Market Brief - 19 March 2013

Market Brief - 19 March 2013

Contents

• Appointment of chairpersons for the Retail Advisory Group and Wholesale Advisory Group
• Review of undesirable trading situation provisions
• Undesirable trading situation claims – update
• Part 10 implementation: Consultation on transitional Code amendments and minor operational matters
• Approved test house forum
• Retail Advisory Group: 20 February 2013
• Exemption granted for Mighty River Power Limited (no 165)
• Amendment to exemption 150 granted for Payless Energy Limited
• Current consultations
• NZ electricity hedge contracts - 15 March 2013

Appointment of chairpersons for the Retail Advisory Group and Wholesale Advisory Group

The Authority has reappointed Peter Allport as chairperson of the Retail Advisory Group, and has appointed John Hancock as chairperson of the Wholesale Advisory Group. Each of these appointments is for a two-year term, beginning 1 April 2013.

John Hancock

John Hancock is an independent consultant who has had a 20 year career in the utilities industry. This includes 7 years in the UK utility industry, navigating the early deregulation of the water, gas and electricity industries as a management consultant at Price Waterhouse and line manager at Yorkshire Electricity. He also spent 14 years with Ernst & Young Consulting, Capgemini and Hewlett Packard (HP) in the Asia Pacific region. Operating at a Board and General Management level he has worked with a number of large international utilities on trends in the sector and how technology can be deployed to enable their strategic response to them.

Review of undesirable trading situation provisions

The Authority has reviewed the undesirable trading situation (UTS) provisions in the Electricity Industry Participation Code (Code) in light of recent experience.

The review did not identify a need for any fundamental changes, but has highlighted a number of areas where the Code could be improved:

• The definition of a UTS is unclear in some respects.
•
• There is currently no time limit on how far into the past a UTS investigation may apply, and this detracts from industry certainty.
•
• The remedy provisions are unclear in some respects, and could impede the adoption of the most efficient UTS remedy at times.
•
The Authority has prepared a consultation paper which proposes Code amendments to address these issues.

• Consultation paper
•
Feedback on the proposed changes is sought by 5pm on Wednesday, 1 May 2013.

Undesirable trading situation claims – update

On 14 March the Authority received claims for the existence of an undesirable trading situation (UTS) from Norske Skog Tasman Limited and Mighty River Power Limited in respect of prices at the Kawerau nodes KAW0111, KAW0112 and KAW1101 from 8 March 2013. These claims are in regard to data and technical issues with the pricing process.

Clause 1.1(1) of the Code makes it clear that a UTS does not cover any contingency or event that, in the reasonable opinion of the Authority, can satisfactorily be resolved by any other mechanism available under the Code. Given that the issues of the UTS claim are currently subject to the interim pricing mechanism described in clauses 13.167 to 13.182 of the Code, and appear likely to be satisfactorily resolved through that mechanism, the Authority will await the outcome before considering the UTS claims further.

The Authority has upheld pricing error claims for March 8, 9, 10 and 11, and directed Norske Skog Tasman Limited to provider metering information to the grid owner and the pricing manager in order for prices on these days to be finalised. Similar pricing error claims for 12, 13, 14 and 17 March are currently being processed.

The Authority notes that clause 13.179 requires a period of at least two hours between the pricing manager publishing the Authority’s decision on a pricing error claim and either republishing interim prices (if a pricing error has occurred) or publishing final prices (if a pricing error has not occurred). The Authority will always ensure that parties affected by a pricing error claim decision have sufficient time to consider and respond to that decision before prices are finalised.

The UTS claims will remain open until such time as they are either progressed through to a decision or the claims are withdrawn.

Part 10 implementation: Consultation on transitional Code amendments and minor operational matters

The Authority is about to publish a consultation paper proposing amendments to Part 11 and the new Part 10 of the Electricity Industry Participation Code (Code) to facilitate participants’ transition to new metering arrangements scheduled to come into effect on 6 June 2013.

The transition to the new Part 10 will be staged, starting with a registry outage from 24 to 29 May 2013. This will cause delays in participant activities for which there are regulated time periods. The proposed transitional amendments are to ensure the transition will not cause participants to breach the Code.

The consultation paper also includes proposed amendments on compliance with the current Part 10 and the new metering arrangements.

Approved test house forum

The Authority is holding a forum for approved test houses on Thursday, 11 April 2013. The forum will start at 9am and finish around 5pm. The venue is yet to be confirmed.

The forum will discuss the new Part 10, Electrical Safety Amendment Regulations 2012 and calculation of uncertainty.

Those wishing to attend should register by sending their names and company details to conference@ea.govt.nz with 'Approved test house forum attendee’ in the subject line. Registrations close Tuesday, 9 April 2013.

• Agenda
•

Retail Advisory Group: 20 February 2013

The minutes for the Retail Advisory Group meeting held on 20 February 2013 have been published.

• Minutes
•

Exemption granted for Mighty River Power Limited (no 165)

The Authority has granted Mighty River Power Limited an exemption from clause 10.3(b) of the Code.

• Gazette notice and the reasons for the approval
•

Amendment to exemption 150 granted for Payless Energy Limited

The Authority has granted Payless Energy Limited an amendment to exemption 150.

• Gazette notice and the reasons for the approval
•

Current consultations

Electricity Information Exchange Protocols (EIEPs): decisions and further consultation

The Authority has released a consultation paper to notify participants of the Authority’s decision to confirm a number of revisions to terminology, definitions and field attributes used in the EIEPs. Started: 5/2/2013. Ending: 22/3/2013, 5pm.

• Electricity Information Exchange Protocols (EIEPs) – Decisions and further consultation
•
Transmission pricing methodology proposal

The Authority is accepting cross-submissions in its transmission pricing methodology proposal consultation. Started: 4/3/2013. Ending:28/3/2013.

• Transmission pricing methodology review – issues and proposal consultation
•
Under Frequency Management Initiatives and Change to the Procurement Plan

The Authority has released a consultation paper on the proposed operational changes to the way the system operator manages under-frequency events, and changes to the ancillary services procurement plan, which implements some of the above changes. The paper also seeks views on longer-term initiatives for instantaneous and sustained reserves. Started: 8/2/2013. Ending: 27/3/2013, 5pm.

• Under Frequency Management Initiatives and Change to the Procurement Plan
•
Loss factor methodologies

The Authority has released a consultation paper on losses of electricity in distribution networks. It contains proposals to publish and monitor updated guidelines on the calculation and the use of loss factors, and to amend the definition of ‘losses’, the use of ‘losses’ and the use of related definitions in the Electricity Industry Participation Code 2010. Started: 19/2/2013. Ending: 16/4/2013, 5pm.

• Loss Factor Methodologies
•
Review of advisory group administrative arrangements

The Authority seeks feedback on a proposal to make a small number of minor amendments to the charter on advisory groups and the advisory group terms of reference. The proposed changes would apply to the Retail Advisory Group, the Wholesale Advisory Group and any future advisory groups that may be established. Started: 5/3/2013. Ending: 16/4/2013, 5pm.

• Review of advisory group administrative arrangements
•

NZ electricity hedge contracts - 15 March 2013

Information plays an important part in building market confidence and strength.

To assist interested parties in tracking market development, the Authority publishes NZ electricity hedge contracts as a standard section of its weekly Market Brief.

ENDS

© Scoop Media