2021
As the regulator of New Zealand’s electricity system and markets, it is a key priority of the Electricity Authority to actively monitor behaviour, enforce the rules and hold industry to account. This ensures consumers continue to receive this essential service.
9 August - closure of case alleged against Contact Energy Limited
On the evening of Monday 9 August 2021, a significant weather event caused the system operator to declare a grid emergency due to record national demand and a shortage of generation. Contact’s Taranaki Combined Cycle (TCC) unit was offline during the event.
Multiple participants alleged Contact Energy Limited (Contact) breached clause 13.5A (trading conduct rule) by failing to offer generation from its 377 MW Taranaki Combined Cycle unit during trading periods 37 – 42 on 9 August 2021.
On 6 December 2021, the Authority’s Compliance Committee approved a recommendation to decline to take further action on the alleged breach under Regulation 11(1)(b) of the Electricity Industry (Enforcement) Regulations 2010, on the basis that the evidence did not establish a breach of clause 13.5A.
TCC requires between 36 – 72 hours to start up from cold. To be operational for the evening peak on 9 August, Contact would have needed to turn the unit on before 10:00 pm on Saturday 7 August. At this time the information available in the market would not have enabled a rational generator to predict the unusual tightening of supply and demand which occurred at the evening peak of 9 August. Accordingly, there is no evidence to suggest that Contact’s conduct was inconsistent with the way that a rational generator would act in a completive market. As a result, the Compliance Committee did not appoint an investigator in respect of this matter.
The Authority normally only publishes the outcome of cases that reach the investigation stage. However due to high public interest and because the allegation was made public, the Authority has decided, and Contact Energy agreed, to publish the decision in this case.
