History of electricity governance
We were established on 1 November 2010 under the Electricity Industry Act 2010 and tasked with governing the electricity market.
The Electricity Authority Te Mana Hiko is an independent Crown entity that was established on 1 November 2010 under the Electricity Industry Act 2010.
The Electricity Authority was created following a 2009 Government electricity market review, after which it was decided to improve governance by:
- abolishing the Electricity Commission and replacing it with the Electricity Authority;
- establishing a Security and Reliability Council to monitor the system operator's performance and advise on security of supply; and
- transferring responsibility for grid upgrade approvals to the Commerce Commission.
You can see a timeline of electricity governance from pre-1980s to our establishment in 2010 below.
History of electricity governance
The Electricity Authority was established as a result of the Electricity Industry Act 2010.
The Act provided a new framework for the regulation of the electricity industry. It disestablished the Electricity Commission and replaced it with the Electricity Authority. It also allowed lines businesses back into retailing, incorporated revised continuance of supply provisions and reconfigured some assets of the three State owned generators (Genesis Energy, Meridian Energy and Mighty River Power).
A Government review of New Zealand’s electricity system was conducted. The outcome was a range of initiatives designed to improve competition and constrain price increases, increase security of supply, and ensure effective governance. Most of these initiatives were contained in the Electricity Industry Bill 2009 (enacted in 2010).
In May, the Government established the first electricity regulator, the Electricity Commission, under the Electricity Act 1982. A Government Policy Statement on Electricity Governance set the objectives and outcomes that the Government expected of the Electricity Commission.
In December, new Electricity Governance Rules and Regulations came into effect and terminated the former operations under the New Zealand Electricity Market and the Metering and Reconciliation Information Agreement (the predecessor to the Electricity Industry Participation Code 2010).
Electricity Corporation of New Zealand
The Electricity Corporation of New Zealand was created as a company under the State-Owned Enterprises Act 1986 to own and operate the generation and transmission assets of the Ministry of Energy. These assets are now in the hands of Transpower, Meridian, Genesis and Mercury.
First Government decisions on reform
The Government announced its decision to reform the generation and transmission sectors of the electricity industry. This included:
- Firstly, the separation of operational electricity functions, which resulted in the creation of the Electricity Corporation of New Zealand Limited.
- Secondly, the creation of a light-handed regulatory regime. Industry self-regulation progressed during the 1990s with the industry setting up its own body, the Electricity Governance Board and creating some rules eg, the Metering and Reconciliation Information Agreement 1994, the New Zealand Electricity Market 1996 and the Multilateral Agreement on Common Quality Standards 1999. (These all form the basis of the current Electricity Industry Participation Code 2010.)
- Thirdly, the corporatisation of the Electricity Supply Authorities, our current day retailers and distributors.
Review of Crown’s role
A major inter-departmental review of the Crown’s role in the electricity industry was carried out.
Ministry of Energy
The New Zealand electricity system was controlled by central government. The Ministry of Energy was responsible for electricity generation, transmission and regulation.