The Electricity Authority (the Authority) are investigating a range of options to better manage potential risks to balancing electricity supply and demand for Winter 2023. They have released a consultation paper seeking feedback on 11 proposed options for managing supply risk, as well as:
- the problem definition
- a consumer-centric criteria to assess options
- the evidence and likely costs to consumers of any interventions.
Some of the lower cost and risk options are already being investigated for possible implementation, subject to the outcome of this consultation and any further steps required. Others require more analysis to assess, and some may not be practically feasible for Winter 2023.
This consultation ran from 25 November to 16 December 2022.
We submitted a response to this consultation with the following recommendations.
- Longer consultation periods are needed to ensure meaningful participation in the Authority’s processes from consumers and smaller organisations.
- Options for Winter 2023 should be assessed using these principles:
- fairness to residential and small business consumers – electricity is an essential service and reliability of supply in winter is crucial due to high dependence on electricity, particularly for heating for households
- small consumers should not bear the brunt of winter shortages – the electricity industry should have been better prepared for winter demand. Therefore, small consumers should not be expected to shoulder the consequences of the operational coordination problems evident in the current management of supply
- consumers should not be unfairly required to pay for the costs of market failure while generators are making large windfall profits. Instead, windfall profits of generators should be utilised to help get consumers through winter.
- The Council supports options A, B, D and E, and strongly supports option H for further investigation. It also supports investigation of option K.
- Whichever solutions are implemented, consumers should not be left to absorb additional costs.
After considering the feedback received, the Authority refined the options presented in the consultation paper. They also engaged with the system operator and NZX to understand potential implementation issues. A decision paper was published on 9 March 2023.