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Major Electricity Users’ Group (MEUG)

Major Electricity Users’ Group (MEUG)

Energy user’s angry at lack of advice on rolling Maui gas outages ”Major users’ of gas and electricity have incurred lost production and additional energy costs in the order of millions of dollars due to the rolling outages on the Maui-A platform over the last week,” said Ralph Matthes, Executive Director of the Major Electricity Users’ Group (MEUG).

Members of MEUG yesterday identified a range of costs they had borne because of the rolling Maui outages:

· Being requested to shed gas demand when the duration of the outages was relatively short considering gas line-pack could have been used;

· Shedding electricity demand (and hence losing production) because of extremely forecast high electricity spot prices - prices that in the final prices were much lower but still high relative to average prices for this time of year;

· Having to pay high spot electricity prices because some load could not be shed;

· Some electricity retailers calling in force majeure clauses on hedge contracts thereby stranding consumers onto spot prices; and

· Widespread uncertainty as to the status of the outages and expected timing for restoration of supply - creating problems for users’ managing production.

“We have sought information from a number of parties including the Maui operator on the likelihood for these outages to reoccur and the NZEM Market Surveillance Committee about the lack of confidence by the demand side in forecast spot electricity prices during these events. Another issue to be considered is if some generators benefited from high spot prices while their retailing divisions failed to inform consumers of events.

“The most pressing issue is to fix the lack of useful and timely information being available to all downstream affected parties in case these outages continue. The Government has also been asked to use any influence it has as the purchaser of Maui gas from the field owner to urgently improve the flow of information so that end consumers can make informed decisions,” concluded Mr Matthes.

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