Downstream Reconciliation
Overview
Introduction
This work programme is concerned with downstream reconciliation and allocation, ie with gas quantities delivered to and taken from gas gates, for delivery to consumers via local distribution networks. The initial project covered work on the development and implementation of the Gas (Downstream Reconciliation) Rules 2008. The 'go-live' date in the rules was 1 October 2008. There were three main objectives for this implemenatation project: first, to have a properly appointed allocation agent in place and ready to operate with other required infrastructure when the reconciliation rules take operational effect; second, to ensure that prospective participants in the reconciliation process would be well prepared for and, as far as possible, committed to the implementation of the reconciliation rules on the go-live date; and last, to ensure that the holders of ICP-related information (principally distributors) were positioned to provide it to reconciliation participants, during the transitional period from 1 October 2008 to the go-live of 1 March 2009 for the gas registry.
There is a substantial amount of work associated with ongoing operations. This includes overviewing work by the allocation agent, carrying out specific functions defined in the rules, managing exemption applications, and analysing reconciliation results with a view to identifying any issues, targeting areas for scrutiny, and identifying improvement to the rules themselves.
Summary of Status
The development and establishment phase of reconciliation was completed on schedule for go-live on 1 October 2008. The first allocation was completed in November 2008. The Rules have been amended twice since go-live: once to make minor amendments with effect from 2 October 2009; once to implement changes resulting from a review of the Rules with effect from 1 June 2013. For up-to-date Rules, see the Rules page.
Contact Details
Ian Dempster
Tel: 04 494 2467
Ian.Dempster[at]gasindustry.co[dot]nz
Consultation
Previously Consulted On
Consultation on determinations, guidelines and exemptions - Submissions close 16 May 2013
In December 2012, Gas Industry Co made a recommendation to the Minister of Energy and Resources ('the Minister') on amendments to the Gas (Downstream Reconciliation) Rules 2008 ('the Rules'). The Minister accepted the recommendation and the amended Rules were gazetted on 28 February 2013, with an effective date of 1 June 2013.
The amended Rules require that Gas Industry Co determines and publishes certain technical details, these are:
- a list of direct connect gas gates;
- a list of unmetered and oversized metered gas gates; and
- criteria for the determination of global 1-month (G1M) gas gates
In addition, during policy development of the amendments, the Downstream Reconciliation Advisory Group noted that it would be beneficial for Gas Industry Co to provide guidance on a number of matters introduced in the amended Rules, in particular, correction of annual UFG factors and audits of major system changes.
This Consultation Paper includes proposals on the above issues and seeks feedback from participants. The Consultation Paper also covers further matters associated with the implementation of the amended Rules, including:
- revocation of seven exemptions which will be made redundant by the amendments to the Rules;
- variation of one exemption to align with the go-live of G1M arrangements under the Rules;
- consideration of a new exemption application from the allocation agent associated with go-live of G1M arrangements under the Rules; and
- updates to current determinations and guidelines on the Gas Industry Co website reflecting the amendments to the Rules and experience with operation of reconciliation arrangements over the past five years.
Submissions received
Consultation on two special allocation decisions
This paper considers two instances of errors that have been uncovered which impact allocation results at two different gas gates. This consultation will inform Gas Industry Co's determination of whether or not to direct the Allocation Agent to perform special allocations under the Gas (Downstream Reconciliation) Rules 2008. The first issue is a correction that has been applied to the injection volumes for three months at the Westfield gas gate (part of the Greater Auckland notional gas gate). The second issue is the discovery of an incorrect pressure factor for an ICP at the Hunua gas gate, affecting the period from October 2011 to August 2012.
Submissions received
Consultation on exemption application DR12-01-S
This paper considers a standard exemption application enabling the allocation agent to recalculate the annual UFG factor (AUFG) for the Tawa A (TWA35610) gas gate for the 2012/2013 gas year, commencing 1 October 2012
Consultation on exemption application and special allocations
This paper considers two issues under the Gas (Downstream Reconciliation) Rules 2008. The first is an exemption application for a new direct connect gas gate and the second is whether, and how, to address the impacts of corrected consumption information received for an ICP at the Tawa A gas gate.
Submissions received
Consultation on exemptions and rule 37 determination
The purpose of this paper is to consult on two issues relating to the Gas (Downstream Reconciliation) Rules 2008. The first is to propose the extension of a set of exemptions under the Rules which are due to expire on 30 September 2012. The second is to carry out the required consultation on the accuracy threshold in rule 37 before the annual determination of the threshold is made by Gas Industry Co. The rule 37 determination must also take place by 30 September 2012
Submissions received
Downstream Reconciliation Options Paper
Submissions received
Consultation on Exemption under the Gas (Downstream Reconciliation) Rules 2008
Vector is seeking an exemption from rule 41 in respect of situations where:
- metering data fails Vector's initial validation process and further enquiry reveals there is no demand-side reason for the failure; and
- a correction to the metering data is required as part of Vector's validation process in order to accurately reflect actual flow; and
- Vector is able to create corrected data (which may in some cases include estimated data) to submit to the allocation agent, by the required deadline, that is likely to be closer to actual injection quantities than an estimation performed by the allocation agent in accordance with the estimation process set out in the allocation agent's functional specification document.
Submissions received
Consultation on GTA Designation to add Papakura
Consultation on rule 37 percentage of error determination under the Gas (Downstream Reconciliation) Rules 2008
Submissions received
Proposed guideline for application of gas billing factors
Submissions received
Consultation on Exemption under the Gas (Downstream Reconciliation) Rules 2008
The annual UFG (AUFG) factor for the Greater Hamilton gas gate for the 2010/11 gas year has been affected by an error in TOU consumption submissions by a retailer. Now that the error has been identified and quantified, the allocation agent is seeking an exemption to allow recalculation of that AUFG factor.
Submissions close on 22 December so that, if a decision to grant the exemption were to be made, the allocation agent would be in a position to use an amended AUFG factor in time for the December initial allocation.
Submissions received
Consultation on Exemption under the Gas (Downstream Reconciliation) Rules 2008
The recent assignment of E-Gas customer contracts from the liquidator to Nova Gas necessitated an urgent exemption from the reconciliation rules to facilitate a more accurate result for the November 2010 initial allocation. Once an urgent exemption has been granted, Gas Industry Co must consult on that exemption. Please note that, as this is only a short paper and the issues appear to be straightforward, submissions are due on Friday 17th December 2010.
Submissions received
Consultation on rule 37 percentage of error determination under the Gas (Downstream Reconciliation) Rules 2008
This consultation paper seeks submitters' views on the appropriate percentage of error for the accuracy of consumption information provided for initial allocation, to be determined by Gas Industry Co, for the consumption periods in the gas year commencing 1 October 2010.
Determinations on the percentage of error applicable for each gas year can be found here
Submissions received
Consultation on proposed variations to exemptions under the Gas (Downstream Reconciliation) Rules 2008
Submissions are invited on a proposal to vary nine existing exemptions, all of which expire on 30 September 2010. The exemptions relate to direct connect gas gates, global 1-month UFG methodology gas gates, oversized metered gas gates, unmetered gas gates and to injection information supplied by transmission system owners. The variations sought extend the exemptions until 30 September 2012, thereby maintaining the status quo position whilst the major policy review of the reconciliation rules is undertaken.
Submissions received
Guideline Notes for the Gas (Downstream Reconciliation) Rules 2008
Submissions are invited on an updated draft of the Guideline note for rules 65 to 75 and 80: the commissioning and carrying out of performance audits and event audits.
This guideline note is intended to assist allocation participants in understanding the processes that will be adopted by Gas Industry Co when commissioning audits in accordance with the Rules. In particular, the updated draft includes a procedure for approving auditors, as well as the timetables Gas Industry Co intends to follow for performance audits of allocation participants.
The deadline for submissions is Wednesday, 18 August 2010.
Submissions received
Consultation on exemption application DR10-02-S under the Gas (Downstream Reconciliation) Rules 2008
Gas Industry Co has received an application from Contact Energy (Contact) for exemption from aspects of the Gas (Downstream Reconciliation) Rules 2008 ('Reconciliation Rules') in respect of the Te Rapa Cogeneration gas gate (TRC02003).
Submissions received
Consultation on Proposed Variations to Exemptions under the Gas (Downstream Reconciliation) Rules 2008
Submissions were invited on two issues relating to exemptions from the Gas (Downstream Reconciliation) Rules 2008. First, an urgent direct connect gas gate exemption was granted for the Hunua 3 gas gate in February 2010 and consultation was required on whether the urgent exemption should be varied, replaced or revoked. Second, it was proposed that the unmetered gas gate exemption currently in effect be varied by removing the Waverley gas gate. A gas gate meter has now been installed at Waverley and injection information is available, making the exemption redundant for this gas gate.
Submissions received
Exemption Application DR09-13-S under the Gas (Downstream Reconciliation) Rules 2008
Submissions were invited on an exemption application in respect of the Gas (Downstream Reconciliation) Rules 2008. The application sought to exempt the newly commissioned Kupe gas gate from certain provisions of the Rules in a similar manner to the existing direct connect gas gate exemptions.
Submissions received
Consultation on Proposed Variation to an Exemption under the Gas (Downstream Reconciliation) Rules 2008
Proposal to adddress the unmetered Papakura No.3 and Waverley gas gates.
Consultation Paper: Revocation/variation of exemptions under the Gas (Downstream Reconciliation) Rules 2008
Submissions were invited in respect of Gas Industry Co's proposal to revoke or vary certain existing exemptions, which are now redundant as a consequence of the minor amendments to the Gas (Downstream Reconciliation) Rules 2008 (in force from 2 October 2009).
Submissions received
Consultation on proposed accuracy determination under the Gas (Downstream Reconciliation) Rules 2008
Submissions were invited on a consultation paper relating to the accuracy percentage to be determined under rule 37 of the Gas (Downstream Reconciliation) Rules 2008.
Prior to the beginning of each gas year, Gas Industry Co must determine and publish a percentage of error for the accuracy of the consumption information for allocation groups 3 to 6 provided for initial allocation (when compared against consumption information provided for final allocation).
Submissions received
Exemption Application DR09-12-U under the Gas (Downstream Reconciliation) Rules 2008
Submissions were invited on an exemption application in respect of the Gas (Downstream Reconciliation) Rules 2008. The application sought to exempt Nova Gas' bypass networks from the allocation and reconciliation processes set out in the Rules.
Submissions received
Exemption Applications DR09-09-S, DR09-10-T and DR09-11-S under the Gas (Downstream Reconciliation) Rules
Submissions were invited on a package of three exemption applications in respect of the Gas (Downstream Reconciliation) Rules 2008. The applications related to the requirements for transmissions system owners to provide gas gate injection information in accordance with rules 41 and 42.
Submissions received
Draft report on exemptions granted in respect of rules 41 and 42 of the Gas (Downstream Reconciliation) Rules 2008
In September and November 2008, exemptions were granted exempting transmission system owners from some of the requirements of rule 41 and 42 regarding the provision of gas gate injection information. The exemptions expired on 30 April 2009 and prior to that date Gas Industry Co was required to provide a report on what actions should be taken in respect to the period from 1 May 2009 onward.
Gas Industry Co issued a draft report and consulted with allocation participants on some of the issues and possible outcomes discussed in the draft report - which can be downloaded below.
Submissions received
Exemption Applications DR09-06-T, DR09-07-T and DR09-08-T under the Gas (Downstream Reconciliation) Rules
Author: Bas Walker, Tristan Meo and Phillip Beardmore (Strata Consulting)
Submissions are invited on a package of three exemption applications in respect of the Gas (Downstream Reconciliation) Rules 2008.
Submissions received
Application of Gas Governance Arangements to Private Networks
The existing rules for reconciliation and switching make no distinction between open-access and private networks.
Gas Industry Co commissioned a paper by Dr Geoff Bertram to discuss how gas governance arrangements should be applied to private networks. Submissions were sought on the paper in April 2009, prior to which a workshop was held on 31 March (click here to view the slide presentation). The paper and industry participants submissions in response are set out below.
Gas Industry Co has now also prepared an analysis of submissions that discusses the conclusions of Dr Bertram's report and considers the responses of submitters. The analysis of submissions can be viewed at the link set out below.
Submissions received
Consultation Paper: Exemption Applications under the Gas (Downstream Reconciliation) Rules 2008
Author: Tristan Meo and Phillip Beardmore (Strata Consulting)
Submissions were invited on a package of five exemption applications in respect of the Gas (Downstream Reconciliation) Rules 2008.
Submissions received
Consultation Paper: Proposed Guideline Notes for the Gas (Downstream Reconciliation) Rules 2008
Author: Bas Walker, Tristan Meo, and Phillip Beardmore (Strata Consulting)
Submissions were invited on a package of six proposed guideline notes in respect of the Gas (Downstream Reconciliation) Rules 2008.
The proposed guideline notes were developed to assist allocation participants and the allocation agent in interpreting and applying the Rules and understanding Gas Industry Co's expectations for related downstream allocation and reconciliation processes.
Submissions received
Consultation Paper: Proposed Transitional Exemption DR08-28-T under the Gas (Downstream Reconciliation) Rules 2008
Author: Bas Walker
Submissions were invited on a proposed transitional exemption application under the Gas (Downstream Reconciliation) Rules 2008. A consultation paper on this application can be viewed or downloaded here:
Submissions received
Consultation Paper: Three Exemption Applications under the Gas (Downstream Reconciliation) Rules 2008
Author: Bas Walker
Gas Industry Co received three additional exemptions under the Gas
(Downstream Reconciliation) Rules 2008. This notice published and sought
submissions on these exemption applications.
A consultation paper on these applications can be viewed or downloaded
here:
Submissions received
Consultation Paper: Exemption Application DR08-24-U under the Gas (Downstream Reconciliation) Rules 2008
Author: Bas Walker
Gas Industry Co received an additional exemption application under the Gas
(Downstream Reconciliation) Rules 2008 to apply the Global 1-Month UFG
methodology to the Kiwitahi 2 gas gate KIW34202. This consultation paper
published the exemption application, outlined some additional information and
sought submissions in response.
Submissions received
Consultation Paper on Exemption Applications under the Gas (Downstream Reconciliation) Rules 2008
Author: Bas Walker
Introduction
Subsequent to the release of its initial exemptions consultation paper
on 21 August 2008 ("Initial exemptions under the Gas (Downstream
Reconciliation) Rules 2008"), Gas Industry Co received additional exemption
applications under the Gas (Downstream Reconciliation) Rules 2008.
This notice published and sought submissions on those additional applications
for consultation purposes. Submissions received helped to inform Gas Industry
Co's consideration of the exemptions sought and ensured that all relevant
factors were taken into account.
Gas Industry Co notes that the applications generally relate to issues that
have already been the subject of earlier consultation, albeit in respect of
different gas gates or allocation participants. As such, a relatively
compressed period of consultation was allowed.
Summary of applications and links to previous applications
The applications received are summarised in the table below. The table
also sets out the connection with previous applications. Those previous
applications can be located in the initial exemptions consultation paper of 21
August 2008. The following submissions were received:
|
Applicant and application Code |
Summary of exemption sought |
Connection with previous applications |
|
Nova Gas Ltd DR08-20-S |
Exemption from application of the allocation and reconciliation provisions of the Rules for five single retailer (bypass) gas gates/one direct consumer gas gate |
See previous applications on this issue from Genesis Energy DR08-06-S, Contact Energy DR08-06-S, On Gas DR08-10-S and Mighty River Power DR08-11-S |
|
Nova Gas Ltd DR08-21-S |
Exemption of five single retailer (bypass) gas gates/one direct consumer gas gate from the allocation of ongoing fees |
See previous applications on this issue from Genesis Energy DR08-07-U, Contact Energy DR08-08-U, On Gas DR08-09-U and Mighty River Power DR08-12-U. |
|
Powerco Ltd DR08-22-S |
Exemption of the unmetered Matapu and Pungarehu No. 2 gas gates from the requirement for accurate metering |
See the previous Gas Industry Co proposed exemption DR08014-T on this issue |
|
Bay of Plenty Energy DR08-23-T |
Exemption from applying seasonal daily shape values for a specified period of time. |
See previous application from Nova Gas DR08-03-T on this issue. |
Submissions received
Consultation Paper on the Initial Package of Exemption Applications under the Gas (Downstream Reconciliation) Rules 2008
Author: Bas Walker and Tristan Meo
The Gas (Downstream Reconciliation) Rules 2008 went into full operation
(go-live) on 1 October 2008. These Rules provide for participants or the
allocation agent to apply for exemptions from the rules, and these applications
can be standard, urgent or transitional.
Exemption applications were invited in late July so that they could be
processed before go-live. Including two transitional applications from Gas
Industry Co itself, a total of 18 applications were received. It was decided to
consult participants on all of these applications, so that we could be sure
that the interests of all participants would be appropriately recognised and
taken into account. Exemption applications also formed a very useful part of
the information-sharing process leading up to go-live.
The consultation paper can be viewed or downloaded form here:
Submissions received
Consultation Paper: Proposed Determinations and Other Matters under the Gas (Downstream Reconciliation) Rules 2008 - Second submissions
The consultation paper on Proposed Determinations and Other Matters under the Gas (Downstream Reconciliation) Rules 2008 covered two groups of matters, and there was two different closing date for submissions. The submissions with the closing date of 11 July 2008 can be viewed or downloaded form here:
Submissions received
Consultation Paper: Proposed Determinations and Other Matters under the Gas (Downstream Reconciliation) Rules 2008
Author: Bas Walker and Lucy Elwood
A consultation paper on proposed determinations and other matters under the Gas (Downstream Reconciliation) Rules 2008 was released by Gas Industry Co on 13 June 2008. Submissions were sought from interested parties. The consultation paper covers two groups of matters, and there was a different closing date for submissions for the two groups, as follows:
- with a closing date of Friday 27 June 2008, proposed information exchange file formats
- with a closing date of Friday 11 July 2008, proposed information requirements from transmission system owners, proposed percentage of accuracy, proposed groupings of gas gates, additional information exchanges, provision of reports and information by the allocation agent to allocation participants, notifications to the allocation agent, and issues around gas measurement systems and the definition of gas gate.
Consultation was formally limited to prospective allocation participants, rather than more widely. However, the consultation paper has been published on the Gas Industry Co website for general information.
Submissions received
Discussion Paper - Reconciliation of Downstream Gas Quantities
Author: Lucy Elwood
This discussion paper builds on the feedback received from stakeholders on a previous reconciliation discussion paper released in June 2006. It focuses on downstream reconciliation and details Gas Industry Co's preferred approach for addressing areas where current downstream reconciliation practices are failing to deliver Government's policy aims or appropriately meet industry's requirements. The preferred approach could potentially be implemented under either a pan-industry agreement or a regulatory arrangement. The analysis suggests that a regulatory arrangement is most appropriate, but Gas Industry Co intends to perform a cost-benefit analysis and consider further feedback from stakeholders before ruling out a pan-industry agreement. Attached to the discussion paper as Appendix D is a high-level summary of the possible structure of a regulatory arrangement and attached as Appendix E is a framework cost-benefit analysis paper prepared by NZIER.
Submissions received
Options Paper: Options for Amending Allocation and Reconciliation Arrangements
Author: Paul Mitchell
This consultation paper describes current allocation and reconciliation arrangements in the gas industry and reviews options for developing these.
Submissions received
Working Group
Downstream Reconciliation Advisory Group
- Anna Carrick (nominated by Vector Limited)
- Rod Crone (nominated by Contact Energy)
- Andrew Maseyk (nominated by Genesis Energy)
- Jim Raybould (nominated by Mighty River Power)
- Katherine Shufflebotham (nominated by Vector Limited)
- Martha Tjan (nominated by Powerco)
|
#
|
Meeting Date
|
Meeting material
|
|
1
|
Friday 30 March 2012
|
|
| 2 | Thursday 12 April 2012 | |
| 3 | Friday 27 April 2012 | |
| 4 | Thursday 31 May 2012 | |
| 5 | Tuesday 26 June 2012 | No DRAG meeting. Meeting replaced with RGGF |
| 6 | Thursday 13 September 2012 |
Statement of Proposal
Previously Consulted On
Statement of Proposal: Downstream Reconciliation Rules Review
Following publication of the Downstream Reconciliation Options Paper in December 2011 and based on the submissions received on the Options Paper, Gas Industry Co decided to split the Options Paper issues into two separate Statements of Proposal. This Statement of Proposal has been prepared with input from the Downstream Reconciliation Advisory Group. A second Statement of Proposal will be published by June 2013.
Submissions received
Statement of Proposal: Minor Amendments to the Gas (Downstream Reconciliation) Rules 2008
Since the Gas (Downstream Reconciliation) Rules 2008 (the "Rules") took full effect on 1 October 2008, a number of minor and technical changes to the rules were identified that would improve their operation and, in some instances, reduce the need for exemptions.
For consultation, Gas Industry Co has developed a statement of proposal proposing amendments to the Rules which are considered of a minor and technical nature.
Submissions received
Updated Proposal: Downstream Reconciliation and Allocation
Date published: 20 December 2008 Author: Bas Walker, Tristan Meo and Lucy Elwood (Elwood Consulting)
Following consultation on a Statement of Proposal containing proposed rules for downstream reconciliation and allocation, an Updated Proposal has been prepared by Gas Industry Co.
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 has developed a proposal to recommend to the Minister of Energy rules for allocation and reconciliation of downstream gas quantities
Submissions received
Recommendation
Recommendation to the Minister of Energy and Resources on Review of the Gas (Downstream Reconciliation) Rules 2008
Date Published: 28 January 2013
Since the Gas (Downstream Reconciliation) Rules 2008 (the "Rules") took full effect on 1 October 2008, a number of issues have been identified which have created some unnecessary compliance burdens and inefficiencies. Gas Industry Co commenced a review of the Rules, starting with an Options Paper published in December 2011, which aimed to reduce those inefficiencies. The Recommendation below is the culmination of that review which benefitted from the input of an industry group - the Downstream Reconciliation Advisory Group.
The Minister Gazetted the amended Rules on 21 February 2013. The new rules are effective from 1 June 2013. The marked-up Rules and a clean version of the Rules are available under the Market Administration tab.
Recommendation to Minister: Downstream Reconciliation Rules Review 2012
Recommendation to the Minister of Energy on minor amendments to the Gas (Downstream Reconciliation) Rules 2008
Date Published: 31 July 2009 Author: Ian Dempster and Tristan Meo
Since the Gas (Downstream Reconciliation) Rules 2008 (the "Rules") took full effect on 1 October 2008, a number of minor and technical changes to the rules were identified that would improve their operation and, in some instances, reduce the need for exemptions. The purpose of this recommendation is to recommend a number of rule changes to enhance the operation and efficiency of the allocation and reconciliation of downstream gas quantities. The changes are all minor and non-controversial and, therefore, have been dealt with in accordance with the simplified approach for amendments of this nature, as provided for by the Gas Act 1992.
The text of this recommendation is available at the link below, and a separate document of the recommended marked-up amendment to the Rules is also provided:
Recommended amendments to the Gas (Downstream Reconciliation) Rules 2008 in track-change format
Recommendation to the Minister of Energy on Arrangements for the Allocation and Reconciliation of Downstream Gas Quantities
Date Published: 12 March 2008 Author: Bas Walker, Tristan Meo and Lucy Elwood
Gas Industry Co recommended the making of rules to improve the allocation and reconciliation of downstream gas quantities (the 'Rules').
Gas Industry Co has identified a number of problems with the design of the existing downstream reconciliation arrangements, including especially a lack of specificity in the arrangements, a lack of proper governance and no workable means of enforcing compliance. Improved arrangements, in the form of rules to be approved under the Gas Act, have been developed over the period since 2006 through the operation of an industry group (GART), and the release of two discussion papers, a Statement of Proposal, an Updated Proposal and most recently a further Industry Workshop. Through these mechanisms the issues have been extensively canvassed with the industry. In particular, improved downstream allocation and reconciliation arrangements ensure that UFG is more equitably allocated to retailers, thereby enhancing the competitiveness of the retail market. Improved arrangements also benefit consumers through a reduction in industry participants' operational costs and an increase in the potential for retail competition leading to greater productive, allocative and dynamic efficiency.
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 Amendment to Gas
Compliance Regulations
Market Administration
Gas (Downstream Reconciliation) Rules 2008
The purpose of the Gas (Downstream Reconciliation) Rules is to establish a set of uniform processes that will enable the fair, efficient, and reliable downstream allocation and reconciliation of downstream gas quantities. The Rules are available by clicking on this link: Gas (Downstream Reconciliation) Rules (in force from 2 October 2009). These Rules will change from 1 June 2013 in accordance with the review discussed below.
Review of the Gas (Dowstream Reconciliation) Rules 2008
In December 2012, Gas Industry Co recommended to the Minister a number of changes to the Rules that were the culmination of a review which began with the publishing of the Downstream Reconciliation Options Paper in December 2011. An advisory group was instrumental for the review and all relevant meeting papers are available on Gas Industry Co's website. The rule amendments were gazetted by the Minister on 21 February 2013 and are effective from 1 June 2013.
Copies of the amended Rules are available by clicking the links below:
- Gas (Downstream Reconciliation) Rules (clean format) - in force from 1 June 2013
-
Gas (Downstream Reconciliation) Rules (tracked change format) - in force from 1
June 2013.
Framework of the Gas (Downstream Reconciliation) Rules 2008
The Rules were gazetted by the Minister of Energy on 29 May 2008 and came into full force on 1 October 2008. The Rules provide for:
-
The appointment of an allocation agent;
-
Processes for the:
- provision of gas injection and consumption information;
- allocation by the allocation agent of daily gas quantities for each calendar month to retailers at gas gates;
- reconciliation of downstream gas quantities;
-
Mandatory information disclosure and reporting by the allocation agent, allocation participants, and the industry body; and
-
Ancillary matters related to the process of allocation and reconciliation such as funding by industry participants, exemptions, approval and registration of deemed profiles for gas consumption information, and the performance of audits.
Data on monthly allocation results may be downloaded from the allocation agent
website.
Minor amendments to the Gas (Downstream Reconciliation) Rules 2008
On 31 July 2009, Gas Industry Co recommended to the Minister a number of minor technical rule changes to enhance the operation and efficiency of the allocation and reconciliation of downstream gas quantities. The amendments sought to enhance the operation of the Rules and, in some instances, reduce the need for exemptions. The rule amendments were gazetted by the Minister on 3 September 2009 and came into force on 2 October 2009.
Copies of the amended Rules (in clean and track change formats) and the Rules that applied prior to 2 October 2009 are available by clicking on the links below:
- Gas (Downstream Reconciliation) Rules (clean format) - in force from 2 October 2009
- Gas (Downstream Reconciliation) Rules (track change format) - in force from 2 October 2009
- Gas (Downstream Reconciliation) Rules (clean format) - in force prior to 2 October 2009
Allocation Agent
The allocation agent (NZX Limited) was appointed by Gas Industry Co on 10 June 2009. This appointment follows NZX's purchase of the previous allocation agent's (Marketplace Company Limited) energy business and assets and the assignment of the relevant rights and obligations to NZX.
Rule 8 of the Rules requires that Gas Industry Co publish the allocation agent service provider agreement. Accordingly, a copy of the service provider agreement (and the deed of novation) are available by clicking on the links below.
Please note the functional specification (the Schedule to the deed of novation) may be subject to change via the change request process.
The allocation agent website can be found at http://www.gasreconciliation.co.nz
Register of proposed changes to the Gas (Downstream Reconciliation) Rules 2008
Changes will be required to the Rules from time to time and for a variety of reasons - including changes in market circumstances, the need to correct aspects that are not operating as intended, and to reflect changes in policy. Gas Industry Co has developed guidelines for managing proposed rule changes:
Guidelines for the management of proposed changes to gas governance rules and regulations
The guidelines provide for a register of proposed rule changes to be maintained on the Gas Industry Co website for each set of rules. The register for proposed changes to the Rules can be viewed at the link below.
Register of Proposed Changes to the Gas (Downstream Reconciliation) Rules 2008
This register contains rule changes that have been proposed to date and their current status. Gas Industry Co will continue to update the register with other rule changes that are proposed by participants in due course.
Reports from the allocation agent and auditors
Allocation agent reports
Rules 12 and 13 require that the allocation agent conduct a monthly self-review on its performance and provide a written report to Gas Industry Co on the results of this review. In addition to details of the allocation agent's compliance with the rules and terms of the service provider agreement, the report must also contain details of any area where an amendment to the rules may need to be considered and any other matter that Gas Industry Co reasonably requests. Gas Industry Co is required under rule 13.3 to publish the allocation agent reports, which are available by clicking on the links below.
Audit reports
Under rule 73, Gas Industry Co must publish all final audit reports.
The reports published below have been commissioned under the provisions of the
Rules. As required by rule 68, the auditors appointed for these audits are
independent of Gas Industry Co. These reports represent the work of the
individual auditors. Any conclusions reached, or opinions expressed, in the
final audit reports are solely the auditors' and do not necessarily reflect the
views of Gas Industry Co.
Event audits
Event audit for Greater Auckland gas gate covering consumption periods May-June 2009
Event audit for Tawa A gas gate covering consumption periods May-June 2009
Greater Hamilton Event Audit March 2011
Palmerston North Event Audit May 2011
Performance audits
Gas Industry Co is undertaking a series of baseline performance audits of gas retailers. These audits examine retailers' compliance with requirements in the Rules such as receiving and storing meter readings, converting meter readings to energy usage, and submitting accurate information to the allocation agent. The terms of reference for the baseline audits can be found here.
EGAS and EGLT Performance Audit - Final Version August 2010
Contact Energy Performance Audit Final Report September 2010
Genesis Energy Performance Audit Final Report April 2011
Mighty River Power Performance Audit Final Report April 2011
OnGas Performance Audit Final Report June 2011
Energy Direct Performance Audit Final Report July 2011
Nova Energy Performance Audit Final Report July 2011
Greymouth Gas Performance Audit Final Report July 2011
Allocation Participant Register
Under the Gas (Downstream Reconciliation) Rules 2008, allocation participants are retailers, distributor, meter owners or transmission system owners under the Rules. Gas Industry Co has established an Allocation Participant Register for recording the contact details of all allocation participants. The Allocation Participant Register can be viewed at the link below:
Allocation Participant Register
Although the Register has no formal status under the Rules, it is used by both Gas Industry Co and the allocation agent for the issuing of formal notifications, providing material for allocation participant consultation and notifying determinations made under the Rules. It is important that the allocation participant register is complete and up to date, and all interested parties are expected to maintain the register and provide a new or replacement notification if appropriate. Any company that considers itself to be an allocation participant is invited to notify Gas Industry Co accordingly using the notification form, which can be downloaded from the following page:
Notification of Participant Details for Gas Allocation and Registry Participants
Gas Gates
The following document provides a list of all gas gates. The list was last updated on 1 March 2012 and corresponds to the gas gate list used by the allocation agent and the list available for download from the gas registry. Any changes to the gas gate list should be made via the Gas Gate Change Notice form which is available here.
Annual UFG Factors
Rule 46 requires that for each gas year the allocation agent determine and publish the annual UFG (AUFG) factor for each gas gate, based on the ratio of aggregated injection and consumption information from the 12 months up to and including February of the previous gas year. For the transitional period ending on 30 September 2010, special provisions apply as detailed in rule 79, including a cap and floor on the maximum and minimum values for the AUFG (1.035 and 0.985 respectively). AUFG factors for each gas gate and each gas year where the Rules have been in operation can be accessed by clicking on the links below.
AUFG factors for 2008/09 gas year
AUFG factors for 2009/10 gas year
AUFG factors for 2010/11 gas year
AUFG factors for 2011/12 gas year
AUFG factors for 2012/13 gas year
Combined AUFG factors
The file below contains the final AUFG factors for the gas years 2008/09 through 2010/11 together with revised AUFG factors for the first two gas years that incorporate corrected data provided by one retailer:
AUFG factors 2008/09 through 2010/11 plus revised 2008/09 and 2009/10 figures
Determinations
File Formats
The Rules provide for the industry body (Gas Industry Co) to give notice to allocation participants specifying one or more information exchange file formats (File Formats) that allocation participants must provide information to the allocation agent in.
Reconciliation File Formats Notice v1.2 dated 3 November 2008
Other determinations
The Rules provide for the industry body (Gas Industry Co) to determine and publish certain matters required for the operation of the downstream allocation and reconciliation framework. Notice of these determinations, and the analysis of submissions received through consultation on these determinations, is available by clicking on the links below:
Reconciliation Determination v1.7 dated 28 September 2012
Pursuant to rules 37.3 and 37.4, Gas Industry Co determines that the percentage of error for the accuracy of the consumption information provided for initial allocation to be applied to the consumption periods:
(a) in the gas year commencing 1 October 2008 is ±15%; and
(b) in the gas year commencing 1 October 2009 is ±12.5%; and
(c) in the gas year commencing 1 October 2010 is ±10%; and
(d) in the gas year commencing 1 October 2011 is ±10%; and
(e) in the gas year commencing 1 October 2012 is ±10%
Archived determinations
Previous determinations and analysis of submissions received through consultation on these determinations can be found here
Guideline notes
Gas Industry Co has developed the following guideline notes to assist allocation participants and the allocation agent in interpreting and applying the Gas (Downstream Reconciliation) Rules 2008 ("the Rules"):
- Guideline note rule 5 - definition of gas gate
- Guideline note rule 30.3 - flagging of estimates for allocation group 1 and 2 consumption data
- Guideline note rules 34-37 - historic and forward estimates, and seasonal adjustment
- Guideline note rule 47 - force majeure event and annual UFG factor
- Guideline note rules 44 and 51 - correction of allocations by allocation agent and special allocations
- Guideline note rule 52 - annual reconciliation
- Guideline note rule 61 - guidelines for determinations on profiles
- Guideline note rule 64 - referral to industry body of disputed profile determinations
- Guideline note rule 65 to 75 and 80 - the commissioning and carrying out of performance audits and event audits v2 October 2010
- Guideline note - the submission of revisions to the allocation agent
- Guideline note - management of change requests for the allocation system and the associated provision of services by the allocation agent under the service provider agreement with Gas Industry Co
- Guideline note -- Billing factors guideline note
Market Administrator guideline notes
The Market Administrator has issued the following guideline notes to show how it will apply the factors to be taken into account when determining the materiality of breaches under the Gas Governance (Compliance) Regulations 2008
Archived guideline notes:
Exemptions
The Gas (Downstream Reconciliation) Rules 2008 provide that the industry body (Gas Industry Co) may, where appropriate, exempt an allocation participant(s), the allocation agent or a gas gate from complying with all or any provisions of the Rules. Exemption applications may be either standard (under rule 19) or urgent (under rule 20).
A general information paper on the exemptions process and criteria has been issued by Gas Industry Co and can be viewed or downloaded by clicking the link below.
Information Paper - Dealing with Exemptions under the Downstream Reconciliation and Switching Rules
The table below sets out exemption applications received, the status of those applications and gives notice of any exemptions granted by Gas Industry Co. The status descriptions are as follows:
- Pending - application received and under consideration (including any required consultation)
- Granted - an exemption (partial or full) has been granted in respect of the application
- Declined - application has been declined
| Application | Status | Notice |
| DR10-02 Contact Energy | Granted | Exemption (DR10-02-S: Te Rapa Cogen) Notice 2010 |
| DR10-03 Gas Industry Co | Granted | Exemption (DR10-03-S: Direct Connect Gas Gates) Notice 2010 |
| DR10-04 Gas Industry Co | Granted | Exemption (DR10-04-S: Global 1-Month UFG Methodology) Notice 2010 |
| DR10-05 Gas Industry Co | Granted | Exemption (DR10-05-S: Injection Information) Notice 2010 |
| DR10-06 Gas Industry Co | Granted | Exemption (DR10-06-S: Oversized Metered Gas Gates) Notice 2010 |
| DR10-07 Gas Industry Co | Granted | Exemption (DR10-07-S: Unmetered Gas Gates) Notice 2010 |
| DR11-01 Allocation Agent | Granted | Exemption (DR11-01-S: Revision of Injection Quantities) Notice 2011 |
| DR12-01 Allocation Agent | Granted | Exemption (DR12-01-S: Tawa A Annual UFG) Notice 2012 |
Applying for an exemption
The form for an exemption application is set out at the link below. Gas Industry Co recommends that you follow the format to ensure that all the necessary information is provided and to avoid delays caused by an incomplete application.
Your application can be made by email to Gas Industry Co at: info[at]gasindustry.co[dot]nz. A hard copy of your application should also be forwarded.
Previous exemptions
Exemption applications received, and notices granted, between September 2008 and September 2010 can be viewed here
Ongoing Allocation Costs
Rules 15 to 18 of the Reconciliation Rules provide for ongoing fees to be paid by allocation participants to Gas Industry Co on a monthly basis to meet the ongoing allocation costs. The ongoing allocation costs include the costs:
- payable by Gas Industry Co to the allocation agent for the services provided under Parts 1, 2 and 5 of the Reconciliation Rules in respect of that gas year; and
- of Gas Industry Co associated with allocation and its role under the Reconciliation Rules during that gas year.
Gas Industry Co has determined that its costs should exclude overhead costs and policy work resulting from operational activities under the Reconciliation Rules.
Estimated ongoing costs for the 2012/13 gas year
The estimated costs for the gas year commencing 1 October 2012 include an allowance for modifying the allocation system in line with the rule changes discussed in the 2012 Statement of Proposal. The system developments required by the proposed rule changes have not yet been fully specified so a high-level estimate has been included.
The actual cost of system changes incurred will factor into the determination after the end of the gas year of the actual ongoing allocation costs. In accordance with rule 17, any under- or over-recovery will be invoiced or credited after the costs are published.
| Cost categories | Estimated annual cost |
| Service provider base fee | $680,000 |
| External advice | $20,000 |
| System modifications | $200,000 |
| Total ongoing costs | $900,000 |
Ongoing costs for the 2011/12 gas year
| Cost categories | Estimated | Actual |
| Service provider base fee | $680,000 | $680,000 |
| External advice/system modification | $20,000 | $7,570 |
| Total ongoing costs | $700,000 | $687,570 |