NOME auction decisions reached by RAE, the Regulatory Authority for Energy, and conditions set through a legislative revision which, admittedly, lacks full clarity, have introduced a series of restrictions whose basic objective is to limit the utilization of low-cost electricity obtained at the NOME auctions by traders exporting to foreign markets.
Final decisions on the distribution of electricity amounts to be offered through the year’s four NOME auctions, as well as conditions that need to be met by participating suppliers, are now in the making.
The RAE decisions, which differ to a LAGIE (Electricity Market Operator) plan recently forwarded for public consultation, will be implemented at the year’s first auction to be staged on February 7.
According to the terms, suppliers who took part in previous NOME auctions will need to prove that that they have supplied electricity to consumers – even just one – for an uninterrupted period of at least one month. Otherwise, firms will not be eligible to take part in the next session. This term effectively excludes traders from the NOME auctions.
Newcomers to the NOME auctions will need to present extensive, and convincing, business plans to qualify for participation. If these plans are not approved, interested parties will not be permitted to take part.
LAGIE has been tasked with examining all suppliers for correlations between electricity amounts purchased at NOME auctions, respective retail market shares, as well as electricity export amounts. The operator’s findings will be relayed to RAE.
A total of 1,711 MWH/h will be offered at the four NOME auctions planned for 2018. This amount includes a 594-MWh/h penalty quantity resulting from the main power utility PPC’s failure to reduce its retail electricity market share to 75.24 percent by the end of 2017. The utility ended last year well over this level, registering an 85.34 percent market share.
The first, second and third NOME auctions this year – scheduled for February 7, April 18 and June 18 – will each offer participants 400 MW/h, while a 511-MW/h electricity amount will be offered at the final session, scheduled for October 17. However, these amounts could be revised following a review of the NOME auctions in June.
The 1,711 MWH/h currently planned to be offered in 2018 represents 19 percent of electricity consumption in the previous year. This quota will rise to 22 percent in 2019.
According to the bailout terms, PPC will need to reduce its retail electricity market share to 62.24 percent by the end of 2018 and 49.24 percent by the end of 2019.
The NOME auctions were introduced slightly over a year ago to offer independent suppliers access to PPC’s low-cost lignite and hydropower sources.