UTS 14 August 2008

UTS claim

We received a claim from TrustPower that a UTS occurred on 14 August 2008.

The claim was about the settlement of non half hour purchase volumes from February to July 2008.

TrustPower alleged that because of a change in the reconciliation process under the Electricity Governance Rules 2003 (Rules), market participants had no certainty on their purchases or financial settlements.

Our investigation

During our investigation, we noted that, unlike all preceding UTS claims, this claim did not relate to prices or trading but to settlement issues.

On 14 August 2008, TrustPower lodged a claim that a UTS existed between February and July 2008 due to uncertainties or potential inaccuracies in the settlement of non-half-hour purchase volumes.

TrustPower alleged this uncertainty came from the introduction of Part J of the Rules, which changed the reconciliation process. These changes came into effect on 1 May 2008.

TrustPower claimed that by following the new process, participants who were incumbent retailers prior to 1 May 2008 would be financially disadvantaged compared with participants that were independent retailers.

We acknowledged this issue had been recognised by other sector bodies and exemptions were granted to address it.

Our decision

We found that a UTS did not occur in this instance as trading in the market was not threatened.

However, TrustPower’s UTS claim raised serious issues worthy of careful consideration and we began investigating whether an urgent Rule change could be brought in to address them.