Message from our Chair, Anna Kominik
I am a firm believer in the power of conversations and in my first three months as Chair of the Electricity Authority Te Mana Hiko, I have been spending time with a wide range of sector groups. All have a strong interest in New Zealand’s energy future and in making sure our work as a regulator delivers to New Zealanders and New Zealand.
It’s not news that Aotearoa’s electricity system is transforming at an unprecedented scale and pace. The opportunities are significant, as are the immediate and emerging challenges. Existing regulation needs to keep up with a system that is fundamentally changing.
The key emerging themes are consistent with those heard during previous stakeholder engagements: understanding our changing operating environment; a consumer focus; independence; and balancing the focus between innovation and enforcement. Importantly, there is also a strong desire for the Authority to have an eye on the big picture and be clear about how to support all consumers in the transition to an electrified future.
From my perspective, I want to see the Authority as an exemplar modern regulator. I believe that a good electricity industry regulator needs to be a guardian of consumer interests, building a healthy regulatory environment for all participants while ensuring sector players operate responsibly at all times. We achieve this through a combination of clear regulations, active enforcement, convening and education, and adaptability to change. We recognise we are one player among many but we have an important role as the regulator, and delivering on that means being clear about what we are doing and why.
The Authority faces quite a different environment from when it was established, and will face a challenge without some level of increase in funding. The Authority is struggling to keep up, let alone support the future. There is no doubt the Authority needs to work differently to keep the power on and ensure market rules enable, rather than hinder, better outcomes. We need to shift a gear to provide regulatory certainty to enable an efficient transition at the least cost for the people of New Zealand. We need to respond to consumers who want affordable, reliable and sustainable energy options now and in the future.
The electricity system already has a strong foundation and we are committed to support the evolution of the industry and electricity markets. We want to work more closely and collaboratively with our sector - with regulated parties, agencies and consumer voices - to deliver what the industry and consumers need from us in the short, medium and long-term.
Collaboration will get us part of the way, but it is also clear that the Authority’s need and desire to change is constrained by current funding levels. Before this financial year, our baseline funding increased by less than 1.5% per annum (from 2012-23) not accounting for inflation, while third-party market operation service provider costs increased (~70% of appropriation) and continue to rise. This has directly reduced funding for essential operations - and it shows.
While our reporting and monitoring is strong in some areas, it is not as strong as any of us would like in others. Together with all our government and sector partners, we need good evidence (both quantitative and qualitative) to make good decisions.
The Authority has been funded for an electricity industry of the past. We no longer have the benefit of time, or a steady environment, in which to develop and implement incremental reform. Acting now is a priority, as the transition is here.
Our CE Sarah Gillies and I intend the Authority to be clear about how we are prioritising our efforts and making sure that our engagement is broad and inclusive.
In the coming months we will be working to improve the regulatory settings for distribution networks; progressing work on the future security and resilience of the system while responding to immediate and potential winter pressures; and diving deeper into the retail market.
Already, we have changed the way we consult to communicate better about what consultations are coming up and making it easier to provide feedback. It has been great to see an immediate impact, with hundreds of submissions received during the recent consumer care guidelines consultation process. Thank you to everyone who took the time to respond. We want to keep up this momentum and welcome the continued value you bring to our work through your insights and ideas.
We are also building in regular updates so the sector and interested parties can hear about our workplans and projects, our compliance work and our team can answer any questions. The first open online forum is on Thursday 19 October at 2pm, with Sarah and our policy and compliance managers.
Our intention is to sustain the positive momentum being created, acknowledging your active participation, valuable insights, and creative ideas are crucial in delivering positive outcomes for New Zealand.
Ngā mihi nui,
Chair, Electricity Authority Te Mana Hiko
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