The Electricity Commission (Commission) is running a project to carry out a fundamental review of part D of the Electricity Governance Rules 2003 (Rules).

Part D of the Rules sets out the obligations on participants in relation to metering standards. It deals with the responsibility of participants in relation to the provision of metering installations, the testing of metering installations, ensuring a metering installation complies with a set of codes of practice, and the role of the reconciliation manager in relation to metering inaccuracies.

• Background
• Initial consultation on Part D: Issues and possible options
• Project purpose
• Project Scope
• Project structure
• Industry Reference Group
• Project Timeline
• Industry Forum
• Commission contact

Background

The Commission has established a project (Part D Review) to carry out a fundamental review of part D of the Rules.  The Part D Review has come about because:

1. the existing set of rules in part D is internally inconsistent, references out of date international standards, is in part ambiguous, and has a general lack of clarity.  This is not an appropriate compliance regime for a system that handled $6.4 billion in wholesale market trades in 2008;
2. New metering and communications technology has emerged and the current part D rules are inadequate for dealing with it.  In some instances, the existing rules act as a barrier to the innovation opportunities presented by this new technology. In other cases, the absence of any regulatory framework leaves the consumer exposed to potential breaches of security in relation to the accuracy, security and privacy of information related to billing.  Associated with new technology, a new regulatory framework is required that will enable:
1. future developments such as smart grids (allow consumers to interact with the electricity market);
2. multiple participants and the consumer to interface with the metering installation (the current rules envisage only one participant interfacing with the metering installation);
3. the ability for retailers to offer different tariff options, enhanced load management options and markets etc; and
4. enable electricity supply alternatives, which includes demand side management.  
   
   

Initial consultation on Part D: Issues and possible options

In late 2008 the Commission consulted with the industry about undertaking a fundamental review of the existing regulatory framework for metering in the New Zealand electricity industry, as contained in part D of the Rules, to ensure that it is fit for purpose.  The consultation sought the industry’s feedback on the key issues identified with the rules contained in part D, options to address these key issues, and suggested guiding principles for a review of part D.

The industry’s submissions confirmed the issues and options detailed in the consultation document, and confirmed the suggested scope of the Part D Review. Consequently, the Commission established the Part D Review Project.

• Part D: Issues and possible options consultation
  
• Submissions

Project purpose

The purpose of the Part D Review project is to:

1. fix the problems with the current rules;
2. Update the current rules to allow for and keep pace with the adoption of new metering technology; and
3. future proof the rules to enable innovation.
   

Implementation of any new regulatory framework will proceed only after substantial consultation with the industry and provided any recommendations to the Minister for rule changes are approved. 

If and when any rule changes are approved the Commission anticipates running an implementation project at that point to ensure the new regulatory framework is implemented in an appropriate timeframe and in a coordinated manner.

Project Scope:

The project will:

1. review the existing regulatory framework for metering as contained in part D of the Rules to ensure that it is fit for purpose; and 
2. examine the market developments in metering and infrastructure to determine what, if any, impact these developments have on the regulatory framework contained in part D and develop proposed rules, where necessary, to manage impacts that cannot be left to guidelines to ensure:
1. metering technology does not become a barrier to customer switching;
2. technology being currently installed is appropriate;
3. information is secure and privacy is maintained;
4. AMI complements the current load management infrastructure; and
5. open access to metering information is achieved.
   

The part D rules structure document pdf [14 KB] contains the extent of the rules being reviewed.

Project structure

The governance for the project is being provided by a Steering Committee.  This group also proactively provides quality management and assurance of the deliverables over the life of the project.

The key project work is being carried out by a specialist Project Team, to work through the issues and options arising out of the August 2008 consultation, on the Part D review.  The outputs produced by the Project Team were subject to a peer review by an Industry Reference Group (IRG)

The output from this process is being used as the basis of the proposed new rules principles, to be consulted on. 

Industry Reference Group

The IRG provided unbiased and expert knowledge to the Commission by:

1. considering the options proposed by the four work streams and advise on the impact of the proposed changes on the industry; 
2. providing advice/feedback on other possible options for achieving the outcome; 
3. providing advice on technical matters; 
4. providing advice, at a high level, on the likely benefits and costs of the proposed changes;
5. providing an assessment of costs and benefits for options determined during the review process; and
6. determining options that may not have been previously considered.
   

• IRG Members pdf [15 KB]

Project Timeline

The Part D Review project is expected to take approximately 20 months to complete. The key stages are outlined in the following table:

Industry forum

An industry forum was held on 30 September 2009 to introduce the proposed new rules principles (consultation on part D issues and proposed options)

• Part D review project: introduction to consultation document pdf [777 KB]
• Process flow diagrams for part D consultation document pdf [46 KB]
• Questions and answers 30 September 2009 pdf [65 KB]

Commission contact

If you have any questions regarding the project, please contact Todd Collings on todd.collings@electricitycommission.govt.nz or 04 462 0602.