21 October 2011
 
 
Contents
Demand-side initiatives gazetted
Hedge market objectives achieved  
Consultation on Financial Transmission Right (FTR) market regulations  
 
Demand-side initiatives gazetted

The Authority has gazetted Code amendments for the Demand-side Bidding and Forecasting (DSBF) and Dispatchable Demand (DD) initiatives. The Code amendments for DSBF come into force on 28 June 2012 and those for DD one year later on 27 June 2013.

This gazetting meets the Authority’s obligation under section 42(2)(d) of the Electricity Industry Act to implement Code amendments by 1 November to allow demand-side participants to benefit from demand reductions. Together both initiatives are a significant change to the wholesale electricity market which will assist with the management of tight supply situations by making better use of demand-side responsiveness.

The Gazette notices and Code amendment have been published on the Authority's website at:

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Hedge market objectives achieved

The Authority has also met the policy objective of s42(2)(g) of the Act, which requires the Authority to facilitate, or provide for, an active market for trading financial hedge contracts for electricity. New market-maker arrangements for trading on the NZ electricity futures market have been adopted by the ASX and the large generators without the Authority amending the Code. The new market-maker arrangements have sharply reduced the bid-ask spreads for futures contracts and substantially increased trading volumes, providing the foundation for an increasingly active hedge market to develop over time.

An overview document on these developments has been published and is available at

http://www.ea.govt.nz/our-work/programmes/market/hedge-market-development/

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Consultation on Financial Transmission Right (FTR) market regulations

In order to establish the FTR market, the Authority is proposing several amendments to regulations. The proposed amendments are to:

  • establish the FTR manager as a market operation service provider under the Electricity Industry Act 2010;
  • establish a liability limit for the FTR manager;
  • add ‘FTR manager’ to the list of market operation service providers required to hold professional indemnity insurance; and
  • add ‘a person who suffers loss as the holder of an FTR’ to the list of persons to whom the clearing manager is liable for financial loss.

Submissions are sought by 5pm on Thursday, 17 November 2011. The consultation paper is available at:

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