Distributed unmetered load non-compliances
This case study looks at some common compliance issues with distributed unmetered load (DUML) audits. We discuss the impact these issues create for the industry.
Inaccuracies in data can lead to distorted settlements and increased costs for participants and, ultimately, consumers.
Background
The Electricity Industry Participation Code 2010 (Code) requires certain participants to undergo audits under Parts 15 and 16A. The objective of the audit regime is to uphold accuracy, transparency and fairness in market operations.
A DUML database logs information on unmetered assets such as streetlights, billboards, traffic lights and other electrical loads connected to an installation control point (ICP). The information in the database is used to reconcile the unmetered load. Reconciliation is the check and match of data with the amount of electricity delivered to buyers and the amount supplied by generators. This process also adjusts, calculates and distributes any electricity invoicing that isn't accounted for.
Reconciliation is completed by the reconciliation manager. Retailers are responsible for ensuring that their DUML databases are audited by an independent auditor.
Regular DUML audits ensure that information about unmetered assets is accurately recorded within the database and that the corresponding load is accurately reconciled with the reconciliation manager.
The three most common types of DUML related compliance issues are:
- timely audit submissions (clause 16A.26 & clause 15.37B(b)
- failure to ensure a database is accurate (clause 11 of schedule 15.3) and
- recording database changes as a monthly snapshot, instead of daily database updates as required under the Code (clause 11(3) of Schedule 15.3).
Some of the relevant Code provisions are outlined at the end of this case study.
Non-compliance impacts and the importance of audits
Accurate reconciliation of load is critical to the efficient operation of the industry. It helps the industry to plan ahead and make sure consumers are being charged appropriately for the electricity they consume.
When databases are not accurately maintained, this can lead to reconciliation issues and an inability to accurately determine actual load usage. Inaccurate submissions can lead to significant financial impacts to consumers, retailers, and other participants within the affected area.
Ensuring that the load is accurate helps other participants plan for the future. For example, for the planning of new LED streetlight rollouts, understanding network load requirements or simply knowing exactly what is, or isn’t, being consumed on the network in question.
Common non-compliance in distributed unmetered load
Audits submitted after the due date
Regular audits are crucial to understanding where issues exist in the industry. Audits must be submitted on time.
Audit deadlines are governed by two provisions in the Code, clauses 16A.26 and 16A.13(1). These clauses say that both the audit and the compliance plan must be submitted to the Electricity Authority Te Mana Hiko no later than the due date.
Timely submission of audits reduces the likelihood of undiscovered inaccuracies and builds trust and confidence in the industry. Audits give assurance to consumers, participants and the Authority that accurate data has been used in reconciliation of the unmetered load. This stems from the rigorous analysis of both the load recorded in the database, as well as in the field, to ensure the two match. If accuracy cannot be confirmed, the audits can demonstrate whether there are plans in place to make sure that errors are found and corrected quickly in future to limit and resolve the impact.
The late submission of an audit can prolong the period that incorrect volumes go undiscovered leading to a greater financial impact to the market and consumers.
Maintaining a complete and accurate database
Accurate records help prevent market distortions, ensuring fairness and transparency.
Clause 11 of Schedule 15.3 requires participants to maintain up-to-date DUML records, including asset attributes, load profiles, and location details. Participants must also make sure that they regularly update records. For example, databases need updating following asset works (eg, LED lighting upgrades).
Maintaining accurate and up-to-date databases supports accurate and equitable reconciliation. In some cases, inadequate updates lead to reconciliation errors that extend beyond the last opportunity to correct reconciliation data (in reconciliation period 14), imposing permanent costs on the wider market.
Providing data as a monthly snapshot
The Code requires DUML data in a daily record rather than a monthly snapshot. In 2019 we issued a memo to the industry explaining that monthly snapshots were no longer acceptable because daily record-keeping was now mandatory. While compliance has improved over time, some participants are continuing to use monthly snapshots.
The purpose of clause 11(3) of Schedule 15.3 is to ensure database accuracy. If participants do not verify database changes daily, submission errors can accumulate. These errors collectively create significant market-wide distortions and financial consequences for consumers and participants.
A hypothetical example illustrates this issue:
If a contractor replaces a council’s old sodium vapour lamps with LED lights over several weeks—amounting to 1000 load items—but the database extract fails to capture these changes daily, the reconciled volumes will be misaligned with the actual load. For example, if these 1000 items are 100W bulbs (assuming a 12-hour burn time per day) the consumption would be 36MWh a month. The same calculation for the replacement LEDs at 60W equals 21.6MWh a month. In turn, if we assume that the lights are replaced at the beginning of the month but not updated in the database for a month this leads to an over submission of approximately 14.4MWh for that month.
While an isolated light change in a single database may not appear to have a significant impact, when such discrepancies occur across multiple DUML databases — particularly in larger datasets — the cumulative effect is substantial. The more precise data offered by daily tracking improves the overall reconciliation process and benefits both retailers and consumers.
More information
It is each industry participant’s responsibility to comply with the Code. The Authority is here to support and advise. You can find out more information on the audit regime and Parts 15 & 16A of the Code at the following links and you can contact compliance@ea.govt.nz with any queries.
Distributed unmetered load audits | Electricity Authority
Electricity Authority – The Code, Part 15 (Reconciliation)
Electricity Authority – The Code, Part 16A (Audits)
Code provisions
Here are the relevant Code clauses as at 14 March 2025
Clause 15.37B(b) – Retailers to arrange for audits in respect of distributed unmetered load
Each retailer that is responsible for distributed unmetered load must arrange for an audit to be carried out in accordance with Part 16A in respect of the distributed unmetered load that verifies that—
…
(b) the information recorded in the retailer's distributed unmetered load database is complete and accurate;
Clause 11 of Schedule 15.3 – Distributed unmetered load
(1) A retailer must ensure that an up-to-date database is maintained for each type of distributed unmetered load for which it is responsible. The methodology for deriving submission information in the database must comply with Schedule 15.5.
Clause 11(3) of Schedule 15.3 – Distributed unmetered load
The database must track the time of additions and changes in a way that enables the total load in kW to be retrospectively derived for any day.
Clause 16A.26 – submitting DUML audits on time
(1) In relation to audits required under clause 15.37B, a retailer that is responsible for distributed unmetered load must ensure that—
(a) an initial audit is carried out in respect of the distributed unmetered load no later than three months after the date on which information about an ICP associated with the distributed unmetered load is first provided by the retailer to the reconciliation manager as submission information under clause 15.4; and
(b) further audits are completed as specified by the Authority under clause 16A.14.