UTS 9 August 2021
We completed an investigation into an undesirable trading situation claim and concluded that no UTS occurred.
This investigation involved a lot of technical information. We would like to thanks all submitters for their time and insights.
On this page —
On 12 August 2021, we received a claim from Haast Energy Trading Limited (Haast Energy) and Electric Kiwi Limited (Electric Kiwi) that a UTS occurred on 9 August 2021 in relation to six trading periods (37 to 42). New Zealand faced the largest demand peak on record because of one of the coldest nights of 2021.
Two more parties subsequently joined the claim: Flick Energy Limited (Flick Electric) and Switch Utilities Ltd (Vocus New Zealand).
The claim alleged that the UTS was individually and jointly caused by Contact Energy Limited (Contact Energy) and Genesis Energy Limited (Genesis Energy) on the grounds that:
- Genesis Energy did not offer Huntly Rankine Unit 4 (HLY4) to the market, and
- Contact Energy had the Taranaki Combined Cycle station (TCC) available but did not run it.
Although not part of the claim, after an initial review of the data, we decided to also consider whether Transpower as the system operator contributed to the alleged UTS.
Our preliminary decision
After investigating the alleged UTS, we reached the preliminary decision that a UTS did not occur in relation to trading periods 37 to 42 on 9 August 2021.
We found the decisions made by the system operator and generators were reasonably open to them in the circumstances. The market operated as expected, and the events lasted for a relatively short time period.
As a result, there was no situation that threatened or may have threatened confidence in, or the integrity of, the wholesale market.
We invited feedback on the following preliminary decision paper which set out our investigation and findings.
Submissions on our preliminary decision
We received the following eight submissions from nine parties on our preliminary decision paper, with supporting letters from a further two parties. In summary:
- 4 parties supported our finding that there was no UTS
- 1 party stated it did not dispute our preliminary finding and noted this was a decision for us
- 4 parties were of the view that it was a UTS
- 2 parties did not endorse or disagree with our preliminary decision paper, but sought further information/clarification of our approach and specific points raised.
As a result of further information obtained in our investigation and consideration of submissions, we published the following supplementary consultation paper.
We invited feedback on whether it is appropriate for scarcity pricing to apply to trading periods 39 – 42 on 9 August 2021.
Submissions on our supplementary consultation
We received the following nine submissions from 12 parties on our supplementary consultation paper. In summary:
- 5 parties submitted it was appropriate for scarcity pricing to apply to the four trading periods
- 6 parties submitted it was not appropriate for scarcity pricing to apply
- 1 party did not respond to the question, but raised a number of related-matters.
Our final decision
We carefully considered all submissions and found that there was no UTS. The reasons for our decision are set out in the following final decision paper.
We would like to thank all those who provided valuable input into the investigation of this UTS and contributed to lessons learned.
Interim prices without scarcity pricing applied
We received an information request from Nova Energy Limited for the interim prices (without scarcity pricing applied) for the six trading periods (37 to 42) on 9 August 2021.
Our decision on this UTS is under appeal, along with decisions relating to a pricing error claim arising on the same date. The High Court hearing occurred on 27-28 February 2023. We are awaiting a judgment.