Anne Herrington is a founding partner of Smart Power and as such has been with the company since 1993. Prior to that she worked in the early development of the wholesale market with the Electricity Corporation of New Zealand (ECNZ).
Anne has a Diploma in Energy Management and extensive experience in the New Zealand energy market and energy pricing sectors. As well as advising Smart Power customers on energy pricing issues (wholesale market products, spot market exposure etc) and general energy management, she was a consumer representative on the Electricity Commission's retail advisory group.
Anne has also been a member of, or chaired, other advisory groups for the Commission. Anne's detailed knowledge of the electricity market is invaluable when producing submissions on industry issues for our clients.
UTS Update
The EA has published the following in its market brief of 8 May.
"In July 2011 the Authority decided that the events of 26 March 2011 were an undesirable trading situation (UTS) under the Code. Genesis, Contact, Bay of Plenty Energy and Todd Energy appealed against the Authority's decision, but were unsuccessful in the High Court. Genesis subsequently sought leave to appeal the High Court's decision.
On Monday the High Court granted leave for Genesis to appeal against the High Court's decision. At the same time, the High Court also lifted the order that prevented the Authority from publishing the revised interim prices for 26 March 2011 as final prices. The Authority is now taking steps to implement the lifting of the stay on final prices.
While the decision of the court cannot be known in advance it is likely that if the appeal is successful then the court will direct the EA to review their decision and after doing that there is the possibility that they could come back with different pricing. So the prices which are about to be made final could still change (although we consider that fairly unlikely). The publishing of the prices means that Retailers will now be asked to pay for energy used on that date. It is expected that this will happen within the next week. Retailers will then be able to finalise pricing to their customers.
The EA has not yet arrived at a mechanism for handling settlement if the final prices were to be changed at some point in the future as this has not occurred previously. We will keep you posted. "
Increasing Power Factor charges
A couple of months ago Get Smart featured an article about why Power Factor is important. The message was " its important to you because poor Power Factor can cost you cold hard cash". This month we are covering Power Factor again as Vector has introduced extra charges for poor power factor on some pricing plans and we don't want to see consumers being caught with increased costs that they could easily avoid.
Poor power factor means that the network is being used inefficiently. If not corrected, the network will eventually require additional capacity to be built, costing everyone on the network money. This is why network companies give financial penalties to consumers to incentivise them to correct poor power factor.
So what is happening with Vectors new power factor penalties? At present the new charge is set at a very low level and for a lead in period there will be a negligible impact on consumers invoices. However Vector has indicated that following a marketing push over the course of this year that they will be increasing their charges significantly.
They have signalled to Smart Power that we should be working with our customers now as the increase should be sufficient to enable affected consumers to build a business case for installation of power factor correction equipment.
To put some numbers into the mix, if your highest kVAr value in April was 35, you would be charged $1.05 on the Vector network, however on the Wellington network you would be charged $294.95, or 281 times as much!
We are well aware that approval for capital expenditure is not generally completed overnight and usually needs to be built into budgeting cycles. So now is the time to act to ensure that you are not caught out with months of substantial power factor charges.
Just to recap on our previous advice
- Check your power bill and if the network charges contain something called power factor penalty or reactive charges then you've most likely got poor power factor and its costing you money (and in the case of customers in Vectors area next year the costs will most likely rise substantially);
- If you have installed power factor correction in the past then make sure that it is checked on an annual basis to maintain it and ensure that it is still working and also that it meets your current needs.
If you're not sure how to handle this or if you don't have the time to do it yourself then Smart Power offers a cost effective and hassle free service which that will make sure your network charges are minimised and profits aren't leaking away in unnecessary network charges.
If you have any questions or if you want to discuss your requirements, please contact:
Anne Herrington
anne@smartpower.co.nz
021 470 308