TPM oral submissions published
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The Authority Board heard oral submissions on the transmission pricing methodology (TPM) proposal on 2 and 12 December 2019. Twenty-four submitters took the opportunity to present their submissions orally. We appreciate the time and effort made by submitters, particularly those who travelled to Wellington at short notice. Oral submissions were recorded and are available here.
The Authority is keen to engage further on specific issues. These issues were raised in submissions and the Authority considers they warrant further analysis and feedback.
The Authority will inform stakeholders of the next steps in the new year.
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The Authority and Consumer NZ have merged the What’s My Number and Powerswitch websites
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Since 2011, What’s My Number (WMN) and Powerswitch have worked together to help people check and switch their power deals.
We have now merged these two websites to make checking and switching even easier for consumers.
WMN’s savings calculator has been added to the Powerswitch website, and all WMN web traffic is now being automatically redirected to the new Powerswitch landing page.
It’s an initial step in working closely with Consumer NZ to create a more advanced single comparison website.
The merge is part of our wider programme of work to ensure New Zealand electricity consumers have easy access to clear information about different electricity deals and was supported by the Government in its response to the Electricity Price Review.
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ASX makes enhancements for market participants
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This week the electricity sector market makers voluntarily agreed to changes to increase confidence in the ASX traded electricity hedge market. From 13 January 2020 all four market makers, Contact, Genesis, Mercury and Meridian have agreed to reduce the bid-ask spread from 5% to no more than 3% and increase the volume of all market make contracts from 1 MW to 3 MW.
These steps support the Authority’s wider commitment to improving the hedge markets. The additional measures also complement a broader package of activities to manage risks associated with the known HVDC and planned gas outages in summer 2020. That package includes a new stress test scenario and more reporting and monitoring to ensure all participants understand the risks of potential outages and have the tools available to manage their risk.
The bid-ask spread of market made contracts is a key metric of market performance and it greatly influences the experience of purchasers and their confidence in the market. As well as increasing confidence in the efficiency of prices, a tighter bid-ask spread could facilitate more trading by non-market making parties.
Increased volume of market made contracts will improve market depth and increase participants’ confidence in the futures market.
The ASX and the four market makers have agreed that the changes to market making will take place from 13 January 2020.
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Applying for an exemption from the Code – 2020 dates
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Participants may apply for exemptions as a temporary release from an obligation in the Electricity Industry Participation Code 2010 (Code). It is intended, for example, to provide a participant time to comply with the Code, or to suggest a Code amendment.
The Authority's Compliance Committee considers most exemption applications. As the Committee generally meets only six times a year, we have published the Compliance Committee meeting dates. For each meeting date we have included the date by which we would need to receive an application so it can be considered at the meeting. If you intend on applying for an exemption, please allow enough time for us to process your application so that the Committee may consider it.
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Advanced notice of release of discussion paper – Review of spot market trading conduct provisions
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The Market Development Advisory Group (MDAG) are planning to release a discussion paper early in the new year. The discussion paper will cover the MDAG’s review of the current provisions and describe the MDAG’s proposed change, focussing on trading conduct when parties are pivotal. The MDAG looks forward to receiving your feedback.
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Happy holidays and office hours
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Our office will close on Tuesday, 24 December 2019 and we will reopen on Friday, 3 January 2020.
The Board and staff of the Authority would like to thank everyone who has participated in our work in 2019. It has been a busy year and we appreciate the time given to submissions and discussions.
We wish you all the best for the festive season and look forward to working with you again next year.
We will publish the next edition of Market Brief on Tuesday, 14 January 2020.
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