The High Standard of Trading Conduct (HSOTC) provisions regulate the behaviour of generators and ancillary service agents when they make offers for the supply of generation and instantaneous reserves to the New Zealand wholesale electricity market in locations where, and periods when, competition is weak.
The Market Development Advisory Group (MDAG) consider the provisions to lack certainty. They proposed a new set of rules in a discussion paper in February 2020. After considering feedback from submissions and the findings from the evaluation panels process, the MDAG changed some aspects of its original proposal.
The MDAG proposes that the Electricity Authority replace the current HSOTC provisions in the Code (clauses 13.5A and 13.5B and the definition of “pivotal”) with the operative clauses that were consulted on in the February 2020 discussion paper (with minor drafting changes) and with more concise purpose clauses. This proposal is expected to improve the efficiency of wholesale electricity spot prices in circumstances where competition is weak.