Knowing procedures to produce, sell electricity vital: ICCC

THE Independent Consumer and Competition Commission (ICCC) says knowing the requirements and licence application procedures to produce and sell electricity is important to ensure participants comply with the law.
Commissioner and chief executive officer Paulus Ain said the third-party access code was formulated in accordance with the ICCC Act 2002. It outlined the requirements and the licence application procedures to carry out operations in the electricity supply industry.
Ain said the code provided the overarching regulatory framework for third-parties intending to sell across a network owned by an incumbent transmission network owner such as PNG Power Ltd.
The code sets out the pricing mechanisms and arrangements for accessing the transmission and distribution networks owned by PNG Power.
The commercial arrangement for sale and purchase of wholesale power is captured under a power purchase agreement (PPA).
A PPA is a contract between an Independent Power Producer (IPP) and PNG Power. The TPA code further sets out the review and approval requirements including pricing mechanisms. It is a mandatory requirement that the TPA code power purchase reference price must be based on the least cost generation options.
“To date, PNG Power has submitted the power purchase reference prices for the POM and Ramu grids only and is yet to submit the same for the Gazelle grid,” Ain said.
“It is important to submit proposed reference prices for Gazelle grid as the delay may not only affect the approval process of potential PPAs in that region, but can also result in exposure to risks relating to legality of the PPAs and consumers’ baring the risk of paying higher prices.”