In November 2014, Gas Industry Co issued a Draft Decision Paper which sought stakeholder feedback on the proposed framework for insolvent retailer arrangements.

The framework proposed in this Paper had three elements:

Amendments to the Switching Rules that:

    • define what insolvency means in this context;
    • prescribe the contents of a data exchange file format; 
    • enable the industry body to request information from the insolvent retailer; and
    • allow the industry body to transfer vacant and inactive ICPs whose responsible retailer, as listed in the registry, is no longer trading.

Drafting Instructions for backstop regulations that:

    • are based on the previous insolvency regulations; but
    • are written more generically, to allow them to be tailored to a specific insolvency situation; and
    • reflect the suggestions and discussions in the Insolvent Retailers Working Group (IRWG) meetings regarding transferred terms and conditions, the identification of recipient retailers, and the transfer of transmission capacity.

Amendments to the Reconciliation Rules that:

    • clarify that a retailer’s obligations to provide allocation data survive that retailer’s exit from the market, either through insolvency or other reason.

The amendments to the Switching Rules and Reconciliation Rules were implemented following the release of the Final Decision Paper. The drafting instructions will be utilised only if, and when, any gas retailer insolvency occurs, on recommendation by Gas Industry Co under section 43P of the Gas Act.

Background

Following the repeal of the Gas Governance (Insolvent Retailers) Regulations 2010 to address the failure of gas retailer E-Gas, Gas Industry Co embarked on a policy development process to identify the problems created by retailer insolvency, evaluate possible options in response, and determine a preferred approach.
Previous work identified that the preferred approach for managing instances of retailer default is to be prepared but flexible: that is, not to have standing regulatory arrangements in place (which could prove unsuitable for managing the particular details of a retailer insolvency), but to be prepared with drafting instructions for regulations that could be tailored and implemented under urgency in the rare circumstances they were needed. On 17 September 2013, the Minister endorsed this proposed approach.

The proposals in this Paper were developed with assistance and input from the Insolvent Retailer Working Group (IRWG). 

Related Documents

  • Draft decision paper Backstop Arrangements Insolvent Retailers - 15 October 2014
    340 KB Adobe Acrobat PDF file
  • Submission Template - Draft Decision Paper - 15 October 2014
    23 KB Word document
  • Insolvent Retailers Draft Drafting Instructions
    113 KB Adobe Acrobat PDF file

Submissions

  • Genesisenergy
    Framework for Gas Retailer Insolvency Arrangements 15 October 2014 86 KB Adobe Acrobat PDF file
  • Contact Energy
    Contact Energy ID 2483 122 KB Adobe Acrobat PDF file
  • Mighty River Power
    Draft decision paper Backstop Arrangements Insolvent Retailers submission 27Nov14 203 KB Adobe Acrobat PDF file
  • Meridian Energy
    Meridian Energy Submission Framework for gas retailer insolvency arrangements 131 KB Adobe Acrobat PDF file
  • Vector Limited
    Vector Submission Draft Decision Paper Gas Retailer Insolvency 244 KB Adobe Acrobat PDF file
  • Powerco Limited
    20141126 Powerco submisson on retailer insolvency framework VF 82 KB Word document
  • Powerco Limited
    20141126 Powerco submisson on retailer insolvency framework VF 117 KB Adobe Acrobat PDF file
  • Greymouth Gas NZ submission on Insolvent Retailers
    GGNZ Letter to GIC on Insolvent Retailers November 2014 130 KB Adobe Acrobat PDF file

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