Insolvent Retailers

Overview

Owner: Ian Dempster
Status: In Progress

This work programme came about as a result of the Gas Governance (Insolvent Retailers) Regulations 2010. Those Regulations were created using the urgent regulation-making provisions of the Gas Act (section 43P).

Gas Industry Co consulted on those Regulations in March-April 2011. The outcome of that consultation was that Gas Industry Co recommended to the Minister that the Regulations be allowed to lapse and that work be commenced to consider whether a generic regulatory solution is required to address retailer insolvency.

As a first step for that work, Gas Industry Co engaged Castalia Strategic Advisors to prepare an issues paper on whether there are any identifiable market failures that warrant regulatory intervention in the event of gas retailer insolvencies. The Castalia Report and the submissions received on it are available under the 'Consultation' tab.

The next step was to publish an Options Paper which presented different options for addressing those market failures identified in the Castalia Report. The Options Paper is available under the 'Consultation' tab.

Consultation

Previously Consulted On

Insolvent Retailers - Options Paper

Date Published: 17 December 2012

Building on from the consultation on the Castalia Report, this Options Paper presents the options available for managing the market failure risks posed by orphaned customer gas consumption. Feedback received in submissions will be used as an input for the next step in the workstream which is to develop and implement the preferred option.

Submissions closed on 11 February 2013.

Submissions received

Discussion Paper: Castalia Strategic Advisors report on Insolvent Retailers

Date Published: 22 June 2012

In March 2011, Gas Industry Co issued a Statement of Proposal seeking submissions on the Gas Governance (Insolvent Retailers) Regulations 2010. That consultation process culminated in a recommendation to the Minister of Energy in May 2011 that the Regulations should be allowed to expire (revoked) and that Gas Industry Co would establish a workstream to consider whether a generic regulatory solution is required, and if so the form of that regulatory solution, to address retailer insolvency.

As a first step in considering whether to develop a regulatory backstop for gas retailer insolvency, Gas Industry Co has engaged Castalia Strategic Advisors (Castalia) to provide advice on whether normal insolvency processes can be relied upon to produce acceptable outcomes when a gas retailer becomes insolvent.
Submissions on the Castalia report closed on Monday 30 July 2012.

Submissions received

Gas Governance (Insolvent Retailers) Regulations 2010 - Statement of Proposal

Date Published: 22 March 2011

The Gas Governance (Insolvent Retailers) Regulations 2010 were passed under urgency in November 2010. The Gas Act 1992 requires that, after urgent regulations are made, those regulations must be assessed and consulted on, and a recommendation must go to the Minister on whether the regulations should be revoked, replaced, or amended.

This Statement of Proposal was published to meet that Gas Act requirement. The paper is in two parts. The first part assesses the GGIR Regulations and concludes that they do not provide a set of transition arrangements that would be suitable in all cases of retailer insolvency. The draft recommendation in the paper is therefore to allow the GGIR Regulations to expire.

The second part of the consultation paper begins to address a request by Minister Brownlee to Gas Industry Co to provide advice on the "form and content of backstop regulations" to address retailer insolvency. The paper briefly canvasses the objectives and frameworks of insolvent retailer regulations in other jurisdictions. It seeks responses to a number of high-level questions, including whether retailer insolvency is an issue that warrants regulatory intervention and, if warranted, possible forms such intervention might take. Responses will be used to guide further work in this area.

Your responses are invited on both parts of the consultation paper. Submissions must be received no later than 5.00 PM on Friday, 15 April 2011. Please note that responses after this date will not be able to be considered.

Submissions received

Insolvent Retailers Working Group

Insolvent Retailers Working Group

The Insolvent Retailers Working Group (IRWG) was established to assist Gas Industry Co in designing the drafting instructions for regulations that could be made urgently following the insolvency of a gas retailer.

IRWG consists of the following members, appointed for their expertise in reconciliation, allocation and switching processes:

  • Joan Purdie (Vector, Group Manager, Transaction Processing)
  • Anna Carrick (Vector, Manager, Natural Gas Trading)
  • Jim Raybould (Mighty River Power, Gas Manager)
  • Mark Herman (Powerco, Customer and Commercial Manager)
  • Andrew Maseyk (Genesis, Reconciliation and Commercial/Technical Manager)
  • Rod Crone (Contact Energy, Network and Reconciliation Manager)

The IRWG terms of reference can be found here:

Terms of reference: IRWG

IRWG Meetings held and associated papers:

Meeting 1 Wednesday, 16th October 2013

Agenda

Meeting Material

Minutes

Meeting 2 Wednesday, 27th November 2013

Agenda

Meeting Material

Minutes

Arrangements for Insolvent Retailers

On 18 October 2010 the E-Gas group of companies went into liquidation. At the request of the Minister of Energy and Resources, Gas Industry Co assisted the Ministry of Economic Development and Parliamentary Counsel Office to prepare the Gas Governance (Insolvent Retailers) Regulations 2010.

In May 2011, Gas Industry Co recommended to the Acting Minister of Energy and Resources that the Regulations be revoked by the operation of regulation 19, and for Gas Industry Co to consider whether a generic regulatory solution was required to address retailer insolvency, and if so, Gas Industry Co would develop the form of that solution.

Insolvent Retailers Regulations - Recommendation to the Minister