1. This notice of a recommendation and assessment concerning the Electricity Governance Rules 2003 ("Rules"), Rule Amendment Proposal No. 133, 2009, is issued by the Electricity Commission ("Commission") pursuant to section 172E(3)(a)(iii) of the Electricity Act 1992 ("Act").
2. The Act provides that, no later than 10 working days after making a recommendation to the Minister of Energy and Resources ("Minister") concerning an earlier urgent amendment to the Rules, the Commission must publicise the recommendation and the assessment completed under section 172F of the Act.
Recommendation that the Minister not revoke, replace or amend the urgent rule amendment
3. Section 172E(3) of the Act provides that the Commission is not required to comply with section 172E(2)(b) and section 172F (relating to consultation and assessment) before making an urgent rule amendment, if it is considered necessary or desirable in the public interest for the rule amendment to be made urgently.
4. Instead, consultation and the assessment must be carried out within 6 months of the amendment being made.
5. On 18 September 2008, the Minister made an urgent amendment to part J of the Rules by publishing the Notice of Making of Electricity Governance Amendment Rules (No. 65) 2008 and Notice of Reasons for Decision*.
6. The urgent rule amendment was made to resolve
an unanticipated issue that arose when new reconciliation rules came into force on 1 May 2008.
The new reconciliation rules provide for a change
from reconciliation on the basis of differencing to global reconciliation. That change distorted the seasonal adjustment shapes used for the reconciliation of non half-hour electricity volumes.
7. The distortion meant that allowing the process in the Rules to allocate non half-hour volumes of electricity over the 1 May 2008 boundary would have resulted
in the inaccurate allocation of volumes between participants, which would have financially disadvantaged participants that were incumbent retailers before 1 May 2008 compared with participants that were independent retailers. The rule amendment resolves the issue by minimising the distortion, and the resulting financial disadvantage to participants that were incumbent retailers.
8. The Commission has assessed the options for achieving the objective of the rule amendment, issued a statement of proposal, and consulted with persons representative of interested persons likely to be substantially affected by the rule amendment. Three submissions were received in relation to the rule amendment.
9. In accordance with section 172E(3)(a) of the Act,
having considered the three submissions received, on
16 February 2009 the Commission recommended to the Minister that the Minister not revoke, replace or amend the rule amendment.
10. A copy of the Commission's recommendation and assessment is available, at no cost, on the Commission's website at
http://www.electricitycommission.govt.nz/rulesand
regs/recommend
Dated at Wellington this 17th day of February 2009.
For and on behalf of the Electricity Commission:
HON DAVID CAYGILL, Chair.
*New Zealand Gazette, 18 September 2008, No. 141, page 3847