Releasing the Transmission Pricing Methodology second issues paper and review of Part 6 distributed generation pricing principles
The Authority Board has confirmed the release date for the Transmission Pricing Methodology (TPM) second issues paper and the consultation paper on a review of Part 6 distributed generation pricing principles. Both papers will be released on Tuesday, 17 May 2016. Consultation will run for eight weeks.
We will hold a stakeholder briefing, covering both papers, on the morning of Tuesday, 17 May 2016. During the consultation period, we will hold workshops in Auckland, Wellington, Christchurch and Invercargill on the TPM second issues paper. We will confirm the timing of the stakeholder briefing and the workshops closer to the release date. We will also meet with stakeholders on a one-to-one basis if they would like to discuss either paper.
Assessment of real time pricing (RTP) options: consultation paper published
We have published a consultation paper seeking views on options to improve spot pricing arrangements in the wholesale electricity market. At present, the pricing manager does not determine and publish final spot prices for a trading period until at least two days later. We have considered options under which final spot prices would be determined before, during, or just after the trading period.
We have developed four options to a conceptual level, two of which (dispatch-based prices and 5-minute ‘look behind’ prices) we expect would deliver net benefits compared with current arrangements.
If one of these options was adopted, it would replace the current method for calculating spot prices. Our assessment suggests dispatch-based pricing would deliver greater net benefit to consumers than the other options we considered.
We are seeking submissions to decide whether to explore real-time pricing in more detail and, if so, which option to develop further. If we consider that a real-time pricing option is consistent with our statutory objective, we will prepare a formal proposal to amend the Electricity Industry Participation Code 2010 (Code), for consultation in the 2016/17 financial year.
If we decide to adopt real-time pricing, we expect it would take more than two years to implement.
We are holding a workshop in Wellington on 21 April 2016, between 10am and midday, for people to discuss the consultation paper and its findings. Howard Haas, Chief Economist from Monitoring Analytics (the market monitor for PJM market) will be attending to answer questions about how real-time pricing works in the PJM and other North American markets. If you are interested in attending the workshop, please email conference@ea.govt.nz by Tuesday, 19 April 2016 with ‘RTP workshop’ in the subject line.
Code amendments: system operator and other market operation services providers
We have approved Code amendments that alter the way the system operator and other market operation service providers perform their roles.
The amendments specify the functions of the system operator, how those functions are performed, and set requirements for transparency and performance. The amendments also include a general obligation for the system operator to provide all of its Code obligations to the standard of a reasonable and prudent system operator.
The amendments also require the system operator and all other market operation service providers to perform their roles in a way that supports the Authority’s statutory objective. This should help to ensure that our service providers share our objective of achieving long-term benefits for consumers, including through the delivery of more efficient and value-for-money services.
Improving the efficiency and value of these services has also been a focus of our recent re-negotiation and retendering of most of the market operations service provider agreements.
The Code amendments will be Gazetted shortly and are expected to take effect on 19 May 2016.
Clearing manager consultation: revisions to the FTR prudential security methodology
The clearing manager, NZX Limited, is consulting on changes to its methodology for determining financial transmission right (FTR) prudential security for the wholesale market. The changes concern the calculation of daily settlement prices for FTR options.
Submissions close with the clearing manager at 5 pm on Thursday, 5 May 2016.
We have released a technical memo on the use of measuring transformers where the burden being applied in a metering installation is not within the burden that the measuring transformer is calibrated for. Further details are available in a memo on our website.
