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Efficient network infrastructure investment and operation

Removing Schedule 14.3 of the Code

To reduce the costs of running the Financial Transmission Rights (FTR) market we proposed to remove the rentals calculation and allow the FTR market to settle using all available Loss and Constraints Excess (LCE).

  • Wholesale
  • Innovation

    • Overview

    We've decided to retain schedule 14.3 of the Code as we believe it is crucial to maintaining a market that provides long term benefits to consumers. We are currently undertaking a review of the (FTR) market during which we will retain Schedule 14.3, providing regulatory certainty whilst the review is underway.

    We initially investigated removing Schedule 14.3 of the Code to enable operational cost savings in the Financial Transmission Rights (FTR) market.

    Development

    Past activity

    Project background

    The Financial Transmission Rights (FTR) market has grown to the point that an average of 90% and sometimes up to 100% of the loss and constraint excess is allocated to the settlement of the FTR market.

    To support a more efficient process we are proposing to allocate 100% of the loss and constraint excess (LCE) to the FTR market and continue to return any unused portion to transmission customers via Transpower. This will increase efficiencies for participants and reduce costs because there will be no need for a costly and maintenance-heavy software program to calculate the LCE payments.

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