Gas (Information Disclosure) Regulations Newsletter (No. 3, April 1998)
[ Last Updated 21 December 2005 ]
This is the first newsletter issued since June last year. Since that time the Gas (Information Disclosure) Regulations were promulgated on 7 July 1997 and the first round of annual disclosures, which were due by 1 January 1998, have been published in the New Zealand Gazette.
We were pleased that there was close to one hundred percent compliance with the regulations for the material required to be published in the Gazette. The only significant issue concerned ensuring consistency in the way that the revaluations component of the ARP formula was calculated. The Ministry is examining this issue in more detail. Compliance with the other regulations has been reasonable, although it has been necessary to follow up some issues concerning the disclosures of line charges and contracts. The Regulation Unit is working through the issues with the companies concerned and at this stage it seems to us that the omissions have resulted from genuine differences in the interpretation of the regulations.
Ernst & Young have already published a report analysing the performance of gas pipeline businesses and we have noted their conclusions. We will shortly be reporting to the Minister of Energy about the compliance of the industry with the regulations and what the disclosures show.
Gas Information Disclosure Timetable
Six categories of information are required to be disclosed:
- line charges
- contracts (agreements);
- pipeline capacity information.
- line charge (pricing) methodologies;
- financial statements and performance measures and;
- methodologies for allocation of costs, revenues, etc.
Last year, given that it was the first year of disclosures, more time was allowed before information had to be disclosed than will be the case for this year. The timetable is set out below.
Line charges: Any company which invoices any consumer for a line charge is required to disclose that charge and related information within 3 months after the beginning of each financial year. This means that for companies with a financial year ending 31 March, the line charges have to be disclosed by 30 June, and for those with 30 June financial years, disclosure has to be made by 30 September. This is the case whether line charges have changed or not. In addition, companies are also required to disclose any changes to their line charges within 2 months of first invoicing any customer for the new line charge (regulations 24 - 27 refer).
Contracts: All pipeline owners must disclose certain details about the contracts they have for the conveyance of gas through their pipelines. In addition, NGC must disclose certain details about the contracts it has for the wholesale supply of gas. (regulations 8 - 14 refer).
Pipeline capacity: Every pipeline owner is required to publicly disclose details of its pipeline capacity within 2 months after the end of each financial year. This means that, depending on the company's financial year, this is due by 31 May or 31 August each year (regulation 23 refers).
Line charge methodologies: Every pipeline owner is required to disclose the methodology used to determine their line charges within 5 months after the beginning of each financial year. This means that depending on the company's financial year, methodologies have to be disclosed by 31 August or 30 November each year. This applies whether the line charges or the methodology have changed or not. In addition, companies are also required to disclose any changes to their methodologies within 1 month of that change (regulation 20 refers).
Financial statements and performance measures: Every pipeline owner is required to disclose by way of Gazette notice and public disclosure a full set of financial statements and a prescribed set of performance measures within 5 months of the end of each financial year. This means that, depending on the company's financial year, these have to be gazetted by 31 August or 30 November each year (note this means published in the gazette, regulations 6, 7 and 15 - 19 refer).
Methodologies for allocation of costs, revenues, etc: In conjunction with the disclosure of financial statements and performance measures, pipeline owners are required within 5 months of the end of each financial year to disclose the methodologies which they have used in preparing their financial statements. This means they are also due by 31 August or 30 November each year (regulation 21 refers).
Review of Gas (Information Disclosure) Regulations
The Ministry of Commerce is proposing to carry out a limited review of the regulations this year, with a major review planned for 1999. This year's review is expected to cover the issue of wholesale contract disclosure by NGC, and a few technical issues. The Ministry will be writing to industry participants in a few weeks setting out the issues which it has identified for this year's review, and inviting suggestions of further minor technical amendments for inclusion.
Ministry Publication of Material
Disclosure material and tariff monitoring: For the electricity sector the Ministry produces an annual publication which contains a compilation of the performance (financial and efficiency) statistics of line businesses, together with information derived from tariffs on the costs of supply (energy and line charges) to a range of standardised smaller consumers. The Ministry is giving consideration to whether a similar publication should be produced for the gas sector. Given that Ernst and Young has already published material on the performance data of gas pipeline businesses, the main factor in question is the value of such a tariff analysis which produces information on the costs of supply to gas consumers.
Energy Data File (EDF): The January 1998 edition of the biannual Energy Data File, prepared by the Energy Markets Information and Services Group, was released recently. The EDF contains extensive energy sector production, consumption and price data from the early 1970s to the present. The information is similar to that prepared by Statistics New Zealand for other sectors and relates to the energy sector overall rather than to the operation of individual companies. For the gas sector, information is provided on the volume of gas produced and supplied to industrial, commercial and domestic consumers. When information sought under the Gas (Statistics) Regulations is available, it should be possible to provide more detailed information on, for example, the costs of supply to different consumer classes, such as is included in the EDF for the electricity sector. The EDF is available from:
Hien Dang
Energy Modelling and Statistics Unit
Resources and Networks Branch
Ministry of Commerce
PO Box 1473
Wellington
Phone: 04-472 0030 x 8397
Fax: 04-473 9930
email: hien.dang@moc.govt.nz
http://www.moc.govt.nz/ran/emisg/emsu
New Resources and Networks Branch
Recently the Ministry of Commerce has been restructured. Energy policy issues (but not energy safety) are now dealt with by the Networks Directorate (Director, Ken Heaton) within the Resources and Networks Branch. Within the Networks Directorate, Tony Fenwick is Manager of the Energy Markets Policy Group and Andrew Smith is the Manager of the Energy Markets Information and Services (EMIS) Group.
(Compliance with the information disclosure regime is managed by the Energy Markets Regulation Unit.)
Contact Details
Contact details for the Energy Markets Regulation Unit are as follows:
Energy Markets Regulation Unit
Ministry of Commerce
April 1998
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