Monitoring, compliance and enforcement
Review of spot market trading conduct provisions
Review of the trading conduct provisions by the Electricity Authority and Market Development Advisory Group.
Overview
Following a comprehensive review involving multiple stakeholder consultations and expert panels to test options, we decided to introduce a new trading conduct rule (effective from 20 June 2021).
The new rule replaces the high standard of trading conduct provisions (clauses 13.5A and 13.5B and the definition of ‘pivotal’) in the Electricity Industry Participation Code 2010.
Under the new rule, generators and ancillary service agents are required to ensure any offers they make in the wholesale electricity spot market are consistent with offers they would have made in a market where no party could exercise significant market power.
Timeline
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1 June 2021
Decision —New trading conduct rule from 30 June 2021
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9 February - 23 March 2021
Consultation —Proposal to replace the high standard of trading conduct provisionsView consultation -
15 December 2020
Report —MDAG's final recommendations on trading conduct provisions
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22 October - 5 November 2020
Consultation —Supplementary consultation: MDAG's review of trading conduct provisionsView consultation -
15 September 2020
Development —MDAG evaluation panels
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25 February - 27 May 2020
Consultation —High standard of trading conduct provisions: MDAG reviewView consultation -
30 July 2019
Event —MDAG stakeholder briefing on its trading conduct provisions review
Project background
The trading conduct provisions came into effect in June 2014 and have been tested by various events in subsequent years.
In November 2017, we asked the Market Development Advisory Group (MDAG) to investigate the trading conduct provisions in light of those events and provide recommendations to ensure the provisions are effective in promoting outcomes consistent with workable competition.
There are a broad range of trading conduct issues the provisions could cover. MDAG focused on trading conduct when parties are pivotal ie, they do not face competition, usually in the short term, for some portion of their supply.
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