Electricity contracts for consumers
In three areas in New Zealand, consumers have one contract with a retailer and another contract with the lines company. In one of those three areas, the lines company actually invoices the consumer separately from the retailer so that consumers receive two bills for their overall electricity supply. This contracting approach is generally termed a ‘conveyance’ model.
In the past, the industry and the Electricity Commission worked towards a model contract for retailers to use when contracting with consumers. However, in mid-2009, a change of approach saw the development of a set of voluntary minimum terms and conditions underpinned by a set of good contracting principles. This was finalised in May 2010: ‘Final Principles and Minimum Terms and Conditions for Domestic Contracts for Delivered Electricity (Interposed)’. Work is ongoing around developing these so that they can be used by lines companies under the conveyance model.
It is important to note that the minimum terms are voluntary; retailers can choose whether to align their standard contracts with the minimum terms or not. However, a monitoring and reporting regime has been adopted that will, over time, make it transparent as to the extent to which each retailer’s standard contract complies with the minimum terms. As it takes some time for retailers to amend their contracts, a two-year transition period will apply between June 2010 and June 2012, during which time monitoring of retailers’ adoption of the proposed arrangements is expected to take place. At the end of the two-year period, an assessment will be made as to whether the voluntary approach is achieving satisfactory outcomes, or whether alternative approaches are warranted.
The Domestic electricity retail contracts page contains further information on this area, and its development.
This page is related to: Consumer Information.