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Three appeals against Electricity Authority finding

Tuesday 19th July 2011

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Three appeals have been filed against the Electricity Authority's decision to cut spot market prices that spiked on March 26.

The authority decided to reduce to a maximum of $3000 per megawatt hour the prices from Genesis Energy's Huntly power station that had climbed to around $19,000.

It found an undesirable trading situation (UTS) arose when national grid operator Transpower closed part of the grid to upgrade lines into Auckland.

After the price spike, 35 claims of a UTS were made to the authority relating to the offer behaviour of Genesis Energy at the time.

A combined appeal from Bay of Plenty Energy and Todd Energy, and appeals from Contact Energy and Genesis have been filed in the High Court at Wellington.

Genesis said the authority's decision to take corrective action as a result of its final decision that a UTS occurred on March 26 directly affected the final prices achieved by Genesis for the electricity it supplied.

The authority erred in law by applying a wrong legal test and/or misdirected itself as to the correct legal test in determining that a UTS had developed, Genesis said.

The combined appeal from Bay of Plenty Energy and Todd Energy said the authority failed to properly identify the contingency or event said to comprise the UTS.

It also said the authority wrongly concluded that any such contingency or event threatened, or may threaten, trading on the wholesale market for electricity.

Contact Energy's appeal said the authority applied too low a threshold for determining what was outside the normal operation of the wholesale electricity market.

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