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10 March 2020
Welcome to Market Brief, the Electricity Authority’s weekly update on regulatory and market developments.

Contents

Hedge Market Enhancements market making discussion paper - submissions published

In November 2019, the Authority released a discussion paper on the initial analysis of problems and opportunities with market making, seeking information and evidence from stakeholders to support further analysis. 

Submissions closed on 2 December 2019. Eighteen submissions are now available on our website. Five submissions contained confidential information and have not been published.
Read submissions

TPM: peak charge information paper

Later this week, the Authority will publish an information paper that sets out the Authority’s current thinking on its proposed approach toward peak (that is, congestion) charging in light of submissions. We will publish the paper on the TPM project page. We will also publish expert reports prepared by Professor William Hogan and Concept Consulting Group Ltd. 

Authority determination of under-frequency event disputed

Transpower New Zealand Limited, in its capacity as grid owner (Transpower), has referred the Authority’s final determination in relation to an under-frequency event on 14 December 2018 (UFE) to the Electricity Rulings Panel.

The Rulings Panel has directed that any industry participants should give notice to the Rulings Panel at registrar@electricityrulingspanel.nz by 24 March 2020 if they wish to make submissions in relation to this. The Rulings Panel will then consider the status of any participant which has indicated a wish to be heard. More information about the UFE, including the Authority’s final determination, can be found here.

Stress test scenarios reverted for the April-June quarter of 2020

The stress test scenarios previously published on the Authority's website will apply for the April-June quarter of 2020. There is one change from the previous quarter. Test scenario C2 is not required to be submitted as it applied only to the January-March quarter of 2020.

The stress-testing regime requires certain participants in the wholesale electricity market to apply a set of standard stress tests to their market position, and report the results to their Board and to the NZX as the independent registrar appointed by the Authority.

Questions about the stress tests can be directed to marketoperations@ea.govt.nz.

Downstream 2020 – 17-18 March

We are looking forward to Downstream next week. Our senior leadership team and some of our Board members are attending. The Authority is hosting a booth in the Engage Zone. Book a meeting to speak with our senior leaders on key topics, or just come by and see us.

UTS claim 2019

The Authority is continuing to investigate the claim of an undesirable trading situation (UTS) made by Haast Energy Trading, Ecotricity, Electric Kiwi, Flick Energy, Oji Fibre, Pulse Energy Alliance and Vocus in December 2019.

At the time the claim was lodged, the claimants asserted the alleged UTS began on 10 November 2019 and was continuing as at 12 December 2019.  

The Authority subsequently agreed with the claimants the investigation period for this alleged UTS is 10 November 2019 to 16 January 2020.

What’s a UTS?
The Electricity Industry Participation Code 2010 defines a UTS as:
any situation–

(a) that threatens, or may threaten, confidence in, or the integrity of, the wholesale market; and
(b) that, in the reasonable opinion of the Authority, cannot satisfactorily be resolved by any other mechanism available under this Code (but for the purposes of this paragraph a proceeding for a breach of clause 13.5A is not to be regarded as another mechanism for satisfactory resolution of a situation).

We take all claims of undesirable trading situations very seriously and follow a robust process of investigation, analysis and peer review.

Depending on the nature of the claim, some investigations will take longer than others and it can be difficult to confirm when a decision will be made.  

This claim requires deep analysis of a lot of information. We have gathered all the information required to analyse the situation in detail, and we are now in the final stages of our investigation.

We are working on the decision paper and intend to recommend a decision to the Authority Board in April 2020.  

Grant Benvenuti, Acting General Manager Market Performance is leading this UTS investigation.

Find out more
You can read the Guidelines for Participants on Undesirable Trading Situations on our website. The guidelines outline the process for investigating a UTS claim.

The Authority’s Board makes the decision on whether an undesirable trading situation is developing or has developed.

Depending on the Board’s decision, the Authority may decide to consult on a preliminary decision, before making a final decision.

The Authority will publish the decision (preliminary or final) on its website and communicate it through Market Brief. We will give advanced warning of the publication date so everyone knows when to expect the decision.

We do not share the decision with the claimants or affected parties in advance of its publication. Everyone finds out about the decision at the same time.

Reminder: Next steps on Authority strategy development

We are planning our next workshop engagement for the afternoon of Wednesday 8 April. We intend for this to cover five-year themes of action that sit underneath each of the headings in the strategy, and our work programme for financial year 2020/21. We will send out further details in the coming weeks, but for now please save the date in your calendars.

Reminder: Call for nominations for IPAG Chair and MDAG Chair

We are calling for nominations for independent chairs of both the Market Development Advisory Group (MDAG) and the Innovation and Participation Advisory Group (IPAG).

New Chair terms start 30 May 2020. An Advisory Group Chair’s term is normally for three years, but both current Chairs have served for shorter terms due to the prior Chairs resigning early.

More details, including the nomination form, the Charter for Advisory Groups and the Terms of Reference for the Advisory Groups, are available on our website.

Nominations close at 5pm on Friday, 27 March 2020.

Reminder: Call for nominations for Standing Data Formats Group

We are calling for nominations for two trader members, two metering equipment provider members, and a distributor member to join the Standing Data Formats Group (SDFG). The SDFG provides independent advice to the Authority on information exchange protocols between:
  • participants and the market operation service providers
  • participants and consumers
  • participants and third party providers.
Nominations and accompanying documents should be emailed to marketoperations@ea.govt.nz with ‘Nomination for SDFG membership’ in the subject line by 5pm on Tuesday, 24 March 2020.

Further information about the SDFG, nomination process and accompanying documents are available on our website.
Read more

Reminder: Open Networks – Standards forum – March 2020

The Authority is hosting a second Open Networks forum in Wellington on Thursday, 19 March 2020 focussing on standards. This is a follow up to the first forum held on 19 November 2019 and will include:
  • updates and discussions on standards development in the industry, including presentations from Westpower and WEL Networks
  • discussion on standards that were suggested at the first forum
  • pilot, trial and investigation networking session.
Please register if you wish to attend this event.
Read more and register

Current consultations

High Standard of Trading Conduct provisions: a review by the MDAG discussion paper

Ending: 06/04/2020 5pm

Read more
Level 7, Harbour Tower, 2 Hunter Street, PO Box 10041, Wellington 6143, New Zealand
Tel: + 64 4 460 8860   Email: info@ea.govt.nz
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