Authority confirms trader default process initiated
On 19 October the Authority triggered its trader default process after being alerted to an event of default. The situation has reached a commercial resolution with the defaulting trader transferring its customers to a new trader.
The trader initially defaulted by not making the required prudential and settlement payments to the clearing manager. Given commercial resolution has occurred, the Authority will not be instigating a communications campaign to affected customers.
The default process is designed to ensure customers are looked after, while maximising the opportunity for the trader to resolve the default. This in turn minimises the risk of reduced payments to generators.The industry is aware of and should be prepared for the possibility of such reduced payments.
We strongly encourage all market participants to regularly review their risk position and ensure they have adequate and appropriate hedge cover.
Entry and exit into a competitive market is perfectly healthy and expected. Since October 2016, 16 traders have entered the retail electricity market and two have exited. There are currently 39 traders listed.
As this is the first time the default process has progressed to the point where a campaign could be required, we will use this opportunity to learn more about where improvements can be made throughout the process.
Transpower – update to software specifications for SPD and RMT
Transpower, as system operator, publishes software specifications for its core market system solvers. Some industry participants use the software specifications to assist in their understanding and modelling of how the wholesale electricity market functions. The software specifications are:
a formulation document providing a mathematical description of the Scheduling, Pricing, and Dispatch (SPD) software
a functional specification for the Reserve Management Tool (RMT).
Transpower updated these specifications because of a request we made. The updates have extended the scope of these specifications to include existing SPD and RMT functions that are not part of the core solution engines and were not previously documented. No changes have been made to how the actual functions operate.
The latest software specifications can be found on Transpower's website.
The Australian Securities Exchange (ASX) is hosting an Industry Training Day in Wellington on 13 November 2018. Attendees will increase their understanding of the New Zealand electricity market, including ASX electricity derivatives and the important role they play in the market.
Training will be provided on the full suite of ASX New Zealand energy derivative products, their specifications and characteristics/risk profile, as well as how they are typically used in relation to the underlying electricity physical market.
Further information and registration details are on the event’s webpage.
The Authority gives notice to participants that, for the purposes of the Electricity Industry Participation Code 2010 (Code), Monday, 21 January 2019 (Wellington Anniversary Day) is declared not to be a business day.
We are coordinating the consultation processes for more minor projects into an omnibus series. In our first omnibus, we are consulting on four areas.
1. Review of metering and related registry processes.
2. Access to WITS and the registry.
3. Switch process review.
4. Integrating hosting capacity into Part 6 of the Code.
