Electricity Industry (Levy of Industry Participants) Regulations 2010

Reprint as at 1 July 2015

Coat of Arms of New Zealand

Electricity Industry (Levy of Industry Participants) Regulations 2010

(SR 2010/457)

Anand Satyanand, Governor-General

Order in Council

At Wellington this 13th day of December 2010

Present:
His Excellency the Governor-General in Council

Note

Changes authorised by subpart 2 of Part 2 of the Legislation Act 2012 have been made in this official reprint.

Note 4 at the end of this reprint provides a list of the amendments incorporated.

These regulations are administered by the Ministry of Business, Innovation, and Employment.

Pursuant to section 128 of the Electricity Industry Act 2010, His Excellency the Governor-General, acting on the advice and with the consent of the Executive Council and on the recommendation of the Minister of Energy and Resources, makes the following regulations.

Regulations

1 Title

These regulations are the Electricity Industry (Levy of Industry Participants) Regulations 2010.

2 Commencement

These regulations come into force on 20 December 2010.

3 Application

(1)

These regulations apply to the period commencing on 1 November 2010 and ending with 30 June 2011 and to subsequent financial years.

(2)

The levy rate for the financial period ending with 30 June 2011 includes the costs incurred by the Crown on or after 1 January 2010 relating to establishing the Authority, disestablishing the Electricity Commission, transferring functions to other agencies, and preparing the initial Code.

(3)

These regulations do not apply to an industry participant in respect of the Stewart Island network, the Chatham Islands network, or the Haast network.

Part 1 Interpretation and general rules

4 Interpretation

(1)

In these regulations, unless the context otherwise requires,—

associate has the same meaning as in clause 8 of Schedule 2 of the Act

Authority means the Electricity Authority established by section 12 of the Act

Code means the Electricity Industry Participation Code administered by the Authority under the Act

common quality operations means the activities of the Authority that relate to the following parts of the Code:

(a)

the common quality operations referred to in Part 7, system operator:

(b)

Part 8, common quality

consumer connection,—

(a)

in relation to a distributor, means the total number of ready and active ICPs for that distributor; and

(b)

in relation to a retailer, means the total number of ready and active ICPs for that retailer

consumer participation operations means—

(a)

the activities of the Authority under section 16(1)(i) of the Act to promote to consumers the benefits of comparing and switching retailers; and

(b)

any other activities of the Authority that seek to facilitate consumer participation in electricity markets, including programmes focusing on addressing consumer awareness, understanding, motivation, and action

costs means all of the costs that are to be met out of the levy under section 128(3) of the Act, whether incurred directly or indirectly by the Authority or the Crown

distributor means—

(a)

an industry participant that is a business engaged in distribution; and

(b)

Transpower

electricity conveyed,—

(a)

in relation to the grid, means the quantity of electricity injected at grid injection points; and

(b)

in relation to a local network, means the quantity of electricity entering the network at grid exit points and at points of connection with embedded networks and at points of connection with embedded generating stations; and

(c)

in relation to an embedded network, means the quantity of electricity entering the network—

(i)

at points of connection with a local network; and

(ii)

at points of connection with other embedded networks; and

(iii)

at points of connection with embedded generating stations; but

(d)

does not include any quantity of electricity that is conveyed by a distributor for its own consumption or for the consumption of its associates

electricity efficiency operations means the functions, powers, and duties of the Energy Efficiency and Conservation Authority under the Energy Efficiency and Conservation Act 2000 that—

(a)

relate to the encouragement, promotion, and support of electricity efficiency; and

(b)

give rise to the costs that are within the portion of total costs that is determined by the Minister to be the portion to be met by levies under section 128(3)(c) of the Act

electricity generated, in relation to a generator,—

(a)

means the quantity of electricity sold by the generator to the clearing manager or to a retailer; but

(b)

does not include the quantity of electricity generated by an embedded generating station that has a rated electricity generating capacity of less than 10 MW in the station’s asset capability statement

electricity purchased, in relation to a purchaser, means the quantity of electricity purchased from the clearing manager by the purchaser at all grid exit points

embedded generating station has the same meaning as in the Code

establishment costs means the costs referred to in regulation 3(2)

estimated costs means an amount that—

(a)

is an estimation of the costs, net of the income, that are to be met out of the levy under section 128(3) of the Act for the financial year, exclusive of any goods and services tax:

(b)

does not exceed the appropriations for the financial year in respect of those costs, exclusive of any goods and services tax, where appropriation includes the following amounts at the time of the calculation under regulation 7:

(i)

any existing appropriation or other authority by or under an Act; and

(ii)

any appropriation sought in an Appropriation Bill and set out in the Estimates:

(c)

does not exceed, in the case of the costs referred to in section 128(3)(c) of the Act, the portion referred to in that provision

Estimates has the meaning set out in section 2(1) of the Public Finance Act 1989 and includes the Supplementary Estimates (within the meaning of that section)

financial year means the year beginning on 1 July and ending with the following 30 June

generator means an industry participant that is a business engaged in generation but, for the purpose of these regulations, excludes a business engaged in generation mostly for its own consumption or for the consumption of a person who is involved in the business or for the consumption of any of the business’s associates

grid has the same meaning as in the Code

industry participant has the same meaning as in section 5 of the Act

levy means the levy prescribed by these regulations

levy rate or annual levy rate means the rate calculated under regulation 7 or the rate as adjusted or reconciled under regulations 10 to 12, as the case may be

market operations means the activities of the Authority that relate to the following parts of the Code:

(a)

regime for dealing with undesirable trading situations:

(b)

metering:

(c)

trading arrangements:

(d)

clearing and settlement:

(e)

prudential requirements:

(f)

reconciliation

Minister means the Minister of Energy and Resources

month means a calendar month

monthly instalment means the monthly instalment of the annual levy that is payable under regulation 6

other activities

(a)

means the functions, powers, and duties of the Authority under the Act or the Code, other than the activities to which costs are separately allocated as listed in column 1 of table 1 in regulation 7(2):

(b)

includes—

(i)

the monitoring and enforcement of the Code by the Authority, the Rulings Panel, and any investigator appointed under the Electricity Industry (Enforcement) Regulations 2010:

(ii)

the costs of processing applications for exemptions from Part 3 of the Act (which relates to separation of distribution from certain generation and retailing):

(c)

includes the costs of collecting the levy

purchaser means an industry participant that buys electricity from the clearing manager; and includes any other participant that has assumed that person’s rights and obligations in relation to the purchaser

quantity of electricity means the quantity of electricity generated, purchased, or conveyed, as the case may be, as reconciled in accordance with the Code

registry and consumer operations means the activities of the Authority that relate to Part 11, registry information management, of the Code and other consumer-related activities (other than activities within consumer participation operations)

retailer means an industry participant that buys electricity from the clearing manager and supplies it to a customer or to another retailer

supply reliability operations means—

(a)

the activities of the Authority that relate to Part 9, security of supply, of the Code:

(b)

the security of supply operations referred to in Part 7, system operator, of the Code:

(c)

the activities of the Security and Reliability Council appointed under section 20 of the Act:

(d)

the activities of the Authority that are associated with the Whirinaki agreement and any activities of the Crown that are associated with the Whirinaki generating plant after the Whirinaki agreement is terminated:

(e)

the functions of the Authority under section 136 of the Act

transmission operations

(a)

means the activities of the Authority that relate to Part 12, transport, of the Code; and

(b)

includes the costs incurred by the Crown in relation to developing and publishing regional electricity supply and demand forecasts and scenarios, and related information and analysis, for the purpose of assisting investment planning by industry participants

Whirinaki agreement means the reserve generation capacity agreement entered into between the Electricity Commission and Her Majesty the Queen in right of New Zealand.

(2)

Any term or expression that is defined in the Act or the Code and used, but not defined, in these regulations has the same meaning as in the Act or the Code.

Regulation 4(1) consumer participation operations: inserted, on 1 July 2015, by regulation 4(1) of the Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015 (LI 2015/134).

Regulation 4(1) customer switching fund: revoked, on 1 July 2015, by regulation 4(1) of the Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015 (LI 2015/134).

Regulation 4(1) market operations: replaced, on 30 June 2015, by regulation 4(2) of the Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015 (LI 2015/134).

Regulation 4(1) registry and consumer operations: amended, on 1 July 2015, by regulation 4(3) of the Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015 (LI 2015/134).

5 Overview of these regulations

(1)

Each generator, purchaser, and distributor is liable to pay a levy to the Authority on behalf of the Crown.

(2)

The levy—

(a)

must initially be calculated under regulations 7 and 9 (which provide for calculation on the basis of estimated costs); and

(b)

may be adjusted under regulation 10 (for example, if estimated costs increase or decrease or if a different quantity of electricity is generated, purchased, or conveyed than was anticipated); and

(c)

must be reconciled against the levy that would have been payable after the end of the financial year under regulation 11 or 12.

6 How and when levy must be paid

(1)

The annual levy is payable to the Authority in monthly instalments in arrears.

(2)

Each industry participant that is a generator, purchaser, or distributor at the end of a month during a financial year is liable to pay a monthly instalment of the levy for that month to the Authority.

(3)

The Authority must invoice industry participants for each monthly instalment as soon as practicable after the start of the following month.

(4)

The due date for payment of each monthly instalment is the later of—

(a)

the tenth working day after the industry participant receives an invoice for that monthly instalment; or

(b)

the 20th day of the month following the month to which the instalment relates.

(5)

The Authority may waive the payment of 1 or more monthly instalments if the Authority considers that the cost of invoicing the industry participant would exceed the amount to be recovered.

Part 2 Calculations, adjustments, and reconciliations

Initial calculation of annual levy rates

7 Calculation of annual levy rates

(1)

This regulation provides how the annual levy rates must be calculated by the Authority.

(2)

Step 1 is that the costs of each activity must be determined. This is done by allocating the estimated costs to the activities listed in column 1 of table 1, including by—

(a)

apportioning the Authority’s indirect costs to those activities; and

(b)

apportioning the Authority’s costs in relation to any review and report on any matter relating to the electricity industry that is requested by the Minister under section 18 of the Act—

(i)

to the particular activity to which the review and report relates, if it relates to a particular activity; and

(ii)

to other activities, if the report or review does not relate to a particular activity.

Table 1
Allocation of costs of each activity
Column 1: ActivityColumn 2: Classes of industry participants to whom costs of activity are allocated
GeneratorsPurchasersDistributors

Common quality operations

One-thirdOne-third to purchasersOne-third

Market operations

One-halfOne-half to purchasers

Registry and consumer operations

One-half to retailers

One-half to distributors other than Transpower

Supply reliability operations

All to purchasers

Transmission operations

All to Transpower

Electricity efficiency operations

All to purchasers

Consumer participation operations

All to retailers

Other activities

One-thirdOne-third to purchasersOne-third

Establishment costs relating to transition of functions to Commerce Commission

All to Transpower

Establishment costs relating to Energy Efficiency and Conservation Authority

All to purchasers
All other establishment costsOne-thirdOne-third to purchasersOne-third

(3)

Step 2 is that the costs of each activity must be allocated to the classes of industry participants according to the proportions listed in column 2 of table 1 (this determines the costs payable by each participant class per activity).

(4)

Step 3 is that the costs payable by each class of industry participant per activity must be divided by the relevant number calculated in accordance with table 2 (this determines the annual levy rate per unit of electricity generated, purchased, or conveyed or per consumer connection, as the case may be).

Table 2
Calculation of annual levy rate per unit of electricity generated, purchased, or conveyed or per consumer connection
ActivityGeneratorsPurchasersDistributors

Common quality operations

GPD

Market operations

GP

Registry and consumer operations

CC

Supply reliability operations

P

Electricity efficiency operations

P

Consumer participation operations

C

Other activities

GPD

Establishment costs

GPD

where—

C

is the estimated average total number of consumer connections during the financial year

D

is the estimated total quantity of electricity to be conveyed by distributors during the financial year

G

is the estimated total quantity of electricity to be generated by generators during the financial year

P

is the estimated total quantity of electricity to be purchased by purchasers, or sold by retailers, as the case may be, during the financial year.

Regulation 7(2) table 1: amended, on 1 July 2015, by regulation 5(1) of the Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015 (LI 2015/134).

Regulation 7(4) table 2: amended, on 1 July 2015, by regulation 5(2) of the Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015 (LI 2015/134).

8 Notification of annual levy rates

As soon as practicable after calculating the annual levy rates under regulation 7, the Authority must give notice of the levy rates by—

(a)

publishing a notice in the Gazette that sets out the annual levy rates; and

(b)

maintaining a list of the annual levy rates on its Internet site at all reasonable times.

Calculation of monthly instalments

9 Calculation of each participant’s monthly instalment

(1)

This regulation shows how the monthly instalment payable by a generator, purchaser, or distributor must be calculated by the Authority.

(2)

Step 1 is that the annual levy rate per unit of electricity generated, purchased, or conveyed or per consumer connection, as the case may be, must be multiplied in accordance with the multipliers in table 3.

Table 3
Annual levy rate multipliers—quantity of electricity generated, purchased, or conveyed or per consumer connection
ActivityGeneratorsPurchasersDistributors

Common quality operations

GimPimDim

Market operations

GimPim

Registry and consumer operations

Cim/12Cim/12

Supply reliability operations

Pim

Electricity efficiency operations

Pim

Consumer participation operations

Cim/12

Other activities

GimPimDim

Establishment costs

GimPimDim

where—

Cim/12

is one-twelfth of the total number of consumer connections for which the purchaser or distributor is responsible at the end of the month

Dim

is the total quantity of electricity conveyed by the distributor during the month

Gim

is the total quantity of electricity generated by the generator during the month

Pim

is the total quantity of electricity purchased by the purchaser during the month

(3)

Step 2 is that the annual costs of transmission operations, and the establishment costs relating to the transition of functions to the Commerce Commission, as allocated under regulation 7(2) must be included in the levy payable by Transpower, in 12 monthly instalments.

(4)

Step 3 is that, for each industry participant, the amounts of the levy payable in respect of each activity must be added together (this determines the total amount of the monthly instalment of the levy payable by each individual participant under regulation 6).

Regulation 9(2) table 3: amended, on 1 July 2015, by regulation 6 of the Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015 (LI 2015/134).

Adjustments to annual levy rates during financial year

10 Levy rates may be adjusted during financial year

(1)

An annual levy rate may, at the Authority’s discretion, be adjusted if—

(a)

the estimated costs significantly change during the financial year; or

(b)

the costs of an activity significantly change during the financial year; or

(c)

the amount of levy money estimated under regulation 7 to be collected during the financial year is either too much or too little because the quantity of electricity generated, purchased, or conveyed is significantly different from the quantity that was estimated, or the number of consumer connections has significantly changed; or

(d)

the Authority’s costs are reallocated between activities.

(2)

An annual levy rate is adjusted by redoing the calculation in regulation 7 using the amended figures for the whole or any part of the financial year.

(3)

As soon as practicable after adjusting an annual levy rate, the Authority must—

(a)

publish the adjusted annual levy rate in accordance with regulation 8; and

(b)

notify relevant industry participants of the adjusted annual levy rate before invoicing the industry participants for the next monthly instalment; and

(c)

use the adjusted levy rate for calculations of future monthly instalments in that financial year.

Reconciliation of levy after end of financial year

11 Reconciliation of levy after end of financial year

(1)

The Authority must, as soon as practicable after the audited financial statements for a financial year are presented to the House of Representatives,—

(a)

reconcile the levy for the financial year against the levy that would have been payable if the calculation under regulation 7 (or, if it has been recalculated, the recalculation under regulation 10(2)) had used—

(i)

the actual costs for the year, rather than the estimated costs; and

(ii)

the actual quantity of electricity generated, purchased, or conveyed at the time the reconciliation of the levy is performed, and the actual number of consumer connections at the time the reconciliation of the levy is performed, rather than the estimated numbers; and

(b)

have the reconciliation calculation referred to in paragraph (a) independently audited; and

(c)

publish the reconciled annual levy rates in accordance with regulation 8.

(2)

For the purposes of subclause (1),—

actual costs for a financial year is the amount—

(a)

identified in audited financial statements for that year as the costs, net of the income, that are to be met out of the levy under section 128(3) of the Act; and

(b)

that does not exceed the total amount appropriated for that year in respect of those costs; and

(c)

that does not exceed, in the case of the costs referred to section 128(3)(c) of the Act, the portion referred to in that provision; and

(d)

that is exclusive of goods and services tax

audited financial statements means the audited financial statements of—

(a)

the Authority:

(b)

the Energy Efficiency and Conservation Authority:

(c)

the Ministry for the time being responsible for any activities of which the costs are to be met out of the levy under section 128(3) of the Act.

12 Further reconciliation of levy on basis of significant changes in quantities

(1)

This regulation applies if the Authority—

(a)

has already performed a reconciliation of the levy under regulation 11; and

(b)

considers that—

(i)

the quantities of electricity generated, purchased, or conveyed are significantly changed from the quantities used in the levy reconciliation under regulation 11; and

(ii)

those changes are the result of reconciliation under clauses 15.24 to 15.28 or Schedule 15.4 of the Code.

(2)

The Authority must perform a further levy reconciliation under regulation 11 by using the changed quantities of electricity.

13 Refunds and further invoices

(1)

As soon as practicable after the levy is reconciled under regulation 11 or 12, the Authority must,—

(a)

if there has been an over-recovery from an industry participant, refund to that participant the amount over-recovered from it; and

(b)

if there has been a significant under-recovery from an industry participant, invoice that participant for the amount under-recovered from it, as part of the levy for the current year.

(2)

Any under-recovery that is included in the levy under this regulation may be collected by a further invoice.

(3)

The due date for payment of that amount is the tenth working day after the industry participant receives that invoice.

Part 3 Revocation and transitional provisions

Revocation

14 Revocation

Transitional provisions

15 Saving

The Electricity (Levy of Industry Participants) Regulations 2005 continue to apply to the levies that were payable in respect of periods before the commencement of these regulations.

16 Reconciliation of levy for period ending 31 October 2010

Reconciliations may be done under the Electricity (Levy of Industry Participants) Regulations 2005 as if 31 October 2010 were the end of the financial year and with all other necessary modifications.

17 Levy for period commencing 1 November 2010 and ending 30 June 2011

These regulations apply to the period commencing on 1 November 2010 and ending with 30 June 2011—

(a)

as if references to year and to annual were references to the period commencing on 1 November 2010 and ending with 30 June 2011; and

(b)

as if references to 12 monthly payments were references to equal monthly payments; and

(c)

with all other necessary modifications.

18 Recovery of costs of additional activities

(1)

This regulation applies to the costs of any activity—

(a)

that the Authority or the Crown began to carry out before the date on which these regulations come into force or begins to carry out after that date; and

(b)

that the Authority was authorised to carry out, or in respect of which the costs are authorised to be met out of the levy, under the Act.

(2)

The Authority may decide to recover all or any of the costs of an activity by one of the following methods:

(a)

in 1 or more monthly instalments of the levy, by setting a new rate for that activity or by adjusting an existing levy rate under regulation 10:

(b)

in the end-of-year reconciliation under regulations 11 and 12.

19 Levy for year ending 30 June 2015

The levy for the 2014/15 financial year is payable in accordance with these regulations as amended by regulation 4(2) of the Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015, irrespective of the fact that that regulation was made after the 2014/15 financial year had commenced.

Regulation 19: inserted, on 1 July 2015, by regulation 7 of the Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015 (LI 2015/134).

20 Levy for year ending 30 June 2016

The levy for the 2015/16 financial year and subsequent years is payable in accordance with these regulations as amended by the Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015.

Regulation 20: inserted, on 1 July 2015, by regulation 7 of the Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015 (LI 2015/134).

Rebecca Kitteridge,
Clerk of the Executive Council.

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 16 December 2010.

Reprints notes
1 General

This is a reprint of the Electricity Industry (Levy of Industry Participants) Regulations 2010 that incorporates all the amendments to those regulations as at the date of the last amendment to them.

2 Legal status

Reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by any amendments to that enactment. Section 18 of the Legislation Act 2012 provides that this reprint, published in electronic form, has the status of an official version under section 17 of that Act. A printed version of the reprint produced directly from this official electronic version also has official status.

3 Editorial and format changes

Editorial and format changes to reprints are made using the powers under sections 24 to 26 of the Legislation Act 2012. See also http://www.pco.parliament.govt.nz/editorial-conventions/.

4 Amendments incorporated in this reprint

Electricity Industry (Levy of Industry Participants) Amendment Regulations 2015 (LI 2015/134)