Market Monitoring in the Australian Electricity Market

1
Market Monitoring in the Australian Electricity
Market

• Brian Spalding
• General Manager Power Exchange

2
Market Monitoring

• Division of Responsibility
• Regulatory structure
• NEMMCO and NECA
• NEMMCO
• Investigations
• Data to NECA
• NECA
• Surveillance and Monitoring Strategy
• Reporting
• Enforcement
• National Electricity Tribunal

3
National Market Regulation
National Electricity Law
Elect. Tribunal
NECA
(Enforcement - Disputes)
National Market Code
NEMMCO
(Competition - Trade Practices)

• Code Participants
• Generators
• Market Customers(Retailers)
• Participant End Use Customers
• Network Operators
• Traders

ASIC
(Financial Markets)
5 State Regulators
(Access regulated activities)
4
Weekly Average Price
Averages to 26 Aug 2000
NSW 28.77 Qld 47.05 SA 56.12 Snwy
28.69 Vic 28.45
5
Market Information

• Advance of trading
• Pre-dispatch, and PASA, Statement of
  Opportunities
• Progressive
• Regional demands/prices - each 5 minutes
• Next Day
• Scheduled generation and all bids

6
Predispatch, PASA SOO

Stmt of Ops
Medium Term PASA
ST PASA
Predispatch Schedule
0 day 1 week 1 year 1
year 2
7
Division of Responsibility

• Under the National Electricity Code, the primary
  responsibility for market monitoring and
  surveillance lays with the National Electricity
  Code Administrator (NECA)
• NEMMCOs role is limited to providing data to
  NECA and publicly reporting on system incidents
  that have potential to impact on system security

8
NEMMCOs Role

• Conduct reviews of significant operating
  incidents
• to assess the adequacy and response of facilities
  or services
• actions taken to restore or maintain power system
  security.
• Review must be made available to Code
  Participants and the public.
• Provide data to NECA under a protocol
• re-bidding activity and reasons
• dispatch compliance
• routine reports and data requirements

9
NECAs Role

• NECAs objective is to operate a light-handed but
  effective regulatory regime that emphasises
  voluntary Code compliance. However, NECA will
  move swiftly and appropriately in response to
  evidence that any market participants are not
  acting in good faith.

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NECAs Role

• Monitoring and Surveillance
• Monitor and respond to potential Code breaches
  through continuous and targeted monitoring of
  market participants and systems
• routine review of market operations using reports
  and data provided by NEMMCO
• random targeting of specific Code requirements
  and
• the monitoring and assessment of power traders
  and their ability to comply with the Code.

11
NECAs Role

• Monitoring and Surveillance (continued)
• Monitors variations between forecast and actual
  spot prices
• Determine reasons for deviations
• Where breach of TPA possible report to the
  Australian Competition and Consumer Commission
  (ACCC). This may lead to further action by the
  ACCC under the Trade Practices Act.

12
NECAs Role

• Investigations
• market events or practices
• allegations made by other parties and
• referrals by the ACCC under a memorandum of
  understanding (MOU) with NECA.
• NECA will report incidents where it finds that
  significant variations are caused by activities
  that in its opinion are inconsistent with the
  objectives of the market

13
NECA Investigations
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Enforcement

• The National Electricity Law provides for
  regulations, to determine the category (A, B, C)
  into which specific breaches of the Code fall.
• The National Electricity Tribunal has been
  established by legislation

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Enforcement

• The functions of the Tribunal are to
• review decisions by NEMMCO or NECA which are
  identified as reviewable decisions under the Code
  and the National Electricity Law
• act as a court of appeal where NECA imposes a
  category A civil penalty on a Code participant
  and
• determine applications by NECA alleging breaches
  of the Code by Code participants.

16
Results

• No breaches of Code progressed
• No actions under the Trade Practices Act
• NECA has attempted to introduce a code of ethics
• Stricter rules proposed on re-bidding
• NECA has issued some general be careful letters
• Some concerns over market power

17
Market Monitoring in the Australian Electricity
Market

• Brian Spalding
• General Manager Power Exchange