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 Electricity Industry Act.

We review the System Operator’s performance and have completed an assessment for the period 1 July 2023 to 30 June 2024.

Overall, we are generally satisfied with the System Operator’s day-to-day business during this period. The System Operator operated and responded well to power system events throughout the year.

We have eight recommendations for 2025:

1. The System Operator clearly demonstrates and communicates line of sight between its strategic plan and other planning and delivery artefacts such as the ICT roadmap, capex roadmap, capex plan, and business plan. The System Operator should explicitly show how investment and prioritisation decisions are driven by the System Operator focus areas (and any other parameters).
2. The System Operator tests its strategy, and particularly its strategic risks, opportunities, and focus areas with market participants. Feedback from engagement with smaller, less traditional participants and recent entrants to the market would be of particular value.
3. The System Operator and Electricity Authority continue to work together to refine communications issues and responsibilities for security of supply and power system events to maintain public confidence in the electricity system. This relates to communications to the industry and communications between the System Operator and the Electricity Authority.
4. The System Operator communicates lessons learned and improvements implemented after power system events, as well as improvements to tools (eg, dispatch from back up tools, failure to publish schedules).
5. The System Operator formally reports all issues in its tools and cybersecurity through the correct channels and includes (where appropriate and not confidential) these issues in the published monthly reports.
6. The System Operator continues to improve information used in the Security of Supply Assessment where this is available (noting the system operator has the flexibility under clause 7.3(2C) of the Code to deviate from the assumptions in the Security Standards Assumptions Document).
7. The System Operator shares the results and actions of its regular critical control risk reviews with the Electricity Authority going forwards. The System Operator regularly conducts reviews, but the Electricity Authority currently has no visibility of the completed reviews or resulting actions.
8. The System Operator proactively analyses, identifies, and alerts the Electricity Authority to information it needs, and from which participants, to effectively manage the electricity system.

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