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Market Brief - 21 April 2020
Welcome to Market Brief, the Electricity Authority’s weekly update on regulatory and market developments.

Contents

COVID-19 advice for consumers

The Authority is working with other agencies to make sure consumers have the right advice about their electricity during COVID-19. We have published advice for consumers and we have started a campaign to encourage consumers to talk to their retailer and check they are on the right plan.
Visit the webpage

Participant audits will help maintain industry confidence through COVID-19 pandemic

The Authority has issued a memo confirming how participant audits required under Part 16A of the Code can continue during the COVID-19 lockdown period.
 
Industry can be confident that that the transparency and accountability provided by audits will continue during the lockdown period.
Read memo

COVID-19 Issues Working Group: Summary of issues 

The COVID-19 Issues Working Group (CIWG) has met a few times over the past couple of weeks to discuss COVID-19 related issues being experienced by consumers and industry participants. You can read more about the CIWG and who participates on our website.
 
The CIWG has published a summary of the main issues identified to date. The summary has been prepared by the Secretariat and as such reflects its views rather than the views of individual members.
Read summary

Work programme report for the eight-month period to 29 February 2020

We have published our work programme report for the period covering 1 July 2019 to 29 February 2020. This is a progress report against the updated work programme that we published in February 2020.
 
The updated 2019/20 work programme and the 8-month report are available on our website.

Hedge Market Enhancements consultation paper released

The Authority is reviewing the current market making arrangements to design and implement a sustainable solution for the long-term benefit of consumers. We would like to thank our stakeholders who have provided significant feedback so far.
 
We have published a consultation paper Hedge Market Enhancements: Ensuring market making arrangements are fit-for-purpose over time. The paper identifies six possible approaches to an enduring solution that sit along a spectrum of regulatory intervention; from a voluntary arrangement between the ASX and market makers, a commercial arrangement between the Electricity Authority and market makers, a regulatory approach requiring parties to market make, and a combination of all approaches.
 
We are now inviting stakeholder views. We are particularly interested in feedback on whether the approaches and trade-offs identified in the paper are the most relevant to support a decision for the long-term benefit of consumers.
 
The consultation period closes at 5pm on Tuesday 16 June 2020.
 
The Authority Board will decide on the high-level approach for market making in August 2020.
 
Read consultation paper and further information
 

TPM CBA presentation registrations close today

On Friday 17 April, the Authority published an information paper on its revisions to the cost benefit analysis that supported the Transmission Pricing Methodology: 2019 Issues Paper, in response to feedback received. Associated code and tables were also published.
 
We will deliver a presentation on this paper through a webinar on 28 April 2020, with an opportunity for questions and answers.   
 
Registrations for the webinar close at 5:00pm today. Please email tpm@ea.govt.nz if you would like attend. Information about the webinar will be sent to registered parties.
 

Hedging with base load futures

The settlement process for electricity futures contracts traded on the ASX, and its implications for building and holding a hedging position, can be complex. The Authority has developed a simplified tutorial to demonstrate the main aspects of how a position is maintained each day along with the ultimate settlement outcome. The tool will help promote a broader understanding of the process within the risk management community.
 
This tool uses historical wholesale price and futures settlement data to demonstrate the outcome associated with holding a single baseload futures position. Different purchase dates and levels of cover can be simulated to illustrate the possible outcomes. The tool will be updated quarterly as futures contracts mature.
Try out the tool

Response to Distributor feedback on the system operator AUFLS data requirements 

The Authority published the system operator’s proposed Automatic Underfrequency Load Shedding (AUFLS) data specification in January 2020. Feedback on the specification was received from PowerCo Limited, Vector Limited and Energy Market Services.
 
The following response answers the queries raised by both Vector and PowerCo regarding the proposed direction of the Extended Reserve project and how the system operator will use the data requested.
Read more

Reminder: Compliance investigations commenced and open for participants to join – deadline 27 April 

The Authority has commenced investigations into the following alleged breaches of the Electricity Industry Participation Code 2010 (Code):
  • Energy Clearing House Limited as the clearing manager alleged that Auckland Commercial failed to provide the minimum security by the 4pm deadline on four occasions.
  • WEL Networks Limited (WEL) alleged that Pioneer Energy Limited electrically connected an ICP supplying a newly constructed retirement village to its network without first having written approval from WEL.
  • The Authority alleged that WEL changed the ICP identifier for an ICP associated with a builder’s temporary supply (BTS).
  • The Authority alleged that eTrading did not submit a final audit report to the Authority by the date specified. Subsequently eTrading did not maintain certification as a reconciliation participant.
Participants who consider they are affected by any of the above matters being investigated may join as a party to the investigation. To join an investigation, participants should notify the investigator no later than 27 April 2020. The investigator’s contact details are in the notices of investigation on our website.
Read investigations

High Standard of Trading Conduct discussion paper – reminder and offer for conversations

The consultation period for the Market Development Advisory Group’s (MDAG) discussion paper reviewing the ‘High Standard of Trading Conduct’ provisions is still live, closing Monday, 4 May.
 
This will be followed by a cross-submissions period, closing Wednesday, 27 May.
 
The MDAG are available for conversations if you would like to ask questions about the discussion paper to better inform your submissions. Send questions to: MDAG@ea.govt.nz.
 
More information, including a fact sheet, is available on our website.

Current consultations

High Standard of Trading Conduct provisions: a review by the MDAG discussion paper

Ending: 04/05/2020 5pm

Read more
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Tel: + 64 4 460 8860   Email: info@ea.govt.nz
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