14 DECEMBER NEW ZEALAND GAZETTE 4349

27. The Government expects all retailers to offer at least one tariff to domestic consumers with a fixed charge of no more than 10 per cent of the bill of the average domestic consumer (i.e. consuming 8,000 kWh per annum). This new tariff should incorporate the following design features:

• increases in variable (i.e. per kWh) charges in the new tariff are to be constrained so that the annual bill of the average domestic consumer (8,000 kWh per annum) will be the same regardless of their choice of current or new optional tariffs;
• the new tariff is to be advertised and promoted in the same manner as existing tariffs;
• the new tariff to be available only for dwellings where the consumer usually resides;
• the new requirement is to extend to cover both ‘standard’ tariffs and tariffs for ‘interruptible load’ such as water heating and nightstore heaters;
• all retailers to be required to make the new tariff genuinely available (subject to usual credit-worthiness tests), irrespective of the size of the consumer; and
• tiered variable tariffs (e.g. high c/kWh for the first 2,000 kWh per annum) are to be precluded (this is to ensure that the lower fixed charge offers genuine advantages to small consumers).

28. The Government will monitor developments in fixed charges and will, if necessary, regulate to ensure that its policy is enforced.

Consumer Complaints Resolution System

29. The Government expects the industry, in consultation with the Ministry of Consumer Affairs, to establish a system under which complaints by consumers relating to retail and line distribution companies can be appropriately addressed. As set out in paragraph 7, this system is to be included in the Governance Board’s rules.

30. The system should include the following features:

Key Features of the Consumer Complaints Resolution System

The consumer complaints resolution system will feature:

• an industry code of practice that includes standards for contracts (covering such matters as billing and disconnection) and metering practices;
• membership by all distributors and retailers;
• robust internal complaints-handling processes within all member companies;
• an independent, external, consumer complaints resolution scheme that meets the following standard benchmarks:
  • accessibility: the scheme provides all consumers with rights of access by promoting knowledge of its existence, being easy to use and having no cost barriers;
  • independence: the decision-making process and administration of the scheme, including appointment and funding, ensure appropriate independence of the office-holder from member companies;
  • fairness: the scheme produces decisions which are fair and seen to be fair by observing the principles of procedural fairness, by making decisions on the information before it and by having specific criteria upon which its decisions are based;
  • accountability: the scheme publicly accounts for its operations by publishing its determinations and information about complaints and highlighting any systematic industry problems;
  • efficiency: the scheme operates efficiently by keeping track of complaints, ensuring complaints are dealt with by the appropriate process or forum and regularly reviewing its performance; and
  • effectiveness: the scheme is effective by having appropriate and comprehensive terms of reference and periodic independent reviews of its performance;
• self-funding by the industry;
• compensation where appropriate; and
• a fines process through the independent surveillance body set up by the Governance Board in accordance with point (o) of the Guiding Principles. Key features of the fines process should include:
  • consultation with the Ministry of Consumer Affairs on issues that should be subject to fines;
  • ability to receive complaints direct from consumers as well as referrals from the external, consumer complaints resolution scheme; and
  • fines imposed to take account of any awards or compensation made by the consumer complaints resolution scheme.

Government Oversight of Progress

31. The Government favours industry solutions ahead of regulation. However, implementation of these changes must be timely and effective. The electricity industry is invited to move quickly to put in place the new governance structure.

32. The Chair of the Governance Board (or the Chair of any establishment committee of the Governance Board) should report to the Minister of Energy every two months on progress in implementing the Government Policy Statement, with the first such report to be in December 2000. Until such time as the Governance Board or an establishment committee is established, these reports should be submitted by the chairs of NZEM, MARIA and MACQS.

33. The Minister requests a specific report by 28 February 2001 on progress in establishing the Governance Board that meets the Government’s design principles. If there has been insufficient progress, the Government will regulate to establish the Governance Board.

34. The Government advises that, working with the Ministry of Consumer Affairs, the industry should agree on the overall features and design of a consumer complaints resolution system, including the rules and terms of reference, and have commenced recruitment procedures for the principal office-holder of the scheme by 31 March 2001. If there has been insufficient progress, the Government will consider other options, including regulation, to establish the system.