Hon Gerry Brownlee Minister of Energy and Resources

16 November 2010

Media Statement

Gas industry regulations take affect

Backstop regulations to address potential difficulties for consumers and the gas industry, arising from the liquidation of gas retailer E-Gas, came into force today.

The Gas Governance (Insolvent Retailers) Regulations 2010 provide transition arrangements for customers of insolvent gas retailers where there is a risk those customers could end up without a retailer, Energy and Resources Minister Gerry Brownlee said.

"The regulations protect consumers and provide certainty and reduce risk for industry participants.

"Circumstances dictated that the regulations be made without the consultation and assessment requirements that would normally be undertaken by the Gas Industry Company (GIC).

"I have asked the GIC to advise me on the form and content of permanent backstop regulations once it has completed the usual consultation and assessment processes," Mr Brownlee said.

Outline of the regulations

The regulations provide for the following:

* GIC may transfer the customer contracts of an insolvent retailer to other retailers if certain conditions are met;

* the new retailers must continue to supply gas under the transferred contracts for a transition period of a minimum of 30 days; and

* the transferred customers may switch to another retailer, without any fee or penalty, during the transition period, and otherwise will roll over into a contract with the new retailer at the end of that period.

The regulations also:

* set out the procedures and methods by which the industry body must allocate customer contracts to other retailers apportioned by retailers' relative market shares; and

* provide for the transmission capacity of the insolvent retailer to be provided to any retailer that requires extra capacity in order to supply its new customers; and

* require the insolvent retailer to provide certain information to GIC for consumer billing purposes and reconciliation purposes; and

* provide for various transitional matters associated with the transfer of customer contracts, including where customers are part-way through the process of switching to an alternative retailer.

ENDS

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