Decision paper on review of the stress test regime
We have published a decision paper on our review of the stress test regime. The Authority has decided to make the following improvements to the stress test regime:
- Improve the content and format of quarterly stress test reports (option 2 in the consultation paper).
- Provide a facility for disclosing participants to be informed when the latest quarterly report is published (variation of option 4 in the consultation paper).
- Amend clause 13.236E of the Electricity Industry Participation Code 2010 (“Code”). The amendment will provide that, if a disclosing participant is not exposed to spot price risk in a particular quarter, the spot price disclosure statement it submits for that quarter need not contain all the information ordinarily required in a spot price disclosure statement.
We completed the decision paper in May 2017 and intended to publish it in mid-June 2017. However, by mid-May the dry winter of 2017 had become apparent—South Island controlled hydro storage passed the 1% hydro risk curve on 21 May. Given this development, we decided to postpone releasing the decision paper until the dry year situation had ended.
The 2017 dry winter event has not changed the review findings and accordingly we kept the decision paper as it was in May 2017.
The Authority is currently reviewing the 2017 dry year event. Any relevant lessons for the stress test regime that arise out of the review of 2017 dry year event will be considered in a separate process.