UTS 13 February 2009
We completed an investigation into an undesirable trading situation (UTS) claim made by Contact Energy and concluded no UTS occurred.
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UTS claim
Contact Energy claimed the existence of a UTS around the “would be final prices” for trading period 24 on 13 February 2009.
The claim was about high dispatch prices for the Auckland region and alleged issues in the calculation of spring washer prices.
Our investigation
On 13 February 2009, the Otahuhu B power station tripped due to a transmission circuit failure. The system operator issued a nationwide frequency and voltage excursion notice advising of the station tripping, with the loss of 320MW of generation.
This led to price volatility during trading period 24, with some nodes showing prices as high as $73,000 and others as low as -$9,900, ultimately resulting in a high spring washer price.
A “spring washer” is the term used to describe prices that are caused by the flow of electricity around a loop from a constrained circuit in the electricity grid. Prices on one side of the constraint are usually quite high while prices on the other side of the constraint are relatively low. A “high” spring washer is when the price differential across the constrained circuit is high.
Our investigation found the calculation and pricing process met all the requirements under the Electricity Governance Rules 2003 for final prices.
Our decision
We found that a UTS did not occur, as the situation did not threaten trading on the wholesale market for electricity and the pricing processes were carried out correctly.
Our analysis and conclusions are detailed in the following final decision paper.