Wholesale Market Information Disclosure

The new Code requires participants to provide their first report by 31 July 2021. That report must cover the reporting period 1 April – 30 June 2021.

The new Code amendment does not have any retrospective application, meaning there is no quarterly disclosure report for the period 1 January – 31 March 2021. As the quarterly disclosure report provisions come into force 1 April 2021, there will be a quarterly disclosure report for the period 1 April – 31 June 2021, and which will be due (in accordance with clause 13.2D(2)) by 31 July 2021. We do not think that there is a need to provide for transitional arrangements to clarify the position above.

The Authority has decided that the Wholesale Market Information Disclosure Portal (a web-based portal) is the ‘specified form’ for the purpose of clause 13.2D(2)(b).

A word version of the form was published on 30 March which contains the questions that participants will need to respond to in this web form.

The Authority may, from time to time, make administrative or operational improvements to the Disclosure Portal. The Authority will engage with stakeholders and clearly communicate changes to the Disclosure Portal.  

Clause 13.2B(5) provides: Subject to clause 13.2E(3), the requirement to provide information under subclause (1)

- applies despite any legal  obligation to keep the disclosure information confidential and shall not be deemed a breach of any such obligation; and

- does not put the major participant in breach of any law.

The intention of clause 13.2B(5) is to provide greater scope for the provision of disclosure information. Confidentiality obligations on participants (which may come from legislation, regulations, contracts or other instruments with legal effect) are often subject to exceptions that permit the disclosure of information where disclosure is required by law. The Authority sees the new provisions as coming within such exceptions by providing that any legal obligation to keep information confidential will not be breached in circumstances where disclosure is required to be made to the Authority under clause 13.2B(1).

Note also the operation of clause 13.2E(3) (which clause 13.2B(5) is subject to) which prevents the Authority from publishing information received in a quarterly disclosure report in certain circumstances. This was added to protect the underlying interest that participants will have that confidential information is not publicly disclosed by operation of the new provisions.

If, despite the above matters, there is an inconsistency between the requirements of the new provisions and another Act or regulation, section 33(2) of the Act will apply.  This section provides that where any conflict exists between the Code and an Act, or with any regulation made under an Act, the Act or regulation (as the case may be) must prevail.  The Authority, however, considers that there will be few, if any, situations where this would arise.

The Authority considers that clause 13.2B(5) is authorised by the Authority’s Code-amending power in section 38 of the Electricity Industry Act 2010 (Act). The Authority considers that disclosure of information required by clause 13.2B(1) to the Authority is necessary to achieve the objectives of the amendment. Without clause 13.2B(5), the Authority considers that a significant amount of information could likely not be provided to the Authority, which would mean that the Authority would be unable to properly evaluate the ways in which participants apply the exceptions in clause 13.2A(2) of the Code.

For now we will ask participants to do that yes, as we are keen to encourage active thinking about whether the disclosure status has changed. If over time this looks like it is applying to a lot of information and creating a large compliance burden, we will re-assess the approach.

Please refer back to the definition of disclosure information in part 1 of the Code. You should report on all disclosure information you held in the reporting period. If the information is about yourself (the major participant), held by you, and you expect, or ought reasonably to expect, that the information will impact wholesale prices if it is released, this information should be reported on.

Clauses 13.2B-D do not have a retrospective application so for the first quarterly report, you do not need to report on historical instances of disclosure information that impacted only historical prices. If you started to hold the information at a date before the reporting period and it still meets the definition of disclosure information in the reporting period, ie, it is expected to impact future prices, you need to report on it. We would expect long term contracts eg, fuel supply may need to be reported.

If you started to hold the information at a date before the reporting period but it no longer meets the definition of disclosure information in the reporting period, you do not need to report on it. For example, if the information relates to past events, it cannot impact prices anymore and will not meet the definition of disclosure information.

Please contact marketoperations@ea.govt.nz if you have questions about your particular example.

The report will enable you to select multiple exclusions for each disclosure item.

The report will enable you to select multiple exclusions for each disclosure item. You do not need to record the dates when each exclusion applied.

The report will enable you to select clause 13.2 (misleading or deceptive information, or information likely to mislead or deceive) as a reason for non-disclosure.

The Authority will apply a pragmatic approach to compliance and support participants to understand and comply with the new rules

The Authority has published a list of major participants (further below) who are subject to the new provisions, including 14 participants who meet the ‘direct purchaser’ aspect of the definition (persons who purchase electricity from the clearing manager, who are not retailers).

One of the first questions in the report will ask whether the participants held disclosure information during the reporting quarter. If they did not, they can skip to the end of the form where signoff is required and submit it without having to enter additional information. All participants are already subject to clause 13.2A which requires them to identify and make available to the public disclosure information, so this should not impose a material increase in compliance costs.

The intention behind creating the definition of ‘major participant’ is to focus the reporting obligation on those participants who are most likely to hold disclosure information more frequently. The Authority has taken a pragmatic approach and limited the costs of the reporting obligation by not extending it to all participants, and avoiding a disproportionately large compliance burden.

If the Authority receives feedback that the reporting obligation is causing a large compliance burden on parties with no relevant information, the Authority is open to addressing this in future, as priorities allow.

The decision paper summarises the costs and benefits of the decision and Appendix G of the original consultation paper includes the full cost benefit analysis.

The current disclosure obligations (clause 13.2A) have been in place for several years and market participants should already have the administrative setup and internal processes in place to ensure compliance with those rules. The expected marginal costs for the major participants of complying with the new reporting obligations would largely involve the need to strengthen administrative and internal processes. Participants who already have good disclosure processes and practices will incur smaller additional costs.

The benefits of the reporting regime include;

• major participants paying increased attention to their disclosure obligations under clause 13.2A, which would result in more information being published to the market, benefiting all participants through reduced information asymmetry
• new information to support the Authority to monitor compliance with the disclosure regime, supporting trust and confidence in the market
• quarterly reports published to the market summarising how often participants are using exclusions, also supporting trust and confidence in the market.

Nominated representatives of major participants will receive an email inviting them to register on the portal at the end of June.

From 1 July 2021 the link to the portal can be found here.

No, you will be able to start completing a report from the beginning of a new reporting quarter, and add information as the quarter progresses.

You should not submit the report until the quarter is complete.

Currently there is no functionality, eg, APIs, to integrate participant systems with the Disclosure Portal.

If you have suggestions or feedback on functionality that would be useful please contact marketoperations@ea.govt.nz and the Authority will consider it for future development.

Clause 13.2D(2) of the Code requires major participants to submit the quarterly disclosure report by the end of the month following expiry of the quarter to which the report relates. The table below shows the deadlines. Participants should make every effort to submit their reports on time. A late submission is a breach of the Code.

Please contact marketoperations@ea.govt.nz with the details of mistake and the correct details as soon as you can.

Supplying incorrect information could be a breach of the Code.

Clause 13.2L of the Code requires major participants to take all practicable steps to ensure the information provided in a disclosure report is complete and correct, and to correct it as soon as practicable if this is not the case. Clause 13.2 requires that all participants must not disclose information that was or could be misleading or deceptive.

A minimum of one person will need to sign up for an account. The Authority recommends at least two people sign up (for redundancy purposes).

You must provide one primary contact person (for example, the person responsible for the bulk of the disclosure data entry).

You can also choose to provide details of additional administrative contacts (for example, people responsible for checking or submitting the data).

The senior member of staff will need to sign up for an account. It can either be the Primary contact or the Administrative contact.

All major participants must complete a report.

The middle section of the report asks for information about when you held disclosure information but didn’t publish it straight away.

If you published all the disclosure information you held during the quarter as soon as practicable after starting to hold it, you do not need to complete these questions.

If you relied on an exclusion (under clause 13.2A(2)) or clause 13.2 (misleading or deceptive) to avoid publishing disclosure information at any point during the quarter, you must complete this middle section.