Electricity Industry Participation Code 2010

• (1) The purpose of this Part is to promote competition in the electricity industry by restricting relationships between a distributor and a generator or a retailer, where those relationships may not otherwise be at arm’s length.
• (2) In general terms, this Part imposes rules in respect of distributors as follows:
  • (a) corporate separation and arm’s-length rules, if a person is involved both in a distributor and in either or both of—
    • (i) a generator with connected generation of more than 50 MW of generation connected to the distributor’s network; or
    • (ii) a retailer that retails more than 75 GWh per year to customers connected to the distributor’s network:
  • (b) distributor agreement rules, if—
    • (i) a connected retailer retails more than 5 GWh per year to customers connected to the distributor’s local network; or
    • (ii) a connected generator has connected generation of more than 10 MW of generation that is connected to any of the distributor’s networks:
  • (c) rules preventing payments to retailers in respect of the transfer of retail customers:
  • (d) no-discrimination rules that apply when distributors or specified persons pay dividends or rebates.
• (3) Subclause (2) is intended only as a guide to the general scheme and effect of this Part.

In this Part and Schedule 6A.1, unless the context otherwise requires,—

• (1) Every participant and specified person who carries on the business of distribution must carry on that business in a different company from the company that carries on the business of a connected generator or a connected retailer.
• (2) The following persons must comply, and ensure that the person’s businesses comply, with the arm’s-length rules:
  • (a) every distributor in respect of which there is a connected generator or a connected retailer, and any other participant involved in that distributor:
  • (b) a connected generator in respect of the distributor, and any other participant involved in the connected generator:
  • (c) a connected retailer in respect of the distributor, and any other participant involved in the connected retailer:
  • (d) a specified person who is involved in the distributor, and either a connected generator or a connected retailer in respect of the distributor.
• (3) In this clause, unless the context otherwise requires,—
• connected generator, in relation to a distributor, means a generator—
  • (a) that has connected generation of more than 50 MW of generation that is connected to any of the distributor’s networks; and
  • (b) in respect of which the distributor, or any other person involved in the distributor, is involved
• connected retailer, in relation to a distributor, means a retailer—
  • (a) that is involved in retailing more than 75 GWh of electricity in a financial year to customers who are connected to any of the distributor’s networks; and
  • (b) in respect of which the distributor, or any other person involved in the distributor, is involved.

• (1) Every distributor in respect of which there is a connected retailer or a connected generator must—
  • (a) have a comprehensive, written distributor agreement that provides for the supply of line function services and information to the connected retailer or connected generator (as the case may be); and
  • (b) ensure that the terms of that distributor agreement do not discriminate in favour of one business and do not contain arrangements that include elements that the business usually omits, or omit elements that the business usually includes, in distributor agreements with parties that are—
    • (i) connected or related only by the transaction or dealing in question; and
    • (ii) acting independently; and
    • (iii) each acting in its own best interests; and
  • (c) operate in accordance with that distributor agreement; and
  • (d) publish that distributor agreement and provide it to the Authority.
• (2) A distributor agreement required by subclause (1)(a) must be entered into, in the case of a business to which the corporate separation rule does not apply, as if the distribution business and the connected retailer or connected generator were separate legal persons.
• (3) In this clause, unless the context otherwise requires,—
• connected generator, in relation to a distributor, means a generator—
  • (a) that has connected generation of more than 10 MW of generation that is connected to any of the distributor’s networks; and
  • (b) in respect of which the distributor, or any other person involved in the distributor, is involved
• connected retailer, in relation to a distributor, means a retailer—
  • (a) that is involved in retailing more than 5 GWh of electricity on the distributor’s local network in a financial year to customers who are connected to that network; and
  • (b) in respect of which the distributor, or any other person involved in the distributor, is involved
• local network means a network operated by a distributor in a contiguous geographic area or areas.
• (4) A distributor required to have a distributor agreement under this clause must submit to the Authority a statement indicating whether, in the preceding calendar year,—
  • (a) the terms in the distributor agreement are a true and fair view of the terms on which line function services and information were supplied in respect of the retailing or generating to which the agreement relates; and
  • (b) this clause was otherwise fully complied with.
• (4A) The statement provided under subclause (4) must be:
  • (a) in the prescribed form;
  • (b) signed and dated by a director of the distributor and either—
    • (i) another director of the distributor; or
    • (ii) the distributor’s chief financial officer, or a person holding the equivalent position; or
    • (iii) the distributor’s chief executive officer, or a person holding the equivalent position; and
  • (c) submitted by 31 March in respect of the preceding calendar year.
• (4B) The statement provided under subclause (4) must be published by the distributor.
• (5) A distributor must not publish or provide the Authority with any information under this clause that, at the time the information was published or provided, was false or misleading in a material particular.

• (1) A distributor, and any other person listed in subclause (2), must not pay, or offer to pay, any consideration to a retailer in respect of the transfer to a connected retailer of any retail customers who are connected to the distributor’s networks.
• (2) The following persons must comply with subclause (1):
  • (a) the distributor and any other participant involved in the distributor:
  • (b) a connected generator in respect of the distributor and any other participant involved in the connected generator:
  • (c) a connected retailer in respect of the distributor and any other participant involved in the connected retailer:
  • (d) a specified person who is involved in the distributor and either a connected generator or connected retailer in respect of the distributor.
• (3) To avoid doubt, subclause (1) includes a prohibition on—
  • (a) any agreement to acquire the assets or voting securities of another retailer (regardless of whether any, or only nominal, consideration is attributed to customers) as a result of which there is a transfer of responsibility for retailing electricity to customers; and
  • (b) any consideration that is directly or indirectly or in whole or in part in respect of the transfer of any of another retailer’s customers or customer accounts.
• (4) [Revoked]
• (5) In this clause,—
  • agreement has the same meaning as in clause 10 of Schedule 2 of the Act
  • connected generator has the same meaning as in clause 6A.4
  • connected retailer has the same meaning as in clause 6A.4.

• (1) This clause applies if a distributor has a connected retailer.
• (2) Every person listed in subclause (3) must ensure that any rebates or dividends or other similar payments paid do not discriminate between—
  • (a) customers of the connected retailer; and
  • (b) customers of other retailers where those customers are connected to the distributor’s networks.
• (3) The persons are—
  • (a) the distributor, and any director of the distributor who is involved in the connected retailer; and
  • (b) any customer trust or community trust that is involved in the distributor and the connected retailer, and the trustees of that consumer trust or community trust; and
  • (c) any customer co-operative that is involved in the distributor and the connected retailer, and the directors of that customer co-operative.
• (4) In this clause, connected retailer has the same meaning as in clause 6A.4.
• (5) [Revoked]

• (1) Each distributor referred to in clause 6A.4(1) (distributor agreements) must disclose the quantity of electricity sold each financial year by connected retailers to customers who are connected to its local network (within the meanings in that clause).
• (2) The disclosure must be made in a statement to the Authority within 2 months after the end of the financial year.
• (3) The statement provided under subclause (2) must be:
  • (a) in the prescribed form; and
  • (b) signed and dated by a director of the distributor and either—
    • (i) another director of the distributor; or
    • (ii) the distributor’s chief financial officer, or a person holding the equivalent position; or
    • (iii) the distributor’s chief executive officer, or a person holding an equivalent position.
• (4) The statement provided under subclause (2) must be published by the Authority and the distributor.
• (5) A distributor must not publish or provide the Authority with any information under this clause that, at the time the information was disclosed, was false or misleading in a material particular.

• (1) Each person referred to in clause 6A.3(2) must provide to the Authority, no later than 31 March in each year, a statement confirming whether the person has complied with all of the arm’s-length rules during the preceding calendar year.
• (1A) The statement provided under subclause (1) must be:
  • (a) in the prescribed form; and
  • (b) unless subclause (1B) or (1C) applies, signed and dated by a director of the participant and either—
    • (i) another director of the participant; or
    • (ii) the participant’s chief financial officer, or a person holding the equivalent position; or
    • (iii) the participant’s chief executive officer, or a person holding an equivalent position.
• (1B) If the person providing the statement under subclause (1) is a natural person, the statement must be signed and dated by that person.
• (1C) If the person providing the statement under subclause (1) is a specified person but is not a natural person, the statement must be signed and dated by an authorised representative of that specified person.
• (2) Statements provided under subclause (1) must be published by the Authority and, if the person who provided the statement is a participant, the participant.
• (3) A person must not publish or provide the Authority with any information under this clause that, at the time the information was published or provided, was false or misleading in a material particular.

• (1) A specified person may apply to the Authority for a Part 6A dispensation in respect of their involvement in two or more classes of industry participant that are the subject of this Part, or specific provisions of this Part.
• (2) The application must be submitted in the form and by the means specified by the Authority.
• (3) Where the Authority receives an application under this clause, it may grant a Part 6A dispensation to a specified person if the Authority is satisfied that—
  • (a) it is not necessary, for the purpose of achieving the Authority’s objectives under section 15 of the Act, for the specified person to comply with this Part or the specific provisions of this Part; or
  • (b) granting a Part 6A dispensation in respect of the specified person would better achieve the Authority’s objectives than requiring compliance.
• (4) The Authority must give reasons for its decision under subclause (3).
• (5) The Authority may grant a Part 6A dispensation on any terms or conditions that it reasonably considers are necessary.
• (6) The Authority may amend or revoke a Part 6A dispensation granted under subclause (3) by issuing a notice that identifies the specified person subject to the Part 6A dispensation and gives reasons for the amendment or revocation, but only if the Authority—
  • (a) has given notice of the proposed amendment or revocation to the specified person subject to the Part 6A dispensation and given them a reasonable opportunity to comment; and
  • (b) in relation to an amendment, is satisfied that the amendment is necessary or desirable for the purpose of achieving the Authority’s objectives in section 15 of the Act; and
  • (c) in relation to a revocation, is no longer satisfied of the matters in subclause (3).
• (7) The Authority must publish a list of all current Part 6A dispensations granted under this clause.