The purpose of this Act is to provide a framework for the regulation of the electricity industry.

In this Act, unless the context otherwise requires,—

(1) In this Act, the regulations, and the Code, unless the context otherwise requires, a reference to a person who breaches a provision of this Act, the regulations, or the Code is a reference to a person who—

• (a) breaches the provision; or

• (b) attempts to breach the provision; or

• (c) aids, abets, counsels, or procures any other person to breach the provision; or

• (d) induces, or attempts to induce, any other person, whether by threats or promises or otherwise, to breach the provision; or

• (e) is in any way, directly or indirectly, knowingly concerned in, or party to, the breach by any other person of the provision; or

• (f) conspires with any other person to breach the provision.

(2) A breach includes a failure to comply.

(1) The following are industry participants for the purposes of this Act:

• (a) a generator:

• (b) Transpower:

• (c) a distributor:

• (d) a retailer:

• (e) any other person who owns lines:

• (f) a person who consumes electricity that is conveyed to the person directly from the national grid:

• (fa) a person, other than a generator, who generates electricity that is fed into a network:

• (g) a person who buys electricity from the clearing manager:

• (i) any industry service provider identified in subsection (2).

(2) The following industry service providers are industry participants:

• (a) a market operation service provider:

• (b) a metering equipment provider:

• (ba) a metering equipment owner:

• (c) an ancillary service agent:

• (d) a person that operates an approved test house:

• (e) a load aggregator:

• (f) a trader in electricity:

• (g) any other industry service provider identified in regulations made under section 116.

(3) The Authority is not an industry participant, except to the extent that it performs functions as an industry service provider.

(1) The system operator is Transpower.

(2) As well as acting as system operator for the electricity industry, the system operator must—

• (a) provide information, and short- to medium-term forecasting on all aspects of security of supply; and

• (b) manage supply emergencies.

(3) The Code must—

• (a) specify the functions of the system operator; and

• (b) specify how the system operator's functions are to be performed; and

• (c) set requirements relating to transparency and performance.

(4) A failure to comply with subsection (2) is to be treated, for the purposes of enforcement under this Part, as a breach of the Code.

(1) Every industry participant must—

• (a) register as an industry participant by supplying the Authority with the information specified in section 30(2); and

• (b) comply with the Code.

(2) A failure to comply with subsection (1) may result in an industry participant being—

• (a) liable to conviction for an offence under section 34, in the case of failure to register; and

• (b) subject to the enforcement measures set out in this Part, in the case of failure to comply with the Code.

(1) Despite section 11(1)(a), an industry participant need not register if—

• (a) it is a member of a class of industry participants identified in regulations made under section 117 as a class of industry participants that is exempt from the obligation to register; or

• (b) the Authority exempts the participant by issuing an individual exemption notice in the Gazette that—

  • (i) identifies the industry participant that is exempt from the obligation to register; and

  • (ii) gives reasons for the exemption.

(1A) The Authority may grant an individual exemption to an industry participant only if the Authority is satisfied that—

• (a) it is not necessary, for the purpose of achieving the Authority's objective under section 17, for the participant to be registered; and

• (b) exempting the participant will reduce overall administration and compliance costs.

(1B) The Authority may amend or revoke an individual exemption, by issuing a notice in the Gazette that identifies the exempt participant and gives reasons for the amendment or revocation, but only if the Authority—

• (a) has given notice of the proposed amendment or revocation to the exempt participant and given the participant a reasonable opportunity to comment on the proposal; and

• (b) is satisfied that—

  • (i) the amendment or revocation is necessary or desirable for the purpose of achieving the Authority's objective under section 17; and

  • (ii) the benefit of the amendment or revocation outweighs any disadvantage resulting from any increased administration and compliance costs.

(2) To avoid doubt, an individual exemption notice issued under subsection (1)(b) is not a regulation for any purpose.

(3) The Authority must publicise a list of all current class and individual exemptions.

(1) Despite section 11(1)(b), an industry participant need not comply with the Code, or specific provisions of the Code, if—

• (a) it is a member of a class of industry participants identified in regulations made under section 117 as a class of industry participants that is exempt from the obligation to comply with the Code or specific provisions of the Code; or

• (b) the Authority exempts the participant by issuing an individual exemption notice in the Gazette that—

  • (i) identifies the industry participant that is exempt from the obligation to comply with the Code or specific provisions of the Code; and

  • (ii) gives reasons for the exemption.

(1A) The Authority may grant an individual exemption to an industry participant only if the Authority is satisfied that—

• (a) it is not necessary, for the purpose of achieving the Authority's objective under section 17, for that participant to comply with the Code or the specific provisions of the Code; and

• (b) exempting the participant will reduce overall administration and compliance costs.

(1B) The Authority may amend or revoke an individual exemption, by issuing a notice in the Gazette that identifies the exempt participant and gives reasons for the amendment or revocation, but only if the Authority—

• (a) has given notice of the proposed amendment or revocation to the exempt participant and given the participant a reasonable opportunity to comment on the proposal; and

• (b) is satisfied that—

  • (i) the amendment or revocation is necessary or desirable for the purpose of achieving the Authority's objective under section 17; and

  • (ii) the benefit of the amendment or revocation outweighs any disadvantage resulting from any increased administration and compliance costs.

(2) To avoid doubt, an individual exemption notice issued under subsection (1)(b) is not a regulation for any purpose.

(3) The Authority must publicise a list of all current class and individual exemptions.

(1) The Electricity Authority is established.

(2) The Authority is a Crown entity for the purposes of section 7(1) of the Crown Entities Act 2004 (and, by virtue of being named in Part 3 of Schedule 1 of that Act, is an independent Crown entity).

(3) The Crown Entities Act 2004 applies to the Authority except to the extent that this Act expressly provides otherwise.

(1) The Authority comprises between 5 and 7 members.

(2) When recommending a person for membership of the Authority, the Minister must have regard to the need to ensure that the Authority has amongst its members knowledge and experience of, and capability in, the following:

• (a) the electricity industry:

• (b) consumer issues:

• (c) business generally.

(3) The Minister may not recommend a person for membership of the Authority unless he or she has first publicised an invitation for nominations from interested parties and considered any nominations received.

(1) No member of the Authority, when acting as a member, may represent, or promote the interests or views of, any organisation or any particular industry participant or group of industry participants.

(2) This section does not limit, and is in addition to, the duties of members set out in Part 2 of the Crown Entities Act 2004.

The objective of the Authority is to promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers.

(1) The Authority's functions are as follows:

• (a) to maintain a register of industry participants in accordance with subpart 2, and to exempt individual industry participants from the obligation to be registered:

• (b) to make and administer the Electricity Industry Participation Code in accordance with subpart 3:

• (c) to monitor compliance with the Act, the regulations, and the Code, and to exempt individual industry participants from the obligation to comply with the Code or specific provisions of the Code:

• (d) to investigate and enforce compliance with this Part, Part 4, the regulations, and the Code (see subpart 4 of this Part):

• (e) to investigate and enforce compliance with Part 3 (see subpart 2 of Part 3):

• (f) to undertake market-facilitation measures (such as providing education, guidelines, information, and model arrangements), and to monitor the operation and effectiveness of market facilitation measures (see section 47A):

• (g) to undertake industry and market monitoring, and carry out and make publicly available reviews, studies, and inquiries into any matter relating to the electricity industry:

• (h) to contract for market operation services (but see subsection (2)) and system operator services:

• (i) to promote to consumers the benefits of comparing and switching retailers:

• (j) to perform any other specific functions imposed on it under this or any other Act.

(2) Instead of, or as well as, contracting for market operation services, the Authority may itself perform—

• (a) the functions of the market administrator, if the Authority considers it desirable to do so; and

• (b) any other market operation service, but only on a temporary basis (such as when there is no current contract, or the contractor is unable or unwilling to perform the service).

(1) In performing its functions, the Authority must have regard to any statements of government policy concerning the electricity industry that are issued by the Minister.

(2) Before issuing a statement under this section, the Minister must consult with the Authority.

(3) Every statement of government policy concerning the electricity industry must be—

• (a) conveyed to the Authority in writing; and

• (b) notified in the Gazette; and

• (c) presented by the Minister to the House of Representatives; and

• (d) made publicly available.

(4) A statement of government policy concerning the electricity industry—

• (a) comes into effect on the date specified in the Gazette notice, which must be on or after the date of the notice and is to be treated as the date on which the statement is issued; and

• (b) may be amended, revoked, or replaced in the same way as it may be given.

(1) On written request by the Minister, the Authority must review and report on any matter relating to the electricity industry that is specified by the Minister.

(2) The Minister must consult the Authority before issuing a request for a review.

(3) When requesting a review, the Minister may, without limitation,—

• (a) specify a date by which, or a period within which, the Authority must provide its report; and

• (b) give the Authority any specific directions about how to conduct the review (such as directions about consultation, the issue of draft reports, timing); and

• (c) specify particular matters that the Authority is to consider.

(4) If, in the course of a review, the Authority considers that there are matters that fall outside the scope of the review but which it should nevertheless report on to the Minister, the Authority may include a report on those matters in the final report or in a separate report.

(5) Within 15 days after receiving a final report on a review conducted under this section, the Minister must make the report publicly available.

(6) However, in making the report publicly available, the Minister may omit any information that he or she would be likely to withhold if it were requested under the Official Information Act 1982.

(1) The Authority must make, and make publicly available, a charter that sets out—

• (a) how it will establish and interact with advisory groups appointed under sections 23 and 24; and

• (b) when and how it will consult advisory groups on material changes to the Code; and

• (c) how advisory groups must operate, including provisions concerning procedure.

(2) Before making a charter, the Authority must consult interested parties on a draft charter.

(3) The Authority and all advisory groups must comply with the charter made under this section.

(3A) The first charter must be made within the first year after this section comes into force.

(4) Until the first charter is made under this section,—

• (a) the Authority may establish and interact with advisory groups as it thinks fit; and

• (b) advisory groups may determine their own procedure, subject to any specific directions or requirements of the Authority.

(1) The Authority must appoint a Security and Reliability Council.

(2) The function of the Security and Reliability Council is to provide independent advice to the Authority on—

• (a) the performance of the electricity system and the system operator; and

• (b) reliability of supply issues.

(3) The Council must meet at least once every 6 months.

(4) The Council may determine its own procedure, subject to this Act and the charter (once made) prepared under section 22.

(5) The Authority must ensure that the members of the Council have between them appropriate knowledge and experience of the electricity industry to provide advice to the Authority, but members need not be independent persons.

(6) The Authority may not appoint a person as a member of the Council unless the Authority has first publicised an invitation for nominations for membership and considered any nominations received.

(7) The terms of appointment as a member of the Council are as determined by the Authority on an individual basis.

(1) The Authority must establish 1 or more other advisory groups to provide independent advice to the Authority on the development of the Code and on market facilitation.

(2) Every advisory group must include people whom the Authority considers have appropriate knowledge of, and experience in, the electricity industry and consumer issues, but members need not be independent persons.

(1) The following provisions of the Crown Entities Act 2004 apply, with all necessary modifications, to or in respect of each member of an advisory group appointed under section 23 or 24 (an advisory group member) as if the advisory group were a statutory entity:

• (a) sections 43, 48, 57, 77, 120, 121, 126, and 135:

• (b) sections 62 to 72, as if the disclosure required by those sections must be made to both the relevant advisory group and the Authority.

(2) Section 47(1) of the Crown Entities Act 2004 (which is about remuneration) applies to advisory group members as if the advisory groups were autonomous Crown entities.

(3) Each advisory group member is deemed to be a member of the Authority for the purpose of—

• (a) the Authority indemnifying the member under section 122 of the Crown Entities Act 2004; and

• (b) the Authority effecting insurance cover under section 123 of that Act; and

• (c) the application of section 125 of that Act.

(4) For the purpose of section 152 of the Crown Entities Act 2004 (which is about disclosing payments in an annual report), the Authority must treat each advisory group member as if he or she were a member of the Authority.

(1) There continues to be a Rulings Panel.

(2) The Rulings Panel is the same body as the body established by regulation 160 of the Electricity Governance Regulations 2003.

(1) The Rulings Panel comprises up to 5 members appointed by the Governor-General.

(2) The Governor-General must appoint—

• (a) 1 member to be the chairperson of the Rulings Panel, who must be a barrister or solicitor of the High Court of at least 7 years' standing; and

• (b) 1 member to be deputy chairperson of the Rulings Panel.

(3) The Governor-General may make an appointment under subsection (1) or (2) only in accordance with a recommendation by the Minister given after the Minister has consulted with the Minister of Justice and the Authority.

(5) Further provisions relating to the membership of the Rulings Panel may be set out in regulations made under section 119.

The function of the Rulings Panel is—

• (a) to assist in the enforcement of the Code by—

  • (i) hearing and determining complaints about breaches or possible breaches of the Code; and

  • (ii) hearing and determining appeals from certain decisions made under the Code; and

  • (iii) considering and resolving certain disputes between industry participants relating to the Code; and

  • (iv) making appropriate remedial and other orders; and

• (b) to review any suspension of trading by the Authority under section 47E; and

• (c) to exercise any other functions conferred on it under this Act or the regulations.

(1) The Authority must fund the Rulings Panel.

(2) The Authority may recover the costs of that funding from industry participants through levies payable under section 126.

(3) The remuneration of members of the Rulings Panel, other than remuneration covered by subsection (4), must be set by the Remuneration Authority under section 12(1)(a)(va) of the Remuneration Authority Act 1977 as if the members were members of an independent Crown entity.

(4) Members of the Rulings Panel are entitled, in accordance with the fees framework (as defined in section 10(1) of the Crown Entities Act 2004), to be reimbursed for actual and reasonable travelling and other expenses incurred in carrying out their functions as members.

(1) The Authority must maintain and publicise a register of industry participants.

(2) The register must record—

• (a) the name, contact details, and business details of every current industry participant, other than a participant that is exempt from the obligation to register:

• (b) the date on which a participant's name was first entered in the register:

• (c) the date and nature of every subsequent change to the details recorded for each participant:

• (d) the name of every person who, after this section comes into force, has been recorded as a current industry participant but subsequently ceases to be.

(3) For the purposes of the register,—

• (a) an industry participant's contact details are its physical address, postal address, telephone number, fax number, and email address; and

• (b) an industry participant's business details are details about the nature of its business (for example, whether it is involved in generation, transmission, distribution, retailing, or a combination of any of these).

(4) The register may, but need not, contain the names of all or any industry participants that are exempt from the obligation to be registered.

The name, contact details, and business details of every person that, immediately before this section comes into force, is recorded as an industry participant on the register maintained by the Electricity Commission under regulation 9 of the Electricity Governance Regulations 2003—

• (a) must be transferred to the register maintained under section 30(1); and

• (b) is deemed to have been recorded on that register on the date on which the register is established.

(1) An industry participant is registered as soon as its information is recorded, or deemed to be recorded, on the register.

(2) A registered industry participant must supply updated information, as soon as practicable, if its name, contact details, or business details change.

(1) The Authority must remove an industry participant's name, contact details, and business details from the register of current registered participants if satisfied that the person has ceased to be a participant; but the Authority may retain a record of the participant's name and business details on the register as a former participant.

(2) A person ceases to be a registered industry participant when the person's name is no longer recorded on the register as a current industry participant.

(3) An industry participant's obligations under the Code, and any proceedings underway or orders in effect under the Code, are not affected merely because the participant ceases to be registered as a current participant.

(1) An industry participant that fails, without reasonable excuse, to register as an industry participant commits an offence and is liable on summary conviction to a fine not exceeding $20,000.

(2) A registered industry participant commits an offence, and is liable on summary conviction to a fine not exceeding $20,000, if it knows or ought to know that the information recorded for it on the register is wrong or incomplete and it fails to supply updated information as required by section 32(2).

(1) The Code may contain any provisions that are consistent with the objective of the Authority and are necessary or desirable to promote any or all of the following:

• (a) competition in the electricity industry:

• (b) the reliable supply of electricity to consumers:

• (c) the efficient operation of the electricity industry:

• (d) the performance by the Authority of its functions:

• (e) any other matter specifically referred to in this Act as a matter for inclusion in the Code.

(2) The Code may not—

• (a) impose obligations on any person other than an industry participant or a person acting on behalf of an industry participant, or the Authority; or

• (b) purport to do or regulate anything that the Commerce Commission is authorised or required to do or regulate under Part 3 or 4 of the Commerce Act 1986 (other than to set quality standards for Transpower and set pricing methodologies (as defined in section 52C of that Act) for Transpower and distributors); or

• (c) purport to regulate any matter dealt with in or under the Electricity Act 1992.

(3) The Code may incorporate by reference any of the following:

• (a) New Zealand Standards, or standards, requirements, or recommended practices of any overseas or international body:

• (b) codes of practice issued under Part 4 of the Electricity Act 1992:

• (c) any other written material dealing with technical matters that, in the opinion of the Authority,—

  • (i) is too long to publish as part of the Code; or

  • (ii) it is impracticable to publish as part of the Code.

(4) Schedule 1 applies to any material incorporated by reference into the Code.

(1) The Code is a regulation for the purposes of the Regulations (Disallowance) Act 1989 but is not a regulation for the purposes of the Acts and Regulations Publications Act 1989.

(2) If any provision of the Code conflicts with this or any other Act, or with any regulation made under this or any other Act, the Act or regulation prevails.

(1) The Code made under section 39 must comprise—

• (a) a consolidation of the following enactments:

  • (i) the Electricity Governance Rules made under section 172H of the Electricity Act 1992:

  • (ii) subpart 2 of Part 1 and Parts 2, 2A, and 3 of the Electricity Governance Regulations 2003:

  • (iia) subpart 2 of Part 10 of the Electricity Governance Regulations 2003 (the Comalco agreements exemptions):

  • (iii) the Electricity Governance (Security of Supply) Regulations 2008:

  • (iv) the Electricity Governance (Connection of Distributed Generation) Regulations 2007:

• (b) provisions referred to in section 10(3) (concerning the system operator):

• (c) provisions to give effect to any exemptions granted under subpart 1 of Part 10 of the Electricity Governance Regulations 2003.

(2) The Code must include whatever changes to the text of the enactments referred to in subsection (1)(a) are necessary or reasonably required to ensure that the Code—

• (a) is consistent with this Act, the regulations, and any amendments made to other enactments by this Act; and

• (b) is accurate and coherent; and

• (c) addresses any transitional issues.

(2A) To avoid doubt, the Code must not include provisions relating to statements of opportunities or grid planning assumptions.

(3) The Code is deemed to include the provisions of any regulations or rules made, within 6 months before this section comes into force, under section 172E(3) of the Electricity Act 1992 (which relates to regulations and rules made urgently); but—

• (a) the provisions expire on the date that is 6 months after the date on which those regulations and rules come into force; and

• (b) the text of those regulations and rules need not be included in any draft or final copy of the Code that is publicised or made publicly available.

(1) The Minister must certify a draft Code that complies with section 37.

(2) The Minister must make reasonable efforts to ensure that the certified draft is publicised at least 1 month before section 39 comes into force.

(2) The Minister must publicise the draft Code as soon as practicable after it is certified.

(3) The Minister's certificate is conclusive evidence that the draft complies with section 37.

(1) The certified draft Code comes into force as the Code on the day this section comes into force.

(2) That Code is deemed to have been made by the Authority on that day.

(1) The Authority must make the Code, and all amendments to it, publicly available.

(2) The Minister must present a copy of the Code, and of all amendments to it, to the House of Representatives in accordance with section 4 of the Regulations (Disallowance) Act 1989.

(3) The Authority may periodically issue and make publicly available consolidated versions of the Code with all amendments incorporated, in which case the consolidation must clearly show the date on which it is issued and when each amendment was made.

(1) The Authority may amend the Code at any time, subject to section 42 of this Act and section 54V of the Commerce Act 1986.

(2) An amendment may be an addition, an omission, a substitution, or a complete replacement.

(3) An amendment is made by—

• (a) publicising the amendment; and

• (b) giving notice in the Gazette of—

  • (i) the date on which the amendment comes into force; and

  • (ii) a short summary of what the amendment contains or relates to.

(4) An amendment may not come into force until a date that is at least 28 days after the date of the Gazette notice.

(1) Before amending the Code, the Authority must—

• (a) publicise a draft of the proposed amendment; and

• (b) prepare and publicise a regulatory statement; and

• (c) consult on the proposed amendment and the regulatory statement.

(2) The regulatory statement required for a proposed amendment to the Code must include the following:

• (a) a statement of the objectives of the proposed amendment:

• (b) an evaluation of the costs and benefits of the proposed amendment:

• (c) an evaluation of alternative means of achieving the objectives of the proposed amendment.

(3) Despite subsection (1), the Authority need not comply with subsection (1)(b) or (c) if it is satisfied on reasonable grounds that—

• (a) the nature of the amendment is technical and non-controversial; or

• (b) there is widespread support for the amendment among the people likely to be affected by it; or

• (c) there has been adequate prior consultation (for instance, by or through an advisory group) so that all relevant views have been considered.

(1) The Authority may amend the Code without complying with section 42(1) if—

• (a) the Authority considers that it is necessary or desirable in the public interest that the proposed amendment be made urgently; and

• (b) along with the notice of the amendment that is published in the Gazette under section 41(3)(b), the Authority publishes a statement of the reasons why the urgent amendment is needed.

(2) Every amendment made under this section—

• (a) comes into force on the date specified in the Gazette notice (despite section 41(4)), which may be any day after the date of that notice; and

• (b) expires on the date that is 9 months after the date on which it comes into force.

(1) The Authority must develop, issue, and make publicly available a consultation charter that includes guidelines, not inconsistent with this Act, relating to the processes for amending the Code and consulting on proposed amendments.

(2) However, no amendment to the Code is invalid merely because—

• (a) there was no consultation charter at the time the amendment was consulted on or made; or

• (b) the Authority failed to comply with the charter.

(1) Before the date that is 1 year after this section comes into force, the Authority must either—

• (a) have amended the Code so that it includes all the matters described in subsection (2) (the new matters); or

• (b) to the extent that the Code does not include all the new matters, have delivered to the Minister a report described in subsection (3).

(2) The new matters are as follows:

• (a) provision of compensation by retailers to consumers during public conservation campaigns:

• (b) imposing a floor or floors on spot prices for electricity in the wholesale market during supply emergencies (including public conservation campaigns):

• (c) mechanisms to help wholesale market participants manage price risks caused by constraints on the national grid:

• (d) mechanisms to allow participants who buy electricity on the wholesale market (commonly called the demand side) to benefit from demand reductions:

• (e) requirements for distributors that do not send accounts to consumers directly to use more standardised tariff structures:

• (ea) requirements for all distributors to use more standardised use-of-system agreements, and for those use-of-system agreements to include provisions indemnifying retailers in respect of liability under the Consumer Guarantees Act 1993 for breaches of acceptable quality of supply, where those breaches were caused by faults on a distributor's network:

• (f) facilitating, or providing for, an active market for trading financial hedge contracts for electricity.

(3) A report provided under subsection (1)(b) must—

• (a) identify which new matters are not included in the Code; and

• (b) explain why the Authority has not amended the Code to include those matters; and

• (c) suggest alternative methods by which the matters are or may be provided for; and

• (d) set out if, when, and how the Authority proposes to provide for the matters.

(1) The Minister may amend the Code by including provisions for any of the new matters identified in section 45(2) if—

• (a) the Minister considers that the Code's provisions for a new matter are not satisfactory; or

• (b) the Minister considers that, in light of the Authority's report given under section 45(1)(b), it is necessary or desirable for the Minister to amend the Code to include provisions for the matter in the Code.

(2) The Minister may amend the Code as if he or she were the Authority, and sections 40 to 43 apply accordingly.

(3) Before amending the Code, the Minister must—

• (a) consult with the Authority (in addition to any consultation required under section 42); and

• (b) be satisfied that the amendments will achieve the Authority's objective in section 17.

(4) The power given by this section may not be exercised earlier than 1 year after, and not more than 3 years after, the date on which this section comes into force.

(1) Without limiting section 35, the Code may require Transpower and 1 or more industry participants to enter into 1 or more agreements for connection to, use of, and (where relevant) investment in, the national grid (a transmission agreement).

(2) The Code may prescribe default terms and conditions that are deemed to be included in transmission agreements.

(2A) The parties to a transmission agreement may, by mutual consent, agree to modify any default terms and conditions, but only if and to the extent that the Code permits those terms and conditions to be modified.

(2B) Every transmission agreement between Transpower and an industry participant is deemed to include a provision under which the industry participant agrees to pay Transpower any amounts that Transpower charges the industry participant in accordance with the transmission pricing methodology.

(3) A transmission agreement is binding on both parties and enforceable as if it were a contract between the parties that had been freely and voluntarily entered into.

(4) If the parties do not comply with a requirement in the Code to enter into 1 or more transmission agreements, the default terms and conditions in the Code, and the provision in subsection (2B), are binding on both parties and enforceable as if they were set out in a transmission agreement.

(6) The procedures for resolving disputes about transmission agreements between the parties to those agreements must be set out in the Code.

The purposes for which the powers in section 47B may be exercised are as follows:

• (a) carrying out the Authority's monitoring functions, which are to—

  • (i) monitor compliance with this Act (including Part 3), the regulations, and the Code; and

  • (ii) undertake and monitor the operation and effectiveness of market-facilitation measures under section 18(1)(f); and

  • (iii) undertake industry and market monitoring, and carry out any other function referred to in section 18(1)(g):

• (b) carrying out the Authority's function of investigating breaches or possible breaches of, and enforcing compliance with, this Part, Part 4, the regulations, and the Code.

(1) The Authority may exercise the powers in this section only for a purpose described in section 47A.

(2) The Authority may require an industry participant to do any of the following:

• (a) provide, within any reasonable time specified by the Authority, any information, papers, recordings, and documents that are in the possession, or under the control, of the participant and that are requested for the purpose:

• (b) permit its officers or employees to be interviewed (which interview may be recorded) and ensure as far as possible that they are made available for interview and answer truthfully and fully any questions put to them:

• (c) give all other assistance that may be reasonable and necessary to enable the Authority to carry out its functions and exercise its powers.

(3) Nothing in this section requires a person to give the Authority access to any premises, except for a purpose described in section 47A(b) and under a warrant issued under section 47C.

(4) If an industry participant, whether directly or through an officer or employee, fails to comply with a requirement of the Authority under this section, the failure is treated as if it were a breach of the Code and the Authority may apply to the Rulings Panel for any order under section 56.

(1) The Authority may, for a purpose specified in section 47A(b), authorise an employee of the Authority (an authorised person) to search, under a warrant issued under subsection (2), any place named in the warrant for the purpose of ascertaining whether an industry participant has breached, or may breach, this Part, Part 4, the regulations, or the Code.

(2) A District Court Judge, Justice, or Community Magistrate, or a Court Registrar (not being a constable) who is satisfied that there are reasonable grounds to believe that it is necessary, for the purpose of ascertaining whether an industry participant has breached, or may breach, this Part, Part 4, the regulations, or the Code, for an authorised person to search any place may, by warrant, authorise that person to search a place specified in the warrant.

(3) Sections 98B to 98F of the Commerce Act 1986 apply in relation to a search under this section as if—

• (a) references in those sections to a warrant issued under section 98A of the Commerce Act 1986 were references to a warrant issued under subsection (2) of this section; and

• (b) references to the Commission were references to the Authority.

(1) Nothing in section 47B limits any claim for legal professional privilege.

(2) If the Authority requires an industry participant to do anything referred to in section 47B, neither the industry participant nor any officer or employee of the industry participant is excused from answering a question or giving any information or document on the ground that to do so may incriminate or tend to incriminate the industry participant or the officer or employee.

(3) However, any self-incriminating statement or document made or given by an officer or employee, or an industry participant that is an individual, is not admissible as evidence in any criminal or civil proceedings against that person.

(1) This section applies to a generator or purchaser that—

• (a) is unable to pay its debts; or

• (b) calls a meeting for the purpose of Part 14 of the Companies Act 1993; or

• (c) is adjudicated bankrupt; or

• (d) in the case of a company, society, or partnership, has a receiver or statutory manager or similar person appointed in respect of it or of all or any of its assets; or

• (e) is put into liquidation.

(2) A generator or purchaser is adjudicated bankrupt if,—

• (a) in the case of a partnership, all of the partners are adjudicated bankrupt; or

• (b) in the case of an individual, that individual is adjudicated bankrupt.

(3) The Authority may suspend the generator's or purchaser's rights to make bids or offers under the Code, with effect from a time to be determined by the Authority, which must be time later than the relevant event under subsection (1).

(4) Despite any suspension of trading ordered by the Authority, the generator or purchaser must continue to meet its common quality obligations under the Code, to the extent that the suspension order permits.

(5) After a suspension order under this section takes effect,—

• (a) the Authority may order that any rights that were suspended be reinstated in respect of the generator or purchaser; and

• (b) the Authority may apply to the Rulings Panel for a termination order in respect of the generator or purchaser; and

• (c) the generator or purchaser may apply to the Rulings Panel to review the suspension by the Authority; and the Rulings Panel may, on review, exercise all the powers that the Authority has under subsection (3) and paragraph (a) of this subsection.

(1) Complaints about breaches or possible breaches of the Code must be made to the Authority at first instance.

(2) The Authority must deal with complaints in accordance with this Part and the regulations.

(3) Complaints may subsequently be referred to the Rulings Panel, in accordance with this Part and the regulations, by either the Authority or an industry participant.

(4) The Rulings Panel may hear and determine appeals against certain decisions, identified in the regulations or the Code, that were made under the Code.

(5) The Rulings Panel may consider and resolve certain disputes, identified in the regulations or the Code, that are between industry participants and relate to the Code.

(4) The Rulings Panel may determine appeals against decisions made under the Code, and resolve disputes between industry participants that relate to the Code, that are of a kind that are identified in the regulations or the Code.

(5) If the regulations or the Code prescribe practices and procedures in relation to any kind of such appeal or dispute, the Rulings Panel must apply those practices and procedures when dealing with the appeal or dispute.

(1) The Authority may at any time apply to the High Court for the grant of an interim injunction—

• (a) restraining an industry participant from doing anything that is in breach of the Code; or

• (b) requiring an industry participant to do something in accordance with the Code.

(2) The court may grant the injunction if, in the opinion of the court, it is desirable to do so.

(3) Subsection (2) applies, in the case of an injunction under subsection (1)(a),—

• (a) whether or not the participant has done, or omitted to do, that thing; and

• (b) whether or not there is an imminent danger of substantial damage to any person if the participant does, or omits to do, that thing.

(4) The court may rescind or vary the injunction on application by the Authority or any participant affected by the injunction.

(5) The court must not require the Authority, as a condition of granting an interim injunction, to give an undertaking as to damages, and must not, when determining the application, take into account the fact that the Authority is not required to give such an undertaking.

(6) Nothing in this Act or the regulations prevents the Authority from seeking an interim injunction under this section at any time.

(1) The Authority may not exercise its powers in relation to a breach or possible breach of the Code if the breach—

• (a) was discovered, or ought reasonably to have been discovered, more than 3 years before the exercise of the power; or

• (b) occurred more than 10 years before the exercise of the power.

(2) However, once the Authority has exercised a power in relation to the breach or possible breach, the limitations in subsection (1) do not apply.

(1) Every complaint, appeal, or dispute before the Rulings Panel must be dealt with by a panel of 3 members, one of whom must be the chairperson (except when the deputy chairperson acts on his or her behalf).

(2) Subject to this Act and the regulations, and the requirements of natural justice, the Rulings Panel may determine its own procedures.

(2) The Rulings Panel may determine its own procedures, subject to this Act and the regulations, the requirements of natural justice, and, in relation to particular kinds of appeals and disputes, the Code.

(3) The Rulings Panel has all the powers necessary to perform its functions in accordance with the Act and the regulations, the regulations, and the Code.

(1) On determining a complaint that an industry participant has breached the Code, the Rulings Panel may decide that no action should be taken, or do any 1 or more of the following:

• (a) issue a private warning or reprimand to an industry participant:

• (b) make an order that a public warning or reprimand be issued to an industry participant:

• (c) impose additional or more stringent record-keeping or reporting requirements under or in connection with the Code:

• (d) make a pecuniary penalty order requiring an industry participant to pay a pecuniary penalty to the Crown of an amount not exceeding $200,000 (see section 58):

• (e) make a compensation order requiring an industry participant to pay a sum by way of compensation to any other person:

• (f) make a compliance order requiring an industry participant that is found not to be complying with the Code to take any action that is necessary to restore it to a position of compliance (see section 59):

• (g) make orders regarding the reasonable costs of any investigations or proceedings:

• (h) recommend to the Authority that a change should be made to the Code or the regulations:

• (i) recommend to the Minister that a change should be made to the regulations or the Act.

(2) The Rulings Panel must take into account its own previous decisions in respect of any similar situations previously dealt with by the Authority or any predecessor of the Authority.

(1) The remedies that the Rulings Panel may impose under section 56 are the only remedies in respect of a breach of the Code.

(2) No one may bring an action for breach of statutory duty that arises out of, or relates to, a breach of the Code.

(3) No industry participant may bring an action in tort against a market operation service provider that arises out of, or relates to, any act, matter, or thing done, or required or omitted to be done, by the market operation service provider in the course of it providing market operation services, provided that the act or omission is not a fraudulent act or omission by the market operation service provider.

(4) Except as provided in subsection (3), nothing in this section limits the recovery of—

• (a) a debt owing under any order of the Rulings Panel made under this Act; or

• (b) damages in tort other than breach of statutory duty; or

• (c) damages for breach of contract, or for any other wrong, that arises from an act or omission that is also a breach of the Code.

(1) The Rulings Panel may make a pecuniary penalty order under section 56(1)(d) only on an application by the Authority.

(2) In determining whether to make a pecuniary penalty order and, if so, the amount of the order, the Rulings Panel must consider the seriousness of the breach of the Code, having regard to the following:

• (a) the severity of the breach:

• (b) the impact of the breach on other industry participants:

• (c) the extent to which the breach was inadvertent, negligent, deliberate, or otherwise:

• (d) the circumstances in which the breach occurred:

• (e) any previous breach of the Code by the industry participant:

• (f) whether the industry participant disclosed the matter to the Authority:

• (g) the length of time the breach remained unresolved:

• (h) the participant’s actions on learning of the breach:

• (i) any benefit that the participant obtained, or expected to obtain, as a result of the breach:

• (j) any other matters that the Rulings Panel thinks fit.

An industry participant that breaches a compliance order made under section 56(1)(f), or a record-keeping an order made under section 56(1)(c), commits an offence and is liable on summary conviction to a fine not exceeding $20,000.

The Rulings Panel may make a suspension order or a termination order against an industry participant if—

• (a) the industry participant has failed to comply with an order of the Rulings Panel, and the failure has seriously prejudiced the operational or financial security of the wholesale market or transmission system for electricity; or

• (b) the Authority has suspended trading in a generator or purchaser under section 47E and applies to the Rulings Panel for a termination order.

(1) A suspension order suspends all or specified rights under the Code of the industry participant against whom it is made, subject to any conditions set out in the order, and for the period specified in the order.

(2) A termination order terminates all or specified rights under the Code of the industry participant against whom it is made.

(3) A termination order does not affect any liability for payment of money under the Code before the date of the relevant order.

An industry participant commits an offence, and is liable on summary conviction to a fine not exceeding $20,000, if it fails to comply with—

• (a) a suspension order or a termination order; or

• (b) any direction or arrangement made by the Rulings Panel under the regulations in relation to a suspension order or a termination order.

(1) At the conclusion of an appeal against a decision made under the Code, the Rulings Panel may—

• (a) confirm, modify, or reverse the decision; or

• (b) refer the decision back to the original decision-maker, with or without directions relating to the reconsideration.

(2) A decision that is appealed against remains in force until the appeal is determined, unless the Rulings Panel orders otherwise.

Following consideration of a dispute between industry participants in accordance with the regulations, the Rulings Panel may make under this section any order that it determines is just and reasonable in the circumstances, including—

• (a) an order requiring 1 or more parties to the dispute to take any action, including paying money to any other party, or refrain from taking any action, that the Rulings Panel specifies; and

• (b) an order, having assessed damages against any party, awarding compensation to be paid to the party.

In determining an appeal, or resolving a dispute, of a kind identified in the regulations or the Code, the Rulings Panel may make any determination, order, or direction that it thinks fit, subject to—

• (a) any general provisions of the regulations relating to appeals and disputes; or

• (b) if there are specific provisions in the regulations or the Code relating to that kind of appeal or dispute, those provisions.

Every order of the Rulings Panel under section 56, 60, or 62B section 56 or 60—

• (a) must be in writing; and

• (b) is subject to this subpart and any regulations that limit or restrict the amount of liability under an order or cumulative orders; and

• (c) may be amended or revoked at any time by the Rulings Panel.

An industry participant that is affected by a decision of the Rulings Panel may appeal that decision to the High Court on the ground of lack of jurisdiction.

There is a right of appeal to the High Court, on a question of law only, against any decision of the Authority or the Rulings Panel.

(1) The Authority or an industry participant may appeal to the High Court against the following orders made by the Rulings Panel:

• (a) an order requiring a public warning or reprimand to be issued (section 56(1)(b)):

• (b) a pecuniary penalty order, or the amount payable under a pecuniary penalty order (section 56(1)(d)):

• (c) a compensation order, or the amount payable under a compensation order (section 56(1)(e)):

• (d) a compliance order (section 56(1)(f)):

• (e) an order made under section 62B.

• (e) a costs order (section 56(1)(g)):

• (f) an order by the Rulings Panel, in relation to a particular kind of appeal or dispute, that is identified in the regulations or the Code as an order that may be appealed to the High Court under this section.

(2) An industry participant may appeal to the High Court against a suspension order or termination order made by the Rulings Panel.

(3) An industry participant may exercise a right of appeal under this section only if the participant is—

• (a) an industry participant in whose favour or against whom the order of the Rulings Panel is made; or

• (b) an industry participant who joined or was joined as a party to the proceeding that is the subject of the appeal.

An appeal under this Part must be made by giving notice of appeal within 20 working days after the date of the decision or order appealed against or within any further time that the High Court allows.

In determining an appeal under section 66, the High Court may do any 1 or more of the following things:

• (a) confirm, modify, or reverse the order, or any part of it:

• (b) exercise any of the powers that could have been exercised by the Rulings Panel in relation to the matter to which the appeal relates.

(1) The High Court may, instead of determining an appeal, direct the Rulings Panel to reconsider, either generally or in respect of any specified matters, the whole or any specified part of the matter to which the appeal relates.

(2) In giving any direction under this section, the court must—

• (a) advise the Rulings Panel of its reasons for doing so; and

• (b) give to the Rulings Panel any directions that it thinks just concerning the reconsideration or otherwise of the whole or any part of the matter that is referred back.

(3) In reconsidering the matter, the Rulings Panel must have regard to the court's reasons for giving the direction, and the court's directions.

If an appeal is brought against any decision or order of the Rulings Panel, the decision or order remains in full force pending the determination of the appeal, unless the High Court orders to the contrary.

(1) The High Court may, in its discretion, order that the hearing or any part of the hearing of any appeal under this Part be held in private.

(2) The High Court may make an order prohibiting the publication of any report or description of a proceeding or any part of a proceeding (whether heard in public or in private), but no order may prohibit the publication of any determination of the court.

(1) Any party to an appeal before the High Court under this Part who is dissatisfied with a decision or order of the High Court, may, with the leave of the High Court or of the Court of Appeal, appeal to the Court of Appeal.

(2) Section 66 of the Judicature Act 1908 applies to the appeal.

(3) In determining whether to grant leave to appeal under this section, the court to which the application for leave is made must have regard to the following matters:

• (a) whether any question of law or general principle is involved:

• (b) the importance of the issues to the parties:

• (c) the amount of money in issue:

• (d) any other matters that in the particular circumstances the court thinks fit.

(4) The court granting leave may, in its discretion, impose any conditions that it thinks fit, whether as to costs or otherwise.

(1) The purpose of this Part is to promote competition in the electricity industry—

• (a) by prohibiting a person who is involved in a distributor from being involved in a generator where that may create incentives and opportunities to inhibit competition in the electricity industry; and

• (b) by restricting relationships between a distributor and a generator or a retailer, where those relationships may not otherwise be at arm's length.

(2) In general terms, this Part imposes rules in respect of distributors as follows:

• (a) ownership separation, if a person is involved both in a distributor and in a generator with more than 250 MW of generation directly connected to the national grid:

• (b) corporate separation and arm's-length rules, if a person is involved both in a distributor and in either or both of—

  • (i) a generator that generates more than 50 MW of generation connected to the distributor's network:

  • (ii) a retailer that retails more than 75 GWh per year to customers connected to the distributor's network:

• (c) use-of-systems agreement rules, if a connected retailer retails more than 5 GWh per year to customers connected to the distributor's local network:

• (d) rules preventing persons involved in distributors from paying retailers in respect of the transfer of the retail transfer of retail customers:

• (e) no-discrimination rules that apply when distributors, or electricity trusts or customer co-operatives involved in distributors, pay dividends or rebates.

(3) Subsection (2) is intended only as a guide to the general scheme and effect of this Part.

In this Part and Schedules 2 and 3, unless the context otherwise requires,—

(1) For the purposes of this Act, a person is involved in a distributor, a generator, or a retailer if the person—

• (a) carries on a business that does any of those things, either alone or together with its associates and either on its own or another’s behalf; or

• (b) exceeds the 10% threshold in respect of a business that does any of those things; or

• (c) has material influence over a business that does any of those things.

(2) A person exceeds the 10% threshold in respect of a business if the person—

• (a) has more than 10% of the control rights in the business; or

• (b) has more than 10% of the equity return rights in the business; or

• (c) is one of 2 or more associates who, in aggregate, have more than 10% of the control rights in the business; or

• (d) is one of 2 or more associates who, in aggregate, have more than 10% of the equity return rights in the business.

(3) Involvement has a corresponding meaning.

(4) This section is subject to Schedule 2.

(1) A person who is involved in a distributor must not be involved in 1 or more generators that have a total capacity of more than 250 MW that is generated by 1 or more generating plants that are directly connected to the national grid.

(2) To avoid doubt, generation connected to a distribution network is not directly connected to the national grid.

(1) The person or persons who carry on the business of distribution must carry on that business in a different company from the company that carries on the business of a connected generator or a connected retailer.

(2) Every person who is involved in a distributor, and every person who is involved in a connected generator or a connected retailer, must comply, and ensure that the person's businesses comply, with the arm's-length rules.

(3) In this section, unless the context otherwise requires,—

(1) Every director of a distributor in respect of which there is a connected retailer or a connected generator must ensure that—

• (a) the distribution business has a comprehensive, written use-of-systems agreement that provides for the supply of line function services and information to the connected retailer or connected generator (as the case may be); and

• (b) the terms of that use-of-systems agreement do not discriminate in favour of 1 business and do not contain arrangements that include elements that the business usually omits, or omit elements that the business usually includes, in use-of-systems agreements with parties that are—

  • (i) connected or related only by the transaction or dealing in question; and

  • (ii) acting independently; and

  • (iii) each acting in its own best interests; and

• (c) the business operates in accordance with that use-of-systems agreement; and

• (d) the business publicises that use-of-systems agreement and provides it to the Authority.

(1AA) A use-of-systems agreement required by subsection (1)(a) must be entered into, in the case of a business to which the corporate separation rule does not apply, as if the distribution business and the connected retailer or connected generator were separate legal persons.

(1A) In this section, unless the context otherwise requires,—

(2) The directors of the distributor must ensure that there is also publicised, and provided to the Authority, a certificate signed by those directors stating whether or not, in the preceding calendar year,—

• (a) the terms in the use-of-systems agreement are a true and fair view of the terms on which line function services and information were supplied in respect of the retailing or generating to which the agreement relates during that year; and

• (b) this section was otherwise fully complied with during that year.

(3) Every director commits an offence who—

• (a) refuses or knowingly fails to comply with this section; or

• (b) allows a use-of-systems agreement or a certificate to be publicised or provided to the Authority knowing that it is false or misleading in a material particular.

(4) Every director who commits an offence under subsection (3) is liable on summary conviction to a fine not exceeding $200,000.

(1) A distributor, and any other person listed in subsection (2), must not pay, or offer to pay, any consideration to a retailer in respect of the transfer to a connected retailer of any retail customers who are connected to the distributor’s networks.

(2) The persons are—

• (a) the distributor or any other person involved in the distributor:

• (b) a connected generator in respect of the distributor or any other person involved in the connected generator:

• (c) a connected retailer in respect of the distributor or any other person involved in the connected retailer.

(2A) In this section, connected retailer and connected generator have the same meaning as in section 79.

(3) To avoid doubt, subsection (1) includes a prohibition on—

• (a) any agreement to acquire the assets or voting securities of another retailer (regardless of whether any, or only nominal, consideration is attributed to customers) as a result of which there is a transfer of responsibility for retailing electricity to customers; and

• (b) any consideration that is directly or indirectly or in whole or in part in respect of the transfer of any of another retailer's customers or customer accounts.

(4) Every person commits an offence who knowingly fails to comply with this section and is liable on summary conviction to a fine not exceeding $500,000.

(1) This section applies if a distributor has a connected retailer.

(2) Every person listed in subsection (3) must ensure that any rebates or dividends or other similar payments paid do not discriminate between—

• (a) customers of the connected retailer; and

• (b) customers of other retailers where those customers are connected to the distributor's networks.

(3) The persons are—

• (a) the directors of the distributor:

• (b) the trustees of any customer trust or community trust that is involved in the distributor and the connected retailer:

• (c) the directors of any customer co-operative that is involved in the distributor and the connected retailer.

(3A) In this section, connected retailer has the same meaning as in section 79.

(4) Every director and trustee commits an offence who knowingly fails to comply with this section and is liable on summary conviction to a fine not exceeding $200,000.

(1) If the High Court is satisfied on the application of the Authority that a person has breached a provision of this Part, the court may order the person to pay to the Crown a pecuniary penalty that the court determines to be appropriate.

(2) The amount of any pecuniary penalty must not, in the case of an individual, exceed $500,000 in respect of each act or omission.

(3) The amount of any pecuniary penalty must not, in the case of a body corporate, exceed, in respect of each act or omission, the greater of—

• (a) $10 million; or

• (b) either,—

  • (i) if it can be readily ascertained and if the court is satisfied that the contravention occurred in the course of producing a commercial gain, 3 times the value of any commercial gain resulting from the contravention; or

  • (ii) if the commercial gain cannot be readily ascertained, 10% of the turnover of the body corporate and all of its interconnected bodies corporate (within the meaning of the Commerce Act 1986 and section 94) (if any).

(4) In any proceedings under this section for a pecuniary penalty, the standard of proof is the standard of proof applying in civil proceedings.

(5) In determining whether to make a pecuniary penalty order and, if so, the amount of the order, the court must have regard to all relevant matters, including—

• (a) the nature and extent of the act or omission:

• (b) the nature and extent of any loss or damage suffered by any person as a result of the act or omission:

• (c) the circumstances in which the act or omission took place:

• (d) whether the person has previously been found by the court in proceedings under this Part (or any predecessor to this Part) to have engaged in any similar conduct.

(1) Where it appears to the High Court, on the application of the Authority or any other person, that a person intends to engage, or is engaging, or has engaged, in conduct that constitutes or would constitute a breach of a provision of this Part, the court, by order, may do all or any of the following things:

• (a) grant an injunction restraining any person from engaging in conduct that constitutes or would constitute such a breach:

• (b) impose on any person obligations to be observed in the carrying on of any business or the safeguarding of any business or any assets of any business:

• (c) provide for the carrying on of any business or the safeguarding of any business or assets of any business, either by the appointment of a person to conduct or supervise the conduct of any business (on such terms and with such powers as may be specified or described in the order), or in any other manner, as the court thinks necessary in the circumstances of the case.

(2) In any proceedings under this section, the Authority, upon the order of the court, may obtain discovery and administer interrogatories.

Every person is liable in damages for any loss or damage caused by that person engaging in conduct that constitutes a breach of a provision of this Part.

(1) If the High Court is satisfied, on the application of the Authority or any other person, that a person has breached a provision of this Part, the court may give directions ordering a person in breach to renegotiate any agreement that contravenes, or gives rise to a breach of, a provision of this Part, on such terms as the court specifies.

(2) If directions under subsection (1) are not complied with to the satisfaction of the court, the court may—

• (a) reopen any agreement that breaches, or gives rise to a breach of, a provision of this Part and make any orders it deems just and equitable for the purpose of reopening the transaction and setting aside the breach, and, if appropriate, reinstating the parties as nearly as may be in their former positions:

• (b) give directions concerning the business or property of the person, or the management or administration of that person's business or property (including a direction that a person cease to be a manager of the business), and every person is bound by the directions.

(1) In any civil proceedings under this Part, the Authority, upon the order of the High Court, may obtain discovery and administer interrogatories.

(2) Civil proceedings under this Part may not be commenced more than 3 years after the matter giving rise to the breach arose.

(3) Where conduct by any person constitutes a breach of 2 or more provisions of this Part, civil proceedings may be instituted under this Part against that person in relation to the breach of any 1 or more of the provisions; but no person is liable to more than 1 pecuniary penalty under this Part in respect of the same conduct.

(4) Criminal proceedings under this Part may be started against a person whether or not proceedings for an order under section 82 have been started against the person for the same or substantially the same breach in respect of which the criminal proceedings have been started.

(5) Uncompleted proceedings for an order under section 82 must be stayed if criminal proceedings are started or have already been started against the person for the same or substantially the same breach in respect of which the order is sought.

The following provisions of the Commerce Act 1986 apply for the purposes of the exercise by the Authority and the High Court of their jurisdiction and powers under this Part as if the Authority were the Commerce Commission, as if references to provisions of the Commerce Act 1986 were references to corresponding provisions of this Part of this Act, and with other necessary modifications:

• (a) sections 77 and 78 (lay members):

• (b) section 79 (evidence not otherwise admissible):

• (d) section 88A (when undertaking as to damages not required by Authority):

• (e) section 89 (other orders):

• (f) section 90 (conduct by servants or agents):

• (g) Part 7 (except sections 98H, 99A, 104, 105, 106, 108, 110, and 111).

Proceedings brought under this Part are in addition to any proceedings brought under any other Act.

This Part extends to persons outside New Zealand who are involved in a distributor, generator, or retailer in New Zealand.

(1) Each director of a distributor referred to in section 79(1A) section 79(1) (use-of-system agreements) must ensure that the distributor discloses the quantity of electricity sold each financial year by connected retailers to customers who are connected to its local network (within the meanings of that section).

(1A) The disclosure must be made in a statement to the Authority within 2 months after the end of the financial year.

(2) The statement must be in the form prescribed by the Authority from time to time.

(4) The statement must be publicised by the Authority and the distributor.

(5) Every director commits an offence who—

• (a) refuses or knowingly fails to comply with this section; or

• (b) provides the statement to the Authority knowing that it is false or misleading in a material particular.

(6) Every director who commits an offence under subsection (5) is liable on summary conviction to a fine not exceeding $200,000.

(1) Each director of a business to which the arm’s-length rules apply must provide to the Authority, no later than 31 March in each year, a statement confirming whether or not the director has complied with all of the arm’s-length rules during the preceding calendar year.

(2) The directors and the Authority must ensure that the statement is publicised.

(3) Every director commits an offence who—

• (a) refuses or knowingly fails to comply with this section; or

• (b) provides the statement to the Authority knowing that it is false or misleading in a material particular.

(4) Every person who commits an offence under subsection (3) is liable on summary conviction to a fine not exceeding $200,000.

(1) The Authority may, by notice in the Gazette, exempt—

• (a) any business or involvement from the application of this Part; or

• (b) any person from compliance with any provisions of this Part.

(2) The Authority may grant an exemption only if it is satisfied that—

• (a) the exemption will either promote, or not inhibit, competition in the electricity industry; and

• (b) the exemption will not permit an involvement in a distributor and a generator or a retailer that may create incentives and opportunities to inhibit competition in the electricity industry.

(3) The exemption takes effect from the date specified in the exemption (which may not be earlier than the date of the Gazette notice).

(4) The Authority may grant an exemption on any terms and conditions that it reasonably considers are necessary to give effect to the purpose of this Part.

(5) The Authority may in like manner vary or revoke any such exemption.

(6) The Authority must make publicly available a list of all current exemptions under this section.

(7) An exemption under this section is not a regulation for the purposes of the Regulations (Disallowance) Act 1989 or the Acts and Regulations Publication Act 1989.

Except as provided in section 94, nothing in this Part overrides or limits the provisions of the Commerce Act 1986.

(1) For the purposes of Part 2 of the Commerce Act 1986, businesses to which section 78 (corporate separation and arm’s-length rules) applies are deemed to be separate bodies corporate that are not interconnected, despite the fact that they may have a common owner.

(2) Subsection (1) applies despite section 2(7) of the Commerce Act 1986.

(1) An agreement lawfully entered into does not become illegal or unenforceable by any party by reason of the fact that its performance is in breach of a provision of this Part.

(2) An agreement entered into in breach of a provision of this Part is voidable at the option of any party to the agreement who is not in breach of a provision of this Part by notice in writing to the other party to the agreement at any time within 1 month after the innocent party has notice that the agreement is in breach of a provision of this Part.

Any question under this Part or Schedule 2 or 3 is to be determined according to the nature, substance, and economic effect of the interest or relationship or other facts, and independently of form.

(1) Any person described in subsection (2) may make a complaint to the dispute resolution scheme concerning Transpower (except in its capacity as system operator) or any distributor or retailer.

(2) The persons who may make a complaint are any persons (including consumers, potential consumers, and owners and occupiers of land) except members of the dispute resolution scheme.

(3) The dispute resolution scheme is either—

• (a) the approved scheme identified in clause 3 of Schedule 4; or

• (b) the regulated scheme appointed under provided for in regulations made under clause 17 of Schedule 4.

(4) The procedures for making complaints to the dispute resolution scheme are as set out in the rules of the dispute resolution scheme.

(1) Transpower (other than in its capacity as system operator), and every distributor and retailer, must be a member of the dispute resolution scheme, unless exempt under subsection (3).

(2) A person commits an offence and is liable on summary conviction to a fine not exceeding $100,000 if the person knowingly refuses or fails to become a member of the dispute resolution scheme.

(3) A person need not be a member of a dispute resolution scheme if—

• (a) the person is a member of a class of industry participants identified in regulations made under section 118 as a class of industry participants that need not be members; or

• (b) the Minister of Consumer Affairs exempts the person by issuing an individual exemption notice in the Gazette that—

  • (i) identifies the person that is exempt from the obligation to be a member; and

  • (ii) gives reasons for the exemption.

(3A) The Minister of Consumer Affairs may grant an individual exemption to a person only if he or she is satisfied that membership of the dispute resolution scheme by the person is not necessary in order to meet the purpose of the dispute resolution scheme because complaints are unlikely to be made against the person or because complaints should be made in another forum.

(3B) The Minister of Consumer Affairs may amend or revoke an individual exemption, by issuing a notice in the Gazette that identifies the exempt participant and gives reasons for the amendment or revocation, but only if the Minister—

• (a) has given notice of the proposed amendment or revocation to the exempt person (where possible) and given the person a reasonable opportunity to comment on the proposal; and

• (b) is satisfied that the amendment or revocation is necessary or desirable in order to meet the purpose of the dispute resolution scheme.

(4) To avoid doubt, an individual exemption notice issued under subsection (3)(b) is not a regulation for any purpose.

(5) The Ministry must publicise a list of all current class and individual exemptions.

(1) Members of the dispute resolution scheme must comply with the rules of the scheme.

(2) On the application of the person responsible for the dispute resolution scheme, a District Court may require a member of the scheme to do either or both of the following:

• (a) comply with the rules of the scheme:

• (b) comply with a binding settlement determined by the scheme in response to a complaint.

(3) If a District Court is satisfied that the terms of a binding settlement are manifestly unreasonable, the court's order under subsection (2)(b) may modify the terms of the binding settlement, but only to the extent that the modification results in a binding settlement that could have been made under the dispute resolution scheme.

(4) If an order requiring a member to comply with a binding settlement includes a requirement that the member pay an amount of money to a person, that order (or part of the order) may be enforced as if it were a judgment by a District Court for the payment of a sum of money.

(5) A reference in this section to a member includes a reference to a person who was a member of the dispute resolution scheme at the relevant time but is no longer a member at the time of the application or order.

(1) A member or former member of the dispute resolution scheme who, knowing that the member or former member is subject to an order made under section 99, fails to comply with the order, or fails to comply with the order within the time or in the manner required by the order, commits an offence and is liable on summary conviction to a fine not exceeding $100,000.

(2) Nothing in this section applies to an order or part of an order of a District Court referred to in section 99(4).

The trustees of a customer trust and the trustees of a community trust must, within 4 months after the end of each financial year of the trust,—

• (a) prepare financial statements in accordance with generally accepted accounting practice (within the meaning of section 3 of the Financial Reporting Act 1993, applied as if trusts were reporting entities) with respect to the affairs of the trust for that financial year; and

• (b) submit those financial statements to an auditor for audit.

(1) The trustees of a customer trust and the trustees of a community trust must make publicly available the financial statements referred to in section 101 and the auditor's report on those financial statements.

(2) The trustees must also notify the fact that copies of the documents referred to in subsection (1) are so available (and where) by advertisement in the news section of 2 separate editions of each newspaper that is widely read by customers of the customer trust or by persons in the community of the community trust (as the case requires).

(1) The trustees of a community trust and the trustees of a customer trust must, in each financial year, hold an annual meeting of beneficiaries at which the beneficiaries appoint an auditor to hold office from the conclusion of that meeting until the conclusion of the next annual meeting of beneficiaries.

(2) The trustees may fill any casual vacancy in the office of auditor by appointing an auditor to hold office until the conclusion of the next annual meeting of beneficiaries (but, while the vacancy remains, the surviving or continuing auditor, if any, may continue to act as auditor).

(3) The fees and expenses of the auditor must be fixed—

• (a) at the annual meeting of beneficiaries or in the way the beneficiaries determine at the meeting, if the auditor is appointed at the annual meeting:

• (b) by the trustees, if the auditor is appointed by the trustees.

(4) An auditor of a customer trust or community trust—

• (a) must be a person who is qualified to act as an auditor under section 199(1) of the Companies Act 1993 and, in selecting an auditor, the beneficiaries may seek the advice of the Auditor-General:

• (b) must not be a trustee, a director, an employee, or an agent of the trust or of any distributor owned by the trust, or be otherwise disqualified from being an auditor under section 199(2)(b) and (d) of the Companies Act 1993.

(5) In addition, sections 198, 200, and 202 to 207 of the Companies Act 1993 apply in relation to the auditor.

(6) These sections of the Companies Act 1993 apply as if references to a company were to a trust, references to a director were to a trustee, references to a board were to the trustees, references to shareholders were to beneficiaries, references to a subsidiary were to a distributor owned by the trust and the distributor's subsidiaries, and all other necessary modifications were made.

(1) The trustees must give no less than 14 days' notice of the annual meeting of beneficiaries to appoint an auditor in the news section of 2 separate editions of each newspaper that is widely read by customers of the customer trust or by persons in the community of the community trust (as the case requires).

(2) Every beneficiary has 1 vote.

(3) The quorum for the annual meeting is 20 beneficiaries.

(4) No business may be transacted at the annual meeting if a quorum is not present.

(1) If no auditor is appointed in accordance with section 103(1) or a casual vacancy in the office of auditor is not filled within 1 month after the vacancy occurring in accordance with section 103(2), the Auditor-General must be the auditor of a customer trust or community trust.

(2) The trustees of a customer trust or community trust must, within 5 working days after subsection (1) becoming applicable, give written notice to the Auditor-General of this fact.

(3) If the Auditor-General becomes the auditor of a trust, the sections and Parts of the Public Audit Act 2001 listed in section 19 of that Act apply to the trust, until an auditor is appointed at an annual meeting of beneficiaries, as if references in those sections to a public entity were references to the trust and with any other necessary modifications.

(1) The trustees of a customer trust and the trustees of a community trust must comply with sections 101 to 105, rather than section 46A of the Energy Companies Act 1992.

(2) Every trustee commits an offence and is liable on summary conviction to a fine not exceeding $200,000 who, without lawful justification or excuse, knowingly acts in breach of, or fails to comply in any respect with, any provision of sections 101 to 105.

(3) Except as provided in subsection (1), nothing in sections 101 to 105 limits any other enactment or rule of law concerning the maintenance and auditing of the financial statements of a trust.

(4) The Authority's For the purpose of enforcing sections 101 to 105 and any regulations made under section 121, the Authority's monitoring, investigation, and enforcement powers in Part 2 apply to trustees of customer trusts and trustees of consumer trusts as if those trustees were industry participants.

(1) This section applies to a distributor who, in relation to any place,—

• (a) is, immediately before the repeal by this Act of section 62 of the Electricity Act 1992, prohibited from ceasing to supply line function services to the place without the prior consent of either the Minister or every consumer who would be affected by the cessation of those services; or

• (b) is the successor in business to a distributor referred to in paragraph (a).

(2) A distributor to whom this section applies must, in relation to the place referred to in subsection (1), either—

• (a) supply line function services to the place so that the place is within the distributor's network; or

• (b) supply the place with electricity from an alternative source.

(3) The obligation in subsection (2) is subject to anything to the contrary in the Electricity Act 1992, any regulations made under section 169 of that Act, or any written agreement, entered into before this section comes into force, between the distributor and a landowner who is, or would be but for the agreement, affected by the obligation.

(4) A distributor who is obliged under subsection (2) to supply line function services or electricity from an alternative source to a place commits an offence, and is liable on summary conviction to a fine not exceeding $10,000 and to a further fine not exceeding $1,000 for every day or part of a day during which the offence continues, if the distributor,—

• (a) having been made aware that supply to the place has ceased in the circumstances described in section 108(2)(a), fails to resume supply as soon as is reasonable in the circumstances; or

• (b) knowingly ceases to supply line function services or electricity (as the case may be) to the place, other than in circumstances described in section 108(2)(b) or (c).

(5) In this section and sections 108 to 110,—

(1) A distributor's obligation under section 107(2) comes to an end with respect to a place if—

• (a) the landowner and (if the landowner is not the consumer) the consumer, or the Minister, agree in writing to the obligation coming to an end; or

• (b) the obligation is assigned to, or assumed by, a successor in business to the distributor.

(2) The obligation in section 107(2) is suspended, in relation to any place, in any of the following circumstances:

• (a) the supply of line function services or electricity from an alternative source has ceased as a result of circumstances beyond the control of the distributor (such as fire, earthquake, or inevitable accident):

• (b) the supply of line function services or electricity from an alternative source needs to cease for reasons of safety or in order to carry out maintenance or upgrading work:

• (c) the distributor, or a retailer, is entitled to cease supply (whether of line function services or electricity) because of a failure to pay money due on account to the distributor or retailer in respect of the place.

(3) If the supply of line function services or electricity from an alternative source ceases in any of the circumstances described in subsection (2), the cessation may continue only for as long as the reason for cessation continues.

(1) A distributor to whom section 107 applies, and who proposes to comply with section 107(2) by supplying a place with electricity from an alternative source, must give at least 6 months' notice of the proposal to—

• (a) every consumer affected by the proposal; and

• (b) if the landowner is not the consumer, the landowner; and

• (c) every retailer who supplies electricity to the place; and

• (d) the public in the district in which the place is situated.

(2) The notice to each affected consumer and any landowner must—

• (a) outline the proposal; and

• (b) describe how, under the proposal, the consumer's reasonable electricity needs will be met; and

• (c) give the consumer and any landowner a reasonable period in which to comment on the proposal.

(3) If the distributor is unable to locate a landowner of a place after taking reasonable steps to do so, the distributor is not required to give notice to the landowner under subsection (1).

(4) The notice to the public must be by way of a notice—

• (a) published in a newspaper that is published at least weekly and that circulates in the district to which the proposal relates; and

• (b) that outlines the proposal and specifies the time within which any person may comment on it.

(5) The distributor must have regard to any comments received in response to the proposal.

(1) Any obligations under the following that apply to retailers apply to a distributor in connection with any supply by the distributor of electricity from an alternative source, if that supply is in fulfilment of the supply obligation in section 107(2):

• (a) obligations under this Act, the regulations, and the Code:

• (b) obligations under the Electricity Act 1992 and any regulation made under that Act.

(2) However, regulations made under section 120 about low fixed charge tariff options do not apply to a distributor in respect of consumers to whom the distributor supplies electricity from an alternative source.

(3) If a distributor, during a trial or transition in the course of complying with section 107(2), both supplies a place with line function services that connect the place to a network and, at the same time, supplies the place with electricity from an alternative source, the distributor is not to be treated as thereby being involved in generation or retailing for the purposes of Part 3.

(4) For the purposes of subpart 9 of Part 4 of the Commerce Act 1986, the Commerce Commission must treat the costs of providing electricity to a place from an alternative source, and any cost arising in respect of a place from an agreement under section 108(1)(a), as if the costs were the cost of providing electricity lines services (as defined in section 54C of the Commerce Act 1986), but only if those costs are less than the costs would have been had electricity continued to be supplied to the place by line function services.

The Governor-General may, by Order in Council made on the recommendation of the Minister given after consulting the Authority, make regulations identifying which industry service providers, in addition to those listed in section 9(2), are industry participants.

The Governor-General may, by Order in Council made on the recommendation of the Minister, given after consulting the Authority, make regulations for the following purposes:

• (a) identifying which industry service providers, in addition to those listed in section 9(2), are industry participants:

• (b) identifying market operation service provider roles that are additional to those listed in the definition of market operation service provider in section 5.

(1) The Governor-General may, by Order in Council made on the recommendation of the Minister responsible for Part 2, given after receiving a recommendation from the Authority, make regulations that do either or both of the following:

• (a) identify a class of industry participants that is exempt from the obligation in section 11(1)(a) to register:

• (b) identify a class of industry participants that is exempt from the obligation in section 11(1)(b) to comply with the Code or specific provisions of the Code.

(2) Regulations made under subsection (1)(b) may exempt a class of industry participants from all or specified provisions of the Code.

The Governor-General may, by Order in Council made on the recommendation of the Minister responsible for Part 4, make regulations identifying a class of industry participants that is exempt from the obligation in section 98(1) to be a member of a dispute resolution scheme.

(1) The Governor-General may, by Order in Council made on the recommendation of the Minister responsible for Part 2, given after consulting the Authority, make regulations for all or any of the following purposes:

• (a) requiring industry participants to report breaches or possible breaches of the Code, and prescribing procedures relating to such reporting:

• (b) prescribing the practices and procedures of the Authority in relation to monitoring compliance with the Code:

• (ba) prescribing the practices and procedures of the Authority and the Rulings Panel in relation to the investigation of breaches and possible breaches of the Code (including the appointment and powers of investigators) and other enforcement measures:

• (c) prescribing the information that the Authority must or may require from industry participants generally, or classes of industry participants, and regulating what it must or may do with such information:

• (d) regulating the membership and operation of the Rulings Panel:

• (da) prescribing the decisions made under the Code that may be appealed to the Rulings Panel, and the powers and procedures of the Rulings Panel associated with those appeals:

• (da) identifying the kinds of appeals and disputes that may be determined by the Rulings Panel:

• (e) prescribing the disputes between industry participants, or classes of such disputes, that may be considered by the Rulings Panel, and the powers and procedures of the Rulings Panel associated with considering disputes:

• (e) prescribing, both generally and in relation to specific kinds of appeal or dispute, practices and procedures of the Rulings Panel for dealing with appeals and disputes, whether those appeals and disputes are identified in the regulations or the Code:

• (ea) prescribing determinations, orders, or directions, or imposing limits on any determinations, orders, or directions, that the Rulings Panel may make in relation to specific kinds of appeals and disputes (whether those appeals and disputes are identified in the regulations or the Code), and providing for any associated rights of appeal:

• (f) restricting or limiting the amount of liability of, or the amount of any penalty that may be imposed upon, an industry participant or class of industry participant:

• (g) identifying regulations the breach of which are to be treated as a breach of the Code:

• (h) providing for offences, punishable on summary conviction by a fine not exceeding $20,000, for breaching any regulation made under this section or breaching any order made by the Rulings Panel under the regulations.

(1A) The requirement in subsection (1) to consult with the Authority does not apply to the first regulations made under this section if—

• (a) the regulations largely correspond to Parts 4 to 8 of the Electricity Governance Regulations 2003, adapted as necessary for consistency with this Act; and

• (b) the Minister or the Electricity Commission have consulted with interested parties on any material changes.

(1) The Governor-General may, by Order in Council made on the recommendation of the Minister given after the consultation referred to in subsection (3A), make regulations for the purpose of—

• (a) regulating the type of tariffs for fixed and other charges that must or may be offered to domestic consumers; and

• (b) promoting the fair treatment by distributors and retailers of domestic consumers and small businesses; and

• (c) enabling the protection of rural consumers, and consumers supplied with electricity from an alternative source under section 107, from unfair rates of change in the prices charged to them.

(2) Regulations made under subsection (1) may, without limitation, do any of the following:

• (a) require low fixed charge tariff options to be made available to consumers who use less than a prescribed amount of electricity, and impose requirements (including amounts, or ways of calculating amounts) on industry participants in order to ensure that those tariffs result in a benefit to domestic consumers who opt for them:

• (b) provide for regional variations in the application of the regulations relating to low fixed charge tariff options:

• (c) require distributors or retailers, or both, to provide information relating to the types of tariffs offered to consumers, including to low fixed charge tariffs:

• (d) regulate distributors’ and retailers’ dealings with domestic consumers and small businesses, including requiring distributors and retailers to comply with any policies, practices, procedures, guidelines, or model contracts or clauses in contracts, that are set out or referred to in the regulations:

• (e) regulate the rate of change in the prices charged by distributors to rural consumers on a network as compared with the rate of change in the prices charged to comparable non-rural consumers on the same network:

• (f) regulate the rate of change in the prices charged to consumers supplied with electricity from an alternative source under section 107:

• (g) provide for offences, punishable on summary conviction by a fine prescribed by the regulations but not exceeding $100,000, for breaching any regulation made under this section.

(3) Regulations made under this section may include any other provisions necessary or desirable for monitoring and enforcing compliance with the regulations.

(3A) Before recommending an Order in Council under this section, the Minister must—

• (a) consult with the Minister of Consumer Affairs; and

• (b) obtain and consider advice from the Authority on the impact of the proposed Order in Council on the promotion of competition in, the reliable supply by, and the efficient operation of, the electricity industry.

(4) In this section,—

(5) If any material is incorporated by reference in the regulations, Schedule 1 applies.

(6) The Electricity (Low Fixed Charge Tariff Option for Domestic Consumers) Regulations 2004 are deemed to have been made under this section.

(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for the purpose of promoting the accountability of customer trusts and community trusts.

(2) Regulations made under this section may, without limitation, do any of the following:

• (a) require trustees to disclose specified information to beneficiaries of the trust:

• (b) specify procedures concerning requests by beneficiaries for information from trusts and trustees, responses to such requests, and rights to review responses: