✨ Electricity Industry Reforms
6 SEPTEMBER
NEW ZEALAND GAZETTE
2947
- INTRODUCTION
The need for the separation of the line functions, and the associated costs and charges, from those of the energy trading and the power generating functions has been brought about firstly by Government legislation and secondly by a commercial requirement.
The particular piece of legislation is the Electricity Act 1992, which includes many of the reforms the Government had identified for the electricity industry, and the relevant part of the act is that which deals with "the separation of the natural monopoly parts of the industry from the potentially competitive parts." The natural monopoly part is the distribution network or line, and the potentially competitive part is the energy trading and associated activities such as appliance retailing.
For completeness and better understanding it would be appropriate to define line and energy businesses -
The Line Business which is sometimes referred to as the "distribution" or "network" business, is defined as:
"The provision, operation and maintenance of electric lines and cables, transformers, switchgear and associated plant for the purpose of transporting electrical energy."
Included in this would be -
(a) Maintenance of lines and cables
(b) Load management and ownership of load control equipment
(c) Provision of agreed minimum standard meters including customer meters installed at the time of line/energy separation
(d) Monitoring of metering standards to ensure satisfactory accuracy levels
(e) Identification and allocation of energy losses
(f) Contracting line services
The Energy Business which is sometimes referred to as the "retail" business, is defined as:
"The supply of electrical energy and associated customer related activities together with any other contestable activities."
Included in this would be -
(a) Buying and selling energy
(b) Billing customers and associated revenue collection and credit control
(c) Ownership and management of customer metering and load control equipment post line/energy separation
(d) Customer meter reading
(e) Customer advisory services
(f) Appliance sales and any other contestable activities
To ensure that the separation is carried-out, and to curb possible abuse of line business monopoly power and energy business market dominance, such as monopoly pricing and cross- subsidisation, there is an information disclosure requirement included in the legislation so that selected financial and other information can be monitored by competitors customers and the Commerce Commission.
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VUW Te Waharoa —
NZ Gazette 1995, No 95
NZLII —
NZ Gazette 1995, No 95
✨ LLM interpretation of page content
🌾 Separation of Line and Energy Functions in Electricity Industry
🌾 Primary Industries & ResourcesElectricity, Industry Reforms, Line Business, Energy Business, Electricity Act 1992, Cost Separation, Monopoly Regulation, Commerce Commission