Inefficient price discrimination in very large electricity contracts
Date published 31 Oct 2022, 09:00 am
The Electricity Authority is consulting on a change to the Electricity Industry Participation Code.
Consultation overview
In August 2022, the Electricity Authority (the Authority) decided to make an urgent amendment to the Electricity Industry Participation Code (the Code). This change prohibits generators from giving effect to contracts of net 150 MW or more, unless certain conditions are met.
The Authority is now consulting on making this amendment to the Code permanent. The consultation runs from 18 August to 31 October 2022, and a decision on the amendment will be made in May 2023.
Our recommendations
Our submission broadly supports the Authority's proposed Code amendment. Our full recommendations to them state that we:
- support the proposed amendments to the Code addressing the prospect of inefficient price discrimination
- suggest this proposal ensures the Authority is meeting its expanded mandate to include small consumers in its assessments and not solely focusing on the wholesale pricing impact
- recommend that the Authority reconsider investigating the over the counter (OTC) contracting between generator-retailers and independent retailers
- suggest amending Clause 13.269(1)(b) proposed Code wording.