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Enabling investment and innovation
Open Consultation

Default distributor agreements

The main purpose of default distributor agreements is to promote competition in the retail electricity market and promote the efficient operation of the electricity industry.

  • Distribution
  • Legal

    • Open consultation

    Proposed changes to the default distributor agreement

    Submissions due by 31 July 2024

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    Overview

    In July 2020, the Electricity Authority amended the Electricity Industry Participation Code 2010 to introduce templates containing default terms that make it easier for distributors and traders to enter contracts for distribution services, data exchange and dividend payments.

    We consider improvements can be made to two of these templates – the default distributor agreement (DDA) template and the consumption data template.

    Our proposals are designed to lower costs for consumers by encouraging more competition in the electricity market and support more efficient processes that can minimise operational costs flowing through to consumers. The proposals also incentivise distributors to minimise disruption to their networks, which can lead to a more reliable service for consumers.

    In October 2023, we consulted on amendments to these two templates. During that consultation, stakeholder feedback led us to make material changes to two of the proposals we originally consulted on, and propose two new clauses.

    We now welcome your feedback on a follow-up consultation on these final four proposals to ensure they are workable for distributors and retailers, and will benefit consumers.

    Timeline

    Past activity

    Project background

    In 2012 the Electricity Authority finalised a new model use-of-system agreement to facilitate more standardised agreement or to enable alternative methods of standardisation to improve retail competition and efficiency.

    We noticed that retailers and distributors were having issues with singular use-of-system agreements as specified in the Electricity Industry Participation Code 2010. These specific agreements required negotiation and incurred costs and time to finalise contracts and agreements.

    A singular default distributor agreement system would significantly reduce the time and effort for retailers and distributors to finalise an agreement for operations on their network.

    Throughout the consultation process, we engaged with retailers and distributors to develop policy and amendments to the Code that outline standardised agreement terms between retailers and distributors. These agreements being standardised, result in more efficient outcomes for consumers and a lower cost and effort for distributors and retailers to negotiate contracts.

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