Regulatory environment

The Electricity Authority is the electricity market regulator and is responsible for the efficient operation of the New Zealand electricity market.  The Authority regulates the electricity market by developing and setting the market rules – the Electricity Industry Participation Code (Code) – enforcing and administering the Code and monitoring the market’s performance.

The Code requires a generator who is planning to connect a generating unit with rated net maximum capacity equal to or greater than 1 MW to a local network, to provide the systems operator with written advice of its intention to connect together with other information relating to that generating unit (described in Part 8 of the Code). 

The majority of the IEGA members do not have to be registered participants in the New Zealand electricity sector as their generation capacity is less than 10MW. 

As such, members do not have to offer their generation volumes in to the wholesale spot market and are therefore price takers.  This contrasts with generation plant connected to the transmission grid which offer generation volumes at prices which determine the clearing price and are despatched by the system operator.

Part 6 – Connection of Distributed generation – is the relevant part of the Code for distributed generation less than 10MW.  Owners of distributed generation greater than 10MW must have an understanding of, and be compliant with, the rest of the Code.

Part 6 prescribes a connection process between the generation plant owner and the network company.  Schedule 6.4 is the distributed generation pricing principles which detail types of payments between network companies and distributed generation owners – including a payment from distribution companies to distributed generation referred to as ACOT.  The Authority's changes to this Schedule came in effect on 9 January 2017.  

The IEGA does not support the changes to ACOT payments made by the Electricity Authority.  These changes are  in the process of being implemented.  The first region to be subject to the new methodology for assessing the contribution of distributed generation to the transmission system reliability comes into effect on 1 April 2018 for the Lower South Island transmission region.  Distributed generation plant on the 'approved list' (deemed to contribute to reliability) continue to receive ACOT payments using the same rate (Transpower's interconnection charge) until 1 April 2020.    This methodology is to apply in the following timeline for each transmission region:

  • Lower North Island:  1 October 2018
  • Upper North Island:  1 April 2019
  • Upper South Island: 1 October 2019

You can enquire about how the Electricity Authority and Code apply to your business at https://www.ea.govt.nz/


The IEGA is making submissions to the Authority on Code change proposals that impact distributed generation.  The major issue we have addressed is proposed changes to the transmission pricing methodology (TPM) which is ongoing.  The IEGA also made substantial submissions on the Authority's proposals to change the payment from distribution companies to distributed generation referred to as ACOT.

Cross Submissions on Transmission Pricing Proposals

IEGA cross submission, 24 March 2017

Pioneer Energy cross submission, 24 March 2017

Submissions on Transmission Pricing Proposals

IEGA submission on TPM Second issues paper Supplementary consultation, 24 February 2017

NZ Energy Ltd submission on TPM Second issues paper Supplementary consultation, 24 February 2017

Pioneer submission on TPM Second issues paper Supplementary consultation, 24 February 2017

Pioneer submission - July 2016: Cover letter, submission, analysis of CBA

NZ Energy Ltd submission on TPM Second issues paper, July 2016

IEGA reports on DGPP proposals

IEGA Summary of Submissions - October 2016

IEGA DGPP Proposals Q & A - September 2016


Judicial Review

AFFIDAVIT: Final affidavit by Grant Smith, Pioneer Energy, 29 August 2016

Submissions by IEGA and members

The IEGA submission and submissions by IEGA Members are below:

IEGA Submission and PWC Report

A D Harwood Submission

Anonymous Submission

Eastland Generation Submission

Electra Generation Submission

Energy3 Submission

HydroWorks Submission

Inchbonnie Hydro Submission

Kawatiri Energy Submission

King Country Energy Submission

NZ Energy Submission

Nova Energy Submission

Omanawa Falls Hydro Submission

Onekaka Energy Submission

Pioneer Energy Submission

Pupu Hydro Society Inc. Submission

The Electricity Authority received 54 submissions - find all of the submitted documents here: Submissions to EA

Previous submissions by the IEGA on the Electricity Authority’s TPM and ACOT proposals are listed below.

June 2016

IEGA sought an extension to the consultation period for the Review of the distributed generation pricing principles:


The EA declined this request:


May 2016

EA presentation to an IEGA meeting 26 May 2016: DGPP and TPM second issues papers - IEGA meeting 26 May 2016

August 2015 – TPM Options Paper

IEGA submission:  https://www.ea.govt.nz/dmsdocument/19777 and   https://www.ea.govt.nz/dmsdocument/19775

October 2014 - TPM Problem Definition: Interconnection and HVDC

IEGA submission:  https://www.ea.govt.nz/dmsdocument/18697

August 2014

EA presentation to an IEGA meeting: https://www.ea.govt.nz/dmsdocument/18426

January 2014 – TPM Review – ACOT Working Paper

IEGA submission:  https://www.ea.govt.nz/dmsdocument/17090  and https://www.ea.govt.nz/dmsdocument/17089


IEGA submission on draft replacement NZ Energy Efficiency and Conservation Strategy - 7 February 2017

IEGA submission on NZ ETS Review - Other Matters - April 2016

IEGA submission on Next steps for Freshwater - April 2016

IEGA submission on Review of NPS for Renewable Electricity Generation - December 2015