8. Distribution
Pricing methodologies
100. 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.
101. 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 Commission should consider whether standardisation and simplification of tariff schedules and contractual arrangements would facilitate market entry by retailers.
102. 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
103. The Commission should ensure reasonable terms and conditions for use of system agreements for use of distribution lines, and ensure that they remain up-to-date with current market issues. Terms and conditions 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 technologies for load management (including ripple control)
- any other regulations promulgated under the Electricity Act 1992.
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