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Overview
The Retail Gas Contracts Scheme is a voluntary scheme which assesses standard published gas contracts against a set of Benchmarks and Reasonable Consumer Expectations (RCEs) on a 3-yearly basis.
The Retail Gas Contracts Scheme is a voluntary scheme which assesses standard published gas contracts against a set of Benchmarks and Reasonable Consumer Expectations (RCEs) on a 3-yearly basis.
The Independent Assessor's Benchmark Review Assessment Report - 2018 conducted in July 2018, evaluated nine published supply arrangements (eight residential and two business) across eight retailers supplying consumers. The overall alignment of all published supply arrangements against the Benchmarks and RCEs is 'Substanial'. While this is the same level of alignment as was achieved in 2012 and 2015, the 2018 result is stronger than the 2015 result with all arrangements assessed having substantial overall alignment. The 2018 Report can be found here. The next assessment is scheduled to take place in 2021.
The Previous Assessments section contains the results of the 2015 and 2012 Full Assessments, the Transitional Assessment in 2011, and the Baseline Assessment in 2010.
The Background section provides information on the original recommendation and consultation, minor amendments to the scheme, and the full scheme review in 2013.
Previous Assessments
Since the introduction of the Retail Gas Contracts Oversight Scheme, five assessments have been conducted: a baseline assessment in 2010, a 'transitional' assessment in 2011, and full assessments in 2012, 2015 and 2018.
Simpson Grierson was the Independent Assessor appointed by Gas Industry Co to conduct the 2018 assessment. Previous assessments were carried out by Elwood Law and Roger Palairet of Palairet Law.
The 2018 Report can be found below in Related Documents. All previous assessments are found on the left-hand navigation of this page.
Related Documents
Background
This section contains information on the development, scope and structure of the Retail Gas Contracts Oversight Scheme from the original recommendation to the more recent review of the scheme.
The Retail Gas Contracts Oversight Scheme was introduced by Gas Industry Co in 2010, following endorsement by the then Minister of Energy and Resources, and is designed to achieve improved outcomes for small gas consumers - those using less than 10 terajoules of gas per year. More than 260,000 gas consumers - or approximately 99 percent of the national total - use less than this volume each year, and the vast majority are subject to contracts covered by the Scheme. It assesses published gas supply arrangements offered by gas retailers against a set of contract Benchmarks and Reasonable Consumer Expectations (RCEs).
The Scheme addresses the 2008 Government Policy Statement (GPS) objective of ensuring that 'contractual arrangements between gas retailers and small consumers adequately protect the long-term interests of small consumers'.
Building on Gas Industry Co's previous work on retail contracts and other work on model contract guidelines done in conjunction with the Electricity Commission and Utilities Disputes (formerly known as the EGCC), a consultation was held in October 2009. The two options proposed were voluntary adoption of the benchmark terms with regular monitoring, or regulated implementation of the minimum terms, subject to the existing compliance regime.
Following further industry consultation a full proposed design for the oversight of the voluntary implementation of retail contract benchmarks was finalised and presented to the Associate Minister of Energy and Resources for consideration in March 2010 and was endorsed in May 2010. All information and relevant documents relating to this work can be found here.
Information on the review and restatement of the Retail Gas Contracts Benchmarks in 2011 can be found here.
Information on minor amendments to the Benchmarks made in 2012 can be found here.
In 2013 a review of the Scheme to assess its success was undertaken and all information relating to this review can be found here.
Key Areas
Gas Industry Co implemented the Retail Gas Contracts Oversight Scheme (Scheme) in 2010 and over the next three years published baseline, transitional, and full assessment of gas retailers’ contractual arrangements. In line with the original recommendation to the Minister of Energy and Resources, and in response to the improving trend of alignment over the three years of assessments, Gas Industry Co undertook a review of the Scheme to assess its success.
Result of scheme review
On 23 April 2014, following a review of the Retail Gas Contracts Oversight Scheme, Gas Industry Co wrote to the Minister advising on the continuation of the Scheme, with the following amendments:
- Retail gas contracts will no longer be reviewed on an annual basis, instead they will be reviewed on a 3 yearly basis (with a scope to review contracts for new entrant retailers, or amended contracts on an 'as required' basis).
- Gas Industry Co will make some amendments to the benchmarks which will improve the Scheme.
The Minister replied to Gas Industry CO's letter on 14 May 2014, noting the continuation of the Scheme and officials keeping him updated on the Scheme progress from time to time. A copy of the Ministers letter can be viewed below.
The next full assessment of the standard published consumer gas contracts will take place in 2015, with contracts being assessed against the amended benchmarks and newly introduced 'Reasonable Consumer Expectations' which are included in Related Documents below.
Related Information
Result of Scheme ReviewSummary of Submissions : Statement of Proposal (3 April 2014)
Statement of Proposal: Retail Gas Contracts Oversight Scheme (6 January 2014)
Retail Gas Contracts: Review of the Oversight Scheme (13 June 2013)
Related Documents
On 12 May 2010, the Associate Minister of Energy and Resources endorsed the oversight arrangements set out in Gas Industry Co's Recommendation to the Associate Minister of Energy and Resources on the endorsement of arrangements for the oversight of gas retail contracts dated March 2010 (the Recommendation). A "baseline review" of gas supply arrangements was undertaken as at 15 June 2010 (the Baseline Review). As part of that process, Gas Industry Co provided the Independent Assessor with guidance on how the retail contract terms benchmarks set out in the Recommendation should be interpreted.
Following the Baseline Review, the Independent Assessor and Gas Industry Co reviewed the process and determined that the Benchmarks, as originally consulted upon, would benefit from a reorganisation or 'restatement'. The restatement of the benchmarks contained in the below document does not substantially alter the benchmarks. Rather the benchmarks have been reordered and re-framed, duplication and irrelevant statements have been removed, and clarity has been enhanced.
Related Documents
Gas Industry Co started work on retail contracts in 2005, which resulted in the development of proposed Model Contract Guidelines by the Model Contract Guidelines Working Group. However, this work was set aside and instead the adoption of the Electricity and Gas Complaints Commission (EGCC) Code of Practice was recommended to the Minster. The recommendation was not actioned for a number of reasons and Gas Industry Co revisited its work in this area in December 2007.
Building on Gas Industry Co's previous work and other work on model contract guidelines done in conjunction with the Electricity Commission and the EGCC, a consultation paper presenting a set of benchmark, or minimum, contract terms governing domestic and small consumer gas supply arrangements was published in October 2009. The two options were: voluntary adoption of the benchmark terms with regular monitoring, or regulated implementation of the minimum terms, subject to the existing compliance regime.
Following further industry consultation a full proposed design for the oversight of the voluntary implementation of retail contract benchmarks was finalised and presented to the Associate Minister of Energy and Resources for consideration in March 2010 and was endorsed in May 2010.
All information and relevant documents relating to this work can be found here.
Related Information
Recommendation to the Associate Minister of Energy and Resources on the endorsement of arrangements for the oversight of gas retail contractsProposed design for the oversight of voluntary implementation of retail contract benchmarks
Analysis of Submissions and Response to the Options for the Governance of Retail Contract Terms consultation paper
Options for the Governance of Retail Contract Terms - Consultation Paper
Response to Analysis of Submissions on the Consumer Issues Consultation paper dated 18 August 2008
Discussion Paper - Current Issues for Domestic and Small Business Gas Consumers
Options for Consumer Contract Arrangements