Enabling investment and innovation
Default distributor agreements
The main purpose of default distributor agreements is to promote competition in the retail electricity market and promote the efficient operation of the electricity industry.
Overview
In July 2020, the Electricity Authority amended the Electricity Industry Participation Code 2010 to introduce templates containing default terms that make it easier for distributors and traders to enter contracts for distribution services, data exchange and dividend payments.
In late 2023 and mid 2024 we consulted on changes to the default distributor agreement template and the consumption data template. We have now decided to implement the changes consulted on.
The changes to the DDA are designed to lower costs for consumers by encouraging more competition in the electricity market and support more efficient processes that can minimise operational costs flowing through to consumers. The changes also incentivise distributors to minimise disruption to their networks, which will lead to a more reliable service for consumers.
Timeline
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2 - 31 July 2024
Consultation —Proposed changes to the default distributor agreementView consultation -
3 October - 14 November 2023
Consultation —Default distributor agreement and consumption data templatesView consultation -
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16 June 2020
Decision —Amend the Code to introduce default terminology on distributor and retailer agreements
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4 November 2019
Correspondence —Relating to the 2019 DDA consultation
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17 September 2019
Event —Stakeholder briefings: Neutral Part 12A
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19 August to 15 October 2019
Consultation —Default Distributor Agreement Code amendmentView consultation -
13 March 2019
Development —Our right to introduce a DDA. The appeal is allowed in part.
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15 January 2019
Draft documents —Updated draft Code amendment proposals and DDAs
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30 November 2018
Court decision —Partial decision on the Authority’s right to introduce a DDA. Allows us to proceed with DDA proposal.
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31 July 2017
High court judgement —The High Court rejects Vector’s arguments that the Authority does not have power to introduce a DDA. The Court found the Authority has a broad power to amend the Code.
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25 November 2016
Consultation — -
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26 January to 19 April 2016
Consultation —
Project background
In 2012 the Electricity Authority finalised a new model use-of-system agreement to facilitate more standardised agreement or to enable alternative methods of standardisation to improve retail competition and efficiency.
We noticed that retailers and distributors were having issues with singular use-of-system agreements as specified in the Electricity Industry Participation Code 2010. These specific agreements required negotiation and incurred costs and time to finalise contracts and agreements.
A singular default distributor agreement system would significantly reduce the time and effort for retailers and distributors to finalise an agreement for operations on their network.
Throughout the consultation process, we engaged with retailers and distributors to develop policy and amendments to the Code that outline standardised agreement terms between retailers and distributors. These agreements being standardised, result in more efficient outcomes for consumers and a lower cost and effort for distributors and retailers to negotiate contracts.
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