Macquarie Generation & Ors - Authorisations - A91198 & A91199

The NSW Government proposes to disaggregate its three existing electricity generation portfolios into five Gentrader contract bundles. Authorisation is sought for a co-insurance arrangement developed pursuant to the disaggregation of the generation portfolios. Under the co-insurance arrangements a Gentrader that is unable to meet its firm capacity requirements will have the option of calling on co-insurance.

It is proposed that the co-insurance arrangements be implemented though a multiparty agreement between the Generators and the Gentraders who successfully bid for the electricity trading rights of the Generators.

Specifically, authorisation is sought for the following features of the co-insurance arrangements, to be made and given effect to through a Compensation Deed:

-the payment provisions, which specify the price payable (the 'Compensation Price') for the compensation which a Gentrader is able to call on when the Generator is unable to meet its firm capacity requirements
-the firm capacity provisions, which specify the quantity of firm capacity to be made available by each Generator to its Gentrader counterparty for the purpose of the co-insurance arrangement
-the allocation procedures and rules, which specify which Gentrader will be required to pay compensation and the amount of that compensation and
-the supply and acquisition of the co-insurance is limited to the parties to the agreement.

Authorisation is sought for a term of 10 years from the commencement date of the Compensation Deed, being the date on which all the Gentrader Contracts subject to the Compensation Deed are in force.

The ACCC released a final determination on 20 May 2010 denying authorisation to applications A91189-9.