GENERAL: PLU: Pulse Utilities rejects late payment allegations

25 Aug 2010 3:45 pm

PLU 25/08/2010 GENERAL

REL: 1545 HRS Pulse Utilities New Zealand Limited

GENERAL: PLU: Pulse Utilities rejects late payment allegations

MEDIA RELEASE 25 August, 2010

Pulse Utilities rejects late payment allegations

Electricity retailer Pulse Energy has moved quickly to reject suggestions that it was responsible for the series of events that affected wholesale electricity payments from the Clearing Manager to market participants last week

The Energy Clearing House, which facilitates transactions between Generators and the Retailers who buy electricity off them, oversees trades of $200 million to $300 million worth of electricity each month. Trades have to be settled on the 20th of each month but an investigation has been launched, by the Electricity Commission, after the Energy Clearing House failed to make any payments to market participants on Friday.

The Commission has received breach allegations against Pulse Utilities in relation to a much smaller alleged non-payment - but Pulse CEO Dene Biddlecombe is adamant that Pulse is not responsible for the breach:

"The allegation is that a payment was outstanding as at 4.30pm on Friday afternoon. Clearly this wasn't Pulse as we settled our trade account sometime before 3.20pm that day".

Mr Biddlecombe produced a Payment Confirmation and an email, both from ANZ, confirming that the transaction was completed prior to 3.30pm on Friday the 20th. He also referred to Point 7.2.1 on the Ministry of Economic Development website which stipulates that such payments must be made by 1600 (4pm) on the 20th Calendar day of the month. (http://www.med.govt.nz/templates/MultipageDocumentTOC____8279.aspx)

"We have complied with all requirements and are not responsible for the series of events which took place between Friday afternoon and Monday morning".

Responding to the media allegations that infer it was Pulse's payment that caused payments to electricity generators to be frozen, Mr Biddlecombe stated:

"It is nonsensical to suggest that a payment of just under $700,000 which was paid more than an hour before bank transactions closed for the day would effect generator payments reported to amount to $310 million. The Rules provide for liquid prudential requirements to cover this type of situation. This debacle simply illustrates how urgent the need for reform of the system is.

We have consistently paid for our electricity early. The fact that Pulse Energy should be mentioned as even remotely responsible for the failure of the entire electricity payment system is typical of the bullying that Pulse Energy continually faces as a new entrant to market."

For more information contact: Dene Biddlecombe Chief Executive Officer Pulse Utilities Tel: 09 304 1170 Email: dene.biddlecombe@punz.co.nz

About Pulse Energy: Pulse Energy is the trading name of Pulse Utilities New Zealand (PUNZ). Incorporated in 2004, the company was listed on the NZAX in 2007. www.punz.co.nz

[ENDS] End CA:00198820 For:PLU Type:GENERAL Time:2010-08-25:15:45:17

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