Code obligation to submit spot price risk disclosure statements

Under the Electricity Industry Participation Code 2010 disclosing participants must prepare and submit spot price risk disclosure statements every quarter.

This article explains which participants need to submit these statements, when, why, and the consequences of non-compliance.

Who is a disclosing participant?

A disclosing participant is:

a) a person who consumes electricity that is conveyed to the person directly from the national grid

b) a person who buys electricity from the clearing manager.

When are statements due?

Disclosing participants must prepare and submit spot price risk disclosure (stress test) statements every quarter to the stress test registrar, no later than 5 business days before the beginning of the quarter to which the statement relates.

A participant’s obligations in relation to spot price risk disclosure statement is set out in more detail in the Code in subpart 5A of Part 13.

What happens with the statements?

The stress test registrar collates the results and provides them to the Electricity Authority in a format that ensures individual participants are not identified. The Authority publishes the results on the EMI website.

Why spot price risk disclosure statements are important

Spot price risk disclosure statements enhance transparency and facilitate effective risk management in the market.

The rapid uplift in wind and solar electricity generation is contributing to greater volatility in electricity spot prices. This volatility can present challenges in managing spot price risk.

Industry participants use risk management contracts to mitigate their spot price risks. The specifications of these contracts are evolving to meet the changing needs of the market.

What happens if participants don’t comply?

Failure to submit spot price risk disclosure statements by the due date may be a breach of the Code. Breach notifications can be submitted to the Authority and will proceed through our breach process.

About the breach process and potential enforcement

More information

You can find more information on stress tests and how to apply stress testing to your business on our website. If you have any questions, contact compliance@ea.govt.nz

About stress tests