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Electricity Industry Act 2010

Miscellaneous - Amendments to other enactments - Amendments to Commerce Act 1986

151: Definition of consumer-owned

You could also call this:

“Explaining what it means for an electricity company to be owned by its customers”

This law explains what it means for an electricity supplier to be ‘consumer-owned’. It changes some rules about how these suppliers are run.

For a supplier to be consumer-owned, it must be controlled by a trust or co-operative. The people who run these trusts or co-operatives (called trustees or committee members) must be chosen by the people who buy electricity from the supplier. These people are called consumers.

When choosing trustees or committee members, there are some important rules:

Everyone who runs the trust or co-operative must be chosen only by the consumers.

Almost all of the consumers (at least 90%) should be allowed to vote. Sometimes, voting can be done in different areas called wards, but this has to be fair for everyone.

Each consumer gets one vote, and their vote is worth the same as everyone else’s.

The law also says that sometimes people can become trustees or committee members without an election. This can happen if there aren’t many people wanting the job, or if someone else can’t do the job anymore.

If a supplier says they follow these rules, they might have to prove it by making a formal statement to the Commerce Commission.

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Part 5 Miscellaneous
Amendments to other enactments: Amendments to Commerce Act 1986

151Definition of consumer-owned

  1. Section 54D(1)(a) is amended by omitting section 3 of the Electricity Industry Reform Act 1998 and substituting clause 6 of Schedule 2 of the Electricity Industry Act 2010.

  2. Section 54D(1) is amended by repealing paragraph (b) and substituting the following paragraph:

  3. the trustees of each customer trust or community trust, or the committee of shareholders of each customer co-operative, as the case may be, that is referred to in paragraph (a) are elected by the persons who are consumers of the supplier in accordance with subsections (2A) to (2C); and

    1. Section 54D is amended by inserting the following subsections after subsection (2):

    2. The requirements in respect of elections for the purposes of subsection (1)(b) are as follows:

    3. every trustee of the customer trust or community trust, or every member of the committee of shareholders of each customer co-operative, as the case may be, must have been elected solely by the persons who are consumers of the supplier; and
      1. either—
        1. at least 90% of the persons who are consumers of the supplier at the time of the election are eligible to vote in those elections; or
          1. in the case of a customer trust or community trust, there is ward-based voting that complies with the requirements of subsection (2B); and
          2. each consumer must have an equal vote.

            1. The requirements for ward-based voting are as follows:

            2. at least 90 % of the persons in a ward who are consumers of the supplier at the time of the election are eligible to vote in the election of all of the trustees of that ward; and
              1. ward boundaries must provide for effective and fair representation of all consumers of the supplier, and in particular,—
                1. the proportion of consumers in relation to the number of trustees of the relevant trust must be approximately equal in each ward; and
                  1. the wards must not be based on volume of electricity supplied; and
                  2. ward boundaries must be reviewed periodically (at intervals determined by the Commission) in consultation with all consumers of the supplier.

                    1. A trustee of a customer trust or community trust, or a member of the committee of shareholders of a customer co-operative, as the case may be, must be treated as having been elected solely by the persons who are consumers of the supplier if the person—

                    2. has been declared to be elected without an election in the case of a nominee at an election where the number of nominations was equal to or less than the number of vacancies; or
                      1. has been declared to be elected as the next-highest-polling candidate in the case where a higher-polling candidate at the election was unable to fill the elected position; or
                        1. has been declared to be elected by the remaining trustees or members following a casual vacancy that arose between elections, provided that—
                          1. the person is the first person to have been so elected since the last election at which consumers of the supplier voted; and
                            1. the person is elected to hold office only until the next scheduled election at which consumers of the supplier will vote.

                            2. The Commerce Commission may require a supplier that claims to meet the criteria in this section to verify that claim by statutory declaration.

                            3. The declaration must be made by the persons and in the form required by the Commerce Commission.

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