1. Pursuant to section 172I of the Electricity Act 1992,
I notify the amendment of the Electricity Governance Rules 2003 ("the Rules") under section 172H of the Electricity
Act 1992.
2. The empowering provisions for the electricity governance regulations in relation to which the Rules are made are sections 172D (1) (3) and (4) of the Electricity Act 1992.
3. A brief description of the nature of the amendments is as follows:
To correct several errors in the Rules relating to the allocation of voltage support costs to Zone 1 distributors:
? Rule 11.6 of section IV, part C of the Rules is amended, and a new defined term "distributor kvar reference node" is inserted into Part A of the Rules, to allow the voltage support cost allocation methodology to be performed on an aggregate rather than GXP basis;
? a new Rule 11.6.4 of section IV, part C is inserted into the Rules so that generators are excluded from the definition of "distributor" for the purposes of Rule 11.6;
? references to "reconciled quantity" are replaced
by references to "metered information" in Rule 11.6.3
of section IV, part C of the Rules to ensure that the clearing manager uses the appropriate information; and
? other amendments to Rule 11.6 of section IV, part
C of the Rules to clarify and correct minor drafting errors.
4. These amendments are made in reliance on section 172F (3) of the Electricity Act 1992.
5. Pursuant to section 172Z (4) of the Electricity Act 1992, the reasons for my decision to amend the Rules are that:
? the amendment to Rule 11.6 allows cost allocation to be performed on an aggregate, rather than GXP basis, which means the Rules match the intent and historical practice. This will ensure the correct incentives for new investment are in place and gives distributors flexibility to manage voltage within each local network area;
? the amendments correct an error in the Rules, which required generators to nominate a kvar level for their offtake by excluding generators from the definition of "distributor" for the purposes of Rule 11.6;
? the amendments correct an error in Rule 11.6.3, which required the clearing manager to use reconciled quantity rather than metering information. The amendment means that the allocation of charges is in a manner that creates least distortion; and
? other amendments to Rule 11.6 to clarify the Rules and correct other minor drafting errors.
6. These Rules come into force on 13 January 2005.
7. Copies of the Rules may be inspected free of charge or purchased from the Electricity Commission, Level Seven, ASB Bank Tower, 2 Hunter Street, Wellington.
The Rules can also be viewed on the Electricity Commission web site:
http://www.electricitycommission.govt.nz/govern/regs/index.html
Dated at Wellington this 9th day of December 2004.
PETE HODGSON, Minister of Energy.
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