Our plan for 1 July 2017–30 June 2018 Statement of Performance Expectations
An introduction from our Chair
Our Statement of Performance Expectations (SPE) outlines our plan for the 2017/18 financial year. It includes information about our programmes and our business-as-usual functions, as well as our forecast financial statements.
The SPE is a partner document to our Statement of Intent 2017–2021 (SOI) published in June 2017. The SOI sets out our long-term strategic intentions for a four-year period, while the SPE details our planned work and financial forecasts for the first year of the period covered by our new SOI.
This SPE has been informed by the submissions we received on the consultation regarding our 2017/18 appropriations and work programme. It outlines how we plan to use each of our appropriations and what we are aiming to achieve.
We also publish a more detailed work programme on our website, setting out our projects and key deliverables for the 2017/18 year.
Our journey so far
We were established in November 2010 and by November 2011 we had addressed the issues required by section 42 of the Electricity Industry Act 2010 (the Act). These changes were primarily about initiatives to improve reliability of supply and enhance retail market competition.
During the following years we focused on further initiatives to enhance competition in both the retail and wholesale electricity markets. In the last couple of years we have focused on the efficient operation of the electricity industry, primarily in regard to establishing more efficient pricing of transmission and distribution services.
In 2016/17 we shifted our strategic focus significantly, in response to potential security of supply issues and rapidly advancing improvements in new technology and rapidly falling prices for many of those technologies. As a result of the new strategic direction, we decided to re-orient the structure and presentation of our work programme. We also decided to re-orient our advisory groups, because new technology and business models are increasingly blurring the traditional demarcation between retail, distribution, transmission and wholesale market activities.
We made a significant shift in our strategic focus last year, and in doing so created a solid foundation to guide and drive our work. We will continue to follow this course in 2017/18, as discussed further under the ‘What we do’ section.
We are focused on removing any unwarranted barriers to market entry, expansion, exit, innovation and technological change. This includes increasing the scope for competitive provision of support services to distribution and transmission businesses. Likewise, we want to improve consumers’ access to and participation in markets, and remove unwarranted barriers to consumers and their agents (eg, energy services companies) obtaining accurate information when they want it.
We are focused on creating the conditions for more efficient prices in the market, and ensuring price-related information is readily available. In particular, we will continue to support and encourage Transpower and distributors to implement changes to their pricing structures.
We are focused on developing the hedge market to provide new products for market participants to manage their price risks, and provide better price signals about future supply risks and more options for parties to respond in ways that address those risks. Similarly, we are focused on making it easier for the market and participants to respond to changing market conditions or adverse events.
Our strategy will continue to evolve as our operating environment changes and develops. We are driven by section 15 of the Electricity Industry Act, which requires the Authority to promote competition in, reliable supply by, and the efficient operation of the electricity industry for the long-term benefit of consumers.
Dr Brent Layton
Statement of Responsibility
The Crown Entities Act 2004 requires the Electricity Authority to prepare a Statement of Performance Expectations, including prospective financial and non-financial information, before the start of each year, to promote our accountability to the public. The prospective financial and non-financial information may not be appropriate for any other purpose and is unaudited.
We acknowledge responsibility for the preparation of the prospective financial and non-financial performance statements included in this Statement of Performance Expectations for 1 July 2017–30 June 2018. This includes the appropriateness of the assumptions underlying the prospective financial statements and all other required disclosures, pursuant to the Crown Entities Act 2004.
We acknowledge the responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of the Authority’s performance and financial reporting.
In our opinion, the prospective statements fairly reflect the forecast financial position of the Authority at 30 June 2018, and results of our financial and service performance for the period ending on that date. We therefore authorise the issue of the prospective statements.
Dr Brent Layton