9. Distribution
Pricing Methodologies
116. The Commission should develop, in consultation with interested parties, principles or model approaches to distribution pricing and monitor their uptake. The Commission should recommend regulations if required to ensure compliance. As part of this work the Commission should investigate barriers to demand side participation.
117. The diversity and complexity of the terms and conditions offered by different lines companies for use of their lines is often cited as a significant barrier to expansion of retail competition. The Government considers that greater standardisation and simplification of tariff schedules and contractual arrangements will facilitate market entry by retailers.
118. The Government expects distribution companies to keep any changes to rural line charges in line with changes to urban line charges. The Commission should monitor developments in rural charges.
Use of System Agreements
119. The Commission should ensure reasonable terms and conditions for model use of system agreements for use of distribution lines. The Commission should monitor uptake of model use of system agreements, and review these model agreements from time to time to ensure that they remain effective and up-to-date with current market issues. If the Commission thinks it necessary and beneficial, it may also recommend regulations. Arrangements should take into account the interests of consumers, retailers and distributors and should be consistent with:
- arrangements for connecting distributed generation to distribution networks (described later)
- obligations imposed on retailers as a result of arrangements relating to contracts between retailers and consumers
- arrangements covering distribution pricing methodologies
- arrangements for the use of ripple control for load management
- any other regulations promulgated under the Electricity Act 1992.
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