Exciting new technologies are giving consumers more choice and are transforming the ways they use electricity. We expect the benefits to consumers to be significant. More efficient distribution pricing plays an important role in achieving these benefits.

In October 2016, we wrote to distributors to outline our expectations for the industry-led approach for adopting more efficient distribution pricing and requesting each distributor publish a ‘roadmap’ for moving to more efficient pricing by 1 April 2017.

All distributors responded to our request to develop roadmaps. These are available on the Electricity Network Association website.

Electricity Network Association website

We have completed an overview and summary of these roadmaps and we have written to distributors, the Electricity Networks Association and the Electricity Retailers Association of New Zealand to outline our views on the roadmaps and discuss what we see as the next steps for the distribution pricing project.

The initial roadmaps are a good first step

We are encouraged by distributors’ progress towards more efficient distribution pricing.

It is in distributors’ best interests to adopt more efficient pricing structures and the roadmaps are a good first step towards industry-wide adoption of more efficient distribution price structures. The roadmaps provide us and other industry stakeholders, especially retailers and consumers, with greater visibility about when and how distribution price structures will change.

There is still a lot of work to be done

There is still a lot to be done. Roadmaps set out the path that distributors plan on taking. These plans need to be further developed in many cases and then implemented.

A number of issues have come to light that need to be addressed. These include:

  • timeline for change – change needs to occur as soon as practicable 
  • more cooperation between distributors and retailers – more cooperation is needed between distributors and retailers on communications with consumers. We are encouraged by the work distributors and retailers have undertaken to ensure consumers are appropriately informed about price changes that may result
  • further consideration is required on a number of issues - we support current efforts to establish a joint retailer/distributor working group to further consider and address some issues including implementation issues.

We will consult on the voluntary distribution pricing principles and the associated information disclosure guidelines

The voluntary distribution pricing principles and the associated information disclosure guidelines are a market facilitation measure introduced by the Electricity Commission in 2009. We are reviewing these and expect to consult on them later in the financial year.

Authority monitoring and reporting

The Authority will monitor the progress of:

  • distributor and retailer collaboration on technical and implementation matters
  • individual distributors adopting more efficient pricing, including providing six-monthly progress updates.