Overview

The Gas Governance (Compliance) Regulations 2008 provide for the monitoring and enforcement of a number of rules and regulations.

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 (expired June 2014)
- the Gas (Downstream Reconciliation) Rules 2008
- the Gas Governance (Critical Contingency Management) Regulations 2008

These rules and regulations, together with the relevant provisions of the Gas Act 1992, can be viewed under our statutory framework.

The day to day work that occurs as a result of these Regulations and how they are put into operation can be found in Current Arrangements.

Determinations and Settlements, made by the Market Administrator and the Rulings Panel under the Compliance Regulations, can be found in Breach Determinations and Settlements.

The original development of the Regulations and subsequent amendments, including previous consultations, can be found in Background.

Current Arrangements

A Market Administrator, Investigator and Rulings Panel are appointed under the Regulations to undertake a range of functions in relation to alleged breaches as follows:

  • the Market Administrator receives breach notices, refers allegations that raise material issues to the Investigator and where appropriate, attempts to achieve a resolution on allegations which do not raise material issues. The Market Administrator function is currently being performed by Gas Industry Co.
  • the Investigator investigates the facts surrounding all alleged breaches notified to him/her, and endeavours to settle every alleged breach.
  • the Rulings Panel has jurisdiction to approve or reject settlements provided by the investigator. The Rulings Panel also determines alleged breaches which the Investigator has been unable to settle. The Minister of Energy and Resources has appointed Hon Sir John Hansen KNZM as the Rulings Panel.

A flowchart of the compliance process is available for viewing below

Key Areas

Gas Industry Co has published a paper to inform reconciliation participants of the Market Administrator’s proposed approach to alleged breaches of rule 37.2 of the Downstream Rules and to invite comments on the proposal.

Comments on the proposal were invited by Friday 12 April 2019 and these are found below. 

In addition to the two submissions, Genesis also provided a brief email on 20 March 2019, indicating that it supports the proposed changes.

Related Documents

  • Approach to alleged breaches of rule 37.2 of the DR Rules
    111 KB Adobe Acrobat PDF file
  • Market Administrator Guidelines on the materiality of breaches
    76 KB Adobe Acrobat PDF file

Submissions

  • Greymouth Gas New Zealand Limited
    GGNZ Letter to GIC on r37.2 80 KB Adobe Acrobat PDF file
  • Vector Limited
    Vector Submission Rule 37.2 174 KB Adobe Acrobat PDF file

The Market Administrator is responsible for notifying participants of breach allegations, determining whether a breach allegation raises material issues, attempting to resolve breach allegations that do not raise material issues with the agreement of the parties and referring breach allegations that raise material issues to the Investigator. Gas Industry Co acts as the Market Administrator under the Compliance Regulations.

Under the Compliance Regulations, the Market Administrator may be notified of an alleged breach if: 

  • a participant under the Rules believes on reasonable grounds that it or another participant has breached the rules (reg 9);
  • any consumer or other person (other than a participant) believes on reasonable grounds that a participant has breached the Rules and that they are affected by that alleged breach (reg 10);
  • Gas Industry Co becomes aware of an alleged breach (reg 10); and
  • the registry operator, allocation agent or critical contingency operator  believes on reasonable grounds that any other participant has breached the Rules (reg 11).

Notices of breach allegations can be given by filling in the form available in Related Documents below and emailing it to: [email protected]

The Market Administrator is required to make determinations on materiality of breaches, and to refer all material breach allegations to an Investigator for investigation. Parties may also require the Market Administrator to refer breach allegations it determines not to have raised material issues to an Investigator where the Market Administrator has decided to take no action on that allegation or has been unable to effect a settlement.

Related Information

Market Administrator Guidelines

Related Documents

  • Notice of Breach Template
    27 KB Adobe Acrobat PDF file

The Investigator has a range of powers under the Gas Act to investigate and report on breach allegations. On completing an investigation, the Investigator must endeavour to effect a settlement of the breach allegation within the timeframes set out in the Compliance Regulations. All settlements must be referred to the Rulings Panel for approval. If a breach allegation is unable to be settled, or a settlement is not approved by the Rulings Panel, then the Investigator must refer the breach allegation to the Rulings Panel for determination.

The Rulings Panel is an independent body appointed by the Minister of Energy and Resources under the Compliance Regulations.

The Rulings Panel approves or rejects settlements referred by an Investigator under the Compliance Regulations and determines breach allegations that are unable to be settled or in respect of which a settlement has not been approved.

Under section 40(2) of the Gas Governance (Compliance) Regulations 2008, the Rulings Panel must provide a summary of its procedures to Gas Industry Co who then must publish that summary. The Rulings Panel Procedures document is available below under Related Documents.

Related Documents

  • Rulings Panel Procedures - March 2016
    28 KB Adobe Acrobat PDF file

Regulations 81 to 84 of the Compliance Regulations provide for ongoing compliance fees to be paid on a monthly basis to meet the ongoing compliance costs. The ongoing fees are payable by participants under any gas governance rules and regulations:

  • to which the Compliance Regulations apply; and
  • that provide for ongoing fees to be paid to Gas Industry Co.

The Compliance Regulations currently apply to the Gas (Switching Arrangements) Rules 2008, Gas (Downstream Reconciliation) Rules 2008 and Gas Governance (Critical Contingency Management) Regulations 2008. To the extent that any compliance costs cannot be recovered through ongoing fee provisions, they will be recovered through the levy. To date there have been no such recoveries of compliance costs from the levy. The ongoing compliance costs include:

  • The costs payable by Gas Industry Co to the Market Administrator, any Investigators, and the Rulings Panel; and
  • Gas Industry Co's external costs associated with the operation of, and its obligations under, the Compliance Regulations during the year.

Gas Industry Co has determined that the compliance ongoing costs should exclude any overhead costs or policy work resulting from operational activities under the Compliance Regulations. Any such work is to be funded from the levy. The compliance ongoing costs therefore only relate to other direct external costs in connection with Gas Industry Co administering the Compliance Regulations and carrying out the Market Administrator role.

Prior to the start of each financial year, Gas Industry Co is required to determine and publish a breakdown of the estimated compliance costs to be recovered in that financial year. As soon as practicable after the end of each financial year, Gas Industry Co must determine and publish the actual compliance costs for that financial year apportioned to the relevant rules and regulations. Gas Industry Co must then invoice, or issue a credit note to, every person liable to pay the ongoing fees, with the difference between their share of the actual compliance costs and the amount of the estimated compliance costs paid by that person. 

Ongoing costs for previous years costs are found on the left-hand navigation of this page.

 

Ongoing Costs for FY2023 (1 July 2022 to 30 June 2023)

Cost Category

Estimate

Rulings Panel

$27,100

Total Ongoing Costs

$27,100

Apportionment of compliance ongoing costs for FY2023

Rule/Regulation

Share of Ongoing Costs

Estimate

Reconciliation Rules

33%

$9,033

Switching Rules

33%

$9,033

CCM Regulations

33%

$9,033

 

Ongoing Costs for FY2022 (1 July 2021 to 30 June 2022)

Cost Category

Estimate

Rulings Panel

$25,000

Rulings Panel recruitment

$25,000

Total Ongoing Costs

$50,000 

Apportionment of compliance ongoing costs for FY2022

Rule/Regulation

Share of Ongoing Costs

Estimate

Reconciliation Rules

33%

$16,666

Switching Rules

33%

$16,666

CCM Regulations

33%

$16,666

 

 

Ongoing Costs for FY2021 (1 July 2020 to 30 June 2021)

Cost Category

Estimate

Investigator

$20,000

Rulings Panel

$25,000

Expert Advisers and Expenses

$10,000

Total Ongoing Costs

$55,000 


Apportionment of compliance ongoing costs for FY2021

Rule/Regulation

Share of Ongoing Costs

Estimate

Reconciliation Rules

35%

$19,250

Switching Rules

35%

$19,250

CCM Regulations

30%

$16,500

 

Ongoing Costs for FY2020 (1 July 2019 to 30 June 2020)

Cost Category

Estimate

Actual

Investigator

$20,000

$25,000

Rulings Panel

$25,000

-

Expert Advisers and Expenses

$10,000

-

Total Ongoing Costs

$55,000 

$25,000

Over-Recover $30,000

   


Apportionment of compliance ongoing costs for FY2020

Rule/Regulation

Share of Ongoing Costs

Estimate

Reconciliation Rules

35%

$19,250

Switching Rules

35%

$19,250

CCM Regulations

30%

$16,500

 

Ongoing Costs for FY2019 (1 July 2018 to 30 June 2019)

Cost Category

Estimate

Actual

Investigator

$25,000

$25,000

Rulings Panel

$20,000

-

Expert Advisers and Expenses

$10,000

$56,649

Total Ongoing Costs

$55,000 

 $81,649

Under-Recovery $26,649

 

 


Apportionment of compliance ongoing costs for FY2019

Rule/Regulation

Share of Ongoing Costs

Reconciliation Rules

35%

Switching Rules

35%

CCM Regulations

30%

Related Information

Previous Ongoing Costs

Related Documents

  • Compliance breach process diagram
    128 KB Adobe Acrobat PDF file

Breach Determinations and Settlements

The Market Administrator must publish all of its determinations under regulation 18 of the Gas Governance (Compliance) Regulations, including those that have been referred to the Investigator or Rulings Panel.

In this section you will find the Market Administrator’s and the Rulings Panel’s determination of alleged breaches as well as the settlements between industry participants that the Investigator has effected and that the Rulings Panel has approved or rejected.

Key Areas

The Rulings Panel approves or rejects settlements referred by an Investigator under the Gas Governance (Compliance) Regulations 2008 (the 'Compliance Regulations') and determines breach allegations that are unable to be settled or in respect of which a settlement has not been approved.

Settlements approved by the Ruling Panel can be viewed in the left hand navigation.

Related Information

Approved Settlements of Alleged Breaches 2014
Approved Settlements of Alleged Breaches 2013
Approved Settlements of Alleged Breaches 2012
Approved Settlements of Alleged Breaches 2011
Approved Settlements of Alleged Breaches 2010
Approved Settlements of Alleged Breaches 2009
Approved Settlements of Alleged Breaches 2008

The Rulings Panel approves or rejects settlements referred by an Investigator under the Gas Governance (Compliance) Regulations 2008 (the 'Compliance Regulations') and determines breach allegations that are unable to be settled or in respect of which a settlement has not been approved.

Decisions by the Rulings Panel can be viewed in the left hand navigation.

Related Information

Determinations of Alleged Breaches 2018
Determinations of Alleged Breaches 2009

Background

This section contains information regarding the original development of the Gas Governance (Compliance) Regulations and subsequent amendments.

Key Areas

Four years following the implementation of the Gas Governance (Compliance) Regulations, Gas Industry Co undertook a review of the Regulations and proposed a number of changes. All relevant information relating to that review and the amendments to the Regulations can be found in this section.

Related Information

Consultation on Compliance Thresholds - November 2014
Recommendation to the Minister of Energy and Resources to amend the Gas Governance (Compliance) Regulations 2008 (August 2013)
Proposed amendments to the Gas Governance (Compliance) Regulations 2008 - further details of the threshold regime (December 2012)
Statement of Proposal: Amendments to the Gas Governance (Compliance) Regulations 2008 (May 2012)

Stay in touch

Keep up to date with our latest news and analysis by subscribing to our regular newsletter