45 kVA Distraction

Definition of Small Business – Code Amendment Proposal

This submission responds to the Electricity Authority’s (EA) consultation requiring distributors to pay negative charges to reward households and small businesses for exporting power to the network during peak times.
It is grounded in a simple principle: anyone supplying goods or services that reduce system cost or improve reliability should be rewarded.
In the past, this was considered too difficult to measure or administer—but with today’s technology, it can be done.
This submission avoids incumbent pushback, suggests how following a technical path will render the current <45 kVA definition debate redundant.

1. The Real Issue

The current argument over the definition of “small business consumer” is a distraction.
The system challenge is not definitional—it is technical and institutional:

1. The EA has yet to implement dynamic Distributed System Operator (DSO) orchestration.
   Distributors still operate as passive asset managers, not as real-time coordinators of LV resources.
2. Electricity Distribution Businesses (EDBs) lack LV visibility.
   Without ICP-level voltage and phase data, they cannot manage feeders dynamically.
   Blind injection can be counter-productive—raising local voltages, overloading phases, or worsening congestion when the intent was to help.
   Real-time data and Dynamic Operating Envelopes (DOEs) are therefore essential prerequisites for efficient, safe participation.
3. Smart-meter owners (MEPs) have withheld data.
   They control information consumers have already paid for and under CDR own, preventing DSOs from using it to maintain local stability.

Under Section 32(1) of the Electricity Industry Act 2010, the EA has both the power and the duty to amend the Code for the long-term benefit of consumers by promoting competition, reliability, and efficiency.
Consumers request the EA to exercise that duty effectively.

2. The Fix: Move from Definition to Performance

Instead of entrenching size limits, the EA adopt a performance-based framework that measures and rewards actual LV support:

1. Unlock Smart-Meter Data.
   Require MEPs to offer standard, non-discriminatory access to ICP-level consumption and power-quality data (≥ 5-min cadence).
   Back this with MBIE’s Customer and Product Data Act 2025 to enable “Open Electricity.”
2. Mandate DSO Operation.
   Require EDBs to act as DSOs, publishing feeder-level dashboards and Dynamic Operating Envelopes (DOEs) that define real-time headroom for export and import.
3. Introduce Dynamic Locational Marginal Pricing (DLMP).
   Begin pilots so that payments follow measured locational value—where and when injection reduces losses or defers reinforcement.
4. Ensure Three-Phase Price-Neutrality.
   Remove higher daily charges for standard residential three-phase to provide phase balance and share the savings from avoided EDB upgrades.

Once these are in place, the <45 kVA threshold becomes superfluous.
The market can reward any participant—regardless of size—whose measured behaviour supports the LV network.

3. Transitional Guardrail (if retained)

If the Authority insists on a threshold while visibility and pricing mature:

• Treat <45 kVA as a temporary proxy for LV connection, not a long-term rule.
• Include a sunset date (e.g., 12 months).
• Allow case-by-case exceptions where larger LV assets (community batteries, marae systems, EV hubs) demonstrably improve LV stability.

This prevents the cap from becoming a barrier to innovation and community-scale participation.

4. Evidence of Feasibility

Several EDBs have not waited for the EA to catch-up. They already demonstrate that mass-market export and LV visibility are practical now:

• Powerco – 10 kW single-phase export, 5 ¢/kWh winter peak rebate, LV visibility via a 250 000-meter NODS/Bluecurrent programme.
• Aurora Energy – 10 kW export limit effective 1 Aug 2025 with smart-meter voltage control.
• Northpower – 10 kW export enabled through LV visibility.
• WEL Networks – 5-minute LV operational data across 68 600 meters.
• Orion – “ViSION” 5-minute LV analytics.
• Counties Energy – DSO coordination pilots with Transpower and EECA.

These EDBs prove the tools exist; resistance from others is commercial inertia, not technical constraint.

5. Accountability and Enforcement

If data holders or EDBs continue to obstruct progress:

• The EA should refer the matter to the Commerce Commission for a market study into smart-meter data access and recommend stronger remedies.
• If necessary, critical LV data should be regulated as common-carrier infrastructure to guarantee fair, cost-reflective access.

6. Closing Statement

The <45 kVA threshold may serve as a short-term guardrail, but it must not become a barrier.
The Authority’s obligation under s32(1) is to lead, not to be gamed by definitional minutiae.
Implement LV visibility, dynamic DSOs, DOEs, and DLMP so that remuneration follows measured LV benefit.
Support EDBs already modernising, and put the rest on notice to adapt or exit.
Only then will negative charges reward all who strengthen the grid—and the consumer will receive the long-term benefits promised by the Act.