Annual review of the System Operator’s performance

As New Zealand’s electricity regulator, the Electricity Authority Te Mana Hiko is responsible for the settings under the Electricity Industry Participation Code. We define the System Operator’s functions, including performance and transparency requirements, and monitor the System Operator’s compliance with the Code and the Electricity Industry Act.

Every year we review the System Operator’s performance and we have completed an assessment for the period 1 July 2024 to 30 June 2025.

Overall, we are satisfied with the System Operator’s day-to-day business during this period. It operated and responded well to power system events throughout the year, the most notable being the Hawke’s Bay under-frequency event of 21 December 2024.

We are also satisfied that the System Operator addressed the recommendations made in the 2023/24 performance report and engaged with stakeholders at a high level.

We have 10 recommendations for the System Operator for the 2025/26 financial year:

1. Focus on the evolution of the system operation function through its strategy development. This should include (but not be limited to): information technology strategic roadmap, future planning for systems, control room of the future, workforce development and retention.
2. Provide more detailed information on situations where impartiality issues arise, either in the monthly reporting or otherwise, including the detail of the specific situation, the internal processes applied, and actions taken.
3. Make use of the Service Enhancement Capex project funding option available under the SOSPA to ensure that major tool enhancements can be accommodated in a timely manner with appropriate funding.
4. Discuss with the Authority performance metrics proposed by the Authority related to IT systems, with the aim to agree these metrics with the Authority and implement them in the 2026/27 financial year. This will ensure the Authority and market participants have assurance that systems are performing as required.
5. Work with the Authority to clarify roles and responsibilities for planning and running future industry exercises.
6. Continue to encourage the Grid Owner to plan and promote operational discipline to optimise maintenance and reduce development-driven outages on the grid.
7. Prepare and publish discussion papers on a wider range of topics.
8. Proactively make suggestions to improve content or reporting where appropriate; in particular, the Authority suggests the following are addressed for improved content: the performance of Ancillary Services to include more than just cost performance; and system frequency and voltage reporting to include more than the minimum requirements in the Code.
9. Ensure its strategy informs future performance metrics by considering the needs of the System Operator, the Authority, and industry.
10. Provide reporting on actionable insights or lessons learned from international engagements to help the Authority understand what could be implemented in New Zealand.