Pricing explained

Pricing explained

Types of sites

• Large sites: use lots of gas known as Time of Use (ToU) sites
• Smaller sites: use less gas known as Non-Time of Use (N-ToU) sites

Gas supply costs

The cost of gas supply can be split into four broad categories.

• Transmission fees: the cost of piping gas from a gas field to your local network provider
• Distribution fees: the cost of piping gas through your local network to your site
• Base gas price: how much the actual gas costs you
• Carbon fees: as part of the NZ Emission Trading Scheme (NZ ETS).

Pricing

• The carbon fees for all sites (relating to the NZ ETS) are fixed for the initial term of the contract with known rates each year.
• N-ToU pricing has everything bundled together into two rates, a daily rate and a consumption rate, both of which are fixed for the initial term, with no escalations.
• For ToU sites, the base gas rate is fixed for the first three years, but transmission & distribution charges can be changed annually.
• Transmission & distribution charges are set by network companies and are passed through by Genesis.

Non-Time of Use (N-ToU) pricing

Under the Supply Agreement, N-ToU is simplified into two rates per site.

• Daily rate: the amount you pay each day for your connection.
• Consumption rate: the amount you pay for each unit of gas you consume. In the Supply Agreement this rate is set as dollars per Gigajoule (GJ), however the rate we use in calculating N-ToU rates for your agency is converted to per kilowatt hour (kWh). This aligns with your invoices which will most likely have your consumption in kWh.

Guidance is available for determining the N-ToU rates for your agency. You will need to login to view this information.

Time of Use (ToU) pricing

If you have any high consumption sites they may be classed as ToU.

ToU pricing is complex with a number of transmission and distribution costs determined by many variables. Because these rates vary from site to site, these are detailed in site-specific Pricing Supplements.

Pricing Supplements

The Pricing Supplement contains the rates unique to your sites and is prepared by Genesis Energy. Until signed, the Pricing Supplement does not commit your agency to join the Supply Agreement but it is useful for your decision making process.

When you are ready to join, the Pricing Supplement needs to be signed and becomes a contract between your agency and Genesis Energy. This is in addition to completing a Form of Accession.

As you are signing the Pricing Supplement, you will notice there are two options. Please circle which one you would like to choose.

If you choose Option 1, you will not need to sign another Pricing Supplement if MBIE decides to renew the contract in three years’ time. The new rates will be automatically applied to your sites.

If you choose Option 2, you will be able to review the renewal pricing before deciding whether or not to join again. If you choose the new pricing, you will be able to sign a new Pricing Supplement for the term of the renewal.

If you would like to request a Pricing Supplement or ask us some questions contact us at utilities.coe@mbie.govt.nz

Determining N-ToU rates for your agency