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  • Hedge market development

Hedge market development

Overview
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Implementation
Development
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Correspondence
Background
  •  

    Update on off-market hedge information request findings and next steps

    13 Dec 2022  

     
    • Open Letter Stage 2 December 2022

      Open-Letter-Stage-2-December-20221381881.2.pdf (PDF, 82 KB)

      Last updated: 14 December 2022

  •  

    Open voluntary request for off-market hedge information

    31 Oct 2022  

     
    • Open Letter to Market Participants - October 2022

      Open-Letter-Stage-1-October-20221378506-v3.2.pdf (PDF, 110 KB)

      Last updated: 31 October 2022

    • Annex One: Voluntary Letters for RFPs October 2022

      Voluntary-Letter-for-RFPs-October-2022.pdf (PDF, 170 KB)

      Last updated: 31 October 2022

  •  

    Off-market transactions information request

    18 Oct 2022  

     
    • Open Letter for RFPs October 2022

      Open-Letter-for-RFPs-October-2022.pdf (PDF, 252 KB)

      Last updated: 18 October 2022

  •  

    Genesis market making performance

    22 Feb 2021  

     

    • Letter to Genesis regarding their market making performance - February 2021

      Genesis-market-making-performance-Feb-2021.pdf (PDF, 897 KB)

      Last updated: 22 February 2021

  •  

    Letter from Ecotricity

    2 Jul 2020  

     

    • Letter from CE Response to Al Yates - July 2020

      Letter-from-CE-Response-to-Al-Yates-2020-07-01.pdf (PDF, 209 KB)

      Last updated: 02 July 2020

    • RE Urgent interim solution required for Spot and ASX markets Redacted

      RE-Urgent-interim-solution-required-for-Spot-and-ASX-markets-Redacted.pdf (PDF, 83 KB)

      Last updated: 02 July 2020

  •  

    Correspondence relating to Mercury market making

    2 Jul 2020  

     

    • Letter to Mercury re market making in June 2020

      Letter-to-Mercury-re-market-making-in-June-2020.pdf (PDF, 144 KB)

      Last updated: 02 July 2020

  •  

    Protecting the long-term interests of consumers and the health and safety of market maker trading staff

    14 Apr 2020  

     

    The Authority has written to the market makers to clarify the usage for the additional two exemptions during New Zealand’s Covid-19 Alert Level 4.

    • Download a ZIP file containing all documents

    • Market making under Alert Level 3

      Market-making-under-Alert-Level-3.pdf (PDF, 150 KB)

      Last updated: 23 April 2020

    • Response letter to EA on market making re Covid-19 arrangements

      Letter-to-EA-on-market-making-15-April-2020.pdf (PDF, 556 KB)

      Last updated: 21 April 2020

    • Letter to market makers re-Covid-19 arrangements

      Letter-to-market-makers-re-covid-19-arrangements-pre-merge.pdf (PDF, 152 KB)

      Last updated: 14 April 2020

  •  

    Correspondence relating to enduring market making: Industry-led options development

    24 Mar 2020  

     

    The Authority has offered to support the establishment of a forum for developing an industry view on a suitable incentive-based market-making scheme. The letter sent to each market maker/large physical participant is provided below.

    • Download a ZIP file containing all documents

    • Contact Energy Enduring market making letter - 9 March 2020

      Contact-Energy-Enduring-market-making-letter-9-Mar-2020.pdf (PDF, 1.5 MB)

      Last updated: 23 March 2020

    • Genesis Energy Enduring market making letter - 9 March 2020

      Genesis-Energy-Enduring-market-making-letter-9-Mar-2020.pdf (PDF, 1.5 MB)

      Last updated: 23 March 2020

    • Mercury Energy Enduring market making letter - 9 March 2020

      Mercury-Energy-Enduring-market-making-letter-9-Mar-2020.pdf (PDF, 1.5 MB)

      Last updated: 23 March 2020

    • Meridian Energy Enduring market making letter - 9 March 2020

      Meridian-Energy-Enduring-market-making-letter-9-Mar-2020.pdf (PDF, 1.5 MB)

      Last updated: 23 March 2020

    • Nova Energy Enduring market making letter - 9 March 2020

      Nova-Energy-Enduring-market-making-letter-9-Mar-2020.pdf (PDF, 1.5 MB)

      Last updated: 23 March 2020

    • Pioneer Energy Enduring market making letter - 9 March 2020

      Pioneer-Energy-Enduring-market-making-letter-9-Mar-2020.pdf (PDF, 1.5 MB)

      Last updated: 23 March 2020

    • Pulse Energy Enduring market making letter - 9 March 2020

      Pulse-Energy-Enduring-market-making-letter-9-Mar-2020.pdf (PDF, 1.5 MB)

      Last updated: 23 March 2020

    • Trustpower Enduring market making letter - 9 March 2020

      Trustpower-Enduring-market-making-letter-9-Mar-2020.pdf (PDF, 1.5 MB)

      Last updated: 23 March 2020

  •  

    Correspondence relating to urgent Code amendment

    30 Jan 2020  

     

    The Authority has made an urgent Code amendment to insert a dormant mandatory market making scheme into the Code. The Authority has notified the market makers affected by the amendment. The letter to each market maker is provided below.

    • Download a ZIP file containing all documents

    • Letter from CE to Dennis Barnes - Contact Energy

      Letter-from-CE-to-Dennis-Barnes-2020-01-27.pdf (PDF, 73 KB)

      Last updated: 30 January 2020

    • Letter from CE to Fraser Whinerary - Mercury

      Letter-from-CE-to-Fraser-Whinerary-2020-01-27.pdf (PDF, 73 KB)

      Last updated: 30 January 2020

    • Letter from CE to Marc England - Genesis Energy

      Letter-from-CE-To-Marc-England-2020-01-27.pdf (PDF, 73 KB)

      Last updated: 30 January 2020

    • Letter from CE to Neal Barclay - Meridian Energy

      Letter-from-CE-to-Neal-Barclay-2020-01-27.pdf (PDF, 73 KB)

      Last updated: 30 January 2020

  •  

    Correspondence with non-integrated retailers November 2019

    3 Dec 2019  

     

    In November 2019 the Authority met with the non-integrated retailers to discuss the recent performance of the wholesale market.

    • Letter from the Authority to non-integrated retailers December 2019

      Letter-from-the-Authority-to-non-integrated-retailers-December-2019.pdf (PDF, 162 KB)

      Last updated: 03 December 2019

    • Letter from non-integrated retailers to the Authority November 2019

      Follow-up-letter-on-EA-Board-meeting-14-11-19.pdf (PDF, 204 KB)

      Last updated: 03 December 2019

  •  

    Correspondence with generator-retailers November 2019

    29 Nov 2019  

     

    In November 2019 the Authority met separately with each of the four largest generator-retailers to discuss the recent performance of the wholesale market and to seek improvements to market making services. The follow up letters to each organisation are provided below.

    • Download a ZIP file containing all documents

    • Letter from the Authority to Contact

      Letter-from-CE-EA-to-Contact-Energy-2019-11-29.pdf (PDF, 140 KB)

      Last updated: 02 December 2019

    • Letter from the Authority to Genesis

      Letter-from-CE-EA-to-Genesis-Energy-2019-11-29.pdf (PDF, 139 KB)

      Last updated: 02 December 2019

    • Letter from the Authority to Mercury

      Letter-from-CE-EA-to-Mercury-2019-11-29.pdf (PDF, 138 KB)

      Last updated: 02 December 2019

    • Letter from the Authority to Meridian

      Letter-from-CE-EA-to-Meridian-Energy-2019-11-29.pdf (PDF, 139 KB)

      Last updated: 02 December 2019

  •  

    Correspondence with generator-retailers 2019

    12 Nov 2019  

     

    In May 2019 the Authority responded to a request for the criteria it would apply when considering whether to urgently intervene to ensure market making services are provided. That letter is provided below.

    • Electricity Authority to Flick Electric 31 May 2019

      Electricity-Authority-to-Flick-Electric-31-May-2019.pdf (PDF, 1.1 MB)

      Last updated: 12 November 2019

  •  

    Mercury NZ Ltd request for a Central North Island FTR hub

    11 Oct 2016  

     

    On 26 August 2016, we received a letter from Mercury NZ Ltd (Mercury) requesting that we add a Central North Island financial transmission rights (FTR) hub to the existing five FTR hubs. Mercury asked that we add this hub quickly so that participants could purchase FTRs here for use in winter 2017. Thirteen parties provided letters of support for Mercury’s request.

    We have been in discussions with the FTR manager and the clearing manager to undertake an initial assessment of Mercury’s request. We have written to Mercury explaining our response to its request. As a first step, the FTR manager will undertake a consultation on the addition and/or removal of FTR hubs.

     

    • Mercury NZ Ltd to Electricity Authority - 26 August 2016

      Mercury-CNI-FTR-Node-Letter-to-EA-26Aug16.pdf (PDF, 326 KB)

      Last updated: 11 October 2016

    • Electricity Authority response to Mercury NZ Ltd - 11 October 2016

      EA-response-Mercury-FTRHub-11Oct16.pdf (PDF, 2 MB)

      Last updated: 11 October 2016

     

     

    Supporting letters

    • Download a ZIP file containing all documents

    • Contact Energy

      Contact-Energy-Support-letter-CNI-FTR-hub.pdf (PDF, 160 KB)

      Last updated: 10 October 2016

    • MEUG

      MEUG-to-EA-CNI-FTR-node-26-Aug-16.pdf (PDF, 75 KB)

      Last updated: 10 October 2016

    • Meridian

      Meridian-letter-to-EA-supporting-introduction-of-WKM-FTR-node.pdf (PDF, 190 KB)

      Last updated: 10 October 2016

    • NZ Steel

      NZ-Steel-Support-letter-CNI-FTR-hub.pdf (PDF, 249 KB)

      Last updated: 10 October 2016

    • Nga Awa Purua Joint Venture

      NAP-Support-letter-CNI-FTR-hub.pdf (PDF, 332 KB)

      Last updated: 10 October 2016

    • Nova Energy

      Nova-Support-letter-CNI-FTR-hub.pdf (PDF, 375 KB)

      Last updated: 10 October 2016

    • OM Financial

      OMF-trading-Support-letter-CNI-FTR-hub.pdf (PDF, 122 KB)

      Last updated: 10 October 2016

    • Pioneer Energy

      Pioneer-Energy-Support-letter-CNI-FTR-hub.pdf (PDF, 56 KB)

      Last updated: 10 October 2016

    • Pulse Energy

      Pulse-Energy-Support-letter-CNI-FTR-hub.pdf (PDF, 298 KB)

      Last updated: 10 October 2016

    • Smartwin EnergyTrading

      Smartwin-Energy-Trading-Support-letter-CNI-FTR-hub.pdf (PDF, 177 KB)

      Last updated: 10 October 2016

    • Switch Utilities Ltd

      Switch-Utilities-Ltd-Support-letter-CNI-FTR-hub.pdf (PDF, 35 KB)

      Last updated: 10 October 2016

    • Tuaropaki Power Co Ltd

      Tuaropaki-Support-letter-CNI-FTR-hub.pdf (PDF, 241 KB)

      Last updated: 10 October 2016

    • Trustpower

      Trustpower-email-on-addition-of-CNI-FTR-Hub.pdf (PDF, 96 KB)

      Last updated: 10 October 2016

     

  •  

    Correspondence with Pulse Utilities on forward market liquidity

    Oct – Nov 2013  

     

    Letter from Pulse Utilities

    On 15 October 2013 the Authority received a letter from Pulse Utilities to raise issues around forward market liquidity.

    • Letter from Pulse Utilities

      15Oct13-PulseUtilities.pdf (PDF, 173 KB)

      Last updated: 18 August 2016

    Authority Response

    The Authority responded to this letter on 20 November 2013.

    • Authority Response

      20Nov13-AuthorityResponse.PDF (PDF, 556 KB)

      Last updated: 25 June 2015

  •  

    Correspondence with ASX

    26 Nov 2012  

     

    On 26 November 2012 the Chief Executive of the Authority wrote to ASX (and copied to the four largest generators) to request that it promptly finalise arrangements with market-makers and notify the Authority once this has been completed.

    • Letter from the Authority to ASX

      Letter-to-ASX-and-generators-26-November-2012.PDF (PDF, 713 KB)

      Last updated: 26 June 2015

  •  

    Feedback from Contact on Information paper

    May 2012  

     

    Contact Energy Ltd provided feedback on the Information paper: Hedge market performance and project update - 17 April.

    • Contact Energy

      Hedge-Market-Performance-and-Project-Update-Contact.pdf (PDF, 749 KB)

      Last updated: 27 June 2015

  •  

    Feedback on Market-Making CBA

    Jan 2012  

     

    The Authority received feedback from four parties on its information paper exploring the costs and benefits of tighter market-making arrangements.

    • Download a ZIP file containing all documents

    • Genesis Energy

      Genesis-Energy.pdf (PDF, 154 KB)

      Last updated: 27 June 2015

    • Meridian Energy

      Meridian.pdf (PDF, 63 KB)

      Last updated: 27 June 2015

    • Mighty River Power

      MRP.pdf (PDF, 59 KB)

      Last updated: 27 June 2015

    • Trustpower

      Trustpower.pdf (PDF, 140 KB)

      Last updated: 27 June 2015

  •  

    Correspondence relating to consultation on hedge market arrangements

    Sep 2011  

     

    A consultation paper was published that proposed a way forward for further development of the ASX NZ electricity futures market.

    Consultation on improving the opportunities to hedge New Zealand electricity prices.

     TrustPower has made further comment in a letter and the Authority has responded to that letter.

    • Sample letter from Authority

      Sample-letter-from-Authority.pdf (PDF, 83 KB)

      Last updated: 25 June 2015

    • Response letters from generators and ASX

      Responses-from-generators-and-ASX.pdf (PDF, 2.5 MB)

      Last updated: 19 August 2016

  •  

    Correspondence with large generators and ASX

    24 Jun 2011  

     

    On 24 June 2011 the Chief Executive of the Authority wrote to the five major generators and ASX.

    The letter noted the progress in developing the ASX futures market, and requested information, including an indicative timeline, on the following measures being considered to develop more active trading in that market:

    1. Development by ASX of a standardised market making agreement including certain specified characteristics, and
    2. Increased transparency on the virtual asset swap contracts, and in particular, the price indexation to ASX futures prices.

    The responses from the five major generators and ASX indicated a substantial commitment to making the futures market work. The Authority's letter and the response letters are attached below.

    The responses, along with the report by Energy Link were utilised by the Authority to develop the consultation paper published on 1 August 2011.

    The Authority would like to thank respondents for their time and engagement on this issue.

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