Monday 16th May 2011
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Mighty River Power said the Electricity Authority needs set out clear expectations of wholesale electricity market participants and penalise bad behaviour.
In an draft decision the authority said that an undesirable trading situation occurred on March 26 when spot power prices soared to $20,000 per megawatt hour north of Huntly, and said prices for the period should be reduced to between $1500 and $3000 per MWh. Mighty River Power chief executive Doug Heffernan said his company had provided a detailed response to the authority's draft decision. The final ruling needed to go further and it would be precedent setting.
There needed to be clarity to ensure that all participants were acting in the best interests of the market and penalties if participants did not behave appropriately.
"We believe there are additional factors that need to be considered by the authority when it resets prices in any undesirable trading situation - such as the likely customer response to reduce demand when provided with better and earlier information of very high prices.
"We also believe that where a undesirable trading situation is found by the authority and a party has been found to squeeze prices then the authority should remove the squeeze by adjusting that party's offers to pre-squeeze levels, otherwise it is in effect condoning the squeeze," Heffernan said.
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