Hedge market enhancements: Code amendment consultation

The Authority is consulting on changes to the Electricity Industry Participation Code 2010 (Code) to support the introduction of the first iteration of a commercial market-making scheme. The first iteration of the commercial market-making scheme is part of the Authority’s deliberate transition to an enduring market-making approach.

A robust market-making scheme requires both regulated and commercial market-makers to operate under the same market-making service level. This Code amendment ensures the parameters for both regulated and commercial market makers are the same.

The consultation will be for a period of six weeks and closes on Tuesday, 29 March 2022.

Please note there is an opportunity within the consultation period for specific questions related to the proposed refresh obligation, involving market-makers effectively splitting their volume obligation in two. Please provide your questions by 5pm, 4 March 2022 and the Authority will respond on the Authority’s public website by Friday, 11 March 2022.

Using behavioural insights to increase 'switch and search' behaviour

The Authority wants New Zealand consumers to benefit from a competitive, reliable and efficient electricity industry. An integral part of this is making sure New Zealand electricity consumers have easy access to clear information about different electricity deals.

New Zealand has relatively high rates of people switching electricity providers compared to other countries, but we know there are still many people who have never switched.

In August 2021 the Authority undertook a pilot to see if letters, sent via the post, could prompt consumers to go to Powerswitch and check if they are on the best deal for their circumstances. We focused on consumers in areas with lower-than-average switching rates. The Authority with the support of Consumer NZ, developed and tested two different letters to encourage consumers to check Powerswitch.

The pilot found letters are an effective means of communicating with consumers and they prompted people to take action, measured by increased visits to Powerswitch. The evaluation report is published on our website.

Notice of decision to lay formal complaint with the Rulings Panel

On 1 February 2022, the Authority decided, under regulation 23(3)(b) of the Electricity Industry (Enforcement) Regulations 2010, to lay a formal complaint with the Rulings Panel against Transpower New Zealand Limited as the grid owner.

The complaint relates to an alleged breach by the grid owner to provide protection systems for its assets that form part of the grid. On 1 December 2020 the SEL421 relay associated with Otira circuit breaker CB92 failed due to temporary RAM failure. The SEL421 relay fail alarm was incorrectly wired and did not operate when the relay failed. On 12 December 2020 the Kumara to Otira circuit tripped. The failure of the SEL421 relay meant that Otira CB92 failed to open, causing a loss of supply to consumers.

The alleged breach has been calculated to have caused a significant impact on consumers (approximately $1.8 million).

2021 Dry Year Review – submissions published

During December 2021 and January 2022, the Authority consulted on the MartinJenkins review into the 2021 Dry Year Event. Thank you to everyone who provided feedback on the review. The submissions have been published on our website.

The Authority will now consider the submissions and prepare a final version of the report and the recommendations.

In parallel, the Authority is working with the system operator to revise the security of supply policy and the electricity risk curves (the SOSFIP). Areas of specific focus include the demand response assumptions for the electricity sector and the assumptions about how gas is diverted to electricity generation. The system operator intends to consult on the revised policy, likely in March 2022.

Proposed SRAM Principles

Ending: 5pm, 1 March 2022

100% Renewables electricity supply issues paper: MDAG

Ending: 5pm, 15 March 2022