The MIIS Eprints Archive

Calculation of a risk measure for the net system load profile

Russell, Ken and Cerone, Pietro and Challis, Vivien (2007) Calculation of a risk measure for the net system load profile. [Study Group Report]



The Independent Pricing and Regulatory Tribunal (“IPART”) regulates the prices electricity retailers can charge their default customers. This regulation takes the form of a default tariff. Currently, IPART considers the NSLP of each standard retailer, and any projected future changes in these NSLPs, before setting tariff levels for default customers.
In the process of constructing the default tariff, IPART assumes that the cost of purchasing energy is equal for all retailers. IPART also makes no allowance for hedging costs, which will vary depending upon the NSLP of the electricity retailer. If one retailer has more NSLP volatility than other retailers, their hedging costs for default customers will increase. Under the current default tariff structure, these increased hedging costs become an unrecoverable expense.
The aim of this project is to explore the volatility of Integral Energy’s NSLP, relative to that of other retailers, with a view toward developing a risk multiplier that accurately and reliably quantifies the volatility differences between NSLPs.

Item Type:Study Group Report
Problem Sectors:Energy and utilities
Study Groups:Australian and New Zealand Mathematics in Industry Study Group > 24th MISG [Wollongong 5/2/2007 - 9/2/2007]
Company Name:Integral Energy
ID Code:131
Deposited By: Richard Booth
Deposited On:25 Jan 2008
Last Modified:29 May 2015 19:47

Repository Staff Only: item control page