The Authority has finalised and published model use-of-system agreements (MUoSAs) for interposed and conveyance distributor/retailer arrangements, and a set of drafting guidelines for adapting the MUoSAs for use with embedded networks. Publication of these documents marks the achievement of a significant milestone in the Authority's programme that seeks to achieve greater standardisation of distribution arrangements. Greater standardisation is expected to improve competition and efficiency for the long-term benefit of consumers.

The Authority has also published an information paper which provides the Authority's responses to key issues raised in submissions to consultation papers published in February and July 2012, and further explanation of the Authority's light-handed approach to regulating distributor/retailer arrangements.

The MUoSAs and associated documents are available at:

The Authority and system operator consider there are opportunities to improve the process by which the policy statement and procurement plan are reviewed and amended. In response, and in discussion with the system operator, the Authority has developed a more flexible and efficient review process. At the suggestion of the system operator the Authority has also included amendments to the Electricity Industry Participation Code 2010 (Code), relating to certain aspects of the required contents of the procurement plan.

As the review process is prescribed in the Code, the Authority is now consulting on a Code amendment to give effect to its proposal.

The consultation paper is available at:

Submissions should be made to submissions@ea.govt.nz by 5pm on Wednesday, 24 October 2012.

New Zealand has ranked number two in the world when it comes to customer switching in the electricity market, according to a global study.

The VaasaETT World Energy Retail Market Rankings Report shows a steady increase in New Zealanders' desire to ensure they are getting the best value for money, with the 2nd place ranking up from 5th place in 2009.

VaasaETT, a global energy think-tank based in Finland, noted that New Zealand was the biggest riser in the rankings, rapidly approaching the number one ranked Victoria, Australia.

The switching rate in New Zealand has been trending upwards since 2008, from an annual rate of 10.5% in 2008, to 19.5% in 2011. The report notes a number of regulatory initiatives and market changes that have contributed to the increase in retail competition. These include the What's My Number campaign, physical and virtual generation asset swaps between state-owned retail and generation businesses, and developments to establish a more active electricity hedge market.

The VaasaETT report is available at:

The Wholesale Advisory Group has recently completed its work on the Wholesale Market Information Project by providing its recommendations to the Authority Board. These recommendations are focussed on improving the availability of information which impacts the forward price curve for electricity.

The key recommendations are:

The Authority will now progress the advisory group recommendations by targeting the publication of a consultation paper on amendments to clause 13.2 by November 2012, and undertaking the other Wholesale Market Information Project initiatives proposed by the group as a high priority.

The recommendations paper is available at:

The Wholesale Advisory Group has recently completed its work on the Settlement and Prudential Security Review by providing its recommendations to the Authority Board. These recommendations are focussed on encouraging the more efficient use of retailer and industrial user capital, encouraging the entry of new purchasing participants whilst improving the standard of prudential security to better protect the market from a participant default.

The key recommendations are:

The Authority will now progress the advisory group recommendations by targeting the publication of a consultation paper on Code amendments and market facilitation measures by March 2013. Consideration will be given as to whether any of the recommendations can be progressed as 'quick wins'.

The recommendations paper is available at:

The Authority has granted exemptions from the automatic under-frequency load shedding obligations (AUFLS) in the Code to Norske Skog Tasman Ltd, Northpower Ltd, Winstone Pulp International Ltd, Pan Pac Forest Products Ltd, New Zealand Steel Ltd and New Zealand Railways Corporation.

All six applicants currently have exemptions from AUFLS obligations in the Code that will expire on 30 September 2012.

The exemptions will be notified in the NZ Gazette on Thursday 13 September and they will take effect from 1 October 2012. The exemptions will expire on the earlier of:

The Authority has published proposed amendments to the Code to address issues highlighted by an audit of the wholesale information trading system demand-side bidding and forecasting system. These are available at:

Papers for the Retail Advisory Group meeting of 30 August are available at:

Papers for the Locational Price Risk Technical Group meeting of 15 August are available at:

Click on banner to access:

This winter's hydro conditions in the South Island and recent announcements about the Tiwai Point smelter provide an interesting insight into how the forward prices for ASX hedges react to, and reflect, underlying market conditions. This Information on the Market looks at these situations and outlines why they demonstrate encouraging developments in the hedge market.

Click on banner to access: