Buying reticulated gas

Learn about the all-of-government reticulated gas contract. This contract allows schools connected to pipelines in the North Island to buy natural gas. The contracted supplier is Genesis Energy.

Level of compliance Main audience Other

Recommended

  • Principals and Tumuaki
  • Staff responsible for buying on behalf of their school
  • Boards

Benefits of joining this contract

Joining an all-of-government (AoG) contract is likely to save your school both time and money, while also reducing risk.

All-of-government contracts

The AoG reticulated gas contract offers the following benefits to your school:

  • competitive prices for reticulated gas, with the potential to make monthly savings in comparison to pricing available outside of the AoG contract
  • fixed prices over the duration of the contract which are only reviewed at contract renewal points
  • fair and transparent contract terms
  • support and advice from both Genesis Energy and New Zealand Government Procurement
  • access to free decarbonisation workshops which support efforts to reduce carbon emissions and improve efficiency.

How to join the contract

The process for joining the AoG reticulated gas contract is similar to that for other AoG contracts.

The joining process usually takes 1 month to complete. It may be quicker if your school is already with Genesis, or slower if currently with another supplier.

  1. Determine if your school is eligible
  2. Complete a non-disclosure agreement
  3. Read about the contract an the memorandum of understanding
  4. Define your gas requirements
  5. Complete a form of accession and pricing supplement
  6. Delivery of reticulated gas.

1. Determine if your school is eligible

Only schools in the North Island connected to the reticulated gas pipeline can join this contract.

Advice for schools not eligible for the reticulated gas contract

2. Complete a non-disclosure agreement

What is a non-disclosure agreement?

If your school has not signed up to an AoG contract before, you will need to complete a non-disclosure agreement (NDA) available on the NZ Government Procurement (NZGP) website.

Non-disclosure agreement form – NZGP(external link)

You can email school.buying@education.govt.nz to find out if your school has already completed an NDA.

3. Read about the contract and the memorandum of understanding

What is a memorandum of understanding?

Log in to the NZGP website to access more information on the contract. You will need to use your school-linked RealMe account because you will have access to commercially sensitive information.

Reticulated gas – NZGP(external link)

School-linked RealMe

Read the memorandum of understanding (MoU) for the reticulated gas contract in the ‘contract documents’ section. The MoU sets out the obligations of schools participating in the contract.

4. Define your gas requirements

Email the below information to procurement@mbie.govt.nz:

  • the number of sites that require gas supply and the Installation Control Point (ICP) numbers for each site (if not known, check invoices from your current supplier)
  • confirmation of your current supplier and the expiry date of your contract
  • copies of your recent gas invoices (preferably for 12 months).

NZGP will supply this information to Genesis, who will prepare a pricing supplement uniquely for your school.

When NZGP receives this pricing supplement from Genesis, they will send it to you, along with a benefits statement for your review. The benefits statement will state your expected cost (based on your usage profile) and savings compared to your previous contract.

Until signed, the pricing supplement does not commit your school to any agreement.

5. Complete a form of accession and pricing supplement

What is a form of accession?

The form of accession confirms your school agrees to the terms set out in the MoU.

The form for this contract is available in the 'contract documents' section of the NZGP webpage (you will need to be logged in with a school-linked RealMe account).

Reticulated gas – NZGP(external link)

  • Your school may choose to submit a 'paper' letter of accession (printable PDF) instead of the online joining form.
  • You can download a copy of the PDF from the 'contract documents' section on the NZGP webpage.
  • Once completed, email the form to utilities.coe@mbie.govt.nz

Also sign your pricing supplement and return it to NZGP. Signing the supplement confirms that you accept Genesis Energy’s pricing.

Once these are processed, you will receive a confirmation email.

6. Delivery of reticulated gas

When NZGP has processed your completed form of accession and pricing supplement, they will inform Genesis of when your new contract with them will begin.

Pricing supplements received by NZGP by the 20th of each month can begin your contract on the first day of the following month at the earliest.

Pricing for reticulated gas

Gas prices incorporate the below costs.

  • Transmission fees: The cost of piping gas from its source field to your local provider:
    • charged per day
    • differs between schools, depending on a school's location
    • fixed for the duration of the contract (can change at contract renewal).
  • Distribution fees: The cost of piping gas from your local provider to your site:
    • charged per day
    • differs between schools, depending on a school's location
    • fixed for the duration of the contract (can change at contract renewal).
  • Base gas price: the cost of the gas resource to you:
    • charged per unit of gas
    • differs between schools, depending on a school's location
    • fixed for the duration of the contract (can change at contract renewal).
  • Carbon fees: the costs associated with the New Zealand Emissions Trading Scheme:
    • charged per unit of gas
    • equal rate for all schools
    • fixed for the duration of the contract (can change at contract renewal).
  • AoG admin fee: the cost charged by NZGP for administering the contract:
    • charged per unit of gas
    • fixed at $0.047 per gigajoule (GJ) of gas for all schools
    • fixed for the duration of the contract (can change at contract renewal).

Establish the total cost

Almost all schools are 'non-time of us' (N-TOU) sites. This means that the gas price is consolidated into 2 rates.

  1. The daily rate is the amount paid daily for gas connection. This covers the transmission and distribution fees.
  2. The consumption rate is the amount paid for each unit of gas consumed. This covers the base gas price, carbon fees and AoG admin fee.

The daily rate and consumption rate are added together to establish a sub-total. GST is then applied to the subtotal to generate a total cost.

Pricing of gas explained – NZGP(external link)

Advice for schools not eligible for the contract

Buying gas through a contracted arrangement offers better value than non-contracted purchasing. Contracts provide greater price certainty and more preferential terms.

It is best to run a competitive process before signing a contract for the purchase of gas. A competitive process encourages suppliers to offer their best prices and terms.

When running a competitive process for the purchase of gas, be sure to:

  • provide suppliers with accurate information about gas consumption
  • select the contract that offers the best value over its full duration. 

Running a competitive buying process

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