Unison did not breach Code

Unison did not breach Code

The Electricity Authority’s Compliance Committee has ruled that Hawke’s Bay electricity distribution company Unison did not breach the Electricity Industry Participation Code 2010 when it introduced a new tariff for retailers. The new tariff charges retailers based on whether their customers have solar generation.

It was alleged Unison breached Schedule 6.4 of the Code which regulates the connection fees that a distributor charges directly to distributed generators connected to their network.

Distributed generators are generators connected to a local electricity distribution network rather than to Transpower’s national grid. As this schedule of the Code does not apply to tariffs between distributors and retailers, the Compliance Committee found that Unison did not breach Schedule 6.4 of the Code.

Carl Hansen, Chief Executive of the Electricity Authority says “The decision was very simple in the end, Schedule 6.4 didn’t apply to Unison’s charges to retailers.”

”The Authority continues to encourage distributors to consider more service-based and cost-reflective pricing structures, to allow consumers to make efficient decisions about when and how to use evolving technology. For example, distributor tariffs need to change to encourage efficient adoption of new home storage systems, such as the Tesla wall pack, and efficient charging of electric vehicles.

“We have previously stated that Unison’s new tariff is not as clearly service-based and cost-reflective as it could be, and doesn’t offer sufficient choices to consumers. However, that doesn’t mean it breaches the Code.

“Unison has informed us that it’s new pricing is an interim step towards our preferred approaches, as it considers it is currently constrained by incomplete roll-out of smart meters and limitations in retailers’ billing systems, which are necessary requirements for service-based prices.

“Distribution pricing models need to change. The current model is increasingly outdated. Our research shows the residential bills of ordinary New Zealanders could increase by 10% over the next 10 years if distributors do not embrace this change."

The Authority’s views on the impact on evolving technology on distribution pricing, and the need for change to distribution pricing, are summarised in a six-page brochure here: http://www.ea.govt.nz/development/work-programme/transmission-distribution/distribution-pricing-review/consultations/#c15642

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