Authorities identify misuse of NOME order electricity amounts

Certain NOME auction participants appear to have misused electricity amounts acquired through the recently introduced auction procedure, according to LAGIE, the Electricity Market Operator, and RAE, the Regulatory Authority for Energy.

NOME auctions were introduced last October in an effort to break the main power utility PPC’s market dominance by offering independent traders access to PPC’s low-cost lignite and hydropower sources.

Low usage rates for NOME auction orders identified by LAGIE raised suspicions that certain auction participants may have acquired electricity amounts for reasons other than those intended by the auction mechanism’s design.

These participants are suspected of having overstated actual electricity amounts ordered with the aim of manipulating daily energy schedule clearance rates.

According to RAE, data provided by LAGIE showed unusual discrepancies, especially during low-demand periods. Average usage tariffs displayed major fluctuations measuring as much as 60 percent in some cases.

Covering the time period between December 1 and January 12, these unusual patterns concern electricity amounts offered through last October’s inaugural NOME auction.

In response, RAE, backed by LAGIE, has decided to make revisions to the NOME auction regulations.