These are the Commerce Commission's Memorandums of Understanding with the former Elecriticity Commission.
The Commerce Commission is an independent Crown entity with certain functions, powers and duties in relation to the electricity industry. The Electricity Commission is a Crown entity also with functions in relation to the electricity industry under the Electricity Act 1992.
The two Commissions signed a Memorandum of Understanding on 16 August 2007 on how the Electricity Commission and Commerce Commission coordinate their respective roles under the Electricity Act and the Commerce Act. Detailed operational statements regarding the coordination of their respective roles are protocols to the Memorandum of Understanding.
The Government has published a number of statements of government policy in relation to the governance of the electricity industry (Government Policy Statements). In May 2008, the Government published a Government Policy Statement on Electricity Governance, setting out the Government's expectations and intentions regarding the interrelationship between the Electricity Commission and the Commerce Commission with regard to the regulation of Transpower and electricity lines businesses by the Electricity Commission under the Electricity Act and the Commerce Commission under the Commerce Act 1986.
The May 2008 Government Policy Statement requested that the Memorandum of Understanding be reviewed to address the following matters in relation to improving incentives for electricity lines businesses. Paragraph 119 provides:
In addition, the Government requests the Commerce Commission and the Electricity Commission review their Memorandum of Understanding by 30 November 2008 to specifically address the following matters in relation to improving incentives for electricity lines businesses in respect of:
- managing distribution losses;
- facilitating uptake of advanced metering infrastructure and more efficient distribution pricing;
- ensuring target security levels for distribution networks are met at least cost;
- facilitating investment in energy efficiency (including consumer end-use efficiency), demand-side management and distributed generation.
On 13 November 2008, the Commerce Commission and the Electricity Commission signed an updated Memorandum of Understanding and two protocols. The Memorandum of Understanding was amended and updated to take into account the changes to the roles and responsibilities of the Commerce Commission following the passing of the Commerce Amendment Act 2008. The two protocols are the:
- Protocol on Transmission Arrangements - which updates the protocol executed on 16 August 2007 to ensure that it is consistent with the administrative settlement entered into between the Commerce Commission and Transpower Limited.
- Protocol on Improving Incentives for Electricity Distribution Businesses - which deals with the matters set out at paragraph 119, as described above.