Gas (Information Disclosure) Regulations Newsletter (No. 2, June 1997)
[ Last Updated 21 December 2005 ]
This is the second Gas Information Disclosure Newsletter (the first was published in March 1996), and brings you up to date with the most recent developments in the drafting of the regulations. It also contains information which might be useful in the preparation of disclosures.
Once the regulations are in place we aim to produce the newsletter on a more regular basis. We are also working on making the Gas and Electricity Information Disclosure Newsletters (including back issues) accessible through the Internet. We will advise you when this service becomes available.
Gas (Information Disclosure) Regulations
We are working with Parliamentary Counsel Office towards a commencement date of 7 August. It is still intended that the first year of financial information subject to disclosure will be that covering 1996/1997.
The Energy Markets Regulation Unit (EMRU)
Compliance with the regulations will be monitored closely by EMRU, which also monitors electricity information disclosure. We are a unit of the Energy Policy Group, which is part of the Ministry's Energy and Resources Division. The Unit Manager is Russell Vogtherr (DDI 04-474 2189), assisted by Ray Deacon (DDI 04-474 2859) and James Forsberg (Ph. 04-472 0030 x8283).
We are responsible for ensuring companies comply fully with the regulations. Given our experience with the first year of electricity information disclosure, we expect to spend most of our time assisting companies in interpreting and complying with the regulations. We welcome enquiries from companies concerning the requirements of the regulations and much prefer to provide assistance before material is officially disclosed or published. The regulations will also be reviewed from time to time. Based on our experience with electricity disclosure, we anticipate a substantive review of the regulations following the first full cycle of disclosures.
Changes Following Consultation
After consultations over the December 1996 draft of the regulations, a few changes were made:
Gas Processing Facility
The word "domestic" has been removed from the definition.
Allocation of Costs etc. by Tariff Category, by System
This provision (regulation 20 in the December draft) has been dropped, after an analysis of the equivalent regulation in the context of the Electricity (Information Disclosure) Regulations revealed problems with the methodology.
"Each Distribution System"
Under the Gas Act definition, a distribution system is made up of all fittings downstream of a gate station. It was pointed out to us that distributors operate several "systems" by that definition. It was not our intention to make distributors provide information on the basis of sub-regional "systems". References to "each distribution system" in regulations relating to energy delivery performance measures and statistics (draft regulation 15) and reliability performance measures (draft regulation 16) have been changed so that distributors will have the option of disclosing information on these performance measures on the basis of all (or some) systems grouped together. References to "each distribution system" in the capacity disclosure provisions will remain.
Earnings Before Interest and Tax (First Schedule Definitions)
To make the definition consistent with the earlier changes concerning the treatment of transmission charges, we have separated transmission charges from other expenditure. The EBIT definition has been amended to:
"'Earnings before interest and tax' means revenue minus -
- Direct expenditure; and
- Indirect expenditure; and
- Transmission charges; and
- Depreciation:"
Energy Delivery Efficiency Performance Measures
A drafting error crept in to the UFG Ratio denominator "b" in clause 1(b) of Part 3 of the First Schedule of the December draft. It should have read "is the amount of gas (in gigajoules) entering the system or systems during the financial year."
Unplanned Interruptions
We received a comment that third party interference with pipelines is the cause of most unplanned interruptions. We do not propose to amend the interruptions performance measure, but pipeline owners may wish to consider including a record of these incidents in their disclosure.
Pipeline Capacity: Map/Diagram Disclosure
Transmission system map disclosure has been altered to provide two-fold disclosure along similar lines to that for distribution - i.e., one map for public disclosure, and another, showing some more detailed information, available for inspection.
The draft contained a typo. Pipeline owners have the option of disclosing internal, external or (not "and") nominal pipe diameters.
Pipeline Capacity : Gas Held or Reserved in Transmission Systems
The list under clause 8(2)(b) of Part 5 of the First Schedule was intended to expand on what was expected from clause 8(2)(a) disclosure. On reflection, this was not clear from the draft, and clause 8 has been amended accordingly.
Other Issues
Maui Pipeline Exemption
There is continuing general concern with the disclosure requirements for the owners of the Maui pipeline. The Ministry's 1994 discussion paper sought to address the concerns of the time, but there is a view that the situation may have changed since then. We therefore propose to include a review of the application of the disclosure regime to the Maui pipeline (including performance measures) as part of the first review of the regulations.
Exemptions
Once the regulations are in place, it is proposed that applications for exemptions be dealt with by EMRU on behalf of the Secretary of Commerce. The envisaged process will be transparent, and involve consultation. It would not be appropriate to frame assessment criteria in the regulations, because of the risk of either making the assessment too inflexible, or making the criteria so general that they are meaningless. For further information, please contact James Forsberg or Ray Deacon.
Gas Act Amendments
A number of amendments to the Gas Act have been proposed which would affect the information disclosure provisions. They gained only a low priority on the legislative programme in 1996, and could not be included in the 1997 legislative programme either. It is proposed that a new attempt to gain a slot on the legislative programme will be made later this year.
Publication in the New Zealand Gazette
Last year, delays in the publication of electricity industry information occurred. Accordingly, Ministry Staff recently met with Susan Barton of the New Zealand Gazette to discuss ways in which companies could reduce the time required to prepare and publish material in the Gazette. It was clear that much of the delay was due to the poor quality of material submitted by companies. A further complication resulted from companies altering material after submission for publication.
Companies are reminded that the requirement is to publish the material in the New Zealand Gazette within five months of the end of their financial year.
The requirement is not merely to submit the material by that date - it must actually be published in the New Zealand Gazette by that date. The Ministry has the obligation to consider prosecution of companies who fail to meet this legal requirement. Companies should therefore ensure that they submit good quality material no later than a fortnight before the publication deadline.
To expedite publication, we suggest you adopt the following procedure:
- Submit only high quality originals in 10 point Times Roman font.
- The material must fit within the specified borders of the page. These borders are: top = 2.1 cm; bottom = 1.8 cm; left side = 1.5 cm and right side 1.7 cm.
- Shading should be avoided, as this produces a very black output.
- Do not use printed numbering on pages submitted for publication, or include contents or index pages, as the Gazette follows its own page numbering system. The published version may not be formatted in a way that enables your pagination to make sense. However, each page should be numbered by hand in a way which will not show up when printed (the Gazette Office recommends light blue pencil). This will ensure the output is produced with the pages in the correct order.
- Company logos or letterhead should be of the highest print quality.
- Check material thoroughly before submitting it for publication and check proofs immediately, ensuring that all figures are correct. Discussion concerning layout etc. delays publication.
- As well as a hard copy, it is preferable to also send the material on disk. It should be sent in MS Word 6 format and the disk must be virus checked prior to despatch. Infected material can cause serious delays.
- Please supply the Gazette Office with a company contact with phone and fax number and e-mail if available.
Failure to follow these measures may lead to delays in publication, and the possibility of prosecution.
Standing orders for copies of the Supplements to the New Zealand Gazette need to be confirmed now. The address to send orders to is:
Susan Barton
New Zealand Gazette
Department of Internal Affairs
PO Box 805
WELLINGTON
Phone 04-495 9327
Fax 04-495 7289
Email susan_barton@mhs.dia.govt.nz
Energy Markets Regulation Unit
Ministry of Commerce
June 1997
Back to Top