Process for consolidating spot price risk disclosure
Disclosing participants may apply to the Electricity Authority to consolidate spot price risk disclosure statements. This page sets out the process.
It can be more efficient for two (or more) companies to submit one set of consolidated disclosure statements.
Who can consolidate?
Both parties have to be disclosing participants. Under Part 1 of the Code, ‘disclosing participant’ means either of the following:
- a person who consumes electricity that is conveyed to the person directly from the national grid
- a person who buys electricity from the clearing manager.
Note that if a notice under clause 1.5(4) of the Code is in force, ‘Participant A’ to that notice is the person who buys electricity from the clearing manager, and this may change the requirements to submit spot price risk disclosure statements.
The criteria for allowing consolidation are:
- the first party's risk must be wholly absorbed by the second (disclosing) party
- this must be demonstrated by an arrangement covering electricity purchase between the parties
- in the case of parties not closely related, the arrangement must be a written contract between them
- a director, chief executive or chief financial officer for each party must certify existence of the arrangement or contract and consent to the consolidation on behalf of the party.
The consolidation process
If two or more parties wish to consolidate their disclosure statements they should submit an application to us by email with 'Stress testing consolidation application' in the subject line.
The email should describe the extent to which the parties comply with each of the criteria above and include attachments (as necessary) to support the application. This process can be initiated at any time in the reporting cycle.
We’ll consider the application according to the criteria listed above and either approve or decline it. If the application is declined, the Authority will notify the parties stating the reasons for the decision.
If the application is approved, the Authority will:
- notify the parties of the approval and any conditions
- advise the registrar that a consolidated statement is expected from one of the parties and that the other party is exempted.
The disclosing party’s disclosure statement must note the identity of any parties that are covered by the consolidated statement.
The approval is automatically withdrawn if the criteria are no longer met.
If the circumstances change and the participants no longer qualify they must send notice to the Authority as soon as practical. The Authority will advise the registrar and will confirm the change in writing to the relevant participants.
Questions and feedback on this process can be sent by email to our market operations team with “stress testing” in the subject line.