Spot market expectations on retailers
The Electricity Authority has introduced a market facilitation measure outlining its expectations on retailers offering spot price products to residential consumers (spot retailers).
The Authority expects all retailers offering spot price products to residential consumers to:
- Appropriately inform potential customers of the risks, as well as the benefits, of spot price products.
- At appropriate intervals, inform their existing customers of the risks and benefits of spot price products.
- At appropriate intervals, offer their customers options to manage spot price volatility.
- Be able to provide kWh and revenue data by month by region.
The Authority will continue to monitor how effectively spot retailers meet the expectations listed above.
This means spot retailers can expect requests for information from the Authority’s market monitoring team.
This information will help inform the Authority about the practices being used by spot retailers. In the event of a dry year or during shorter-term price spikes, having access to such information will allow the Authority to respond to any concerns raised by these consumers or by other stakeholders regarding these consumers.
If the Authority believes insufficient action has been taken by retailers offering spot price products, we may consider Code amendments to introduce mandatory requirements.
The Electricity Authority undertook a project ‘Spot prices and risk for consumers’ as part of its 2016/17 work programme to consider arrangements for explaining spot price risk to mass-market consumers, especially residential consumers exposed to the spot market.
With more residential consumers choosing spot price products, the Authority wanted to understand the current practices used by spot retailers to help their customers to manage the risks of such products.
The Authority sought information from spot retailers as part of its review into current practices. This included information from some spot retailers about their acquisition and management of residential spot priced customers and a survey with customers on spot price plans.
The review led the Authority to introduce a market facilitation measure outlining its expectations on retailers offering spot price products to residential consumers.
Market facilitation measures are actions the Authority can take to encourage changes in behaviour rather than require such changes by amending the Code.