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Potential Critical Contingency (April 2015)

Gas Industry Co has issued a report ‘Potential Critical Contingency on 15th April 2015 – Analysis of Data’. The report can be found under Related Documents below.

Maui linepack on 14 and 15 April 2015 fell to levels that caused the Critical Contingency Operator (CCO) to issue a ‘Notification of Potential Critical Contingency’. Gas Industry Co was concerned that the situation was triggered by market operations behaviour rather than a physical supply problem.  The Report was conducted in response to broad stakeholder interest in the event, and limited public visibility of data surrounding it. 

In summary, the Report concludes the linepack fall was caused mainly by a steep decline in Running Operational Imbalance (ROI) at transmission pipeline welded points, and that this was attributable principally to shippers on Vector’s North and South-Kapuni-Frankley Road (SKF) Pipelines drawing more gas from the Maui pipeline than they had contracted for.

The event highlighted the ineffectiveness of the current Imbalance Limit Overrun Notice (ILON) process. The report notes that the introduction of daily cash-outs under the new Maui pipeline market-based balancing regime to take effect from 1 October 2015 will prevent such imbalance accumulations at welded points and incentivise all pipeline users to improve primary balancing.

To assist its analysis, Gas Industry Co formally requested gas transaction information from relevant participants under the Information Gathering Protocol. This was not wholly effective and the investigation was hindered because two retailers declined to provide the data requested. Consequently, Gas Industry Co will review the information gathering arrangements, in particular the role of the Protocol. 

Page last saved: October 31, 2016
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Level 8, The Todd Building
95 Customhouse Quay
PO Box 10-646
Wellington 6143

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