Stage: II (Review) Status: Complete Date commenced: 10/05/2012

This review established that high reserve prices were facilitated by Meridian Energy Ltd (Meridian) purchasing the right to offer interruptible load associated with the Tiwai Point aluminium smelter into the South Island market, at a price determined by Meridian.

The review considered the effect on competition of this particular instance of the transfer of offer rights under a contractuall arrangement.

The review concluded that the transfer of offer rights can lead to a reduction in competition, and that it may be desirable to consider amendments to the Code to restrict this type of activity. The review also concluded that security of supply was not impacted, as net levels of hydro storage in the South Island were maintained.

We replied to Genesis in respect of their comments on the review into local net pivotal generation as well as this review, as a number of issues raised by Genesis applied to both reviews.