π’ Electricity Commission
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- Directory of Official Information December 2009, Ministry of Justice website, http://www.justice.govt.nz/publications/global-publications/d/directory-of-official-information-december-2009 (accessed 3 November 2010).
- Electricity Authority website, http://www.ea.govt.nz/ (accessed 3 November 2010).
- Electricity Commission website, http://www.electricitycommission.govt.nz/
- Electricity Governance Establismnet Project website, http://www.egb.co.nz/
- Ministry of Economic Development, http://www.med.govt.nz/ers/electric/establishment/
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[history] => Establishment
The Electricity Commission was established as a Crown Entity that was responsible for providing oversight of New Zealand's de-regulated electricity market in May 2003. The Commission was established under the Electricity Act 1992 (as amended by the Electricity Amendment Act 2001), after the electricity industry failed to agree a set of rules for governing the supply of electricity within New Zealand.
Efforts towards industry self-regulation had been underway since the release of a Government Policy Statement on the industry in December 2000. An industry group, the Electricity Governance Establishment Committee, was set up at that time to develop an integrated set of self-regulatory arrangements (the Rulebook) which would then be put to a referendum voted on by the members of the electricity sector. The referendum was held in April and May 2003 but failed to gain majority approval. At the same time as the failure of this referendum there were growing concerns about the existing supply structure of New Zealand's hydro dominated electricity system. Following a drought in the summer of 2002-2003, which had required significant nation-wide energy conservation efforts, fears were raised that the existing electricity sector regime did not provide enough incentives or inducements to ensure the security of electricity supply in dry years.
The initial work on the establishment of the Commission was undertaken by the Ministry of Economic Development's Electricity Commission Establishment Unit. The Commission was tasked with providing oversight of the operation and governance of the electricity market in accordance with the rules and regulations under the Electricity Act 1992. These rules and regulations were based on the Rulebook developed by the Electricity Governance Establishment Committee but modified to reflect the move to a statutory regime. The operation of the electricity market under the new Electricity Governance Rules and Regulations commenced from 1 March 2004.
Functions and Responsibilities
The functions of the Electricity Commission were to:
-
formulate and make recommendations concerning electricity governance regulations and rules;
-
administer, monitor compliance with, investigate, enforce, and apply penalties or other remedies for contraventions of electricity governance regulations and rules;
-
establish, operate, and facilitate the operation of markets for industry participants or consumers, or both;
-
use reasonable endeavours to ensure security of supply (including contracting for reserve energy), without assuming any reduction in demand from emergency conservation campaigns, while minimising distortions to the normal operation of the market;
-
undertake forecasting and modelling of future electricity supply and demand;
-
promote and facilitate the efficient use and conservation of electricity (including funding programmes that provide incentives for cost-effective energy efficiency and conservation);
-
manage emergency conservation campaigns to avoid material risk of supply shortages;
-
approve one or more complaints resolution system for the purpose of section;
-
develop best practice methodologies and other standards and model agreements for use by industry participants;
-
give effect to Government Policy Statement (on Electricity Governance) objectives and outcomes;
-
provide advice to the Minister on matters concerning the electricity industry.
In addition to the requirements of Act the Commission was also required to operate in a manner that was consistent with the current Government's Policy Statement on the sector, which outlined the Government's expectations for the effective operation of the electricity market and identified three priority areas:
-
Security of supply and reserve generation;
-
Priority investment in the transmission grid;
-
Hedge market arrangements and demand-side participation.
Structure
The Commission comprised a board of 6 commissioners including the Chair of the Board. In November 2003 a draft work programme for the period ending 30 June 2005 was adopted to facilitate the development of policy and determine future operational requirements as the Commission took on more governance responsibilities. In addition on 29 March 2004 the Commission established six advisory groups to provide advice to the Commission. These were the:
-
Wholesale Market Advisory Group;
-
Retail Market Advisory Group;
-
Transmission Advisory Group;
-
Transmission Pricing Advisory Group;
-
Security of Supply Advisory Group;
-
Common Quality Advisory Group.
Disestablishment
A review of the performance of the electricity market was initiated on 1 April 2009 and led by an independent Electricity Technical Advisory Group, appointed by the Minister for Energy and Resources, with assistance from officials from the Ministry of Economic Development. The objective of the review was to look at ways to improve the performance of the electricity market and its institutions and governance arrangements in order to better achieve the government’s objectives for the electricity sector.
On 9 December 2009 the Minister announced the outcome of the review, with the Government agreeing to 29 new measures to improve electricity market performance including the replacement of the Commission with an Electricity Market Authority, which would focus on market facilitation, monitoring and rule making.
Under the provisions of the Electricity Industry Act 2010 the Electricity Commission was disestablished on 31 October 2010, the Electricity Authority inheriting some of its functions the following day.
Show History
Establishment
The Electricity Commission was established as a Crown Entity that was responsible for providing oversight of New Zealand's de-regulated electricity market in May 2003. The Commission was established under the Electricity Act 1992 (as amended by the Electricity Amendment Act 2001), after the electricity industry failed to agree a set of rules for governing the supply of electricity within New Zealand.
Efforts towards industry self-regulation had been underway since the release of a Government Policy Statement on the industry in December 2000. An industry group, the Electricity Governance Establishment Committee, was set up at that time to develop an integrated set of self-regulatory arrangements (the Rulebook) which would then be put to a referendum voted on by the members of the electricity sector. The referendum was held in April and May 2003 but failed to gain majority approval. At the same time as the failure of this referendum there were growing concerns about the existing supply structure of New Zealand's hydro dominated electricity system. Following a drought in the summer of 2002-2003, which had required significant nation-wide energy conservation efforts, fears were raised that the existing electricity sector regime did not provide enough incentives or inducements to ensure the security of electricity supply in dry years.
The initial work on the establishment of the Commission was undertaken by the Ministry of Economic Development's Electricity Commission Establishment Unit. The Commission was tasked with providing oversight of the operation and governance of the electricity market in accordance with the rules and regulations under the Electricity Act 1992. These rules and regulations were based on the Rulebook developed by the Electricity Governance Establishment Committee but modified to reflect the move to a statutory regime. The operation of the electricity market under the new Electricity Governance Rules and Regulations commenced from 1 March 2004.
Functions and Responsibilities
The functions of the Electricity Commission were to:
-
formulate and make recommendations concerning electricity governance regulations and rules;
-
administer, monitor compliance with, investigate, enforce, and apply penalties or other remedies for contraventions of electricity governance regulations and rules;
-
establish, operate, and facilitate the operation of markets for industry participants or consumers, or both;
-
use reasonable endeavours to ensure security of supply (including contracting for reserve energy), without assuming any reduction in demand from emergency conservation campaigns, while minimising distortions to the normal operation of the market;
-
undertake forecasting and modelling of future electricity supply and demand;
-
promote and facilitate the efficient use and conservation of electricity (including funding programmes that provide incentives for cost-effective energy efficiency and conservation);
-
manage emergency conservation campaigns to avoid material risk of supply shortages;
-
approve one or more complaints resolution system for the purpose of section;
-
develop best practice methodologies and other standards and model agreements for use by industry participants;
-
give effect to Government Policy Statement (on Electricity Governance) objectives and outcomes;
-
provide advice to the Minister on matters concerning the electricity industry.
In addition to the requirements of Act the Commission was also required to operate in a manner that was consistent with the current Government's Policy Statement on the sector, which outlined the Government's expectations for the effective operation of the electricity market and identified three priority areas:
-
Security of supply and reserve generation;
-
Priority investment in the transmission grid;
-
Hedge market arrangements and demand-side participation.
Structure
The Commission comprised a board of 6 commissioners including the Chair of the Board. In November 2003 a draft work programme for the period ending 30 June 2005 was adopted to facilitate the development of policy and determine future operational requirements as the Commission took on more governance responsibilities. In addition on 29 March 2004 the Commission established six advisory groups to provide advice to the Commission. These were the:
-
Wholesale Market Advisory Group;
-
Retail Market Advisory Group;
-
Transmission Advisory Group;
-
Transmission Pricing Advisory Group;
-
Security of Supply Advisory Group;
-
Common Quality Advisory Group.
Disestablishment
A review of the performance of the electricity market was initiated on 1 April 2009 and led by an independent Electricity Technical Advisory Group, appointed by the Minister for Energy and Resources, with assistance from officials from the Ministry of Economic Development. The objective of the review was to look at ways to improve the performance of the electricity market and its institutions and governance arrangements in order to better achieve the government’s objectives for the electricity sector.
On 9 December 2009 the Minister announced the outcome of the review, with the Government agreeing to 29 new measures to improve electricity market performance including the replacement of the Commission with an Electricity Market Authority, which would focus on market facilitation, monitoring and rule making.
Under the provisions of the Electricity Industry Act 2010 the Electricity Commission was disestablished on 31 October 2010, the Electricity Authority inheriting some of its functions the following day.
- Directory of Official Information December 2009, Ministry of Justice website, http://www.justice.govt.nz/publications/global-publications/d/directory-of-official-information-december-2009 (accessed 3 November 2010).
- Electricity Authority website, http://www.ea.govt.nz/ (accessed 3 November 2010).
- Electricity Commission website, http://www.electricitycommission.govt.nz/
- Electricity Governance Establismnet Project website, http://www.egb.co.nz/
- Ministry of Economic Development, http://www.med.govt.nz/ers/electric/establishment/
- Crown Entities Act 2004
- Electricity Amendment Act 2001
- π’ Electricity Authority (2010 ‑ )
- π Energy and Resources (2008 ‑ )
- π Infrastructure (1) (2008 ‑ 2011)
- π Energy (1977 ‑ 2008)
- π Realm of New Zealand (2003 ‑ 2010)