Compliance Policy

Introduction

The April 2008 Government Policy Statement on Gas Governance (GPS) seeks as an outcome that gas governance arrangements are supported by appropriate compliance and dispute resolution processes. Gas Industry Co recommended to the Minister of Energy that the Governor-General make regulations to provide for the enforcement of the gas governance rules and regulations recommended by Gas Industry Co.

Overview

Summary of Status

The Gas Governance (Compliance) Regulations 2008 (the 'Compliance Regulations') came into effect on 11 September 2008. The purpose of the Compliance Regulations is to provide for the monitoring and enforcement of the following gas governance arrangements:

  • the Gas (Switching Arrangements) Rules 2008
  • the Gas (Processing Facilities Information Disclosure) Rules 2008
  • the Gas (Downstream Reconciliation) Rules 2008
  • the Gas Governance (Critical Contingency Management) Regulations 2008.

Consultation

Previously Consulted On

Summary of procedures: Gas Governance (Compliance) Regulations 2008

Date Published: 14 August 2008

Author: Nicole MacFarlane

The Gas Governance (Compliance) Regulations 2008 (the 'Compliance Regulations') were published in the New Zealand Gazette by the Minister of Energy on 14 August 2008 and came into effect on 11 September 2008.

The purpose of the Compliance Regulations is to provide for the monitoring and enforcement of the following rules: Gas (Switching Arrangements) Rules 2008; Gas (Processing Facilities Information Disclosure) Rules 2008; and Gas (Downstream Reconciliation) Rules 2008 (collectively, the 'Rules').

Gas Industry Co has consulted on the procedures for the market administrator, investigator and Rulings Panel appointed under the Compliance Regulations.

Submissions received

Options for Compliance and Enforcement Arrangements in the New Zealand Gas Industry

Date Published: 12 April 2006

The consultation paper sought input from stakeholders on the preferred model for a compliance and enforcement regime to support the proposed switching and registry rules and other industry arrangements developed by the Gas Industry Co.

Submissions received

Statement of Proposals and Recommendations

Recommendation to the Minister of Energy and Resources to amend the Gas Governance (Compliance) Regulations 2008

Date Published: 5 August 2013

Gas Industry Co recommended amendments to the Gas Governance (Compliance) Regulations. The Recommendation seeks to implement a number of general improvements resulting from the first four years' of implementation of the gas governance compliance regime, including some following from the review of the CCM Regulations. In developing the Recommendation, Gas Industry Co took into account industry stakeholder input on the Statement of Proposal, and also a smaller consultation document relating to the threshold regime.

Recommendation to the Minister of Energy and Resources to amend the Gas Governance (Compliance) Regulations 2008

Proposed ammendments to the Gas Governance (Compliance) Regulations 2008 - further details of the threshold regime

Date Published: 21 December 2012

On 31 May 2012 Gas Industry Co issued a Statement of Proposal in respect of minor and technical changes to the Gas Governance (Compliance) Regulations 2008 (Compliance Regulations), consistent with our practice to periodically review industry governance arrangements to ensure they remain efficient and effective. A link to that proposal can be found here. One of the proposals was more substantial, in that it would change the mandatory breach reporting requirements on the Allocation Agent and Registry Operator under regulation 11 (known as the threshold regime). Submissions received supported the proposals. However there was some discussion as to how the proposal would enable Gas Industry Co to issue a determination exempting the Allocation Agent or Registry Operator from the mandatory reporting requirements would work in practice.

Gas Industry Co issued a further short consultation document, setting out in more detail how the regime will work by identifying the relevant provisions in the Gas (Switching Arrangements) Rules 2008 and Gas (Downstream Reconciliation) Rules 2008 that the threshold regime would initially apply to, and providing a sample draft of the empowering provision.

After considering submissions, and making changes as a result, we made a Recommendation to the Minister of Energy and Resources to amend the Compliance Regulations. The timing of the Recommendation was dependent on whether there were any consequential changes required to the Compliance Regulations, following Gas Industry Co's review of the Gas Governance (Critical Contingency Management) Regulations 2008

Submissions closed 1 February 2013.

Proposed ammendments to the Gas Governance (Compliance) Regulations 2008 - further details of the threshold regime

Submissions received:

Contact Energy

Genesis Energy

Greymouth Gas NZ

Mighty River Power

Powerco

Vector

Statement of Proposal: Amendments to the Gas Governance (Compliance) Regulations 2008

Date Published: 31 May 2012

Gas Industry Co reviewed the Gas Governance (Compliance) Regulations 2008 (Compliance Regulations), and proposed a number of changes. This is consistent with our practice to periodically review industry governance arrangements to ensure they remain efficient and effective.

The Compliance Regulations have performed well thus far and, as a direct result, industry participants take care to comply with the various gas governance arrangements in force. However, the proposed changes address some inefficiencies that have been identified from our experience in operating the compliance regulations and are aimed at reducing costs across the industry.

The proposed changes are set out in a Statement of Proposal - Amendments to the Gas Governance (Compliance) Regulations 2008. Submissions closed on Friday 13 July 2012.

Statement of Proposal Amendments to the Gas Governance (Compliance) Regulations 2008

Submissions received:

Contact Energy

Energy Direct NZ

Genesis Energy

Greymouth Gas NZ

Mighty River Power

Powerco

Vector

Proposed Amendments to Rulings Panel Summary of Procedures

Date Published: 16 March 2010

The Gas Governance (Compliance) Regulations 2008 (the Compliance Regulations) were published in the New Zealand Gazette by the Minister of Energy on 14 August 2008 and came into effect on 11 September 2008. The purpose of the Compliance Regulations is to provide for the monitoring and enforcement of the following rules: Gas (Switching Arrangements) Rules 2008; Gas (Processing Facilities Information Disclosure) Rules 2008; Gas (Downstream Reconciliation) Rules 2008; and Gas Governance (Critical Contingency Management) Regulations 2008 (collectively, the 'Rules').

A situation arose where there was a lack of clarity regarding process once a matter has been referred to the Rulings Panel for determination. The Rulings Panel proposed a minor amendment to its summary of procedures in response. The proposed addition to the Rulings Panel summary of procedures will insert a new paragraph 7 to read:

"Once the Rulings Panel has decided to determine an alleged breach under regulation 36(c) or the Investigator refers an alleged breach to the Rulings Panel under regulation 37, the procedures listed below apply in determining the alleged breach. If exceptional circumstances arise in relation to an alleged breach that suggest a hearing should not go ahead or should be deferred, such circumstances must be brought to the attention of the Rulings Panel, with full details of the circumstances. The Rulings Panel may then, at its sole discretion as permitted by legislation, amend its processes in respect of that alleged breach."

Submissions closed Wednesday, 7 April 2010.

Draft Amendments to Procedures

Submissions received:

Energy Direct NZ

Vector

Compliance arrangements for the Gas Governance (Critical Contingency Management) Regulations 2008

Recommendation to the Minister of Energy on Critical Contingency Amendments to Gas Compliance Regulations

Date Published: 30 June 2008 Author: Ian Dempster, Tristan Meo and Ben Farrington and Lee Wilson (Concept Consulting Group)

On 30 June 2008, Gas Industry Co recommended regulations providing for the effective management of critical gas contingencies, called the Gas Governance (Critical Contingency Management) Regulations (the 'proposed Regulations'). The proposed Regulations included mandatory processes for the management of critical contingencies, including compliance with curtailment instructions. An effective compliance regime is crucial to ensuring that the proposed Regulations achieve their purpose. Accordingly, Gas Industry Co recommended that the proposed Gas Governance (Compliance) Regulations 2008 be amended as set out in Appendix A of this recommendation.

Recommendation to the Minister of Energy on Critical Contingency Amendments to Gas Compliance Regulations

Statement of Proposal: Gas Outage and Contingency Management Arrangements

Date Published: August 2007 Authors: Ian Dempster & Nicole MacFarlane with support from Lee Wilson, Ben Farrington & Joanne Robinson

Industry members requested Gas Industry Co to develop mandatory arrangements to replace the voluntary National Gas Outage Contingency Plan (NGOCP). This Statement of Proposal puts forward replacement arrangements that are a combination of regulations under the Gas Act and industry-developed arrangements to meet the requirements of those regulations and also addresses potential consequential amendments to the proposed compliance regulations

Statement of Proposal - Gas Outage and Contingency Management Arrangements

Draft Gas (Compliance) Regulations 2008 (as at August 07)

Submissions received:

Contact Energy

Genesis Energy

Maui Development Limited

Methanex

Mighty River Power

Nova Gas

Vector

Compliance arrangements for the Gas (Downstream Reconciliation) Rules 2008

Recommendation to the Minister of Energy on Downstream Reconciliation Amendments to Gas Compliance Regulations

Date Published: 12 March 2008 Author: Tristan Meo

On 12 March 2008, Gas Industry Co made a recommendation to the Minister of Energy for amendments to the Gas Governance (Compliance) Regulations 2008 for compliance with, and enforcement of, the rules relating to the allocation and reconciliation of downstream gas quantities. Text of this recommendation, including the assessment under section 43N of the Act, is available below.

Recommendation to the Minister of Energy on Downstream Reconciliation Amendment to Gas Compliance Regulations

Statement of Proposal: Allocation and Reconciliation of Downstream Gas Quantities

Date Published: 4 September 2007 Author: Mark Soper and Nicole MacFarlane

Efficient arrangements for the accurate allocation and reconciliation of gas quantities are a key component of an efficient gas market. In response to:

  • the Government's desire in the 2004 Government Policy Statement on Gas Governance for, amongst other things, the development of protocols and standards applying to balancing and reconciliation; and
  • requests by industry participants;

Gas Industry Co developed a proposal to recommend to the Minister of Energy rules for allocation and reconciliation of downstream gas quantities, and consequential amendments to the proposed compliance regulations.

Statement of Proposal - Allocation and Reconciliation of Downstream Gas Quantities

Draft Gas (Compliance) Regulations (as at September 07)

Submissions received:

Contact Energy

E-Gas

Energy Direct

GasNet

Genesis Energy

Nova

Powerco

Tetenburg & Associates

Vector

Compliance arrangements for the Gas (Processing Facilities Information Disclosure) Rules 2008

Recommendation to the Minister of Energy on Gas Processing Facilities Amendments to Gas Compliance Regulations

Date Published: 28 January 2008 Author: Nicole MacFarlane

On 28 January 2008, Gas Industry Co made a recommendation for amendments to the Gas Governance (Compliance) Regulations 2008 for enforcement of rules requiring information disclosure by gas processing facility owners. The text of this recommendation, including the assessment under section 43N of the Act, is available below.

Recommendation to the Minister of Energy on Gas Processing Facilities Information Disclosure Amendment to Gas Compliance Regulations

Statement of Proposal: Information Disclosure by Owners of Gas Processing Facilities

Date Published: 3 September 2007 Author: Ian Dempster, Nicole MacFarlane and Jim Truesdale (Concept Consulting Group)

Gas Industry Co developed a statement of proposal in respect of information disclosure by owners of gas processing facilities. This proposal follows from the December 2006 recommendation to the Minister of Energy relating to protocols for access to gas processing facilities. That recommendation, subsequently approved by the Minister, suggested pursuing an industry arrangement for information disclosure, with a fall-back to a regulated option if the industry arrangement proved infeasible. As progress on the industry arrangement stalled, Gas Industry Co had to resort to preparing a proposal to regulate including consequential amendments to the proposed compliance regulations.

Statement of Proposal - Information Disclosure by Owners of Gas Processing Facilities

Compliance arrangements for the Gas (Switching Arrangements) Rules 2008

Recommendation to the Minister of Energy on Gas Compliance Regulations for Enforcement of Switching Arrangements

Date Published: 31 May 2007 Author: Nicole MacFarlane and Gael Webster

On 31 May 2007, Gas Industry Co made two recommendations in respect of arrangements for consumers switching between retailers and an associated compliance regime. In the associated compliance recommendation, Gas Industry Co proposed that the proposed Gas (Switching Arrangements) Rules be monitored and enforced by a Rulings Panel via a set of compliance regulations. The regulations provided for the powers and procedures of that Rulings Panel. The recommendation, including the assessment under section 43N of the Act, is available below:

Recommendation to the Minister of Energy on Regulations for Enforcement of Switching Arrangements

Statement of Proposal: Switching Arrangements for the New Zealand Gas Industry - Part 2: Compliance and Enforcement

Date Published: 31 August 2006 Author: Paul Mitchell

The statement of proposal is for compliance and enforcement arrangements to support the proposed switching arrangements for retail gas customers in New Zealand.

Statement of Proposal - Compliance and Enforcement Arrangements

Draft Regulations - Compliance and Enforcement Arrangements

Submissions received:

Contact Energy

GasNet

Genesis Energy

Mighty River Power

Ministry of Consumer Affairs

Vector

Wanganui Gas