The rules are set out in the Act, regulations and Code.

Electricity Industry Act 2010

Electricity Industry (Enforcement) Regulations 2010

Electricity Industry Participation Code 2010

Review of compliance framework

We have reviewed our compliance framework with the following objective:

Given the Authority’s compliance philosophy, what is the best compliance framework to assist in achieving the Authority’s statutory objective?

We apply ten best practice principles, derived from a literature review of optimal institutional design and regulation, in order to achieve a best practice framework:

  • the approach to compliance is co-ordinated across relevant regulatory bodies
  • the compliance and enforcement strategy is accessible and easy to understand
  • interpretation of rules is well understood and communicated
  • compliance activities are based on a sound understanding of the markets and the incentives of participants
  • monitoring and enforcement activity is risk-based and targeted
  • compliance decision-making is independent and impartial, intended to deliver consistent and predictable decisions
  • the enforcement response is proportionate to the impact of the breach and the type of offending
  • there are accessible, fair and efficient mechanisms for appeal and review of decisions
  • performance measures for compliance are outcomes-based
  • compliance findings inform rule development and policy/regulatory settings.

We also identified some key additions that could be made to our compliance framework:

  • a risk-based approach to compliance monitoring
  • the use of audits more generally
  • a graduated range of sanctions available to the Authority
  • making settlements voluntary, and with the settlements being between the Authority and the party in breach
  • increasing the transparency of information in the compliance process
  • facilitating an increased use of the Rulings Panel
  • moving to an outcomes-based assessment of compliance.

Review of the Electricity Industry (Enforcement) Regulations 2010

We also decided to review the Electricity Governance (Enforcement) Regulations 2010 (Regulations), and pass on our findings to the Ministry of Business, Innovation and Employment (MBIE), which is responsible for administering the Regulations.

This included reviewing the liability arrangements, along with the structure of the liability limits and whether the arrangements are best placed in the Regulations.‘