Nash Stuart; Rurawhe AdrianELECTRICITY INDUSTRY AMENDMENT BILLFirst ReadingHon STUART NASH (Minister for Economic and Regional Development) on behalf of the Minister of Energy and Resources: I present a legislative statement on the Electricity Industry Amendment Bill.ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon STUART NASH: I move That the Electricity Industry Amendment Bill be now read a first time. I nominate the Economic Development Science and Innovation Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 31 March 2022. I intend to move that the committee have the authority to meet at any time while the House is sitting except during oral questions during any evening on a day in which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House and outside the Wellington area despite Standing Orders 193 195 196(1)(b) and (c).The bill will implement a number of recommendations from the 2019 Electricity Price Review to improve the electricity regulatory system and ensure it is more fit for purpose in light of significant changes occurring in the industry. The main amendments proposed to the Electricity Industry Act are strengthening the consumer voice: consumers and particularly households and small businesses struggle to make their voices heard and to engage with and exert influence over decisions affecting them in the electricity sector; (2) clarifying the current ambiguity regarding the Electricity Authority's power to regulate to protect the interests of small consumers; (3) addressing the need for more adaptive regulation to respond to technological advances especially where regulated monopolies are competing with other businesses to sell services to consumers; and (4) clarifying that the Electricity Authority should be able to regulate all parts of distribution access to agreements as it already does for transmission access agreements.The 2019 Electricity Price Review identified that residential and small business consumers struggled to be heard on decisions affecting them in the electricity market in New Zealand. This is often due to technical complexity and a lack of time and resources. The bill provides for the appointment of a consumer advocacy agency to provide evidence-based advocacy for household and small-business consumers. Having a strategy basis for this consumer advocacy agency may enable it to be funded from the electricity levy. The bill will add an additional objective to the Electricity Authority's statutory objective which currently is to promote competition in reliable supply by and the efficient operation of the electricity industry for the long-term benefit of consumers.Despite the reference to and I quote the long-term benefit of consumers" there is uncertainty about the Electricity Authority's jurisdiction to protect small consumers. The bill will give the Electricity Authority an additional objective of protecting the interests of household and small-business consumers in their dealings with industry participants. This will clarify and strengthen the Electricity Authority's important role in protecting household and small-business consumers in their dealings with industry participants.The 2019 Electricity Price Review preferred to give the Electricity Authority a consumer protection function without also changing its objective to minimise potential unintended consequences that might result from changing the objective. However further analysis concluded that it is prudent to also change the objective due to the risk that a consumer protection rule might be considered inconsistent with the existing objective. For example a requirement for retailers to make reasonable efforts to contact a consumer before disconnecting the power for non-payment of a bill could perhaps impose disproportionate costs on some retailers making them less competitive and thereby reduce competition. Protecting small consumers is intended to be a relevant consideration for a relatively small portion of the Electricity Authority's work. It is expected to come into play only when the Electricity Authority is considering the conduct of retailers and other participants that deal directly with small consumers where there is an imbalance of power in those relationships that can result in adverse outcomes for small consumers.The need for more adaptive regulation arises from emerging technologies and services that blur the boundaries between generators distributors and retailers. The bill will give the Electricity Authority greater flexibility to respond quickly if necessary to develop rules that can respond if existing participants used monopoly or market power deliberately or inadvertently to deter competitors from entering the market for such products and services or to disadvantage those already in the market. This will help ensure that consumers can benefit from new products and services that offer high quality lower cost or more choice enabled by these emerging technologies and services. The 2019 Electricity Price Review found that the lack of standardisation of terms and conditions for network access agreements between distributors and other parties seeking access actually raises costs and impedes competition.The Electricity Authority has made good progress in addressing this issue under the default distribution agreements through existing co-provisions but this was impacted by legal action questioning the Electricity Authority's ability to regulate distribution agreements. The bill will enable the co-provisions to regulate distribution access terms and conditions as it already does for transmission.The bill also provides for other matters that will improve the electricity regulatory system. It will clarify and improve the Electricity Authority's powers to gather information from industry participants for the purpose of carrying out reviews or investigations requested by the Minister of Energy and Resources. The Electricity Authority's current information-gathering powers cannot be used for the purposes of an inquiry requested by the Minister of Energy and Resources. This interpretation defeats the intent of the policy which is that the Electricity Authority should be able to use its information-gathering powers when undertaking a review or inquiry requested by the Minister of Energy and Resources.This bill will enable the Minister of Energy and Resources to amend the code if there is not satisfactory progress on specified matters. This will be a time-limited power to ensure timely action by industry and the Electricity Authority to consider and progress improvements to the retail and wholesale electricity markets for the benefit of consumers. The Government expects that taken together the changes proposed in the bill will ensure the electricity regulatory system is more future-fit in light of significant changes occurring in the industry. I commend the bill to the House.DEPUTY SPEAKER: The question is that the motion be agreed to."