Electricity Industry Act 2010

The Electricity Industry Act is the response to an electricity market review that took place in 2009. The Act increases the level of competition in the industry, particularly in retailing and in the South Island. It puts strong incentives on the industry to better manage the security of supply, particularly in dry years. It streamlines the governance and decision-making arrangements for the industry. To improve competition, the Tekapo A and Tekapo B hydro power stations were transferred between two State-owned generators. The Act also contains measures to improve the incentives for the industry and its participants to better manage the security of supply, and to make public conservation campaigns a last resort. The Act improves governance arrangements in the electricity sector by replacing the Electricity Commission with a more focused, independent, and streamlined Electricity Authority. Functions better undertaken elsewhere are transferred, such as the promotion of energy efficiency to the Energy Efficiency and Conservation Authority, the approval of grid upgrade proposals to the Commerce Commission, and the management of supply emergencies to Transpower. The new authority has the objective of improving competition, reliability, and efficiency in the industry. Finally, the Act includes provisions that ensure that rural electricity consumers will continue to receive secure electricity supply, while allowing lines companies to meet their obligations in more efficient and cost-effective ways.

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