| Submission |
Officials' Response |
| Para 116 – Genesis - First sentence suggests addition '…approaches to distribution pricing based on identified market failures and…'. Second and third sentences suggests deleting. |
No change – Commission will be reqruied to consult and do cost/benefit analysis for proposals. See paras 2-4. Second sentence deleted. 3rd sentence reflects government policy as outlined in the NZEECS. |
| Para 117 – Contact – concurs with objective of greater standardization and simplification of terms and conditions offered by lines companies for use of their lines. |
Noted. |
| Para 117 – Orion, KCE – Orion recommend deletion and note the government should take a cautious approach as the likely outcome of standardisation is that innovative solutions will be stifled and more economically efficient/cost reflective improvements would be hindered. KCE suggest this is an extremely anti-competitive move. New entrants and smaller retailers can utilise variability to create niches where they can out-compete the larger companies. |
Agree with comments that government should take a cautious approach. Text revised to suggest Commission investigate a solution, rather than prescribing one. |
| Para 118 – ENA – suggest add to end of sentence 'and should liaise with the Commerce Commission to ensure that any required revenues are recoverable by the distributor involved'. Distributors require an assurance that this cross subsidy will not be challenged or disallowed by the Commerce Commission. A policy that assures cross-subsidies to rural lines disadvantages other, potentially more economic, options such as remote area power systems. |
Noted - The GPS is issued as a section 26 statement under the Commerce Act, so the Commerce Commission is required to have regard to this in its work. |
| Para 118 – Marlborough Lines – do not believe this requirement is appropriate for supply to remote rural area, supplied by grossly uneconomic distribution lines. Consumers won't consider alternatives when the cost of line supply is held at an artificially low level. The clause should be drafted to allow the EC some flexibility for grossly uneconomic lines. |
Noted – paragraph reflects government policy on pricing. |
| Para 118 – Marlborough Lines – The government should delay finalisation of this clause until policy decisions made with respect to the future of section 62. |
Noted - GPS should not be held up pending resolution of other work programmes and will be amended if necessary once work is complete. |
| Para 118 – Genesis - First sentence revised to 'Distribution companies should…', rather than 'The Government expects distribution companies to…'. |
No change. This outcome is broader than the work of the Commission. |
| Para 119 – Meridian – It has been some time since the UoSA were updated. Given these UoSA are likely to become more important as lines companies become more active in generation, Meridian submits these agreements should be reviewed and updated. |
Noted – GPS already requires EC to review model contracts to ensure they remain effective and up to date with current market issues. |
| Para 119 – Vector – the term 'ripple' does not allow for alternate load management technologies and suggests the following addition: "arrangements for use of ripple control (or alternative technology) for load management". |
Agree – text changed to include alternatives. |
| Powerco – Paras 48, 49, 89, 114, 118 detail pricing principles. There would be value in the Ministry reviewing the document with a view to ensuring the various pricing objectives and the incentives they seek to create are consistent. |
Noted. Pricing paragraphs are consistent with government's current policies. The GPS is issued as a section 26 statement under the Commerce Act, so the Commerce Commission is required to have regard to this in its work. |
| Orion – Matters relating to "Principles or model approaches to distribution pricing" should be moved from section 9 to section 10 of the GPS and explicitly considered in the MOU. |
No change - distribution pricing is included in bullet 2 under paragraph 125 as a matter to be addressed in the MoU revision. |
| Unison – On the basis that the Electricity Commission is establishing model distribution pricing principles which are to be adopted by the distributors or mandated, it should be very clear that the Commerce Commission should not then be able to impose alternative requirements on distributors. |
Noted. Distribution pricing included under bullet 2 in para 125 as a matter to be addressed in the MoU between the Commissions. The GPS is issued as a section 26 statement under the Commerce Act, so the Commerce Commission is required to have regard to this in its work. |