Overview

Downstream Reconciliation involves reconciling volumes of gas leaving the high pressure transmission system with volumes consumed by end-users, and appropriately attributing those volumes, plus any unaccounted-for-gas (UFG), to retailers.

Downstream Reconciliation is concerned with reconciling volumes of gas leaving the high pressure transmission system with volumes consumed by end-users, and appropriately attributing those volumes, plus any unaccounted-for-gas (UFG), to retailers.

The current Gas (Downstream Reconciliation) Rules 2008 (the Rules) came into effect on 1 October 2008 and were last modified on 14 September 2015.

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

The trial of a daily allocation model that arose as a result of the implementation of market-based balancing can be found in the D+1 section.

The original development of the Rules, along with subsequent reviews and amendments and previous consultations can be found in Background.

Current Arrangements

The Gas (Downstream Reconciliation) Rules 2008, place ongoing obligations on several parties to effectively manage the downstream reconciliation arrangements. Gas Industry Co is empowered to:

  • appoint an Allocation Agent
  • make determinations, exemptions and guidelines in respect of certain matters.
  • direct audits and special allocations to be carried out, and
  • recover market fees to fund the operation of the downstream reconciliation arrangements (for example the costs of the Allocation Agent).

Gas Industry Co regularly consults with industry Stakeholders when undertaking these activities. This section contains a record of consultations and decisions in all matters relating to the operation of the Downstream Reconciliation Rules.

Key Areas

The Rules require that Gas Industry Co appoints an Allocation Agent to perform allocations by operating the Gas Allocation System and Gas Allocation Portal.

Following the completion of the initial five year term of the service provider agreement, Gas Industry Co carried out a competitive tender process for the role. On 4 October 2013, an agreement was reached with EMS (Energy Market Services, a business unit of Transpower NZ Limited) to take over the appointment as Allocation Agent. This appointment took effect on 1 January 2014, after a transition process from NZX to EMS.

Rule 8 of the Rules requires that Gas Industry Co publish the allocation agent service provider agreement. Accordingly, copies of the service provider agreement documents are available under related documents.

The Allocation Agent Functional Specification details the requirements of the system to be developed and operated by the allocation agent for the downstream reconciliation and allocation of gas. A copy of the Allocation Agent Functional Specification can be viewed under related documents. Please note that the functional specification may be subject to change via the change request process.

Allocation file formats and the file naming conventions are specified in the Reconciliation File Formats Notice available here.

Related Information

Allocation Agent Monthly Reports

Related Documents

  • Extension [& Contract Variation] Letter - July 2023
    994 KB Adobe Acrobat PDF file
  • Amendment to Service Provider Agreement - February 2023
    940 KB Adobe Acrobat PDF file
  • Extension Letter - June 2021
    371 KB Adobe Acrobat PDF file
  • Extension Letter - October 2018
    468 KB Adobe Acrobat PDF file
  • General Terms - October 2013
    813 KB Adobe Acrobat PDF file
  • Ongoing Services - October 2013
    607 KB Adobe Acrobat PDF file
  • Allocation Agent Functional Specification v2.9
    2.4 MB Adobe Acrobat PDF file
  • Establishment Services - October 2013
    496 KB Adobe Acrobat PDF file

Gas Industry Co commissions event audits and performance audits of compliance with the Rules. 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

The purpose of event audits is to ascertain the cause or causes of any particular issue or event that has arisen in relation to the allocation of gas under the Rules.

Performance Audits

Under rule 65, Gas Industry Co is required to commission performance audits of the allocation agent and allocation participants at regular intervals. 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. Performance audits are also required in advance of major system changes.

Related Information

Audits - Previous (2016-2018)
Audits - Previous (2013-2015)
Audits - Previous (2010-2012)

Related Documents

  • Greymouth Gas Downstream Reconciliation Performance Audit - March 2023
    303 KB Adobe Acrobat PDF file
  • OnGas System Change Audit April 2023
    265 KB Adobe Acrobat PDF file
  • 2020 Terms of Reference for Retailer Performance Audits
    137 KB Adobe Acrobat PDF file
  • OnGas (Retailer) Downstream Reconciliation Performance Audit - March 2022
    377 KB Adobe Acrobat PDF file
  • Powerco Distributor and Meter Owner Performance Audit January 2022
    644 KB Adobe Acrobat PDF file
  • Firstgas Major Change Audit - December 2021
    956 KB Adobe Acrobat PDF file
  • Nova (Meter Owner) Performance Audit – December 2021
    796 KB Adobe Acrobat PDF file
  • Hanergy Retailer Downstream Reconciliation Performance Audit October 2021
    412 KB Adobe Acrobat PDF file
  • Firstgas (Distributor and Meter Owner) Performance Audit - May 2021
    444 KB Adobe Acrobat PDF file
  • Pulse (Retailer) Downstream Reconciliation Performance Audit - July 2021
    487 KB Adobe Acrobat PDF file
  • Switch Utilities (Retailer) Downstream Reconciliation Performance Audit - February 2021
    430 KB Adobe Acrobat PDF file
  • Nova (Distributor) Performance Audit - May 2021
    805 KB Adobe Acrobat PDF file
  • Mercury (Retailer) Downstream Reconciliation Performance Audit - March 2021
    360 KB Adobe Acrobat PDF file
  • Contact (Retailer) Downstream Reconciliation Performance Audit - December 2020
    409 KB Adobe Acrobat PDF file
  • GasNet (Meter Owner) Performance Audit - November 2020
    703 KB Adobe Acrobat PDF file
  • Genesis (Retailer) Downstream Reconciliation Performance Audit - October 2020
    466 KB Adobe Acrobat PDF file
  • Trustpower (Retailer) Downstream Reconciliation Performance Audit - November 2020
    344 KB Adobe Acrobat PDF file
  • Nova (Retailer) Downstream Reconciliation Performance Audit - November 2020
    392 KB Adobe Acrobat PDF file
  • MegaTel (Retailer) Downstream Reconciliation Performance Audit - November 2020
    305 KB Adobe Acrobat PDF file
  • Allocation Agent Downstream Reconciliation Performance Audit - April 2020
    399 KB Adobe Acrobat PDF file
  • Firstgas System Change Audit - August 2019
    3.6 MB Adobe Acrobat PDF file

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.

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:

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 all subsequent gas years is ±10%

Matariki 

Gas Industry Co has determined that the new public holiday acknowledging Matariki is a non-business day under gas governance rules and regulations.

The Notice of Determination of Non-Business Day by the Industry Body (Gas Industry Co) under Gas Governance Rules and Regulations can be read below.

It provides for this additional non-business day until the rules and regulations are amended to include an explicit reference to Matariki alongside New Zealand’s other statutory holidays.

Queen Elizabeth II Memorial Day

Following the passing of the Queen Elizabeth II Memorial Day Bill on 20 September 2022, Gas Industry Co determines Queen Elizabeth II Memorial Day, Monday 26 September 2022, to be a non-business day for the purpose of the Arrangements.

The Notice of Determination of Non-Business Day by the Industry Body (Gas Industry Co) under Gas Governance Rules and Regulations can be read below.

Related Information

Previous Determinations

Related Documents

  • Reconciliation File Formats Notice v2.0
    257 KB Adobe Acrobat PDF file
  • Reconciliation Determinations v3.1 - December 2020
    176 KB Adobe Acrobat PDF file
  • Notice of Determination of Non-Business Day by the Industry Body (Gas Industry Co) under Gas Governance Rules and Regulations
    280 KB Adobe Acrobat PDF file
  • Queen Elizabeth II Memorial Day Determination
    100 KB Adobe Acrobat PDF file

The Rules provide that 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).

Gas Industry Co will consult with allocation participants on exemption applications, either in advance of making a decision for standard exemptions, or retrospectively for urgent exemptions.

An exemption application form is available below in Related Documents. All exemption applications, decisions and exemption notices will be published here following consideration. Previous exemptions can be viewed on the subpage by clicking on the appropriate link.

 

CURRENT EXEMPTIONS

There is one exemption currently in effect. The exemption notice is available in the Related Documents section

  • Standard Exemption (DR20-02: COVID-19 Lockdown) Notice 2020

 

EXPIRED EXEMPTIONS

The following expired exemption notice is also available in the Related Documents section

  • Urgent Exemption (DR20-01: COVID-19 Lockdown) Notice 2020

 

 

Related Information

Previous Exemptions

Related Documents

  • Exemption Application Form
    76 KB Word document
  • [EXPIRED] Urgent Exemption (DR20-01: COVID-19 Lockdown) Notice 2020
    64 KB Adobe Acrobat PDF file
  • Consultation on Urgent Exemption
    113 KB Adobe Acrobat PDF file
  • Standard Exemption (DR20-02: COVID-19 Lockdown) Notice 2020
    65 KB Adobe Acrobat PDF file

Submissions

  • Contact Energy
    270420 Consultation on Urgent Exemption under the Gas Downstream Rules v2 379 KB Adobe Acrobat PDF file
  • Vector
    Vector Submission Urgent Exemption under the DRR due to COVID 19 147 KB Adobe Acrobat PDF file

The following document provides a list of all gas gates. The list was last updated in April 2016 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 can be viewed below.

Information on gas gate annual UFG factors, which was previously published in this section, can be found on the Allocation Agent's website, www.gasreconciliation.co.nz. Once on the Allocation Agent's website, click on Downloads then select "GAR090: Annual UFG Factor" in the Submission Type dropdown.

Related Documents

  • Gas Gate Change Notice Form
    62 KB Word document
  • All Gas Gate v2.6 - October 2019
    275 KB Adobe Acrobat PDF file

Gas Industry Co has developed the following guideline notes (see related documents) to assist allocation participants and the allocation agent in interpreting and applying the Gas (Downstream Reconciliation) Rules 2008 ("the Rules").

Related Information

Previous Guidelines

Related Documents

  • Guideline note rule 5 - definition of gas gate - June 2013
    76 KB Adobe Acrobat PDF file
  • Guideline note rule 61 - guidelines for determinations on profiles - June 2013
    108 KB Adobe Acrobat PDF file
  • Guideline note rule 30.3 - flagging of estimates for allocation group 1 and 2 consumption data - June 2013
    66 KB Adobe Acrobat PDF file
  • Guideline note rule 52 - annual reconciliation - June 2013
    90 KB Adobe Acrobat PDF file
  • Guideline note rule 47 - force majeure event and annual UFG factor - June 2013
    75 KB Adobe Acrobat PDF file
  • Guideline note - the submission of revisions to the allocation agent - November 2008
    90 KB Adobe Acrobat PDF file
  • Guideline note rules 44, 46A and 51- correction of allocations by allocation agent, correction of annual UFG factor and special allocations - June 2013
    104 KB Adobe Acrobat PDF file
  • Guideline note rules 34-37 - historic and forward estimates, and seasonal adjustment - June 2013
    130 KB Adobe Acrobat PDF file
  • Guideline note rule 65 to 75 - the commissioning and carrying out of performance audits and event audits - June 2013
    91 KB Adobe Acrobat PDF file
  • Guideline note rule 64 - referral to industry body of disputed profile determinations - June 2013
    65 KB Adobe Acrobat PDF file
  • 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 - March 2009
    64 KB Adobe Acrobat PDF file
  • Guideline Note - Gas Billing Factors - November 2015
    262 KB Adobe Acrobat PDF file
  • Market Administrator Guidelines on the Materiality of Breaches - June 2019
    132 KB Adobe Acrobat PDF file

The Downstream Reconciliation market fees are monthly fees that cover the ongoing costs associated with allocation/downstream reconciliation arrangements. The ongoing allocation costs are:

  • The costs payable to the Allocation Agent.
  • The costs of Gas Industry Co associated with allocation and its obligations under the Reconciliation Rules.

Each month, Gas Industry Co invoices gas retailers for a proportion of the market fees based on their market share of 'allocated' gas (the gas that flows through reticulated gas networks and is used by their customers connected to each network). 

Gas Industry Co estimates the ongoing allocation costs prior to each financial year, collects market fees in monthly installments throughout the year, and then performs an end of year wash-up once the actual costs are known.

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

Ongoing Costs for FY2024 (1 July 2023 to 30 June 2024)

Cost Category

Estimated Costs

Service Provider – Base Fee

$400,000

External Advice/System Development

$150,000

Allocation Agent Appointment

$50,000

Total Ongoing Costs

$600,000

 

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

Cost Category

Estimated Costs

Service Provider – Base Fee

$515,000

External Advice/System Development

$50,000

Service Provider - D+1

$55,350

Allocation Agent RFP

$20,000

Move allocation system to AWS

$120,000

Total Ongoing Costs

$760,350

  

Previous Years

Year

Estimated Ongoing Costs

Actual Ongoing Costs

FY2022

$565,000

$529,860

FY2021

$565,000

$517,580

FY2020

$565,000

$539,872

FY2019

$565,000

$516,744

Related Information

Previous Market Fees

From time to time errors are discovered in the consumption information or injection information that is submitted to to the allocation agent and consideration is given as to whether it is necessary to correct allocation results. The Gas (Downstream Reconciliation) Rules 2008 ('the Rules') allow for various types of corrections to be made:

  • Rule 44 sets out the processes for the notification of errors in consumption information submitted to the allocation agent and, where such errors would have resulted in a materially different allocation, allows the allocation agent to amend results (if time permits) or requires Gas Industry Co to consider whether to direct a special allocation. 
  • Rule 46A allows an annual UFG factor (AUFG) to be recalculated and republished if an error is discovered which Gas Industry Co considers may have, or have had, a sufficiently unfair impact on allocation results.
  • Rule 51 sets out when Gas Industry Co may require the allocation agent to perform a special allocation, either in addition to, or replacing, the allocation results from the previous allocation of gas quantities. 

Before Gas Industry Co is able to direct the allocation agent to perform either an AUFG correction or a special allocation, Gas Industry Co must consider the unfairness of the error. For an AUFG correction, Gas Industry Co must be of the opinion that the current AUFG may have, or have had, a sufficiently unfair impact on allocation results. For a special allocation, Gas Industry Co must be of the opinion that the current allocation information or allocation results are sufficiently unfair  and Gas Industry Co must balance the unfairness of the current allocation information or allocation results against any commercial reasons for retaining the current allocation results.

Consultations on AUFG corrections and special allocations assist Gas Industry Co in determining the unfairness of errors. Previous and current consultations can be found in this section.

Related Information

Consultation on correcting metering errors at GTA03610 and WAG21501
Consultation on options to address three TOU submission errors in May and June 2019 and May 2020
Consultation on correcting a TOU metering error at GMM08801
Consultation on a special allocation and corrections to AUFG factors - October 2018
Consultation on correcting AUFG factors - March 2017
Consultation on special allocations and correcting annual UFG factors - December 2016
Consultation on three special allocations - December 2015
Consultation on Special Allocation
Consultation on two special allocation decisions
Consultation on exemption application and special allocations
Consultation on Correcting Injection Errors TAU07001

The following Excel document provides a list of temperature data for all allocated gas gates. The data was created by NIWA and provides a 30 year average of ground temperature at 30cm depth. The data is presented in degrees Celsius and there is one number per month for each gas gate.

The purpose of this temperature information is for industry participants to use in their data conversion calculations if they wish. The Gas (Downstream Reconciliation) Rules 2008 (the DR rules) require that the data used in the conversion of volume to energy must comply with NZS 5259. Average ground temperature at 30cm depth is provided as an option under NZS 5259.

Currently the use of this information is voluntary however, it is Gas Industry Co’s intent that the DR rules would be changed to incorporate this dataset in the future. If Gas Industry Co were to do this then we would consult with industry on our Statement of Proposal and participants would have the opportunity to submit on whether they think this dataset is appropriate and whether they think it should be mandatory or voluntary to use.

Related Documents

  • Gas gate temperature data
    25 KB Excel spreadsheet

D+1

D+1 is a process that allocates gas to retailers at downstream networks the day following gas flow. Gas Industry Co is trialling D+1 allocation as a means of providing more timely information to retailers about their customers’ gas usage. The information also allows Firstgas to calculate shippers’ running mismatch positions (that is, the net of their gas purchases, sales, and cashouts) on a daily basis.

D+1 Options Paper

Since the D+1 pilot commenced in 2015, it has been Gas Industry Co’s intention to review its performance and, if the trial proved successful, make amendments to the Gas (Downstream Reconciliation) Rules 2008 (the Rules) to incorporate daily allocations.

With this goal in mind, we worked with the Daily Allocation Working Group (DAWG) on rule change proposals in 2021 and planned to release a Statement of Proposal to amend the Rules in 2022. While the DAWG had a good degree of consensus on the rule changes, we have since recognised that we need to further explore non-regulatory solutions in order to meet our obligations under the Gas Act.

Key Areas

The current purpose of the daily allocation working group (DAWG) is to assist Gas Industry Co in reviewing the Gas (Downstream Reconciliation) Rules 2008 (the Rules) to consider changes relating to D+1, specifically to:

  • discuss what issues need to be considered in a review of the Rules to formalise D+1;
  • evaluate what the options are to address the issues in relation to the Gas Act objectives; and
  • provide feedback on any issues that arise during the build and implementation of the D+1 system

The DAWG consists of representatives from the following organisations:

  • Contact
  • EMS
  • Firstgas
  • Gas Industry Co
  • Genesis
  • Mercury
  • Nova
  • Vector Metering

All meeting papers, minutes and other information can be found below

Related Information

DAWG Meetings (2021)
DAWG Meetings (2015-2019)
Review of D+1 Allocation Options - August 2017

This section contains system documentation, file formats, and the D+1 business rules which govern how participants interact with the system and how it operates.

Related Information

D+1 Process Audit - April 2016

Related Documents

  • D+1 Business Rules v1.2 - October 2016
    84 KB Adobe Acrobat PDF file
  • D+1 Business Rules v1.1 - March 2016
    235 KB Adobe Acrobat PDF file
  • D+1 File Formats Specification v1.0 - October 2018
    136 KB Adobe Acrobat PDF file

In March 2015, Gas Industry Co held a workshop with retailers to present a D+1 model developed by Concept Consulting.  This model uses regression analysis to allocate the previous day's gas consumption to shippers based on past consumption patterns.  Gas Industry Co proposes to use this model as the basis for a trial of D+1 allocation.  The trial would be a low-cost way of determining whether D+1 would be worthwhile to implement as part of the Reconciliation Rules; and, if so, of refining the methodology and processes used.

Related Documents

  • Concept Report - An Approach to D+1 Allocation - March 2015
    483 KB Adobe Acrobat PDF file
  • D+1 Workshop - Presentation by Gas Industry Co - March 2015
    229 KB Adobe Acrobat PDF file
  • D+1 Workshop - Presentation by Concept - March 2015
    959 KB Adobe Acrobat PDF file

Related Documents

  • D+1 Options Paper
    3.9 MB Adobe Acrobat PDF file
  • Firstgas Submission
    298 KB Adobe Acrobat PDF file
  • GGNZ Submission
    173 KB Adobe Acrobat PDF file
  • Nova Submission
    107 KB Adobe Acrobat PDF file
  • Papakura Power Submission
    516 KB Adobe Acrobat PDF file
  • Vector Submission
    222 KB Adobe Acrobat PDF file

Developing

This section contains consultations and developments on the existing downstream reconciliation arrangements. Our most recent consultation related to dealing with the financial impact of consumption and injection errors.

Developments relating to D+1 can be found in the D+1 section.

Key Areas

This consultation considers whether Gas Industry Co should facilitate a financial settlement following the notification of submission errors at GTA03610. Special allocations are also considered in this paper as the errors fall within the available timeframe defined under rule 51 of the Gas (Downstream Reconciliation) Rules 2008.

The preliminary view reached in the consultation paper is our initial position only and is dependent on stakeholder feedback. It is important retailers give an indication of whether there are financial or other commercial drivers that will influence our assessment of the unfairness of the submission errors.

Submissions close end‑of‑business on 24 November 2023. 

Related Documents

  • Consultation on correcting submission errors at GTA03610
    375 KB Adobe Acrobat PDF file

This consultation considered an approach for dealing with the resolution of financial impact of errors in consumption or injection information submitted to the allocation agent where the window for a special allocation has closed.

Gas Industry Co sought allocation participants’ views on, materiality thresholds for resolution of financial impact, costs that Gas Industry Co should include in its calculation of financial impact, and general process.

A summary of the submissions received can be viewed below. 

Related Documents

  • Consultation on resolving the financial impact of consumption and injection errors
    3.1 MB Adobe Acrobat PDF file
  • Submissions analysis on Gas Industry Co’s paper - Resolving the financial impact of consumption and injection errors
    195 KB Adobe Acrobat PDF file

This consultation considers whether Gas Industry Co should facilitate special allocations following the notification of injection errors at TAU07001. Special allocations are considered in this paper as the errors fall within the available timeframe defined under rule 51 of the Gas (Downstream Reconciliation) Rules 2008.

The preliminary view reached in the consultation paper is Gas Industry Co's initial position only and is dependent on stakeholder feedback. It is important retailers give an indication of whether there are financial or other commercial drivers that will influence our assessment of the unfairness of the injection errors.

Please email your submission to [email protected]. Submissions close on Friday 28 April 2023.

Related Documents

  • Consultation on Correcting Injection Errors TAU07001
    350 KB Adobe Acrobat PDF file

Background

Governed by the Gas (Downstream Reconciliation) Rules 2008 (the Rules), downstream reconciliation is concerned with reconciling volumes of gas leaving the high pressure transmission system with volumes consumed by end users, and appropriately attributing them to retailers. The difference between the gas volume that retailers estimate their customers have used and the volume leaving the transmission system is UFG, which is allocated, and charged, to retailers in proportion with their consumption submissions.

This page contains information on the development, scope and structure of the Rules. The Rules came into effect on 1 October 2008 and were amended on 1 June 2013 in accordance with Phase I of the Rules Review discussed below. Phase II of the Rules Review is currently underway.

One minor amendment to the Rules was made in September 2015, following the work undertaken by Gas Industry Co on addressing retailer insolvency. The amendment is a new provision which clarifies the ongoing obligations for retailers who are no longer trading.

Key Areas

The purpose of the 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 provide for:

  • The appointment of an Allocation Agent who operates the allocation system and allocation portal. More information on the Allocation Agent can be found on the Downstream Reconciliation Operations Page.
  • 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 allocated gas gates;
    • reconciliation of downstream gas quantities against quantities billed to customers;
  • 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.

Related Documents

  • Gas (Downstream Reconciliation) Rules 2008 in effect from 14 September 2015
    283 KB Adobe Acrobat PDF file
  • Gas (Downstream Reconciliation) Rules 2008 in effect from 14 September 2015 (marked-up version)
    284 KB Adobe Acrobat PDF file
  • Gas (Downstream Reconciliation) Rules in effect prior to 14 September 2015
    283 KB Adobe Acrobat PDF file

Gas Industry Co is currently undertaking the second phase (Phase II) of a policy review of the Rules which began in 2010. Phase II is concerned with identifying options to either improve the accuracy of the initial allocation or replace it with an alternative. Options currently under investigation (which will form the basis of an options paper in due course) are:

  • D+1: a system which would provide shippers with daily allocated quantities, at a transmission pipeline level, on the day after gas has flowed.
  • An alternative allocation algorithm: no change to the timing of allocations, but the Allocation Agent would use a different allocation methodology, for example, a top-down algorithm or the removal of the application of the annual UFG factor at interim and final stages.
  • Balancing and Peaking Pool (BPP) wash-ups: BPP charges are revisited when interim and/or final allocation results are published.
  • Early publication of SADSV: retailers use the residual profile values for the consumption period to profile customer's read-to-read volumes into consumption submissions.

D+1:  Allocation the day after gas flow

In March 2015, Gas Industry Co held a workshop with retailers to present a D+1 model developed by Concept Consulting.  This model uses regression analysis to allocate the previous day's gas consumption to shippers based on past consumption patterns.  Gas Industry Co proposes to use this model as the basis for a trial of D+1 allocation.  The trial would be a low-cost way of determining whether D+1 would be worthwhile to implement as part of the Rules; and, if so, of refining the methodology and processes used.

After the Rules had been operating for a number of years, Gas Industry Co began a policy review to build on operational experience, remove unnecessary compliance burdens and inefficiencies, and look for general improvements in the Rules and downstream reconciliation arrangements.

An Options Paper was released in December 2011 which sought feedback on a number of proposals to improve the Rules. Following feedback on the Options Paper it was decided to split the review into two parts: Phase I would address the proposals that had a good level of support in the Options Paper or were considered to be minor or technical changes, while Phase II would address options to improve the accuracy of the initial allocation. A working group, the Downstream Reconciliation Advisory Group (DRAG), was appointed to provide expert industry advice on the issues under review.

In December 2012, Gas Industry Co recommended to the Minister of Energy and Resources a number of changes to the Rules that were the culmination of Phase I of the review. The rule amendments were gazetted by the Minister on 28 February 2013 and took effect from 1 June 2013.

Related Information

Downstream Reconciliation Advisory Group (DRAG)
Statement of Proposal (July 2012)
Options Paper (December 2011)
Strata Report: Review of Estimation Methodologies (May 2009)

Related Documents

  • Gas (Downstream Reconciliation) Rules (clean format) - in force from 1 June 2013
    584 KB Adobe Acrobat PDF file
  • Gas (Downstream Reconciliation) Rules (tracked change format) - in force from 1 June 2013.
    397 KB Adobe Acrobat PDF file
  • Recommendation to the Minister: Downstream Reconciliation Rules Review 2012
    599 KB Adobe Acrobat PDF file
  • Summary of changes impacting participants - May 2013
    67 KB Adobe Acrobat PDF file

Since the Rules took full effect in October 2008, a number of minor and technical changes were identified that would improve their operation and, in some instances, reduce the need for exemptions. These issues were addressed in a Statement of Proposal published in June 2009.

Consequently, in June 2009, Gas Industry Co made a recommendation to the Minister proposing a number of rule changes to enhance the operation and efficiency of the allocation and reconciliation of downstream gas quantities. The changes were all minor and non-controversial and, therefore, were dealt with in accordance with the simplified approach for amendments of this nature, as provided for by the Gas Act 1992.

Related Information

Statement of Proposal (June 2009)

Related Documents

  • Gas (Downstream Reconciliation) Rules (clean format) - in force after 2 October 2009
    475 KB Adobe Acrobat PDF file
  • Gas (Downstream Reconciliation) Rules (track change format) - in force after 2 October 2009
    482 KB Adobe Acrobat PDF file
  • Recommendation to the Minister of Energy on minor amendments to the Gas (Downstream Reconciliation) Rules 2008
    1.1 MB Adobe Acrobat PDF file

 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. The paper and industry participants' submissions in response are set out below.

Gas Industry Co also prepared an analysis of submissions that discusses the conclusions of Dr Bertrams's report and considers the responses of submitters.

Related Documents

  • Analysis of submissions - September 2009
    379 KB Adobe Acrobat PDF file
  • Application of Gas Governance Arrangements to Private Networks February 2009
    334 KB Adobe Acrobat PDF file

Submissions

  • Gas Industry Company
    Contact Energy 54 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Energy Direct NZ 9 KB Adobe Acrobat PDF file
  • Gas Industry Company
    DR PolicyDevelopment Minor Application Powerco 686 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Genesis Energy 50 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Mighty River Power 69 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Nova Cover Letter 113 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Nova LECG 88 KB Adobe Acrobat PDF file
  • Gas Industry Company
    Vector Limited 64 KB Adobe Acrobat PDF file

In March 2008, Gas Industry Co made two recommendations to the Minister: the first recommended the making of the rules to improve the allocation and reconciliation of downstream gas quantities; the second recommended associated amendments to the Gas Governance (Compliance) Regulations 2008 to promote compliance with, and enforcement of, the Rules.

Gas Industry Co had identified a number of problems with the design of the existing downstream reconciliation arrangements (under the Reconciliation Code), including 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 the rules to approved under the Gas Act, were developed over the period since 2006 through the operation of an industry working group (the GART), the release of several consultation papers, two consultant reports, and a further industry workshop.

Through these mechanisms the issues were extensively canvassed with the industry. In particular, improved downstream allocation and reconciliation arrangements ensure that UFG is more equitably allocated to its 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.

Related Information

Statement of Proposal (September 2007)
Maunsell Report (June 2007)
Discussion Paper (January 2007)
Options Paper (June 2006)

Related Documents

  • Gas (Downstream Reconciliation) Rules 2008 - June 2008
    256 KB Adobe Acrobat PDF file
  • Recommendation to the Minister (Arrangements for the Allocation and Reconciliation of Downstream Gas Quantities) - March 2008
    622 KB Adobe Acrobat PDF file
  • Recommendation to the Minister (Amendment to Gas Compliance Regulations) - March 2008
    329 KB Adobe Acrobat PDF file

Statement of Proposal

The deployment of smart gas meters, the evolution of the D+1 pilot and the potential injection of renewable gases into downstream networks require changes to gas governance arrangements so that they remain fit for purpose.

The Statement of Proposal presents a coordinated set of changes to the Gas (Downstream Reconciliation) Rules 2008, the Gas (Switching Arrangements) Rules 2008 and associated industry IT systems. The proposals respond to market-led initiatives, such as the rollout of advanced gas metering, and have been informed by industry discussions and working groups.

Please email your submission to [email protected] by 5pm, Friday 23 February 2024.

Related Documents

  • Statement of Proposal Changes to Gas Governance Arrangements
    9.9 MB Adobe Acrobat PDF file
  • Cost benefit analysis of GIC statement of proposal for changes to governance arrangements
    165 KB Adobe Acrobat PDF file
  • Submission template
    51 KB Word document

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