14OMeaning of qualifying contract and net contract position

14O Meaning of qualifying contract and net contract position

14O Meaning of qualifying contract and net contract position

(1) A qualifying contract of a liable entity is a contract or other arrangement to which the liable entity is a party—

(a) that—

(i) is directly related to the purchase or sale, or price for the purchase or sale, of electricity from the wholesale exchange during a stated period; and

(ii) the liable entity entered into to manage its exposure in relation to the volatility of the spot price; or

(b) of another type prescribed by the Rules to be a qualifying contract.

(2) However, a qualifying contract does not include a contract or arrangement mentioned in subsection (1)(a) that is prescribed by the Rules to be an excluded contract for the reliability obligations.

(3) A liable entity’s net contract position during a particular period is—

(a) the number of megawatts of electricity to which the liable entity’s qualifying contracts under subsection (1) relate for the period; and

(b) adjusted in accordance with the Rules to account for the likelihood that, despite the qualifying contracts, the liable entity retains exposure in relation to the volatility of the spot price during the period.

(4) In this section—

spot price means the price for electricity purchased from the wholesale exchange in a region determined in accordance with the Rules.

s 14O: Ins 2019 No 10, sec 7.