Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Electricity Authority Publishes Preliminary Decision On UTS Claim

The Electricity Authority’s Board has published a preliminary decision in response to the undesirable trading situation (UTS) claim made by Haast Energy Trading, Ecotricity, Electric Kiwi, Flick Energy, Oji Fibre, Pulse Energy Alliance and Vocus (the ‘claimants’).

The Authority received the claim on 12 December 2019 alleging a UTS had started on 10 November 2019 and was ongoing at the time of the claim.

The Authority has investigated the claim and considered all the factors put forward by the claimants as well as additional information provided by Meridian and Contact. The analysis and conclusions are detailed in the preliminary decision document.

“The Authority has investigated all matters of the claim and conducted market simulations to test our thinking and better understand all factors at play during the time of the alleged UTS” says Electricity Authority Chief Executive James Stevenson-Wallace.

“Our preliminary view is there was a UTS between 3 and 18 December 2019. What we found is not what we would expect to see given the market conditions in December.

“We had an extreme weather event in the South Island with severe rainfall and lake levels over and above the maximum. Not surprisingly, we saw generators having to spill flood water to keep the levels down. What we didn’t see and would have expected was lower electricity spot prices driven by lower offers from those generators spilling excess water.

“The prices remained relatively high despite an abundant supply of water and no increased demand during the period.

The wholesale market operates on a fine balance of supply and demand. It’s not as simple as there is lots of water so electricity should be cheap – there are other contributing factors to consider such as fixed costs of generation, where the hydro supply is in New Zealand and what other generation is running at the same time.

When we looked at all the details we didn’t expect spilling generators to be offering prices as high as they did, given the conditions at the time.

The Authority closely monitors the market. Before we received the claim, the Authority had already opened a review of 2019 wholesale market prices.

Mr Stevenson-Wallace says the spilling was not unusual but the trading behaviour at the time of spilling was not what the Authority would expect to see so we opened a review.

“As the regulator, we’re focused on making sure the right settings are in place to ensure a competitive market in which consumers have choice, and participants compete on a level playing field. This includes closely watching market conditions and trading behaviour.”

The Market Development Advisory Group, an advisory group to the Authority, has recently advised the current trading conduct rules lack certainty for participants and has suggested a new set of rules.

“The market is performing well and doing what it was intended to do but there is always room for improvement – whether it be in the design of the market or on the rules managing participant behaviour.

“There’s a lot at stake and we want to make sure the market operates in the best interests of New Zealand consumers.”

The preliminary decision document is on the Authority’s website and available for feedback now.


  1. The Authority received a claim of an undesirable trading situation (UTS) on 12 December 2019. The claim was made by seven parties – Haast Energy Trading, Ecotricity, Electric Kiwi, Flick Energy, Oji Fibre, Pulse Energy Alliance and Vocus (the ‘claimants’). The claim relates to the period from 10 November to 16 January 2020.
  2. An undesirable trading situation (UTS) in the electricity market is an extraordinary event which threatens, or may threaten confidence in, or the integrity of, the wholesale market that cannot be resolved under the Code. We investigate any potential undesirable trading situation and can take any action if we consider it appropriate. This could include suspending Code requirements and imposing new requirements on industry participants.
  3. This is a preliminary decision open for consultation for a six-week period. Submissions are due by 5PM, 11 August 2020.
  4. The Authority has commenced a separate compliance process into a breach of the high standards of trading conduct provisions.

The Electricity Authority is an independent Crown Entity with a statutory objective to promote competition in, reliable supply by, and the efficient operation of, the electricity industry for the long-term benefit of consumers.

© Scoop Media

Business Headlines | Sci-Tech Headlines


Energy Sector: Meridian Spilled Water To Hike Electricity Prices - Authority Ruling

The Electricity Authority has found that generator Meridian Energy manipulated the power market, costing consumers about $80 million. More>>


XE Data Update: RBNZ Official Cash Rate Decision

The RBNZ will keep the Official Cash Rate (OCR) at 0.25%. T he key points in the RBNZ statement are: RBNZ keeps the OCR unchanged at 0.25% Maintain the LSAP (large scale asset purchase) at NZD$60 billion. Committee prepared to use additional monetary ... More>>


Electricity: Kiwis Ignore Promise Of Cheaper Power

Electric Kiwi and Flick Electric Co are joint winners of Canstar Blue’s award for Most Satisfied Customers | Electricity Providers From putting on an extra layer – rather than turning on a heater – to turning off lights and choosing the energy-saving ... More>>


Economy: COVID-19 Contributes To 1.6 Percent Fall In March Quarter GDP

Gross domestic product (GDP) fell 1.6 percent in the March 2020 quarter, the largest drop in 29 years, as the initial effects of COVID-19 restrictions impacted on economic activity, Stats NZ said today. This quarter’s GDP results showed a widespread drop ... More>>


Electricity: Transmission Pricing For A Low Carbon Future

The Electricity Authority has decided on new guidelines for transmission pricing. James Stevenson-Wallace, Chief Executive of the Electricity Authority says the new guidelines will deliver significant benefits to consumers, through lower electricity ... More>>


ASB: Investor Confidence Falls To Four-Year Low

As the world grapples with the fallout from the most significant pandemic the world has seen in a century, economic concerns are weighing on investors, dragging investor confidence down to a four-year low in the first quarter of the year. For the three ... More>>


Science Media Centre: Funding For R&D In New Zealand – Expert Reaction

Research, Science and Innovation Minister Dr Megan Woods has today announced $401.3 million funding for research and development through Budget 2020 and the COVID Response and Recovery Fund. The fund includes $150 million for an R&D loan scheme, ... More>>


Science: 2019 Prime Minister’s Science Prizes Announced

The 2019 Prime Minister’s Science Prizes have been announced in a digital livestream event today. The Prizes recognise the impact of science on New Zealanders’ lives, celebrate the achievements of current scientists and encourage scientists of the ... More>>


RNZ: Fuel, Alcohol Costs To Go Up From Today

The increase today in the taxes on fuel, road user charges and alcohol is being called a tone-deaf move. More>>


Stardome Observatory: Young Kiwi Astro-Photographer Shoots For The Stars

Matariki by Josh Kirkley. The stars are aligning for up-and-coming Auckland-based astro-photographer Josh Kirkley (Kāi Tahu). During lockdown, one of his images was picked up by NASA and shared on the space agency’s Instagram to its 59.2 million ... More>>

DCANZ: Time For EU To Commit To A Level Playing Field For Trade

The Dairy Companies Association of New Zealand (DCANZ) has welcomed New Zealand Trade Minister David Parker’s statement that it is unacceptable for New Zealand exporters to continue facing an ‘unlevel playing field’ in the EU. Details leaked ... More>>


Potatoes New Zealand: Protecting NZ Fries As Part Of PNZ Pandemic Recovery & Transformation Plan

Potatoes New Zealand has met with Minister Faafoi this week to discuss investigating the potential importation of heavily discounted frozen potato chips into New Zealand. With MBIE’s support we are undertaking an investigation to gather evidence of the ... More>>


New Zealand Government: Supporting Kiwi Businesses To Resolve Rent Disputes

The Government will legislate to ensure businesses that suffered as a result of the COVID-19 response will get help to resolve disputes over commercial rent issues, Justice Minister Andrew Little announced today. More>>


Science Media Centre: Understanding 5G Concerns – Expert Q&A

Recent attacks on cell phone towers have brought concerns over the rollout of 5G technology into sharp relief.
While scientific research has consistently shown that the technology does not adversely affect human health, public concerns about its impact have spread around the world, fueled in part by growing misinformation online. The SMC asked experts to comment... More>>


Trade: Record Monthly Surplus As Imports Dive

Imports in April 2020 had their biggest fall since October 2009, resulting in a monthly trade surplus of $1.3 billion, Stats NZ said today. “This is the largest monthly trade surplus on record and the annual goods trade deficit is the lowest ... More>>