Transmission pricing methodology – summary of submissions
The Authority has published a summary of submissions and a summary of cross-submissions on the Transmission pricing methodology review – issues and proposal consultation.
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Presentation to stakeholders
Dr Brent Layton, Chair of the Electricity Authority and Chief Executive Carl Hansen gave a presentation at a stakeholder breakfast in Auckland this morning.
In addition to the presentation slides, Dr Layton has prepared a paper to entitled The economics of electricity to provide a more comprehensive and detailed analysis of recent criticisms of current market arrangements.
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“Scarcity Pricing” Code amendment now in force
As reported in last week’s Market Brief, the “scarcity pricing” Code amendment came into force on 1 June 2013. Scarcity pricing is the Authority’s response to section 42(2)(b) of the Electricity Industry Act 2010, which required the Authority to amend the Electricity Industry Participation Code 2010 to impose a floor or floors on spot prices for electricity in the wholesale market during supply emergencies.
The Authority gazetted this Code amendment in October 2011. Since then, the system operator and the pricing manager have developed software and business procedures to ensure readiness to meet the Code effective date of 1 June 2013.
Scarcity pricing provides the pricing manager with a means of modifying prices in the wholesale electricity market when the system operator forces load shedding because there isn’t enough generation to meet demand in either one or both islands.
Correction to item in Market Brief last week
In a scarcity pricing situation, the average price will be set between a $10,000/MWh price floor and a $20,000/MWh price cap on the spot market. This very rare event will only be applied if the system operator has first issued a national or island wide shortage declaration, when an electricity supply emergency causes forced power cuts (emergency load shedding) throughout either one or both islands. |
Market Administrator approval of new profiles
During May 2013, the Market Administrator approved five new profiles for two participants. The proposed start date for these profiles is 1 June 2013.
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Retail Advisory Group papers
Papers for the 15 May 2013 meeting of the Retail Advisory Group have been published.
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Current consultations
Review of domestic contracting arrangements: issues paper
The Retail Advisory Group is seeking feedback on issues relating to the operational effectiveness of the domestic contracting arrangements, so it can identify specific issues to be addressed. Started: 16/4/2013. Ending: 11/6/2013, 5pm.
Consultation on changes to allocation of constrained-on and -off amounts to system operator
The Authority is proposing to remove the provision in the Code requiring the system operator to pay for constrained-on and constrained-off amounts. The Code would instead require the clearing manager to identify and publish constrained-on and -off amounts associated with the system operator exercising discretion to depart from the dispatch schedule. Started: 14/5/2013. Ending: 25/6/2013
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NZ electricity hedge contracts - 31 May 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.
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