Electricity (Low Fixed Charge Tariff Option for Domestic Consumers) Regulations 2004

These regulations are the Electricity (Low Fixed Charge Tariff Option for Domestic Consumers) Regulations 2004.

These regulations come into force on 1 October 2004.

The objective of these regulations is to—

• (a)ensure that electricity retailers offer a low fixed charge tariff option or options for delivered electricity to domestic consumers at their principal place of residence that will assist low-use consumers and encourage energy conservation; and

• (b)regulate electricity distributors so as to assist electricity retailers to deliver low fixed charge tariff options.

(1)In these regulations, unless the context otherwise requires,—

(2)A delivered electricity package is the same as another delivered electricity package if the nature of the goods and services to be supplied are the same or substantially the same in terms of features like meter and relay configuration allowing for load control, prepayment meters, time of day or winter-summer electricity consumption, and kilovolt-ampere (kVA) rating.

(3)In these regulations, references to an electricity distributor doing anything to or for domestic consumers includes doing so directly or indirectly via the electricity retailer.

(4)Examples used in these regulations have the following status:

• (a)an example is only illustrative of the provision to which it relates and does not limit the provision; and

• (b)if an example and the provision to which it relates are inconsistent, the provision prevails.

(1)For each of the delivered electricity packages that an electricity retailer supplies to homes in its supply areas, the electricity retailer must make at least 1 low fixed charge tariff option available.

(2)To avoid doubt, the obligation in subclause (1) applies with respect to all homes, whether or not they have prepayment meters and irrespective of the degree of load control that the domestic consumer has.

(3)However, the obligation in subclause (1) does not apply with respect to a home that is the subject of an exemption granted to an electricity retailer under regulation 26 or 31.

Each low fixed charge tariff option that an electricity retailer makes available in respect of a home must be of one of the following types:

• (a)a bundled low fixed charge tariff option, under which the electricity retailer is the only person that charges the consumer directly in respect of the delivered electricity supplied to the home; or

• (b)a split-charging low fixed charge tariff option, under which—

  • (i)the electricity distributor charges the consumer directly under a regulated distributor tariff option in respect of some services associated with the delivered electricity supplied in the home; and

  • (ii)the electricity retailer charges the consumer directly in respect of the rest of the delivered electricity supplied to the home.

The electricity retailer must ensure that any low fixed charge tariff option that it makes available in respect of a home complies with the following minimum requirements:

• (a)the electricity retailer must not charge the consumer more than 1 fixed charge for the delivered electricity supplied to the home; and

• (b)in the case of a bundled low fixed charge tariff option, that 1 fixed charge must be not more than 30 cents per day, excluding goods and services tax; and

• (c)in the case of a split-charging low fixed charge tariff option, the fixed charge must be not more than 30 cents per day (excluding goods and services tax), less the amount charged directly to the consumer by the electricity distributor under a regulated distributor tariff option; and

• (d)the electricity retailer may not recover any charges associated with the delivered electricity other than by all or any of the following:

  • (i)that fixed charge; and

  • (ii)a variable charge or charges; and

  • (iii)any fees for special services.

(1)The purpose of this regulation is to ensure that average consumers pay no more per year on a low fixed charge tariff option than on any alternative tariff option.

(2)The variable charge or charges in a low fixed charge tariff option must be such that the average consumer would pay no more in total per year for the fixed charge and the variable charges charged in accordance with regulation 8(d)(i) and (ii) than the average consumer would pay in total per year for those same matters on any alternative tariff option.

(3)In determining whether a tariff option complies with subclause (2), the rule in subclause (4) must be applied.

(4)If there is more than 1 variable charge on a tariff option, the average consumer is assumed to consume electricity on the following ratios (unless the average consumer in that supply area in fact consumes on a different ratio or is on a different delivered electricity package):

• (a)for separately charged controlled and uncontrolled any-time electricity consumption, 40% of total consumption is controlled and 60% is uncontrolled:

• (b)for separately charged controlled night and uncontrolled any-time electricity consumption, 25% of total consumption is controlled and 75% is uncontrolled.

(1)The purpose of this regulation is to ensure that other charges under, and other terms and conditions of, the contracts to which low fixed charge tariff options relate are not unreasonably detrimental to the interests of low-use consumers.

(2)A low fixed charge tariff option must not contain—

• (a)variable charges for domestic consumers that are tiered or stepped according to the amount of electricity consumed; or

• (b)fees for special services or discounts that are inconsistent with the fees for special services or discounts charged to domestic consumers who are on alternative tariff options; or

• (c)other terms and conditions that are inconsistent with the terms and conditions of alternative tariff options.

(3)Subclause (2)(a) does not prevent an electricity retailer from setting different variable charges for controlled or uncontrolled load, or for electricity consumption at different times of the day or year, or for prepayment meters, provided that the different variable charges are not tiered or stepped according to the amount of electricity consumed.

The electricity retailer must advertise a low fixed charge tariff option at the same time, and in the same manner, as it advertises an alternative tariff option.

(1)Every electricity retailer must promote low fixed charge tariff options by giving, at least once in every 12 months, a notice of a kind described in subclause (2) to each domestic consumer to whom it currently supplies delivered electricity to domestic premises.

(2)The notice given under subclause (1) must—

• (a)identify the amount of electricity the electricity retailer has sold to the domestic consumer in respect of the domestic premises during the previous 12 months; and

• (b)explain that, if the domestic premises are the consumer’s home, a low fixed charge tariff option is available; and

• (c)explain that, with respect to the home, there may be benefits for the consumer in being on a low fixed charge tariff option if the consumer uses less electricity per year than the average consumer uses; and

• (d)set out the main features of each of the current low fixed charge tariff options that the electricity retailer makes available to homes in the supply area in which the domestic premises are located.

(3)However, an electricity retailer need not give a consumer a notice of a kind described in subclause (2) if—

• (a)every tariff option offered by the retailer that is available to the consumer is a low fixed charge tariff option; or

• (b)obtaining the information referred to in subclause (2)(a) is, in repect of that particular consumer, technically difficult or otherwise impractical; but in that case, the retailer must give the consumer a different notice that explains why it is not providing a notice of a kind described in subclause (2).

The purpose of regulations 14 to 17 is to regulate the way in which electricity distributors charge in respect of homes on low fixed charge tariff options, so as to assist electricity retailers to deliver low fixed charge tariff options.

(1)An electricity distributor must ensure that any arrangement it has with an electricity retailer in respect of a home that is on a bundled low fixed charge tariff option, and that any arrangement it has with a domestic consumer in respect of a home that is on a split-charging low fixed charge tariff option, complies with the following minimum requirements:

• (a)the electricity distributor must not charge more than 1 fixed charge for the line function services supplied to the home; and

• (b)that fixed charge must be not more than 15 cents per day, excluding goods and services tax; and

• (c)the electricity distributor may not recover any charges associated with the delivered electricity supplied to the home other than by all or any of the following:

  • (i)the fixed charge referred to in paragraph (b); and

  • (ii)a variable charge or charges; and

  • (iii)any fees for special services; and

  • (iv)any fee payable for providing or reading any meter that is owned by the electricity distributor; and

  • (v)any fee payable for providing any relay that is owned by the electricity distributor.

(2)If a home is not on a low fixed charge tariff option, the electricity distributor's arrangement with the electricity retailer in respect of that home must treat that home as not being on a regulated distributor tariff option (unless the electricity distributor has only regulated distributor tariff options).

(1)The variable charge or charges in a regulated distributor tariff option must be such that the average consumer would pay no more in total per year for the fixed charge and variable charges charged in accordance with regulation 14(c)(i) and (ii) than the average consumer would pay in total per year for those same matters on any alternative distributor tariff option.

(2)In determining whether the tariff options comply with subclause (1), the following rules must be applied:

• (a)subclause (1) must be complied with both before and after any discounts or rebates or other distributions are applied or made:

• (b)if there is more than 1 variable charge on a tariff option, the average consumer is assumed to consume electricity on the following ratios (unless the average consumer in that supply area in fact consumes on a different ratio or is on a different delivered electricity package):

  • (i)for separately charged controlled and uncontrolled anytime electricity consumption, 40% of total consumption is controlled and 60% is uncontrolled:

  • (ii)for separately charged controlled night and uncontrolled anytime electricity consumption, 25% of total consumption is controlled and 75% is uncontrolled.

(1)A regulated distributor tariff option must not contain—

• (a)variable charges for domestic consumers that are tiered or stepped according to the amount of electricity consumed; or

• (b)fees for special services, rebates, or discounts that are inconsistent with the fees for special services, rebates, or discounts that apply to domestic consumers who are on alternative distributor tariff options; or

• (c)other terms and conditions that are inconsistent with the terms and conditions of alternative distributor tariff options.

(2)Subclause (1)(a) does not prevent an electricity distributor from doing any of the following things:

• (a)setting different variable charges for controlled and uncontrolled load, or for electricity consumption at different times of the day or year, provided that the different variable charges are not tiered or stepped according to the amount of electricity consumed:

• (b)setting rebates or discounts that vary according to the amount of electricity consumed, provided that the rebates or discounts applying to domestic consumers on low fixed charge tariff options are consistent with those that apply to domestic consumers who are on alternative distributor tariff options.

If an electricity distributor charges an electricity retailer on the basis of the quantity of electricity metered in bulk at a grid exit point (wholesale pricing), the distributor is treated as complying with regulations 14 to 16 if there is a wholesale tariff option available to the electricity retailer, referable to homes, that includes a fixed charge at not more than 15 cents per day per home (exclusive of goods and service tax) and the distributor's wholesale tariff option is in all other respects consistent with the purpose referred to in regulation 13.

The 30 cents per day amounts in regulation 8(b) and (c) and the 15 cents per day amounts in regulation 14(b) and regulation 17 are the charges after the deduction of any prompt payment discounts.

Regulations 8 and 14 do not prevent the electricity retailer or the electricity distributor from itemising the components of the fixed and variable charges on a bill so that it is clear what they cover and who the charges are (directly or indirectly) from.

Regulations 8 and 14 apply regardless of the number of electricity meters at the home.

(1)If a domestic consumer is on a bundled low fixed charge tariff option in respect of a home, only the electricity retailer that makes that tariff option available may charge the consumer directly in respect of delivered electricity, or any component of delivered electricity, supplied to the home.

(2)If a domestic consumer is on a split-charging low fixed charge tariff option in respect of a home, only the electricity retailer that makes that tariff option available and the electricity distributor that directly contracts with the consumer under that option may charge the consumer directly in respect of delivered electricity, or any component of delivered electricity, supplied to the home.

(1)Each electricity retailer must supply to the Electricity Commission the information required by regulation 23 in respect of each low fixed charge tariff option it makes available, and each electricity distributor must supply to the Electricity Commission the information required by regulation 23 in respect of the regulated distributor tariff option that it makes available,—

• (a)before 15 October 2004; and

• (b)15 working days before the effective date of any new tariff option, and of any change to an existing tariff option, that applies to domestic consumers; and

• (c)before the expiry of 10 working days (or any longer period permitted by the Electricity Commission) after receiving a written request for the information from the Electricity Commission.

(2)The information must be supplied in writing and, if appropriate, in graph form.

The information required under regulation 22 is all of the following information, or any class, or more specific description, of this information requested in writing by the Electricity Commission:

• (a)a schedule of the tariff options that the electricity retailer makes available in respect of homes in a supply area for the supply of delivered electricity or components of delivered electricity:

• (b)a schedule of the tariff options that the electricity distributor makes available to electricity retailers or domestic consumers in respect of homes in its supply area for the supply of delivered electricity or components of delivered electricity:

• (c)calculations showing how the tariff options comply with regulation 9(2) or regulation 15(1) as the case may be (each of which requires the average consumer to pay no more on a low fixed charge tariff option or on a regulated distributor tariff option than on any alternative option):

• (d)if the electricity retailer or electricity distributor has used a different assumption as to the consumption of the average consumer from that contained in regulation 9(4) or regulation 15(2)(b), as the case may be, a detailed explanation and data to support the use of the different assumption:

• (e)if the electricity retailer or electricity distributor has a delivered electricity package not covered by regulations 9(4) or 15(2)(b), as the case may be, and this package has more than 1 variable charge, a detailed explanation and data to support the ratios used for assigning total electricity consumption to the different variable charges:

• (f)if requested by the Electricity Commission, to assist it in determining whether the tariff options are compliant with regulation 9 or regulation 10 or regulation 15 or regulation 16, information about—

  • (i)a particular tariff option made available by the electricity retailer or the electricity distributor, as the case may be; or

  • (ii)the availability of a particular tariff option; or

  • (iii)how a particular tariff option compares with an alternative tariff option:

• (g)in the case of electricity retailers, information about offers to, and advertising and promotion of, the low fixed charge tariff options and other tariff options that are made available to domestic consumers for the supply of delivered electricity or components of delivered electricity:

• (h)in the case of an electricity distributor that charges an electricity retailer on the basis of wholesale pricing, a schedule of the tariff or tariffs that the distributor makes available to the retailer for the supply of line function services to homes in the supply area:

• (i)the number of homes that are on a low fixed charge tariff option in each of the electricity retailer's or electricity distributor's supply areas.

(1)An electricity retailer that knowingly contravenes any of regulations 5 to 7 or 9 to 11 commits an offence and is liable on conviction to a fine not exceeding $20,000.

(2)An electricity distributor that knowingly contravenes any of regulations 14 to 16 commits an offence and is liable on conviction to a fine not exceeding $20,000.

(3)An electricity distributor, electricity retailer, or other electricity provider that knowingly contravenes regulation 21commits an offence and is liable on conviction to a fine not exceeding $10,000.

An electricity retailer or electricity distributor that without reasonable excuse contravenes regulation 22 commits an offence and is liable on conviction to a fine not exceeding $5,000.

(1)The Minister may exempt an electricity retailer or electricity distributor, or an electricity retailer or electricity distributor in relation to a particular area or areas, from the application of any provision or provisions of these regulations if, in the opinion of the Minister,—

• (a)any of the criteria in regulations 27 to 30 are satisfied; and

• (b)the electricity retailer or electricity distributor materially complies with the objective of section 172B of the Act.

(2)The Minister may also exempt an electricity distributor, or an electricity distributor in relation to a particular area or areas, from the application of any provision or provisions of these regulations if—

• (a)the distributor conveys less than 5 GWh per annum; and

• (b)the distributor's lines are not connected directly, or indirectly through another distributor, to the national grid; and

• (c)in the opinion of the Minister, the distributor would incur a significant or unreasonable cost in complying with the provision or provisions.

One of the criteria according to which the Minister may exempt an electricity retailer from its obligations under these regulations in respect of low fixed charge tariff options, or an electricity distributor from its obligations under these regulations in respect of the regulated distributor tariff option, is that—

• (a)the delivered electricity is supplied to the home under a closed or obsolete tariff offered by an electricity retailer or electricity distributor that is no longer open to new customers; and

• (b)either—

  • (i)a date has been set for the expiry of the closed or obsolete tariff; or

  • (ii)the electricity retailer or electricity distributor has an active programme to facilitate the transition of existing customers off the closed or obsolete tariff and on to new tariffs; or

  • (iii)there are very few customers on the closed or obsolete tariff (for example, less than 50); and

• (c)the electricity retailer or electricity distributor has 1 or more low fixed charge tariff options in respect of other delivered electricity packages that are available to the customers on the closed or obsolete tariff.

One of the criteria according to which the Minister may exempt an electricity distributor from its obligations under these regulations in respect of the regulated distributor tariff option is that—

• (a)the delivered electricity is supplied to a home that is in a very remote area; and

• (b)the home is served by a single line that serves few homes (for example, less than 10) and no other significant electricity consumers; and

• (c)in the opinion of the Minister, it would be a significant or unreasonable cost for the electricity distributor to make a regulated distributor tariff option available in respect of that home.

One of the criteria according to which the Minister may exempt an electricity distributor from its obligations under these regulations in respect of the regulated distributor tariff option is that—

• (a)the home is served by its own dedicated transformer that has not been paid for by the consumer through a special connection fee or other charge; and

• (b)homes with their own dedicated transformers comprise more than 25% of the homes supplied by the electricity distributor in the supply area in which the home is located; and

• (c)in the opinion of the Minister, it would be a significant or unreasonable cost for the electricity distributor to make a low fixed charge tariff option available in respect of the home.

One of the criteria according to which the Minister may exempt an electricity distributor from its obligations under these regulations in respect of the regulated distributor tariff option is that—

• (a)the home is on a 3-phase supply, or a greater-than 15 kVA supply, or on both; and

• (b)the distributor has an active programme of facilitating homes referred to in paragraph (a) to transfer to single phase supply, or to supply of 15 kVA or less; and

• (c)in the opinion of the Minister, it would be a significant or unreasonable cost for the electricity distributor to make a low fixed charge tariff option available in respect of the home.

The Minister may exempt an electricity retailer in relation to a particular area from the application of any provision or provisions of these regulations if—

• (a)the electricity distributor has obtained an exemption under regulation 26; and

• (b)in the opinion of the Minister, a corresponding exemption in respect of the same matter is appropriate for the electricity retailer.

An application for an exemption must be made in writing to the Minister.

(1)The Minister may grant an exemption by notice in writing to the applicant.

(2)The exemption may be granted on any terms and conditions that the Minister thinks fit.

(3)The Minister may vary or revoke an exemption in the same way as the exemption may be granted.

A person to whom an exemption has been granted must publish the exemption on the person's Internet website at all reasonable times.

These regulations do not apply to Transpower.

Nothing in these regulations requires there to be an alternative tariff option or an alternative distributor tariff option.