NZ Electricity Reconciliation 101

Author: Malcolm Souness, Director, 221b Limited

A five minute overview of electricity volume reconciliation in the New Zealand electricity market (for Distributors)

Why Volume Reconciliation
The purpose of electricity reconciliation is to ensure that generators and users of electricity are allocated the correct volume of energy for each half hour trading period. Payments from traders to generators are made on the basis of half hourly prices.

Big Picture
Electricity Authority sets the rules - Electricity Industry Participation Code
MEP collects data from meters (the Code, Part 10)
Participants maintain registry information (the Code, Part 11)
Traders normalise data and estimates into calendar month periods per location
Reconciliation Manager loss adjusts and allocates data to trading periods, balancing load and generation against known POC (/GXP) data. (the Code, Part 15)
Clearing Manager applies prices to each trading period and POC (the Code, Part 14)
Traders make payments to and from NZX to settle demand and supply position

Retailer Processes
Electricity retailers normalise meter readings into calendar periods
HHR data are aggregated to Reconciliation Type, Network, POC, Loss Code, Dedicated NSP, Flow Direction, Trading Date and Trading Period.
NHH data are aggregated with the exception of Trading Date and Trading Period.
ICP days are aggregated to POC, Network and Submission type (HHR / NHH).
Files are transmitted to Reconciliation Manager by 16:00 day 4.

Reconciliation Manager Process
Receive files from Traders, Registry and Transpower
Apply loss factors, profiles and seasonal shape to aggregated data per GXP
Apply scaling to missing ICP days to correct for missing data.
Subtract known HHR demand from known HHR supply, then apply profile shapes to aggregate volumes submitted to match the difference.
Unaccounted for electricity (UFE) is the outstanding difference, allocated to traders based on market share.
Generate reports for Traders, consider volume disputes, then transmit HHR volume allocation data to Traders and Clearing Manager.

Settlement Process
Prudential payments are made to the Clearing Manager, based on forecast demand and prices.
Generation data and hedges lodged with the Clearing Manager can offset prudential requirement.
Clearing Manager applies final HHR prices to generate invoices for each Trader.
Trader makes or receives payment on the outstanding balance.

Reconciliation Manager Reports for Networks
Reconciliation Manager publishes reports for networks
Volume billed (supplied to customer) = As Billed
Volume submitted to market = Replacement Normalised
Volume allocated by Recon Manager = GXP volume
Unaccounted for Electricity = Loss Variance

Further Information is available from the Electricity Authority of New Zealand.
Reconciliation Manager Overview
Clearing Manager Overview