Trading conduct review: decision published
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The Authority is introducing a new trading conduct rule from 30 June 2021.
The new rule will replace the current high standard of trading conduct provisions (clauses 13.5A and 13.5B and revoke the definition of ‘pivotal’) in the Electricity Industry Participation Code 2010.
The purpose of the amendment is to make the trading conduct rule easier to understand and comply with. We expect a clearer trading conduct rule to encourage appropriate trading behaviour by wholesale electricity market participants, which will ultimately lead to better outcomes for consumers in New Zealand.
The new rule is the result of a comprehensive review by the Authority and the Market Development Advisory Group. The review involved multiple consultations with interested parties as well as the use of a pre-eminent expert panel to test a proposed rule. This resulted in a thorough process in which key issues were aired and discussed by stakeholders and legal experts.
We will actively monitor the new rule as part of our enhanced monitoring, enforcement and compliance regime. A monitoring approach has been published to support understanding of the new rule.
The media release is available here .
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Authority welcomes gas agreement
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The Electricity Authority has welcomed a gas supply agreement between Genesis Energy (Genesis) and Methanex. The agreement is in place for each winter from 2021-2023.
The deal is for the sale and purchase of a 3.4 PJ - 4.4 PJ tranche of winter 2021 gas and swaps for each of 2022 and 2023.
“Given New Zealand is grappling with a dry year risk and a lack of gas availability for both industrial users and generators, this agreement provides certainty that there will be enough fuel for generation,” says Andrew Doube, Electricity Authority, General Manager, Market Design.
“The gas agreement is one of several market arrangements that have helped manage the dry year risk,” says Mr Doube. “Others include the Tiwai smelter agreeing with Meridian to reduce consumption, the long standing swaption between Genesis and Meridian, a separate deal earlier in the month between Genesis and Greymouth for 700-800 TJ of winter 2021 gas, and the tolling arrangement between Todd and Contact.
“Each of these market-based arrangements has resulted in an improvement to security of supply.”
You can read the announcement below.
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Transpower is currently developing a proposed Transmission Pricing Methodology (TPM) in accordance with the transmission pricing methodology guidelines published by the Electricity Authority in June 2020 and the Electricity Industry Participation Code 2010.
At agreed checkpoints over the last year, Transpower has submitted aspects of its analysis and preliminary drafting to the Authority, which has then provided feedback. Checkpoint material is published on Transpower’s website.
While the Authority is aiming for a new TPM to be in place on 1 April 2023, there are still several remaining steps in the process. Transpower is set to deliver the proposed TPM, with indicative pricing, to the Authority by 30 June 2021. After 30 June 2021, the Authority will review the proposed TPM and may refer it back to Transpower for further consideration (following the process set out in the Code).
Later in 2021 the Authority intends to consult on the full proposed TPM, before the Authority’s Board makes any final decision.
After 30 June 2021, the Authority will be providing regular updates on TPM progress via Market Brief. We also encourage readers to follow the Authority on Twitter and LinkedIn.
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Real-time pricing online session - Wednesday 9 June
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The Authority, alongside the system operator and NZX, are hosting monthly online engagement sessions covering the market changes being delivered by the real time pricing (RTP) project.
In our next session, we will explain the implementation of scarcity pricing in the market system.
Subject: Scarcity pricing implementation
Date: Wednesday, 9 June 2021
Time: 3 – 4pm
If you would like to attend this session, and haven’t registered with the Cognise learning platform yet, please email RTP@ea.govt.nz with the following information:
- Full name
- Email address
- Contact number
- Organisation
- Role
More details about the session are available on our website.
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2021/22 Levy-funded appropriation consultation: summary of submissions
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We have published the submissions received during our consultation on the proposed 2021/22 Levy-funded appropriations (10 November-8 December 2020), alongside a summary of submissions and Electricity Authority response.
We considered the submissions on our proposed appropriations before reporting to the Minister in February 2021 with our recommended appropriations for the 2021 Budget. Consultation feedback also informed our development of the 2021/22 Statement of Performance Expectations, to be published in late June 2021.
The submissions are available on our website.
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Commercial market-making scheme: Levy consultation
Ending: 22/06/2021 5pm
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Level 7, Harbour Tower, 2 Hunter Street, PO Box 10041, Wellington 6143, New Zealand
Tel: + 64 4 460 8860 Email: communications@ea.govt.nz
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