It remains unclear whether certain electricity export restrictions will be imposed on participants of the year’s first of four NOME auctions, whose new date has just been been rescheduled for February 7 from January 17, new terms forwarded for public consultation by LAGIE, the Electricity Market Operator, have indicated.
According to pundits, the new terms proposed by LAGIE would introduce some sort of monitoring system, but, beyond that, no export limits are specified.
A related legislative amendment delivered by the energy ministry to parliament, and ratified, is vague.
According to market pundits, the only certainty promised by LAGIE’s terms is an immediate elimination of export restrictions previously set by RAE, the Regulatory Authority for Energy.
For the most recent NOME auction, held in October, RAE introduced a term that required participants to have supplied at least 30 percent of electricity amounts purchased at preceding auctions to the domestic market in order to qualify for the session. RAE had also set terms for 2018, increasing this domestic supply quota to 50 percent as a prerequisite for participating in auctions during the first half and 70 percent for auctions in the second half of the year. According to these RAE terms, newcomers faced lighter conditions and could have qualified for NOME auctions throughout 2018 having domestically supplied 30 percent of their auction electricity purchases.
Revised export limits will need to be legislated as the monitoring system, alone, is not expected to prove effective, pundits insist.
Besides the confusion caused by the proposed monitoring system’s lack of clarity, independent electricity suppliers have also reacted against a condition requiring them to submit business plans to market authorities for appraisal, despite a lack of familiarity by the latter of respective company strategies and challenges. This requirement promises to add to the difficulties faced by independent electricity suppliers, seeking to forge appropriate policies for survival in a tough market.
According to the new NOME terms proposed by LAGIE, all electricity suppliers will need to accompany registry applications with annual retail electricity market penetration plans, including targets for each quarter of the year. Other application requirements include rundowns of how NOME electricity amounts will be used by suppliers as well as substantiated analyses of economic benefits to be offered to electricity consumers.
LAGIE has also proposed offering independent electricity suppliers an additional 594 MWh/h at the next NOME auction, on top of the original electricity amount of 1,126 MWh/h, as the main power utility PPC’s market share did not drop to a bailout target figure of 75.24 percent by the end of 2017. It ended the year at 85.34 percent.
LAGIE’s public consultation procedure is scheduled to conclude on January 24.