Proposed levy-funding appropriation consultation 2024/25

Consultation overview

The Electricity Authority (the Authority) are seeking an annual increase of $14.2m in funding from the government – $7.6m for service provider costs, and $6.6m for operating costs. The increased funding would help ensure they can:

• pay for increased service provider costs to operate the electricity system and markets
• keep pace with the rate of change required to support the low-emissions transition and better serve all consumers.

The Authority are consulting on this proposed change with interested parties, and will use the feedback provided to inform their advice on this issue to the Minister for Energy.

Submissions on this consultation closed on 30 January 2024. The Minister’s decision on the Authority’s funding for 2024/25 will be announced on Budget Day, 30 May 2024.

2024/25 Levy-funded appropriations(external link)

Our recommendations

We submitted a response to this consultation with the following recommendations and notes.

• We agree with the Authority that our electricity system faces significant changes as the country transitions to renewable energy. We welcome their commitment to a sustainable, affordable, secure and resilient electricity system.
• Changes to the Electricity Industry Act have given the Authority a new objective to protect the interests of domestic and small business consumers, and it is essential that the Authority is adequately resourced to achieve this objective. Therefore, we consider additional funding to the Authority’s baseline is warranted.
• We note that about 70% of the Authority’s budget currently goes to third-party providers. We think scrutiny of how this money is spent is essential, to ensure consumers can have confidence that levy funding is appropriate and service providers deliver good value. We recommend the proposed increase for third-party providers be reviewed.
• We recommend the Authority develops a statement or set of principles that specifically identifies consumer interests and the long-term benefits they expect to be delivered by the electricity system. 
• We also consider the Authority’s work programme must be consumer focused, regardless of the level of funding, to ensure it delivers the consumer benefits envisaged in its legislative mandate.