UTS 24 April 2004

UTS claim

We received a UTS claim from TrustPower about events leading to price spikes at nodes in the Bay of Plenty on 24 April 2004.

The claim alleged that dispatch prices for trading period 36 did not accurately reflect actual market conditions.

Our investigation

On 20 April 2004, Transpower, as system operator, advised participants that a new constraint was to be added to the Scheduling, Pricing and Dispatch (SPD) model to manage power flows during periods of low generation elsewhere in the system.

The constraint was due to be removed once the low generation was rectified. However, by way of error, the constraint was not removed.

Due to these events, the SPD produced, in accordance with standard procedures, a very high provisional price of $8,242.67/MWh and the “spring washer” effect resulted in a range of prices affected by the same inputs at a number of other nodes.

In the circumstances leading up to the alleged UTS, there were no pricing signals to indicate (to the system operator or the participants) the presence of a constraint or the need for action to adjust to a constraint.

Our investigation found that if the constraint above had been removed from the SPD, price results would have been considerably different.

As we believed a UTS existed, we instructed the pricing manager to delay the publication of final prices and consulted with affected parties before ordering these to be recalculated.

Submissions

Thank you to all who submitted. Here is the summary of submissions and associated documents:

Our decision

We found that, by reason of Transpower error, a UTS existed during the relevant trading periods.