitor the performance of the electricity industry in regard to competition, reliable supply and efficient operation; and
- contract service providers to operate the New Zealand electricity system and market in accordance with the Code.
Market operation
To enable it to undertake effective day-to-day operation of the New Zealand electricity system and market, the Authority contracts and manages several external market operation service providers.
The Authority contracts the system operator for the day-to-day operation of the physical electricity system.
The wholesale market involves bids to buy and offers to sell electricity. For that to happen, the Authority contracts the following service providers:
- the wholesale information and trading system to carry out information transfers, especially the uploading of bids and offers;
- the pricing manager to set final prices;
- the reconciliation manager to reconcile electricity volumes; and
- the clearing manager to carry out the process for settling accounts.
In the retail market, the Authority contracts the registry manager to manage points-of-connection information, which enables consumers to switch retailers, and retailers to facilitate the switching process.
Lastly, the market administrator service provider role provides a number of operational and administrative services to the New Zealand electricity market under the wholesale and retail sections of the Code. The Authority undertakes the role of market administrator in-house.
Regulatory development
Most of the Code was carried over directly from the Electricity Governance Rules 2003, but it also includes key provisions from the Electricity Governance Regulations 2003.
The Authority consults on proposed amendments to the Code in accordance with the Act and the Authority’s consultation charter. Proposed Code amendments and market- facilitation measures commonly draw on the expert advice of advisory groups, comprising consumer representatives and industry participants.
Section 42 of the Act also specified seven ‘new matters’ that the Authority was required to address by amending the Code by 1 November 2011. These new matters were addressed and the Report on the completion of the Section 42 New Matters in the Electricity Industry Act 2010 was provided the Acting Minister of Energy and Resources on 31 October 2011. The Minister accepted the report and agreed to its publication.
The Authority consults on proposed amendments to the Code in accordance with the Act and the Authority’s consultation charter. Proposed Code amendments and market- facilitation measures commonly draw on the expert advice of advisory groups, comprising consumer representatives and industry participants.
Participant registration
All persons who meet the definition of an industry participant under section 7 of the Act must register as an industry participant and comply with the Code (section 9).
Compliance
The Authority is responsible for monitoring and enforcing compliance with the Code, various regulations, and the Act. This work is carried out primarily by the Authority’s compliance team, with breach allegations being considered by a committee of the Board of the Authority. More serious breach allegations are referred to an independent Rulings Panel.
The functions of the Rulings Panel include hearing complaints about breaches of the Code. The members of the Rulings Panel are appointed by the Governor General on the recommendation of the Minister.
Market monitoring and information provision
Free-flowing information is a key element in facilitating competition and effective market performance. The Authority monitors and analyses industry and market performance. The Authority also publishes wholesale and retail market reports and statistics, information on system performance, a dataset that includes half-hourly metering data, bids and offers, prices, hydro inflows, lake levels, and half-hourly network configuration data, such as load-flow models, circuit-breaker, asset-outage and generation information.
Promoting consumer switching
One of the Authority’s functions is to promote to consumers the benefits of comparing and switching retailers.
Sector reviews
The Authority undertakes reviews of specific electricity industry issues at the request of the Minister of Energy and Resources (Minister).
Additional responsibilities
The Authority:
- appoints and services the Security and Reliability Council (SRC), which provides the Authority with independent advice on reliability of supply issues and the performance of New Zealand’s electricity system and the system operator service provider;
- establishes and services advisory groups, which provide independent advice to the Authority on the development of the Code and on market-facilitation measures; and
- services the Rulings Panel.
This page is related to: About the Authority.