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DWGM CPT REVIEW
PREPARED BY: Market Operations and Performance
DOCUMENT REF: DWGM CPT REVIEW – DRAFT REPORT
VERSION: 1.0
DATE: 2 July 2013
DRAFT
Australian Energy Market Operator Ltd ABN 94 072 010 327 www.aemo.com.au [email protected]
NEW SOUTH WALES QUEENSLAND SOUTH AUSTRALIA VICTORIA AUSTRALIAN CAPITAL TERRITORY TASMANIA
DWGM CPT REVIEW
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Contents
1 INTRODUCTION .............................................................................................. 9
1.1 Structure of this report ................................................................................................ 9
2 BACKGROUND ..............................................................................................10
2.1 The CPT Mechanism ................................................................................................ 10
2.2 Decision to review the CPT Mechanism ................................................................... 10
2.3 Guiding Principles .................................................................................................... 11
3 APPROACH ....................................................................................................12
3.1 The operation of the CPT Mechanism ...................................................................... 12
3.2 The modelling tasks ................................................................................................. 12
3.2.1 CPT Event scenarios................................................................................................................. 12 3.2.2 LNG Revenue Sufficiency Model .............................................................................................. 14 3.2.3 Retailer Impact Model ............................................................................................................... 15 3.2.4 Comparative Market Analysis ................................................................................................... 16 3.2.5 Test parameters for the CPT mechanism ................................................................................. 16
3.3 Approach .................................................................................................................. 17
4 RESULTS OF ANALYSIS ...............................................................................18
4.1 Lower constraint value for the CPT .......................................................................... 18
4.2 CPT settings in the STTM and NEM –Retailer impact analysis ................................ 19
4.3 CPT settings in the DWGM -Retailer impact analysis ............................................... 20
4.3.1 CPT Event: 2 consecutive days with prices at VoLL ................................................................ 20 4.3.2 CPT Event: 3 consecutive days with prices at VoLL ................................................................ 25 4.3.3 CPT Event: 4 consecutive days with prices at VoLL ................................................................ 29 4.3.4 CPT Event: 5 consecutive days with prices at VoLL ................................................................ 33 4.3.5 Additional analysis requested by Lumo Energy ........................................................................ 37
5 RECOMMENDATIONS ...................................................................................39
5.1 Summary of findings ................................................................................................. 39
5.2 Excessive or unmanageable Risk ............................................................................. 39
5.3 Combinations of CPT settings that satisfy the risk threshold .................................... 40
5.4 Recommended CPT Settings ................................................................................... 41
6 NEXT STEPS ..................................................................................................43
7 Appendix A IMPACTS OF CPT SETTINGS ON RETAILERS .........................44
8 Appendix B IMPACTS OF CPT SETTINGS ON CUSTOMER MARGIN .........52
DWGM CPT REVIEW
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Version Release History
VERSION DATE BY CHANGES
1.0 2 July 2013 Market Operations and Performance First draft
DWGM CPT REVIEW
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LIST OF TABLES
Table 2-1: DWGM Current Market Settings..................................................................................................... 10 Table 3-1: CPT Event Scenarios ..................................................................................................................... 13 Table 3-2: LNG Cost Assumptions .................................................................................................................. 14 Table 3-3: Standard Retail Assumptions ......................................................................................................... 15 Table 3-4: Standard Customer Assumptions................................................................................................... 15 Table 3-5: Test Parameters ............................................................................................................................. 16 Table 4-1: STTM Base Scenario Results ........................................................................................................ 19 Table 4-2: Retailer impacts for a 2-day CPT Event Scenario .......................................................................... 23 Table 4-3: Customer impacts for a 2-day CPT Event Scenario ...................................................................... 24 Table 4-4: Retailer impacts for a 3-day CPT Event Scenario .......................................................................... 27 Table 4-5: Customer impacts for a 3-day CPT Event Scenario ...................................................................... 28 Table 4-6: Retailer impacts for a 4-day CPT Event Scenario .......................................................................... 31 Table 4-7: Customer impacts for a 4-day CPT Event Scenario ...................................................................... 32 Table 4-8: Retailer impacts for a 5-day CPT Event Scenario .......................................................................... 35 Table 4-9: Customer impacts for a 5-day CPT Event Scenario ...................................................................... 36 Table 5-1: Combinations of CPT settings that satisfy our test for acceptable risk .......................................... 41 Table B-1: Customer impacts for a 2-day CPT Event Scenario for R2 ........................................................... 52 Table B-2: Customer impacts for a 2-day CPT Event Scenario for R3 ........................................................... 52 Table B-3: Customer impacts for a 2-day CPT Event Scenario for R4 ........................................................... 53 Table B-4: Customer impacts for a 2-day CPT Event Scenario for R5 ........................................................... 53 Table B-5: Customer impacts for a 3-day CPT Event Scenario for R2 ........................................................... 54 Table B-6: Customer impacts for a 3-day CPT Event Scenario for R3 ........................................................... 54 Table B-7: Customer impacts for a 3-day CPT Event Scenario for R4 ........................................................... 55 Table B-8: Customer impacts for a 3-day CPT Event Scenario for R5 ........................................................... 55 Table B-9: Customer impacts for a 4-day CPT Event Scenario for R2 ........................................................... 56 Table B-10: Customer impacts for a 4-day CPT Event Scenario for R3 ......................................................... 56 Table B-11: Customer impacts for a 4-day CPT Event Scenario for R4 ......................................................... 57 Table B-12: Customer impacts for a 4-day CPT Event Scenario for R5 ......................................................... 57 Table B-13: Customer impacts for a 5-day CPT Event Scenario for R2 ......................................................... 58 Table B-14: Customer impacts for a 5-day CPT Event Scenario for R3 ......................................................... 58 Table B-15: Customer impacts for a 5-day CPT Event Scenario for R4 ......................................................... 59 Table B-16: Customer impacts for a 5-day CPT Event Scenario for R5 ......................................................... 59
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LIST OF FIGURES
Figure 4-1: Lower Constraint Value for CPT ................................................................................................... 18 Figure 4-2: Impact of CPT settings on Retailer profit for a 2-day CPT Event ................................................. 21 Figure 4-3: Impact of CPT settings on customer types for a 2-day CPT Event .............................................. 22 Figure 4-4: Impact of CPT settings on Retailer profit for a 3-day CPT Event ................................................. 25 Figure 4-5: Impact of CPT settings on customer types for a 3-day CPT Event .............................................. 26 Figure 4-6: Impact of CPT settings on Retailer profit for a 4-day CPT Event Scenario .................................. 29 Figure 4-7: Impact of CPT settings on customer types for a 4-day CPT Event .............................................. 30 Figure 4-8: Impact of CPT settings on Retailer profit for a 5-day CPT Event Scenario .................................. 33 Figure 4-9: Impact of CPT settings on customer types for a 4-day CPT Event .............................................. 34 Figure 4-10: Impact of CPT settings on Retailer profit for the Lumo Scenario ................................................ 37 Figure 5-1: Impact of CPT settings on Retailer profit ...................................................................................... 40 Figure A-1: Impact on Retailer profit for a 2 day CPT Event, when CPP = 15 ................................................ 44 Figure A-2: Impact on Retailer profit for a 2 day CPT Event, when CPP = 25 ................................................ 44 Figure A-3: Impact on Retailer profit for a 2 day CPT Event, when CPP = 50 ................................................ 45 Figure A-4: Impact on Retailer profit for a 2 day CPT Event, when CPP = 70 ................................................ 45 Figure A-5: Impact on Retailer profit for a 3 day CPT Event, when CPP = 15 ................................................ 46 Figure A-6: Impact on Retailer profit for a 3 day CPT Event, when CPP = 25 ................................................ 46 Figure A-7: Impact on Retailer profit for a 3 day CPT Event, when CPP = 50 ................................................ 47 Figure A-8: Impact on Retailer profit for a 3 day CPT Event, when CPP = 70 ................................................ 47 Figure A-9: Impact on Retailer profit for a 4 day CPT Event, when CPP = 15 ................................................ 48 Figure A-10: Impact on Retailer profit for a 4 day CPT Event, when CPP = 25 .............................................. 48 Figure A-11: Impact on Retailer profit for a 4 day CPT Event, when CPP = 50 .............................................. 49 Figure A-12: Impact on Retailer profit for a 4 day CPT Event, when CPP = 70 .............................................. 49 Figure A-13: Impact on Retailer profit for a 5 day CPT Event, when CPP = 15 .............................................. 50 Figure A-14: Impact on Retailer profit for a 5 day CPT Event, when CPP = 25 .............................................. 50 Figure A-15: Impact on Retailer profit for a 5 day CPT Event, when CPP = 50 .............................................. 51 Figure A-16: Impact on Retailer profit for a 5 day CPT Event, when CPP = 70 .............................................. 51
DWGM CPT REVIEW
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ABBREVIATIONS
CPT Cumulative Price Threshold
DWGM Declared Wholesale Gas Market
VoLL Value of Lost Load
CP Cumulative Price
CPP Cumulative Price Period
APC Administered Price Cap
GWCF Gas Wholesale Consultative Forum
NGR National Gas Rules
MCP Market Clearing Price
LAOS Last Approved Operating Schedule
R1 Retailer 1
R2 Retailer 2
R3 Retailer 3
R4 Retailer 4
R5 Retailer 5
C_10 Customer 1
C_30 Customer 2
C_60 Customer 3
C_500 Customer 4
STTM Short Term Trading Market
NEM National Electricity Market
MPC Market Price Cap
DWGM CPT REVIEW
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EXECUTIVE SUMMARY
This document reports the results and recommendations from AEMO’s review of the Cumulative Price
Threshold (CPT) Mechanism for the Declared Wholesale Gas Market (DWGM).
This review examined the market settings for CPT, specifically, the Cumulative Price Threshold, the
Cumulative Price Period, and the mechanism by which these apply.
The decision to review the CPT Mechanism was made following a decision to remove force majeure
provisions from the National Gas Rules. The Gas Wholesale Consultative Forum (GWCF) was concerned
that this left limited scope to offer protection to market participants when market prices were being set at a
very high level, and no further market response was possible, and asked for this issue to be examined.
The approach used in conducting this review reflected the methodology used in previous CPT and Market
Parameter studies.
AEMO has worked closely with the GWCF to gain feedback with respect to the proposed approach,
assumptions and input data, and initial results. GWCF members are now invited to review and provide
feedback on this draft report. The final report and recommendations will be published for consideration at the
GWCF meeting of August 13, 2013.
The CPT mechanism
The Cumulative Price Threshold was introduced to the Victorian gas market on 1 June 2008.
It provides a mechanism to address unmanageable or excessive risk arising from prolonged exposure to
very high prices. The CPT mechanism allows for a high Value of Lost Load (VoLL) that better meets the
objectives of ensuring voluntary market clearing, but at the same time more closely managing risk due to
high price.
The CPT mechanism includes:
A Cumulative Price measure (CP) that is defined as the sum of the published market prices over a
defined period of consecutive trading intervals;
A Cumulative Price Threshold (CPT) that defines a cap on the Cumulative Price measure that, once
exceeded, triggers the application of the Administered Price; and
A Cumulative Price Period (CPP) that defines a rolling data collection period, measured in trading
intervals, according to which the CP and CPT is measured.
Both the National Electricity Market and the Short Term Trading Market also feature a CPT mechanism,
sharing a similar purpose and function. In the case of all markets, the CPT mechanism caps market
participant exposure to consecutive periods of very high prices, and acts as a trigger for the application of the
Administered Price Cap (APC).
Our Review
In consultation with the GWCF, we developed a set of principles to guide the analysis and findings of the
review. We also sought approval for a modelling approach, and for associated assumptions and input data to
inform the analysis. We developed two models for the review:
1. An LNG revenue sufficiency model to determine a lower constraint value for the CPT. This sought to
ensure that CPT recommendations did not deny the reasonable recovery of the fixed and variable costs
of LNG capacity and use; and
2. A retailer impact model to assess the effectiveness of alternative test settings for the CPT mechanism in
mitigating wholesale market price risk from a range of agreed CPT Event scenarios. We used this model
to identify levels of residual risk that may be excessive or unmanageable, therefore guiding
recommendations for the CPT and CPP.
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We also compared the risk-mitigation power of current settings of the CPT mechanisms in each of the
DWGM, the Short Term Trading Market (STTM) and the National Electricity Market (NEM).
Summary of Results
Due to immature financial markets for risk products in the gas industry, market participants must physically
hedge wholesale market risk, achieved via contracts for diverse sources of supply and transportation
capacity. In the case of the Victorian gas market, the Dandenong LNG facility is perhaps the most important
supply of reserve capacity during events that may trigger the CPT Mechanism. AEMO understands that
LNG capacity is mostly contracted, thereby presenting new entrant and rapidly growing retailers with limited
access to a physical hedge against high wholesale market settlement outcomes.
Our analysis has found that current CPT settings may not provide sufficient risk mitigation for new entrant
and rapidly growing retailers1. Moreover, our analysis has found that the level of residual risk is out-of-step
with other markets and may therefore impose an excessive and onerous management cost. These factors
can create a barrier to entry, discouraging new retailers from entering the DWGM. This can reduce
competition to the detriment of the National Gas Objective, and to the long-run interests of gas consumers.
Due to these findings, we recommend a change to the CPT settings to enable a reduction in the level of risk
that is resultant from the CPT mechanism.
We recommend:
1. Cumulative Price Period (CPP): 35 Scheduling Intervals (7 days)
We recommend that current settings for the CPP are maintained at 35 scheduling intervals. This
would satisfy the needs of short-duration CPT events, while also providing sufficient time to
understand and coordinate the initial management of long-duration events. This also shares
symmetry with the NEM and STTM (CPP = 7 days).
2. Cumulative Price Threshold (CPT): $1800
We recommend that the CPT is lowered from $3700 to $1800. Based on our measure of
excessive and/or unmanageable risk, this reduces the level of residual wholesale market risk to a
level that better addresses the needs of new entrant and rapidly growing retailers. We
understand that in the case of the Declared Transmission System, access to injection capacity
from the Dandenong LNG facility will often be required to maintain the security of the system
during possible CPT events. AEMO understands that the bilateral market for LNG capacity is not
liquid, and is mostly contracted by the larger established retailers. It follows that new entrant and
rapidly growing retailers may therefore experience difficulty in procuring sufficient LNG capacity to
address optimal risk management needs. This could present a barrier to entry, affecting
competition and price outcomes, and may create a possible insolvency risk during major CPT
events. Our assessment has also shown that the risk mitigation power of the current settings is
weaker than those of the CPT mechanisms of the NEM and STTM.
A CPT setting of $1800 will not deny sufficient cost recovery for the fixed and variable costs of the
LNG facility, which is also the most expensive source of supply in the Victorian system on a total
average cost basis.
1 We note that small, rapidly growing retailers may frequently need to adjust the size of their physical
contracts in order to maintain a desired level of risk mitigation. In a market that has limited alternatives for contracted gas supply, and that is relatively illiquid and immature, a small rapidly growing retailer may find that it is unable to maintain a desired level of protection from wholesale market price risk.
DWGM CPT REVIEW
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1 INTRODUCTION
This document reports the results and recommendations from AEMO’s review of the CPT Mechanism for the
DWGM.
This review examined the market settings for CPT, specifically, the Cumulative Price Threshold, the
Cumulative Price Period, and the mechanism by which these apply.
The approach reflected the methodology that has been used in previous CPT and Market Parameter studies
for the DWGM and the STTM.
1.1 Structure of this report
Section 2 of the report provides background to the study. It summarises the decision to review the CPT
mechanism and the guiding principles for the review.
Section 3 describes the approach, including the models that have been developed to inform the analysis.
Section 4 presents the results of the analysis.
Section 5 provides and explains AEMO’s recommendations.
Section 6 presents next steps, including feedback on this draft report, and our schedule for publishing a final
report.
Appendix A and B contains a full set of the modelling results.
DWGM CPT REVIEW
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2 BACKGROUND
2.1 The CPT Mechanism
The Cumulative Price Threshold was introduced to the Victorian gas market on 1 June 2008.
It provides a mechanism to address unmanageable or excessive risk arising from prolonged exposure to
very high prices. The CPT mechanism allows for a high Value of Lost Load (VoLL) that better meets the
objectives of ensuring voluntary market clearing, but at the same time more closely managing risk due to
high price.
The CPT mechanism includes:
A Cumulative Price measure (CP) that is defined as the sum of the published market prices over a
defined period of consecutive trading intervals;
A Cumulative Price Threshold (CPT) that defines a cap on the Cumulative Price measure that, once
exceeded, triggers the application of the Administered Price; and
A Cumulative Price Period (CPP) that defines a rolling data collection period, measured in trading
intervals, according to which the CP and CPT is measured.
Both the National Electricity Market and the Short Term Trading Market also feature a CPT mechanism,
sharing a similar purpose and function. In the case of all markets, the CPT mechanism caps market
participant exposure to consecutive periods of very high prices, and acts as a trigger for the application of the
Administered Price Cap (APC).
The following table shows the current settings for the CPT mechanism, and for the associated market
parameters of VoLL and APC:
Table 2-1: DWGM Current Market Settings
Market Parameter Value
VoLL $800 per GJ
APC $40 per GJ
CPP 35 scheduling intervals (7
days)
CPT $3,700
2.2 Decision to review the CPT Mechanism
Current settings for the CPT Mechanism have remained unchanged since it was introduced to the Victorian
gas market in 2008.
In December 2012 AEMO published the conclusions of its DWGM and STTM Market Parameter Review2.
AEMO concluded that it would not at this time recommend changes to VoLL and APC in the DWGM.
As part of a separate process, in 2012 the Gas Wholesale Consultative Forum (GWCF) considered the
removal of National Gas Rules (NGR) covering force majeure, and recommended that AEMO lodge a rule
change proposal to affect this3. However, the GWCF was concerned that this left limited scope to offer
2 STTM and DWGM Parameter Review - Final Report dated 14 December 2012 (click here for report)
3 GWCF meeting 176, Action item 176.4
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protection to market participants where market prices were being set at a very high level, and no further
market response was possible, and asked for this issue to be examined.
GWCF paper 12-082-02 ‘CPT review’4 was presented to GWCF meeting 177 on 17 December 2012. The
GWCF concluded that a CPT of between $1,800 and $2,500 would be appropriate, but that a review of the
CPT should be undertaken to evaluate the risks of a lower CPT and to make recommendations for the CPT
to apply in the event that the force majeure rules were removed from the NGR.
AEMO has therefore conducted this review, with the aim to evaluate the risks to market participants posed
by the current CPT settings once the force majeure rules are removed, and to recommend an appropriate
value for the cumulative price threshold, and cumulative price period, for consideration by the DWGM.
The agreed value for the CPT and CPP will apply from winter 2014.
2.3 Guiding Principles
The following principles have guided the design and implementation of this review:
1. Settings for the CPT mechanism should not act as a barrier to the supply of gas from all available
sources, including in respect of the fixed and variable costs of LNG.
Assumption: Cost recovery for the use of LNG may be limited to those events that also trigger
administered pricing via the CPT mechanism. If this is the case, the CPT mechanism should not be set in
a way that does not allow the reasonable recovery of the fixed and variable costs of LNG capacity and
use.
2. The review of the CPT mechanism should recognise industry structure, and therefore the incidence of
wholesale market price risk on the range of retailers that do or could participate in the market.
Assumption: Market price risk should not be excessive or unmanageable for the range of retail business
that do, or could, participate in the market. This recognises that retailers may have varying portfolio
characteristics and levels of contract cover.
3. The review of the CPT mechanism should recognise links between markets, including the operations and
activities of market participants in the National Electricity Market and the Short Term Trading Market.
Assumption: Many retailers operate across multiple jurisdictions and markets and have established
business arrangements to manage current and anticipated levels of risk. Potential changes to the CPT
mechanism should therefore be mindful of the varying levels of price risk in each of our energy markets,
including as a result of the CPT mechanisms in each of these markets.
4 GWCF meeting 177, Agenda item 4.4 (GWCF 12-082-02)
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3 APPROACH
3.1 The operation of the CPT Mechanism
The CPT is the cap for the cumulative price over 35 scheduling intervals (equivalent to 7 days).
The actual value of the CP, for a given schedule, must account for the Market Clearing Price (MCP) from the
Last Approved Operating Schedule (LAOS) of all other scheduling intervals that form part of the CPP. The
CPP spans 35 scheduling intervals including the current scheduling interval for which the CP is calculated,
plus the 34 contiguous scheduling intervals that immediately precede this scheduling interval.
The measure CP is compared to the CPT in determining when an administered pricing period should be
triggered. Once triggered, the administered pricing period commences from the start of the next scheduling
interval.
3.2 The modelling tasks
Given that the CPT Mechanism seeks to protect market participants from exposure to sustained price
outcomes that could otherwise represent an excessive or unmanageable level of business risk, the modelling
task required the development and use of a business impact model that links the wholesale and retail
markets.
A retailer impact model was therefore developed to assist an understanding of the risk mitigation power of
alternative settings for the CPT Mechanism. For a range of CPT Event scenarios, and after allowance for
the operation of the CPT Mechanism, the model measured the impact of residual wholesale market price risk
on the assumed operating profits of a range of model retailers. The impact metric that was used was the
number of “days of average operating profit foregone”, representing the operating profit impact of the total
CPT Event cost on a selection of modelled retailers, having different customer portfolios and levels of
hedging cover. We also considered CPT Event cost in terms of the number of “days of retail margin impact”
for the residential and business customers of the modelled retailers. However this was a secondary metric
that was only used to present an alternative perspective on the measure of this residual risk.
Given a principle that the CPT Mechanism should not act as a barrier to the supply of gas from all available
sources, and assuming that CPT Events may provide the only prospect of recovery for the fixed and variable
costs of the LNG facility, a LNG Revenue Sufficiency Model was developed to test for a lower-bound
constraint on the range of CPT values that may be appropriate for the DWGM.
Limited comparative analysis was also completed to compare the risk mitigation power of CPT Mechanisms
in each of the DWGM, Short Term Trading Market (STTM) and the National Electricity Market (NEM). This
required an adaptation of the retailer impact model and of a subset of the model retailers.
The following provides a detailed description of the CPT Event Scenarios, and each of these modelling
tasks.
3.2.1 CPT Event scenarios
CPT Event scenarios were defined to reflect the incidence and character of extreme price events that, via the
CPT Mechanism, would likely trigger the commencement of administered prices in the wholesale market.
We anticipate that extreme price events would typically occur in circumstances of a significant and protracted
supply outage at Longford or Iona, and/or the failure of major assets that support the operation of the gas
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supply infrastructure5. Other circumstances may include unexpected commercial events that affect the gas
supply or transportation operations of significant market participants.
It is possible that less significant supply events could combine with high levels of gas-fired power generation
in a way that contributes to high market prices, however the heat rate of installed power generation assets,
combined with the potential of high spot prices for gas, would likely produce high price outcomes in the
electricity market that could not be sustained for periods sufficient to test the limits of the cumulative price
period in the gas market (very high prices in the electricity market typically have a short duration and would
not likely endure for the length of the seven-day duration of CPP in the DWGM; prices would therefore
moderate in the electricity market, which when price is VoLL in the DWGM, would make gas-fired generation
uneconomic).
AEMO does not retain infrastructure models that can support the analysis of forced outage rates affecting
physical assets. Further, the relative infrequency of past events that would qualify as a CPT event scenario
makes a statistical determination of likely CPT Event scenarios unreliable.
For this reason we used the following CPT Event scenarios with unspecified triggers as given by Table 3-1.
Table 3-1: CPT Event Scenarios
Assumptions
48 hour (2 consecutive days) event with prices at VoLL, occurring once every 10 years
72 hour (3 consecutive days) event with prices at VoLL, occurring once every 10 years
96 hour (4 consecutive days) event with prices at VoLL, occurring once every 10 years
120 hour (5 consecutive days) event with prices at VoLL, occurring once every 10 years
In each case we assumed a sequence of “normal prices” leading up to the commencement of the CPT
Event, therefore informing the initial values of the Cumulative Price. The assumed “normal price” was
$4.50/GJ. During the CPT Event we assumed prices were either VoLL or the Administered Price Cap
($40/GJ), depending on whether administered pricing was triggered by the CPT Mechanism.
We also assumed a profile of imbalances during the five scheduling intervals of each CPT Event day. For
each intra-day schedule we deemed 1/5 of the total daily imbalance to occur, effectively deeming a flat
profile across the peak period of the day, and a lower hourly imbalance during the last (off-peak) scheduling
interval. The amount of the daily imbalance was determined by the level of assumed contract (hedge) cover
for each model retailer. For example, hedge cover of 90% means that for each CPT Event day, 10% of the
retailer’s customer withdrawals are effectively supplied from the DWGM, and not from the supply of an
upstream contract.
The assumed imbalance profile was considered reasonable given the anticipated circumstances and
potential risks of the CPT Event scenario. Given the prospect of exposure to VoLL pricing, with supply
constraints requiring LNG, some profile for imbalances (and deviations) is realistic. Our assumed approach
provided a simplification that could be shared across the range of model retailers.
Additional CPT Event scenarios
As part of the consultative process that accompanied this CPT Mechanism review, Lumo Energy proposed
additional analysis to test an alternative “worst case” profile of event costs and market imbalances. The
5 An extreme price event may be limited to only a partial loss of Longford supply capacity and up to a total
loss of supply capacity at Iona. Greater capacity loss at Longford would likely require significant load curtailment.
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requested profile of event cost featured an assumed VoLL price for the first scheduling interval of each CPT
Event day, with subsequent (intra-day) prices equal to the assumed “normal price”. Further, the requested
imbalance profile featured the entire daily imbalance in the first scheduling interval of each CPT Event day.
Lumo Energy also requested additional (higher) test-settings for the CPT Mechanism.
AEMO does not consider that these additional CPT Event scenarios are realistic. Indeed, when faced with
the prospect of VoLL and a possible multi-day CPT Event that could feature major infrastructure outages and
lead to customer curtailment, some portfolio risk management activities would be prudent for a retail
business. Indeed, the very prospect of an exposure to VoLL pricing in the NEM requires many retailers to
have some form of load-shedding agreements in place.
This report presents the results from these additional CPT Event scenarios.
3.2.2 LNG Revenue Sufficiency Model
The assumption is that LNG represents the highest cost source of gas for which CPT settings should not
deny efficient cost recovery. We also assumed that opportunities for LNG cost recovery may be limited to
CPT Events. The reasonable recovery of LNG costs therefore becomes a lower financial constraint on the
setting of the CPT.
We determined an approximate annualised total cost for the required inventory of the Dandenong LNG
facility. We used the maximum possible supply during the assumed CPT event scenario as the required
inventory level, capping this by the size of the existing facility.
It was assumed that the total cost must be fully recoverable by the CPT event scenario. Moreover, as a
conservative assumption, a cost recovery factor was applied, such that total cost recovery was deemed to be
provided by the use of half of the potential inventory. The assumed logic for this is the prospect of
uncertainty over the duration and LNG requirements of the CPT Event. To assume the recovery of total cost
over the full potential inventory could otherwise result in the under-recovery of cost should less LNG be
required.
We use the following assumptions given by Table 3-2 to inform this analysis.
Table 3-2: LNG Cost Assumptions
Assumptions Input Data/Value Source Capital cost of the LNG facility $192,152/tonne
AEMO/APA GasNet
Derived from Major System Augmentation
Report for the Victorian Principal
Transmission System (2005), where
GasNet provided a cost estimate to
replicate the Dandenong LNG plant.
Adjusted to 2013 prices.
Fixed operations and maintenance cost
$0/GJ AEMO assumption
Variable operations and maintenance cost
$0.5/GJ AEMO assumption, inclusive of liquefaction and vaporisation costs.
Variable supply cost of gas $4.50/GJ AEMO assumption.
Weighted Average Cost of Capital (WACC)
7% (pre-tax, real) AEMO assumption
Expected life of LNG facility 30 years AEMO assumption
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3.2.3 Retailer Impact Model
This model measures the impact of price risk on a range of representative retailers. The assessment metric
for price impact is “days of average operating profit foregone”, based on a typical retail margin for
representative customers.
The model assumes five types of retailer, each supplying standard residential and/or business customers.
For the standard customer types, a CPT Event Load Factor is used, reflecting the multiple of average daily
consumption that the customer is deemed to consume on each CPT Event day. Each model retailer is
prescribed a level of contract cover for their retail portfolio, with the value applying to each CPT Event day.
This determines their extent of exposure to prices in the organised wholesale market.
Table 3-3 and Table 3-4 summarise the specification of the standard retailer and customer types that
informed the analysis.
Table 3-3: Standard Retail Assumptions
Portfolio Load Share Contract Cover CPT Event
Retailer Label Residential Business Assumed Cover
Load Factor
Retailer 1 R1 50% 50% 90% Residential: 2.5 Business: 1.0
Retailer 2 R2 20% 80% 80% Residential: 2.5 Business: 1.0
Retailer 3 R3 80% 20% 50% Residential: 2.5 Business: 1.0
Retailer 4 R4 100% 0% 0% Residential: 2.5
Retailer 5 R5 0% 100% 0% Business: 1.0
Table 3-4: Standard Customer Assumptions
Customer Types Label GJ/YR Retailer Portfolio Contribution
Customer 1 C_10 10 33.3% Residential Load
Customer 2 C_30 30 33.3% Residential Load
Customer 3 C_60 60 33.3% Residential Load
Customer 4 C_500 500 100% Business Load
Bill Component Unit C_10 C_30 C_60 C_500
Commodity Cost $/GJ 5.00 5.00 5.00 5.00
Transmission cost $/GJ 0.37 0.37 0.37 0.37
Distribution $/GJ 9.34 7.31 6.70 1.70
Retail Costs $/GJ 9.00 3.00 1.50 0.16
Retail Margin Ave Customer 7% 7% 7% 7%
Retail Margin $/GJ 1.66 1.1 0.95 0.51
DWGM CPT REVIEW
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3.2.4 Comparative Market Analysis
We limited consideration to a comparison of CPT settings between markets. These were translated into
retailer impact measures that are consistent with those of the retailer impact model. The following
summarises the approach:
For STTM:
We used our retailer impact model and the same CPT Event scenarios to measure the residual wholesale
market risk on our model retailers (R1 to R3 only), after allowance for the current settings of the CPT
Mechanism in the STTM.
For NEM:
We used our retailer impact model with changed customer assumptions and an alternative CPT Event
scenario:
Only considered Retailer 1 (R1)
• 50% residential, 50% business, 90% hedged.
o Residential customer 5MWh/Year
o Business customer 50MWh/Year
• Adapted cost structure and used a 1.4 load factor for residential load during the CPT event
CPT event scenario (6 day event: adapted from March 11-17 in 2008 -SA)
• All VoLL prices updated to current settings
• All other prices scaled by a factor of 2.5 with a minimum price of $80/MWh imposed
• This CPT event has been used in advice to the AEMC in their market setting studies6.
• No analysis of CPT event to determine likelihood.
Current CPT Parameters
Market CPP (days) CPT
DWGM 7 $3,700
STTM 7 $440
NEM 7 $193,900
3.2.5 Test parameters for the CPT mechanism
Table 3-5 provides the CPT test parameters for the CPT mechanism:
Table 3-5: Test Parameters
Cumulative Price Period
15 consecutive scheduling intervals Equivalent to 3 trading days
25 consecutive scheduling intervals Equivalent to 5 trading days
35 consecutive scheduling intervals Equivalent to 7 trading days
6
http://www.aemc.gov.au/Media/docs/Risk%20assessment%20of%20raising%20VoLL%20and%20the%20CPT%20-%20Concept%20Economics-658f5848-6273-4c58-9113-8ba387014079-0.pdf
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 17 of 59
70 consecutive scheduling intervals Equivalent to 14 trading days
Cumulative Price Threshold
$1800 Equivalent to 2.25*VoLL
$2500 Equivalent to 3.125*VoLL
$3700 Equivalent to 4.625*VoLL
$4500 Equivalent to 5.625*VoLL
3.3 Approach
AEMO’s approach in reviewing the CPT Mechanism has been guided by the methodologies that have been
used in previous CPT and Market Parameter studies for the DWGM and the STTM.
The following summarises the approach:
1. Develop a revenue sufficiency model for the efficient recovery of LNG costs.
The assumption is that LNG represents the highest cost source of gas for which CPT settings should not
deny efficient cost recovery. We developed a model of expected LNG use for both a median and 1:20
year, in each case determining a revenue sufficiency measure for both fixed and variable costs.
2. Develop a retailer impact model to measure the incidence of price risk on a range of representative
retailers
The analysis assumed a range of representative retailers that are consistent with the current industry
structure, and that assume a range of hedging strategies. We developed a retailer impact model that
measures the incidence of price risk in terms of a measure of annual operating profit forgone.
3. Determine a set of CPT event scenarios
The analysis considered the range of likely trigger scenarios for the CPT mechanism, defining each via a
temporal profile of high price outcomes. These were modelled as a set of multi-day CPT event scenarios
that were used as an input to the retailer impact analysis.
4. Determine a basis for reviewing interactions between related markets.
We did not assume coincident CPT events between markets, and limited consideration to a comparison
of CPT settings between markets. We have translated settings into appropriate retailer impact measures
that are consistent with those of the proposed retailer impact model.
5. Draft a methodology and assumptions paper for review by interested members of the GWCF.
6. Prepare models and conduct analysis
7. Prepare a draft report to summarise results and to suggest recommendations for the value of the CPT.
8. Respond to feedback on the draft report from interested members of the GWCF.
9. Prepare a final report with recommendations for the consideration of the GWCF.
It is proposed that this will be presented for information and discussion at the GWCF meeting on August
13, 2013.
DWGM CPT REVIEW
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4 RESULTS OF ANALYSIS
4.1 Lower constraint value for the CPT
An assumption was made that LNG represents the highest cost source of gas for which CPT settings should
not deny efficient cost recovery. We also assumed that opportunities for LNG cost recovery may be limited
to CPT Events. The reasonable recovery of LNG costs therefore becomes a lower financial constraint on the
setting of the CPT.
In calculating the fixed cost for the lower financial constraint, we determined an approximate annualised total
cost for the required inventory of the Dandenong LNG facility. We used the maximum possible supply during
the assumed CPT event scenario as the required inventory level, capping this by the size of the existing
facility.
It was assumed that the total cost must be fully recoverable by the CPT event scenario. Moreover, as a
conservative assumption, a cost recovery factor was applied, such that total cost recovery was deemed to be
provided by the use of half of the potential inventory. The assumed logic for this is the prospect of
uncertainty over the duration and LNG requirements of the CPT Event. To assume the recovery of total cost
over the full potential inventory could otherwise result in the under-recovery of cost should less LNG be
required.
The variable costs of the Dandenong LNG facility was incorporated in the calculation of the lower financial
constraint. These costs included the liquefaction and vaporisation costs per CPT event and the sum of
typical prices during the cumulative price period. Refer to Section 3.2.2 for the input data assumptions.
Figure 4-1 displays the lower constraint values required by the LNG plant to recover costs, for different
values of CPP. The results indicate that an increase in the CPP leads to a higher lower constraint value. All
of the lower constraint values fall below $800, which are below the lowest CPT test parameter of $1800. This
indicates that the CPT test parameters would not deny the recovery of LNG costs.
Figure 4-1: Lower Constraint Value for CPT
DWGM CPT REVIEW
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4.2 CPT settings in the STTM and NEM –Retailer impact analysis
A comparative analysis was completed to compare the risk mitigation power of the CPT mechanisms of the
STTM and the NEM. This required an adaptation of the retailer impact model and of a subset of the model
retailers.
For the STTM calculation, only the results for R1, R2 and R3 were considered. The results for R4 and R5 are
not provided as these retailers assumed zero contract cover, which is an unrealistic portfolio management
strategy. The cost structure, load factors, and CPT Event scenarios assumed for these retailers are the same
as the DWGM case. Refer to Section 3.2.3 for these input assumptions.
Table 4-1 presents the full set of results of how the CPT Event settings impact on the retailers’ gross
operating profits. The results show that retailers with less contract cover forego more days of gross operating
profit. The least was incurred by R1, which has a contract cover of 90%. It is also observed that when the
CPP is fixed, an increase to the CPT Event duration leads to an increase in the number of days of gross
operating profit foregone. Longer duration CPT events increase the Event Cost, due to the assumption of a
longer period of VoLL prices. Consequently, this increases the portfolio weighted cost7 incurred by retailers,
which increases the number of days of gross operating profit foregone.
Table 4-1: STTM Base Scenario Results
The NEM calculation only considered the result for R1. The cost structure adapted utilised the framework of
the DWGM case. Further, a 1.40 load factor was used for the residential load factor during a CPT Event. The
CPT Event scenario utilised the current market setting parameters and the AEMC’s event scenario that was
used for advice in its market parameter study8.
The modelling indicates that the days of operating profit foregone for R1 in the NEM is 21 days. This value is
significantly lower in comparison to the retailers for the STTM base case scenarios.
7 The portfolio-weighted cost quantifies the impact of the CPT Event on a retailer’s business and residential
portfolio, represented by a defined mix between business and residential customers, and an assumed level of contract cover. 8http://www.aemc.gov.au/Media/docs/Risk%20assessment%20of%20raising%20VoLL%20and%20the%20C
PT%20-%20Concept%20Economics-658f5848-6273-4c58-9113-8ba387014079-0.pdf
R1 R2 R3
Event Description
86.6656 171.9293 435.4263 2 days of prices at VoLL, CPT = 440, CPP = 7
93.8040 186.0905 471.2909 3 days of prices at VoLL, CPT = 440, CPP = 7
100.9423 200.2518 507.1554 4 days of prices at VoLL, CPT = 440, CPP = 7
108.0807 214.4130 543.0200 5 days of prices at VoLL, CPT = 440, CPP = 7
Days of gross operating profit foregone
Impact Assessment
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 20 of 59
4.3 CPT settings in the DWGM -Retailer impact analysis
A retailer impact model was developed to understand the risk mitigation power of alternative settings for the
CPT Mechanism. The model measured the impact of residual wholesale market price risk on the assumed
operating profits of a range of model retailers. The impact metric that was used was the number of “days of
average operating profit foregone”, representing the operating profit impact of the total CPT Event cost on a
selection of modelled retailers, having different customer portfolios and levels of hedging cover. This section
presents the results of the impact metric on the modelled retailers for the four CPT Event scenarios.
We also considered CPT Event cost in terms of the number of “days of retail margin impact” for the
residential and business customers of the modelled retailers. However this was a secondary metric that was
only used to present an alternative perspective on the measure of this residual risk.
4.3.1 CPT Event: 2 consecutive days with prices at VoLL
This section gives the results for the CPT Event scenario when there are two days of potential prices at
VoLL. Figure 4-2 compares the impact of alternative CPT settings on model retailers when the CPP is set to
35 scheduling intervals (7-days). A set of charts, covering alternative CPP test parameters, can be found in
Appendix A. It also shows the comparative impacts of the current specification of CPT mechanisms of the
STTM and the NEM.
For simplification, Figure 4-2 only displays days of gross operating profit foregone for R1, R2, and R3. The
results for R4 and R5 are not provided as these retailers have an assumed zero contract cover, which is an
unrealistic portfolio management strategy. A full list of results is given by Table 4-2.
Note that the bar graphs on the left, which are enclosed by the rectangle, give the days of operating
foregone for the DWGM and the STTM. These values are calculated using current market settings.
In addition, the purple dashed line gives the result for R1 for the NEM, utilising current CPT settings.
DWGM CPT REVIEW
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Figure 4-2: Impact of CPT settings on Retailer profit for a 2-day CPT Event
The following summarises the impact of CPT settings on the modelled retailers.
For the DWGM case, the number of days of gross operating profit foregone for R1 are, 75 when
CPT = $1800, 75 when CPT = $2500, 137 when CPT = $3700, and 167 when CPT = $4500;
An increase in the CPT results in the retailers being more exposed to sustained high price
outcomes. This implies a higher Event Cost incurred by the retailers, which causes their portfolio-
weighted9 cost to increase. This in turn, results in an increase in the number of days of gross
operating profit foregone as the CPT increases;
A similar upward trend is also observed for R2 and R3 of the DWGM, whereby, an increase in the
CPT leads to an increase in the number of days of gross operating profit foregone. This indicates
that retailers would forego more gross operating profit as the CPT increases;
For the current market setting scenario the number of days of gross operating profit foregone for R1
are, 137 for the DWGM, 87 for the STTM, and 21 for the NEM; and
At the current CPT settings, the results indicate that the level of residual risk in the DWGM is
greater than the STTM, and much higher in comparison to the NEM.
Note that it is possible to obtain the same values of operating profit foregone for the respective retailers when
the CPT value increases. This occurs when alternative CPT test parameters have the same mitigation
power, and therefore do not influence the CPT Event Cost, and usually arises when the CPT values range
between $1800 and $2500.
Figure 4-3 compares the impact of alternative CPT settings on representative customer types. Similar to the
previous set of results, the retailer impact model was used to measure how alternative CPT settings impact
on R1 customers. The full set of results can be found in Appendix B.
9 The portfolio-weighted cost quantifies the impact of the CPT Event on a retailer’s business and residential
portfolio, represented by a defined mix between business and residential customers, and an assumed level of contract cover.
DWGM CPT REVIEW
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Figure 4-3: Impact of CPT settings on customer types for a 2-day CPT Event
The above chart summarises the impact of CPT settings on R1’s customer retail margin.
The first four set of bar charts to the left show the impact of CPT settings on the four respective
customer types, when the CPP is set to 35 scheduling intervals. The latter four set of bar charts to
the right shows a similar set of results, but setting the CPP to 70 scheduling intervals;
In the case of when CPP = 35, the number of days of customer retail margin foregone for C_10 are,
56 when CPT = $1800, 56 when CPP = $2500, 102 when CPP = $3700, and 125 when CPP =
$4500;
The trend observed by C_10 is also seen for the other three customer types. This indicates that
more days of customer retail margin are foregone as the CPT increases;
An increase in the CPT results in the retailers being more exposed to sustained high price outcomes.
This implies a higher Event Cost incurred by the retailers, which causes their load-weighted cost to
increase. This in turn, results in an increase in the number of days of customer margin foregone as
the CPT increases;
In the case of when CPP = 70, the number of days of customer retail margin foregone for each
respective customer type also increases when the CPT is revised upwards. However, the values are
always less than or equal to the previous scenario when the CPP = 35;
An increase in the CPP can limit the retailers’ exposure to sustained high prices, as it enables the
CP to breach the CPT earlier during the CPT Event. In doing so, it limits the cost incurred by
retailers, which reduces the load-weighted cost. Hence, this results in a reduction in the number of
days of customer margin foregone.
DWGM CPT REVIEW
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Table 4-2 presents the full set of results of how the CPT settings impact on retailers’ profit for a 2-day CPT
Event scenario.
Table 4-2: Retailer impacts for a 2-day CPT Event Scenario
The following is observed:
The number of days of gross operating profit foregone is generally much greater for R4 and R5,
when compared to R1, R2 and R3. This is because R4 and R5 have no contract cover (unhedged);
When the CPT is fixed an increase in the CPP leads to a reduction in the number days of gross
operating profit foregone; and
Alternatively, when the CPP is fixed, an increase in the CPT, leads to an increase in the number of
days of gross operating profit foregone.
R1 R2 R3 R4 R5
Event Desciption
75.40514 149.5905 378.8512 759.4182 740.9603 2 days of prices at VoLL, CPT = 1800, CPP =15
75.40514 149.5905 378.8512 759.4182 740.9603 2 days of prices at VoLL, CPT = 1800, CPP =25
75.40514 149.5905 378.8512 759.4182 740.9603 2 days of prices at VoLL, CPT = 1800, CPP =35
44.84092 88.95646 225.2902 451.6007 440.6244 2 days of prices at VoLL, CPT = 1800, CPP =50
44.84092 88.95646 225.2902 451.6007 440.6244 2 days of prices at VoLL, CPT = 1800, CPP =70
105.9694 210.2245 532.4122 1067.236 1041.296 2 days of prices at VoLL, CPT = 2500, CPP =15
75.40514 149.5905 378.8512 759.4182 740.9603 2 days of prices at VoLL, CPT = 2500, CPP =25
75.40514 149.5905 378.8512 759.4182 740.9603 2 days of prices at VoLL, CPT = 2500, CPP =35
75.40514 149.5905 378.8512 759.4182 740.9603 2 days of prices at VoLL, CPT = 2500, CPP =50
75.40514 149.5905 378.8512 759.4182 740.9603 2 days of prices at VoLL, CPT = 2500, CPP =70
136.534 270.858 685.973 1375.053 1341.632 2 days of prices at VoLL, CPT = 3700, CPP =15
136.534 270.858 685.973 1375.053 1341.632 2 days of prices at VoLL, CPT = 3700, CPP =25
136.534 270.858 685.973 1375.053 1341.632 2 days of prices at VoLL, CPT = 3700, CPP =35
136.534 270.858 685.973 1375.053 1341.632 2 days of prices at VoLL, CPT = 3700, CPP =50
136.534 270.858 685.973 1375.053 1341.632 2 days of prices at VoLL, CPT = 3700, CPP =70
167.0978 331.4925 839.5342 1682.871 1641.968 2 days of prices at VoLL, CPT = 4500, CPP =15
167.0978 331.4925 839.5342 1682.871 1641.968 2 days of prices at VoLL, CPT = 4500, CPP =25
167.0978 331.4925 839.5342 1682.871 1641.968 2 days of prices at VoLL, CPT = 4500, CPP =35
167.0978 331.4925 839.5342 1682.871 1641.968 2 days of prices at VoLL, CPT = 4500, CPP =50
167.0978 331.4925 839.5342 1682.871 1641.968 2 days of prices at VoLL, CPT = 4500, CPP =70
Days of gross operating profit foregone
Impact Assessment
DWGM CPT REVIEW
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Table 4-3 presents the full set of results of how the CPT settings impact on days of customer retail margin
foregone for a 2-day CPT Event scenario.
Table 4-3: Customer impacts for a 2-day CPT Event Scenario
The following is observed:
The number of days of customer margin foregone generally increases as the customer size
increases;
When the CPT is fixed, an increase in the CPP leads to a reduction in the number of days of
customer margin foregone; and
Alternatively, when the CPP is fixed, an increase in the CPT leads to an increase in the number of
days of customer margin foregone.
C_10 C_30 C_60 C_500
Event Description
56.48611 85.41363 98.6946 74.09603 2 days of prices at VoLL, CPT = 1800, CPP =15
56.48611 85.41363 98.6946 74.09603 2 days of prices at VoLL, CPT = 1800, CPP =25
56.48611 85.41363 98.6946 74.09603 2 days of prices at VoLL, CPT = 1800, CPP =35
33.59041 50.79264 58.69039 44.06244 2 days of prices at VoLL, CPT = 1800, CPP =50
33.59041 50.79264 58.69039 44.06244 2 days of prices at VoLL, CPT = 1800, CPP =70
79.38182 120.0346 138.6988 104.1296 2 days of prices at VoLL, CPT = 2500, CPP =15
56.48611 85.41363 98.6946 74.09603 2 days of prices at VoLL, CPT = 2500, CPP =25
56.48611 85.41363 98.6946 74.09603 2 days of prices at VoLL, CPT = 2500, CPP =35
56.48611 85.41363 98.6946 74.09603 2 days of prices at VoLL, CPT = 2500, CPP =50
56.48611 85.41363 98.6946 74.09603 2 days of prices at VoLL, CPT = 2500, CPP =70
102.2775 154.6556 178.703 134.1632 2 days of prices at VoLL, CPT = 3700, CPP =15
102.2775 154.6556 178.703 134.1632 2 days of prices at VoLL, CPT = 3700, CPP =25
102.2775 154.6556 178.703 134.1632 2 days of prices at VoLL, CPT = 3700, CPP =35
102.2775 154.6556 178.703 134.1632 2 days of prices at VoLL, CPT = 3700, CPP =50
102.2775 154.6556 178.703 134.1632 2 days of prices at VoLL, CPT = 3700, CPP =70
125.1732 189.2766 218.7072 164.1968 2 days of prices at VoLL, CPT = 4500, CPP =15
125.1732 189.2766 218.7072 164.1968 2 days of prices at VoLL, CPT = 4500, CPP =25
125.1732 189.2766 218.7072 164.1968 2 days of prices at VoLL, CPT = 4500, CPP =35
125.1732 189.2766 218.7072 164.1968 2 days of prices at VoLL, CPT = 4500, CPP =50
125.1732 189.2766 218.7072 164.1968 2 days of prices at VoLL, CPT = 4500, CPP =70
Days of customer margin foregone
Impact Assessment
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 25 of 59
4.3.2 CPT Event: 3 consecutive days with prices at VoLL
This section gives the results for the CPT Event scenario when there are three days of prices at VoLL. Figure
4-4 compares the impact of alternative CPT settings on model retailers when the CPP is set to 35 scheduling
intervals (7-days). A set of charts, covering alternative CPP test parameters, can be found in Appendix A. It
also shows the comparative impacts of the current specification of CPT mechanisms of the STTM and the
NEM.
Figure 4-4: Impact of CPT settings on Retailer profit for a 3-day CPT Event
The following summarises the impact of CPT settings on the modelled retailers.
For the DWGM case, the number of days of gross operating profit foregone for R1 are, 83 when
CPT = $1800, 83 when CPT = $2500, 144 when CPT = $3700, and lastly, 174 when CPT = $4500.
In comparison to the 2-day CPT Event Scenario, these values are higher;
Upward revision in the CPT Event scenario, from 2 days to 3 days, leads to an increase in the Event
Cost, due to a longer duration of VoLL prices. Consequently, this increases the portfolio-weighted
cost incurred by retailers, which implies a higher gross operating profit foregone;
Increase in the CPT results in the retailers being more exposed to sustained high price outcomes.
This implies a higher Event Cost incurred by the retailers, which causes their portfolio-weighted cost
to increase. This in turn, results in an increase in the number of days of gross operating profit
foregone as the CPT increases;
A similar upward trend is also observed for R2 and R3 for the DWGM, whereby, an increase in the
CPT, leads to an increase in the number of days of gross operating profit foregone;
At the current market settings, the number of days of gross operating profit foregone for R1 are, 144
for the DWGM, 94 for the STTM, and 21 for the NEM; and
Once again, the results for the current market settings indicate that the level of residual risk in the
DWGM is greater than the STTM, and much higher in comparison to the NEM.
DWGM CPT REVIEW
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Figure 4-5 compares the impact of alternative CPT settings on representative customer types for R1, when
there are three days of prices at VoLL. The full set of results can be found in Appendix B.
Figure 4-5: Impact of CPT settings on customer types for a 3-day CPT Event
The above chart summarises the impact of CPT settings on R1’s customer retail margin.
The first set of bar charts to the left show the impact of CPT settings on the four respective customer
types, when the CPP is set to 35 scheduling intervals. The latter set of bar charts to the right shows
a similar set of results, but setting the CPP to 70 scheduling intervals;
In the case of when CPP = 35, the number of days of customer retail margin foregone for C_10 are,
62 when CPT = $1800, 62 when CPP = $2500, 108 when CPP = $3700, and 131 when CPP =
$4500. In comparison to the 2-day CPT Event scenario, these values are higher;
Upward revision in the CPT Event scenario, from 2 days to 3 days, leads to an increase in the Event
Cost, due to a longer duration of VoLL prices. Consequently, this increases the load-weighted cost
incurred by retailers, which implies a higher number of days of customer margin foregone;
The trend observed by C_10 is also seen for the other three customer types. This indicates that
more days customer retail margin are foregone as the CPT increases;
Increase in the CPT results in the retailers being more exposed to sustained high price outcomes.
This implies a higher Event Cost incurred by the retailers, which causes their load-weighted cost to
increase. This in turn, results in an increase in the number of days of customer margin foregone as
the CPT increases;
In the case of when CPP = 70, the number of days of customer retail margin foregone for each
respective customer type also increases when the CPT is revised upwards. However, the values are
always less than or equal to the previous scenario when the CPP = 35;
Increase in the CPP can limit the retailers’ exposure to sustained high prices, as it enables the CP to
breach the CPT earlier during the CPT event. In doing so, limits the cost incurred by retailers, which
reduces the load-weighted cost. Hence, this results in a reduction in the number of days of customer
margin foregone; and
The set of results show that the customer retail margin foregone is reduced when the CPP is revised
upwards.
0
50
100
150
200
250
C_10 C_30 C_60 C_500 C_10 C_30 C_60 C_500
Day
s o
f cu
sto
me
r re
tail
mar
gin
fo
rego
ne
Customer type
Impact of CPT settings on R1 customer retail margin3 days of prices at VoLL
CPT = 1800
CPT = 2500
CPT = 3700
CPT = 4500
CPP = 70CPP = 35
DWGM CPT REVIEW
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Table 4-4 presents the full set of results of how the CPT settings impact on retailers’ profit for a 3-day CPT
Event scenario.
Table 4-4: Retailer impacts for a 3-day CPT Event Scenario
The following is observed:
The number of days of gross operating foregone is generally much greater for R4 and R5, when
compared to R1, R2 and R3. This is due to R4 and R5 having no contract cover;
The number of days of operating foregone incurred by retailers is generally larger, when compared
to the 2-days of CPT Event duration. The higher Event Cost caused an increase to retailers’ gross
operating profit foregone;
When the CPT is fixed, an increase in the CPP leads to a reduction in the number days of gross
operating profit foregone; and
Alternatively, when the CPP is fixed, an increase in the CPT, leads to an increase in the number of
days of gross operating profit foregone.
R1 R2 R3 R4 R5
Event Desciption
82.54349 163.7517 414.7157 831.3098 811.1045 3 days of prices at VoLL, CPT = 1800, CPP =15
82.54349 163.7517 414.7157 831.3098 811.1045 3 days of prices at VoLL, CPT = 1800, CPP =25
82.54349 163.7517 414.7157 831.3098 811.1045 3 days of prices at VoLL, CPT = 1800, CPP =35
51.97927 103.1177 261.1547 523.4923 510.7686 3 days of prices at VoLL, CPT = 1800, CPP =50
51.97927 103.1177 261.1547 523.4923 510.7686 3 days of prices at VoLL, CPT = 1800, CPP =70
113.1077 224.3857 568.2768 1139.127 1111.44 3 days of prices at VoLL, CPT = 2500, CPP =15
82.54349 163.7517 414.7157 831.3098 811.1045 3 days of prices at VoLL, CPT = 2500, CPP =25
82.54349 163.7517 414.7157 831.3098 811.1045 3 days of prices at VoLL, CPT = 2500, CPP =35
82.54349 163.7517 414.7157 831.3098 811.1045 3 days of prices at VoLL, CPT = 2500, CPP =50
82.54349 163.7517 414.7157 831.3098 811.1045 3 days of prices at VoLL, CPT = 2500, CPP =70
143.672 285.020 721.838 1446.945 1411.776 3 days of prices at VoLL, CPT = 3700, CPP =15
143.672 285.020 721.838 1446.945 1411.776 3 days of prices at VoLL, CPT = 3700, CPP =25
143.672 285.020 721.838 1446.945 1411.776 3 days of prices at VoLL, CPT = 3700, CPP =35
143.672 285.020 721.838 1446.945 1411.776 3 days of prices at VoLL, CPT = 3700, CPP =50
143.672 285.020 721.838 1446.945 1411.776 3 days of prices at VoLL, CPT = 3700, CPP =70
174.2361 345.6537 875.3988 1754.762 1712.112 3 days of prices at VoLL, CPT = 4500, CPP =15
174.2361 345.6537 875.3988 1754.762 1712.112 3 days of prices at VoLL, CPT = 4500, CPP =25
174.2361 345.6537 875.3988 1754.762 1712.112 3 days of prices at VoLL, CPT = 4500, CPP =35
174.2361 345.6537 875.3988 1754.762 1712.112 3 days of prices at VoLL, CPT = 4500, CPP =50
174.2361 345.6537 875.3988 1754.762 1712.112 3 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of gross operating profit foregone
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 28 of 59
Table 4-5 presents the full set of results of how the CPT settings impact on customer retail margin foregone
for a 3-day CPT Event scenario.
Table 4-5: Customer impacts for a 3-day CPT Event Scenario
The following is observed:
The number of days of customer margin foregone generally increases as the customer size
increases;
The number of days of customer margin foregone incurred by R1 is generally larger, when compared
to the 2-days of CPT Event duration. The higher Event Cost caused an increase in the number of
days of customer margin foregone;
When the CPT is fixed, an increase in the CPP leads to a reduction in the number of days of
customer margin foregone; and
Alternatively, when the CPP is fixed, an increase in the CPT, leads to an increase in the number
days of customer margin foregone.
C_10 C_30 C_60 C_500
Event Description
61.83346 93.49945 108.0377 81.11045 3 days of prices at VoLL, CPT = 1800, CPP =15
61.83346 93.49945 108.0377 81.11045 3 days of prices at VoLL, CPT = 1800, CPP =25
61.83346 93.49945 108.0377 81.11045 3 days of prices at VoLL, CPT = 1800, CPP =35
38.93776 58.87846 68.03348 51.07686 3 days of prices at VoLL, CPT = 1800, CPP =50
38.93776 58.87846 68.03348 51.07686 3 days of prices at VoLL, CPT = 1800, CPP =70
84.72917 128.1204 148.0419 111.144 3 days of prices at VoLL, CPT = 2500, CPP =15
61.83346 93.49945 108.0377 81.11045 3 days of prices at VoLL, CPT = 2500, CPP =25
61.83346 93.49945 108.0377 81.11045 3 days of prices at VoLL, CPT = 2500, CPP =35
61.83346 93.49945 108.0377 81.11045 3 days of prices at VoLL, CPT = 2500, CPP =50
61.83346 93.49945 108.0377 81.11045 3 days of prices at VoLL, CPT = 2500, CPP =70
107.6249 162.7414 188.0461 141.1776 3 days of prices at VoLL, CPT = 3700, CPP =15
107.6249 162.7414 188.0461 141.1776 3 days of prices at VoLL, CPT = 3700, CPP =25
107.6249 162.7414 188.0461 141.1776 3 days of prices at VoLL, CPT = 3700, CPP =35
107.6249 162.7414 188.0461 141.1776 3 days of prices at VoLL, CPT = 3700, CPP =50
107.6249 162.7414 188.0461 141.1776 3 days of prices at VoLL, CPT = 3700, CPP =70
130.5206 197.3624 228.0503 171.2112 3 days of prices at VoLL, CPT = 4500, CPP =15
130.5206 197.3624 228.0503 171.2112 3 days of prices at VoLL, CPT = 4500, CPP =25
130.5206 197.3624 228.0503 171.2112 3 days of prices at VoLL, CPT = 4500, CPP =35
130.5206 197.3624 228.0503 171.2112 3 days of prices at VoLL, CPT = 4500, CPP =50
130.5206 197.3624 228.0503 171.2112 3 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 29 of 59
4.3.3 CPT Event: 4 consecutive days with prices at VoLL
This section gives the results for the CPT Event scenario when there are four days of prices at VoLL. Figure
4-6 compares the impact of alternative CPT settings on model retailers when the CPP is set to 35 scheduling
intervals (7-days). A set of charts, covering alternative CPP test parameters, can be found in Appendix A. It
also shows the comparative impacts of the current specification of CPT mechanisms for the STTM and the
NEM.
Figure 4-6: Impact of CPT settings on Retailer profit for a 4-day CPT Event Scenario
The following summarises the impact of CPT settings on the modelled retailers.
For the DWGM case, the number of days of gross operating profit foregone for R1 are, 90 when
CPT = $1800, 90 when CPT = $2500, 151 when CPT = $3700, and lastly, 181 when CPT = $4500.
In comparison to the 3-day CPT Event Scenario, these values are higher;
Upward revision in the CPT Event scenario, from 3 days to 4 days, leads to an increase in the Event
Cost, due to a longer duration of VoLL prices. Consequently, this increases the portfolio-weighted
cost incurred by retailers, which implies a higher gross operating profit foregone;
Increase in the CPT results in the retailers being more exposed to sustained high price outcomes.
This implies a higher Event Cost incurred by the retailers, which causes their portfolio-weighted cost
to increase. This in turn, results in an increase in the number of days of gross operating profit
foregone as the CPT increases;
A similar upward trend is also observed for R2 and R3 for the DWGM, whereby, an increase in the
CPT, leads to an increase in the number of days of gross operating profit foregone.
For the current market settings, the number of days of gross operating profit foregone for R1 are,
151 for the DWGM, 101 for the STTM, and 21 for the NEM; and
Once again, the results for the current market settings indicate that the level of residual risk in the
DWGM is greater than the STTM, and significantly higher in comparison to the NEM.
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 30 of 59
Figure 4-7 compares the impact of alternative CPT settings on representative customer types for R1, when
there are four days of prices at VoLL. The equivalent results for R2 to R5 have been provided in this section.
The full set of results can be found in Appendix B.
Figure 4-7: Impact of CPT settings on customer types for a 4-day CPT Event
The above chart summarises the impact of CPT settings on R1’s customer retail margin.
The first set of bar charts to the left show the impact of CPT settings on the four respective customer
types, when the CPP is set to 35 scheduling intervals. The latter set of bar charts to the right shows
a similar set of results, but setting the CPP to 70 scheduling intervals;
In the case of when CPP = 35, the number of days of customer retail margin foregone for C_10 are,
67 when CPT = $1800, 67 when CPP = $2500, 113 when CPP = $3700, and 136 when CPP =
$4500. In comparison to the 3-day CPT Event Scenario, these values are higher;
Upward revision in the CPT Event scenario, from 3 days to 4 days, leads to an increase in the Event
Cost, due to a longer duration of VoLL prices. Consequently, this increases the load-weighted cost
incurred by retailers, which implies a higher number of days of customer margin foregone;
The trend observed by C_10 is also seen for the other three customer types. This indicates that
more days customer retail margin are foregone as the CPT increases;
Increase in the CPT results in the retailers being more exposed to sustained high price outcomes.
This implies a higher Event Cost incurred by the retailers, which causes their load-weighted cost to
increase. This in turn, results in an increase in the number of days of customer margin foregone as
the CPT increases;
In the case of when CPP = 70, the number of days of customer retail margin foregone for each
respective type also increases when the CPT is revised upwards. However, the values are always
less than or equal to the previous scenario when the CPP = 35;
Increase in the CPP can limit the retailers’ exposure to sustained high prices, as it enables the CP to
breach the CPT earlier during the CPT Event. In doing so, limits the cost incurred by the retailers,
which causes the load-weighted cost to decrease. Hence, this results in a reduction in the number of
days of customer margin foregone; and
The set of results show that the customer retail margin foregone is reduced when the CPP is revised
upwards.
0
50
100
150
200
250
C_10 C_30 C_60 C_500 C_10 C_30 C_60 C_500
Day
s o
f cu
sto
me
r re
tail
mar
gin
fo
rego
ne
Customer type
Impact of CPT settings of R1 customer retail margin4 days of prices at VoLL
CPT = 1800
CPT = 2500
CPT = 3700
CPT = 4500
CPP = 70CPP = 35
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 31 of 59
Table 4-6 presents the full set of results of how the CPT settings impact on retailers’ profit for a 4-day CPT
Event scenario.
Table 4-6: Retailer impacts for a 4-day CPT Event Scenario
The following is observed:
The number of days of gross operating foregone is generally much greater for R4 and R5, when
compared to R1, R2 and R3. This is due to R4 and R5 having no contract cover;
The number of days of gross operating foregone incurred by retailers is generally larger, when
compared to the 3-days of CPT Event duration. The higher Event Cost caused an increase to
retailers’ gross operating profit foregone;
When the CPT is fixed, an increase in the CPP leads to a reduction in the number of days of gross
operating profit foregone; and
Alternatively, when the CPP is fixed, an increase in the CPT, leads to an increase in the number of
days of gross operating profit foregone.
R1 R2 R3 R4 R5
Event Desciption
120.2461 238.5469 604.1413 1211.019 1181.585 4 days of prices at VoLL, CPT = 1800, CPP =15
89.68184 177.9129 450.5803 903.2014 881.2488 4 days of prices at VoLL, CPT = 1800, CPP =25
89.68184 177.9129 450.5803 903.2014 881.2488 4 days of prices at VoLL, CPT = 1800, CPP =35
59.11763 117.2789 297.0193 595.3839 580.9129 4 days of prices at VoLL, CPT = 1800, CPP =50
59.11763 117.2789 297.0193 595.3839 580.9129 4 days of prices at VoLL, CPT = 1800, CPP =70
181.3745 359.8149 911.2633 1826.654 1782.256 4 days of prices at VoLL, CPT = 2500, CPP =15
89.68184 177.9129 450.5803 903.2014 881.2488 4 days of prices at VoLL, CPT = 2500, CPP =25
89.68184 177.9129 450.5803 903.2014 881.2488 4 days of prices at VoLL, CPT = 2500, CPP =35
89.68184 177.9129 450.5803 903.2014 881.2488 4 days of prices at VoLL, CPT = 2500, CPP =50
89.68184 177.9129 450.5803 903.2014 881.2488 4 days of prices at VoLL, CPT = 2500, CPP =70
273.067 541.717 1371.946 2750.107 2683.264 4 days of prices at VoLL, CPT = 3700, CPP =15
150.810 299.181 757.702 1518.836 1481.921 4 days of prices at VoLL, CPT = 3700, CPP =25
150.810 299.181 757.702 1518.836 1481.921 4 days of prices at VoLL, CPT = 3700, CPP =35
150.810 299.181 757.702 1518.836 1481.921 4 days of prices at VoLL, CPT = 3700, CPP =50
150.810 299.181 757.702 1518.836 1481.921 4 days of prices at VoLL, CPT = 3700, CPP =70
303.6314 602.3509 1525.507 3057.924 2983.6 4 days of prices at VoLL, CPT = 4500, CPP =15
181.3745 359.8149 911.2633 1826.654 1782.256 4 days of prices at VoLL, CPT = 4500, CPP =25
181.3745 359.8149 911.2633 1826.654 1782.256 4 days of prices at VoLL, CPT = 4500, CPP =35
181.3745 359.8149 911.2633 1826.654 1782.256 4 days of prices at VoLL, CPT = 4500, CPP =50
181.3745 359.8149 911.2633 1826.654 1782.256 4 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of gross operating profit foregone
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 32 of 59
Table 4-7 presents the full set of results of how the CPT settings impact on customer retail margin foregone
for a 4-day CPT Event scenario.
Table 4-7: Customer impacts for a 4-day CPT Event Scenario
The following is observed:
The number of days of customer margin foregone generally increases as the customer size
increases;
The number of days of customer margin foregone incurred by R1 is generally larger, when compared
to the 3-days of CPT Event duration. The higher Event Cost caused an increase in the number of
days of customer margin foregone;
When the CPT is fixed, an increase in the CPP leads to a reduction in the number of days of
customer margin foregone; and
Alternatively, when the CPP is fixed, an increase in the CPT, leads to an increase in the number of
days of customer margin foregone.
C_10 C_30 C_60 C_500
Event Description
90.07652 136.2063 157.385 118.1585 4 days of prices at VoLL, CPT = 1800, CPP =15
67.18082 101.5853 117.3808 88.12488 4 days of prices at VoLL, CPT = 1800, CPP =25
67.18082 101.5853 117.3808 88.12488 4 days of prices at VoLL, CPT = 1800, CPP =35
44.28511 66.96429 77.37657 58.09129 4 days of prices at VoLL, CPT = 1800, CPP =50
44.28511 66.96429 77.37657 58.09129 4 days of prices at VoLL, CPT = 1800, CPP =70
135.8679 205.4483 237.3934 178.2256 4 days of prices at VoLL, CPT = 2500, CPP =15
67.18082 101.5853 117.3808 88.12488 4 days of prices at VoLL, CPT = 2500, CPP =25
67.18082 101.5853 117.3808 88.12488 4 days of prices at VoLL, CPT = 2500, CPP =35
67.18082 101.5853 117.3808 88.12488 4 days of prices at VoLL, CPT = 2500, CPP =50
67.18082 101.5853 117.3808 88.12488 4 days of prices at VoLL, CPT = 2500, CPP =70
204.555 309.3112 357.406 268.3264 4 days of prices at VoLL, CPT = 3700, CPP =15
112.9722 170.8273 197.3892 148.1921 4 days of prices at VoLL, CPT = 3700, CPP =25
112.9722 170.8273 197.3892 148.1921 4 days of prices at VoLL, CPT = 3700, CPP =35
112.9722 170.8273 197.3892 148.1921 4 days of prices at VoLL, CPT = 3700, CPP =50
112.9722 170.8273 197.3892 148.1921 4 days of prices at VoLL, CPT = 3700, CPP =70
227.4507 343.9322 397.4103 298.36 4 days of prices at VoLL, CPT = 4500, CPP =15
135.8679 205.4483 237.3934 178.2256 4 days of prices at VoLL, CPT = 4500, CPP =25
135.8679 205.4483 237.3934 178.2256 4 days of prices at VoLL, CPT = 4500, CPP =35
135.8679 205.4483 237.3934 178.2256 4 days of prices at VoLL, CPT = 4500, CPP =50
135.8679 205.4483 237.3934 178.2256 4 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 33 of 59
4.3.4 CPT Event: 5 consecutive days with prices at VoLL
This section gives the results for the CPT Event scenario when there are five days of prices at VOLL. Figure
4-8 compares the impact of alternative CPT settings on model retailers when the CPP is set to 35 scheduling
intervals (7-days). A set of charts, covering alternative CPP test parameters, can be found in Appendix A. It
also shows the comparative impacts of the current specification of CPT mechanisms for the STTM and the
NEM.
Figure 4-8: Impact of CPT settings on Retailer profit for a 5-day CPT Event Scenario
The following summarises the impact of CPT settings on the modelled retailers.
For the DWGM case, the number of days of gross operating profit foregone for R1 are, 97 when
CPT = $1800, 97 when CPT = $2500, 158 when CPT = $3700, and lastly, 189 when CPT = $4500.
In comparison to the 4-day CPT Event Scenario, these values are higher;
Upward revision in the CPT Event scenario, from 4 days to 5 days, leads to an increase in the Event
Cost, due to a longer duration of VoLL prices. Consequently, this increases the portfolio-weighted
cost incurred by retailers, which implies a higher gross operating profit foregone;
Increase in the CPT results in the retailers being more exposed to sustained high price outcomes.
This implies a higher Event Cost incurred by the retailers, which causes their portfolio-weighted cost
to increase. This in turn, results in an increase in the number of days of gross operating profit
foregone as the CPT increases;
A similar upward trend is also observed for R2 and R3 for the DWGM, whereby, an increase in the
CPT, leads to an increase in the number of days of gross operating profit foregone.
For the current market settings, the number of days of gross operating profit foregone for R1 are,
158 for the DWGM, 108 for the STTM, and 21 for the NEM; and
Once again, the results for the current market settings indicate that the level of residual risk in the
DWGM is greater than the STTM, and significantly higher in comparison to the NEM.
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 34 of 59
Figure 4-9 compares the impact of alternative CPT settings on representative customer types for R1, when
there are five days of prices at VoLL. The full set of results can be found in Appendix B.
Figure 4-9: Impact of CPT settings on customer types for a 4-day CPT Event
The above chart summarises the impact of CPT settings on R1’s customer retail margin.
The first set of bar charts to the left show the impact of CPT settings on the four respective customer
types, when the CPP is set to 35 scheduling intervals. The latter set of bar charts to the right shows
a similar set of results, but setting the CPP to 70 scheduling intervals;
In the case of when CPP = 35, the number of days of customer retail margin foregone for C_10 are,
73 when CPT = $1800, 73 when CPP = $2500, 118 when CPP = $3700, and 118 when CPP =
$4500. In comparison to the 4-day CPT Event Scenario, these values are higher;
Upward revision in the CPT event scenario, from 4 days to 5 days, leads to an increase in the Event
Cost, due to a longer duration of VoLL prices. Consequently, this increases the load-weighted cost
incurred by retailers, which implies a higher number of days of customer margin foregone;
The trend observed by C_10 is also seen for the other three customer types. This indicates that
more days of customer retail margin are foregone as the CPT increases;
Increase in the CPT results in the retailers being more exposed to sustained high price outcomes.
This implies a higher Event Cost incurred by the retailers, which causes their load-weighted cost to
increase. This in turn, results in an increase in the number of days of customer margin foregone as
the CPT increases;
In the case of when CPP = 70, the number of days of customer retail margin foregone for each
respective customer type also increases when CPT is revised upwards. However, the values are
always less than or equal to the previous scenario when the CPP = 35;
Increase in the CPP can limit the retailers’ exposure to sustained high prices, as it enables the CP to
breach the CPT earlier during the CPT event. In doing so, limits the cost incurred by retailers, which
causes the load-weighted cost to decrease. Hence, this results in a reduction in the number of days
of customer margin foregone; and
0
50
100
150
200
250
C_10 C_30 C_60 C_500 C_10 C_30 C_60 C_500
Day
s o
f cu
sto
me
r re
tail
mar
gin
fo
rego
ne
Customer type
Impact of CPT settings of R1 customer retail margin5 days of prices at VoLL
CPT = 1800
CPT = 2500
CPT = 3700
CPT = 4500
CPP = 70CPP = 35
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 35 of 59
The set of results show that the customer retail margin foregone is reduced when the CPP is revised
upwards.
Table 4-8 presents the full set of results of how the CPT settings impact on retailers’ profit for a 5-day CPT
Event scenario.
Table 4-8: Retailer impacts for a 5-day CPT Event Scenario
The following is observed:
The number of days of gross operating foregone is generally much greater for R4 and R5, when
compared to R1, R2 and R3. This is due to R4 and R5 having no contract cover;
The number of days of gross operating foregone incurred by retailers is generally larger, when
compared to the 4-days of CPT Event duration. The higher Event Cost caused an increase to
retailers’ gross operating profit foregone;
When the CPT is fixed, an increase in the CPP leads to a reduction in the number of days of gross
operating profit foregone; and
Alternatively, when the CPP is fixed, an increase in the CPT, leads to an increase in the number of
days of gross operating profit foregone.
R1 R2 R3 R4 R5
Event Desciption
127.3844 252.7082 640.0059 1282.911 1251.729 5 days of prices at VoLL, CPT = 1800, CPP =15
96.8202 192.0742 486.4449 975.093 951.393 5 days of prices at VoLL, CPT = 1800, CPP =25
96.8202 192.0742 486.4449 975.093 951.393 5 days of prices at VoLL, CPT = 1800, CPP =35
66.25598 131.4402 332.8839 667.2755 651.0571 5 days of prices at VoLL, CPT = 1800, CPP =50
66.25598 131.4402 332.8839 667.2755 651.0571 5 days of prices at VoLL, CPT = 1800, CPP =70
188.5128 373.9762 947.1279 1898.546 1852.401 5 days of prices at VoLL, CPT = 2500, CPP =15
96.8202 192.0742 486.4449 975.093 951.393 5 days of prices at VoLL, CPT = 2500, CPP =25
96.8202 192.0742 486.4449 975.093 951.393 5 days of prices at VoLL, CPT = 2500, CPP =35
96.8202 192.0742 486.4449 975.093 951.393 5 days of prices at VoLL, CPT = 2500, CPP =50
96.8202 192.0742 486.4449 975.093 951.393 5 days of prices at VoLL, CPT = 2500, CPP =70
280.205 555.878 1407.811 2821.998 2753.408 5 days of prices at VoLL, CPT = 3700, CPP =15
157.949 313.342 793.567 1590.728 1552.065 5 days of prices at VoLL, CPT = 3700, CPP =25
157.949 313.342 793.567 1590.728 1552.065 5 days of prices at VoLL, CPT = 3700, CPP =35
157.949 313.342 793.567 1590.728 1552.065 5 days of prices at VoLL, CPT = 3700, CPP =50
157.949 313.342 793.567 1590.728 1552.065 5 days of prices at VoLL, CPT = 3700, CPP =70
341.3339 677.1462 1714.933 3437.633 3354.08 5 days of prices at VoLL, CPT = 4500, CPP =15
188.5128 373.9762 947.1279 1898.546 1852.401 5 days of prices at VoLL, CPT = 4500, CPP =25
188.5128 373.9762 947.1279 1898.546 1852.401 5 days of prices at VoLL, CPT = 4500, CPP =35
188.5128 373.9762 947.1279 1898.546 1852.401 5 days of prices at VoLL, CPT = 4500, CPP =50
188.5128 373.9762 947.1279 1898.546 1852.401 5 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of gross operating profit foregone
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 36 of 59
Table 4-9 presents the full set of results of how the CPT settings impact on customer retail margin foregone
for a 5-day CPT Event scenario.
Table 4-9: Customer impacts for a 5-day CPT Event Scenario
The following is observed:
The number of days of customer margin foregone generally increases as the customer size
increases;
The number of days of customer margin foregone incurred by R1 is generally larger, when compared
to the 4-days of CPT Event duration. The higher Event Cost caused an increase in the number of
days of customer margin foregone;
When the CPT is fixed, an increase in the CPP leads to a reduction in the number of days of
customer margin foregone; and
Alternatively, when the CPP is fixed, an increase in the CPT, leads to an increase in the number of
days of customer margin foregone.
C_10 C_30 C_60 C_500
Event Description
95.42387 144.2921 166.7281 125.1729 5 days of prices at VoLL, CPT = 1800, CPP =15
72.52817 109.6711 126.7239 95.1393 5 days of prices at VoLL, CPT = 1800, CPP =25
72.52817 109.6711 126.7239 95.1393 5 days of prices at VoLL, CPT = 1800, CPP =35
49.63246 75.05011 86.71965 65.10571 5 days of prices at VoLL, CPT = 1800, CPP =50
49.63246 75.05011 86.71965 65.10571 5 days of prices at VoLL, CPT = 1800, CPP =70
141.2153 213.5341 246.7365 185.2401 5 days of prices at VoLL, CPT = 2500, CPP =15
72.52817 109.6711 126.7239 95.1393 5 days of prices at VoLL, CPT = 2500, CPP =25
72.52817 109.6711 126.7239 95.1393 5 days of prices at VoLL, CPT = 2500, CPP =35
72.52817 109.6711 126.7239 95.1393 5 days of prices at VoLL, CPT = 2500, CPP =50
72.52817 109.6711 126.7239 95.1393 5 days of prices at VoLL, CPT = 2500, CPP =70
209.9024 317.397 366.7491 275.3408 5 days of prices at VoLL, CPT = 3700, CPP =15
118.3196 178.9131 206.7323 155.2065 5 days of prices at VoLL, CPT = 3700, CPP =25
118.3196 178.9131 206.7323 155.2065 5 days of prices at VoLL, CPT = 3700, CPP =35
118.3196 178.9131 206.7323 155.2065 5 days of prices at VoLL, CPT = 3700, CPP =50
118.3196 178.9131 206.7323 155.2065 5 days of prices at VoLL, CPT = 3700, CPP =70
255.6938 386.639 446.7576 335.408 5 days of prices at VoLL, CPT = 4500, CPP =15
141.2153 213.5341 246.7365 185.2401 5 days of prices at VoLL, CPT = 4500, CPP =25
141.2153 213.5341 246.7365 185.2401 5 days of prices at VoLL, CPT = 4500, CPP =35
141.2153 213.5341 246.7365 185.2401 5 days of prices at VoLL, CPT = 4500, CPP =50
141.2153 213.5341 246.7365 185.2401 5 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
DWGM CPT REVIEW
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4.3.5 Additional analysis requested by Lumo Energy
As part of the consultative process that accompanied this CPT Mechanism Review, Lumo Energy proposed
additional analysis to test an alternative “worst case” profile of event costs and market imbalances. The
requested profile of event cost featured an assumed VoLL price for the first scheduling interval of each CPT
Event day, with subsequent (intra-day) prices equal to the assumed “normal price”. Further, the requested
imbalance profile featured the entire daily imbalance in the first scheduling interval of each CPT Event day.
Lumo Energy also requested additional (higher) test-settings for the CPT Mechanism.
Figure 4-10 compares the impact of alternative CPT settings on model retailers when the CPP is set to 35
scheduling intervals (7-days) for the LUMO Energy scenario. It also shows the comparative impacts of the
current specification of CPT Mechanisms for the STTM and the NEM.
Figure 4-10: Impact of CPT settings on Retailer profit for the Lumo Scenario
The following summarises the impact of CPT settings on model retailers.
For the DWGM case, the number of days of gross operating profit foregone for R1 are, 341 when
CPT = $1800, 341 when CPT = $2500, 646 when CPT = $3700, and lastly, 799 when CPT = $4500.
In comparison to the 5-day CPT Event Scenario, these values are approximately 4 times higher.
These results eventuated from letting the daily imbalance to occur only in the first scheduling
interval for each CPT Event day.
This caused the CPT Event cost to increase quite significantly, which consequently led to increases
in the number of days of gross operating profit foregone;
As seen previously, an increase in the CPT results in the retailers being more exposed to sustained
high price outcomes. This implies a higher Event Cost incurred by the retailers, which causes their
portfolio-weighted cost to increase. This in turn, results in an increase in the gross operating profit
foregone as the CPT increases;
A similar upward trend is also observed for R2 and R3 for DWGM, whereby, an increase in the
CPT, leads to an increase in the number of days of gross operating profit foregone; and
For the current market setting scenario, the number of days of gross operating profit foregone for
R1 is, 158 for the DWGM, and 21 for the NEM. This shows that the level of risk tolerated by retailers
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in the Lumo Energy scenario is significantly greater than the current market setting outcome for the
NEM.
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5 RECOMMENDATIONS
5.1 Summary of findings
The analysis has found that the current CPT settings may not sufficiently protect market participants from
sustained high prices, resulting in possible exposure to unmanageable and excessive price risk.
The analysis also found, for the modelled CPT Event scenarios and current CPT settings, that the DWGM
CPT mechanism provides significantly less protection than do the CPT mechanisms of the STTM and the
NEM.
5.2 Excessive or unmanageable Risk
Our test for wholesale market price risk measures the residual cost impact of a range of CPT Events on the
gross operating profits of a range of modelled retailers. In particular, we measured the cost impact of each
CPT Event scenario in terms of the number of days of gross operating profit foregone for each modelled
retailer. This measured cost took into account an assumed level of contract hedge cover for each modelled
retailer, thereby measuring the net cost, after hedging, of market prices for a retail portfolio featuring both
residential and/or business customers.
Unlike for the NEM, the financial markets do not offer a range of risk products to assist the management of
price risk in the wholesale gas markets. This means that in the case of the wholesale gas markets,
participants must physically hedge price risk; this requires a participant to hold a diverse gas portfolio,
including both supply and transportation capacity. In the case of the DWGM, price risk can be significant
because of the small amount of linepack within the Declared Transmission System. During a CPT Event,
this means that LNG and Iona gas inventories may be needed. Of these, the location of the Dandenong
LNG facility makes it an important facility from a security of supply perspective.
Our modelling assumption is that a CPT Event is likely to occur once every ten years. The actual prospect of
a CPT Event can vary by scenario however, with the shorter duration events perhaps more realistic. An
actual event that could otherwise cause five days of prices at VoLL may not be realistic, given that such a
scenario would likely require considerable curtailment, and possible market suspension. Indeed, for major
events we would expect that the limited linepack capacity of the Declared Transmission System would
require market suspension before the CPT event would otherwise end. For this reason we have given
greater weight to the two and three-day CPT event scenarios.
We determined that a CPT Event cost of more than 500 days of foregone gross operating profit could reflect
a level of risk that is unmanageable and excessive for a modelled retailer. This amounts to about 10% of the
annual operating costs of the Victorian retail portfolio of a typical retailer. For an established retailer with a
national dual-fuel business this would be manageable. However for a new entrant or small, rapidly growing
retailer, this could present an insolvency risk.
In the wholesale gas markets, the bilateral market for LNG supply and capacity is not liquid. AEMO
understands that most LNG capacity is subject to long-term contracts by the larger and more established
market participants. This may make it difficult for a new entrant retailer to establish and maintain a sufficient
physical hedge against CPT Events.
An inability to hedge against excessive levels of risk creates a barrier to entry to potential new retailers,
which can result in less competition in the long term. This outcome would not be in the long-run interests of
consumers, and does not assist the achievement of the National Gas Objective.
For this reason, we used our modelled retailer, R3, as the basis for determining whether CPT settings may
be insufficient. R3 is a proxy for a new entrant or small rapidly growing retailer, having a retail portfolio that
has an 80%:20% mix between residential and business customers, and having only 50% contract cover for
CPT Events.
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By comparison, our modelled retailer, R1, resembles a major established retailer, having an assumed 90%
level of contract cover for CPT Events.
Our risk threshold for deeming a level of risk that is excessive and/or unmanageable is therefore 500 days of
average gross operating profit foregone for retailer R3
5.3 Combinations of CPT settings that satisfy the risk threshold
We have found that the current settings for the CPT mechanism may not provide sufficient risk mitigation for
retailers that have limited contract cover. R3, that only has 50% contract cover, would forego 686 days of
gross operating profit in the case of our 2-day CPT Event. Figure 1 below illustrates this finding.10
Figure 5-1: Impact of CPT settings on Retailer profit
CPT settings that do not breach the risk threshold of 500 days for retailer R3:
Table 5-1 identifies those combinations of CPT settings that do not breach the risk threshold of 500 days for
retailer R3 (highlighted in green).
The results show that for each of the respective CPT Event scenarios, adjustment to the CPP or the
CPT or both, will be required in order to protect the model retailer, R3, from a level of risk that is
deemed excessive and/or unmanageable. These combinations of CPT settings are highlighted in
green;
For the CPT Event scenario of two days duration, it was noted that an acceptable level of risk can be
achieved by revising the CPT from $3700 to $1800, and selecting any one of the CPP test values.
Similarly, an acceptable level of risk can be achieved by revising the CPT from $3700 to $2500, and
choosing a CPP setting between 25 to 70 scheduling intervals;
The same combinations of CPT settings can achieve an acceptable level of risk for the CPT Event
scenario that has a duration of three days; and
For CPT Event scenarios of four and five days, the acceptable level of risk can achieved by setting
the CPP parameter to between 25 and 70 scheduling intervals, and setting the CPT to $1800 or
$2500.
10
Note that it is possible to obtain the same values of operating foregone for the respective retailers when the CPT
values increase. This occurs when the change in CPT values does not influence the CPT Event Cost.
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Table 5-1: Combinations of CPT settings that satisfy our test for acceptable risk
5.4 Recommended CPT Settings
The current CPT setting may not provide sufficient risk mitigation for retailers that have limited contract
cover. Moreover, our analysis has found that this level of risk is out-of-step with other markets and may
therefore impose an excessive and onerous management cost. These factors can create a barrier to entry
and may discourage new retailers from entering into the DWGM.
Due to these findings, we recommend a change to the CPT settings to enable a reduction in the level of risk
that is resultant from the CPT mechanism.
Recommended CPT Settings
Cumulative Price Period (CPP) 35 Scheduling Intervals (7 days)
Cumulative Price Threshold (CPT) $1800
We recommend:
1. Cumulative Price Period (CPP): 35 Scheduling Intervals (7 days)
We recommend that current settings for the CPP are maintained at 35 scheduling intervals. This
would satisfy the needs of short-duration CPT events, while also providing sufficient time to
understand and coordinate the initial management of long-duration events. This also shares
symmetry with the NEM and STTM (CPP = 7 days).
2. Cumulative Price Threshold (CPT): $1800
We recommend that the CPT is lowered from $3700 to $1800. Based on our measure of
excessive and/or unmanageable risk, this reduces the level of residual wholesale market risk to a
CPT ($) 15 25 35 50 70
1800 378.8512 378.8512 378.8512 225.2902 225.2902
2500 532.4122 378.8512 378.8512 378.8512 378.8512
3700 685.9732 685.9732 685.9732 685.9732 685.9732
4500 839.5342 839.5342 839.5342 839.5342 839.5342
1800 414.7157 414.7157 414.7157 261.1547 261.1547
2500 568.2768 414.7157 414.7157 414.7157 414.7157
3700 721.8378 721.8378 721.8378 721.8378 721.8378
4500 875.3988 875.3988 875.3988 875.3988 875.3988
1800 604.1413 450.5803 450.5803 297.0193 297.0193
2500 911.2633 450.5803 450.5803 450.5803 450.5803
3700 1371.946 757.7023 757.7023 757.7023 757.7023
4500 1525.507 911.2633 911.2633 911.2633 911.2633
1800 640.0059 486.4449 486.4449 332.8839 332.8839
2500 947.1279 486.4449 486.4449 486.4449 486.4449
3700 1407.811 793.5669 793.5669 793.5669 793.5669
4500 1714.933 947.1279 947.1279 947.1279 947.1279
2 days
CPT EVENT
DURATION
CPP
5 days
3 days
4 days
DWGM CPT REVIEW
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level that better addresses the needs of new entrant and rapidly growing retailers. We
understand that in the case of the Declared Transmission System, access to injection capacity
from the Dandenong LNG facility will often be required to maintain the security of the system
during possible CPT events. AEMO understands that the bilateral market for LNG capacity is not
liquid, and is mostly contracted by the larger established retailers. It follows that new entrant and
rapidly growing retailers may therefore experience difficulty in procuring sufficient LNG capacity to
address optimal risk management needs. This could present a barrier to entry, affecting
competition and price outcomes, and may create a possible insolvency risk during major CPT
events. Our assessment has also shown that the risk mitigation power of the current settings is
weaker than those of the CPT mechanisms of the NEM and STTM.
A CPT setting of $1800 will not deny sufficient cost recovery for the fixed and variable costs of the
LNG facility, which is also the most expensive source of supply in the Victorian system on a total
average cost basis.
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6 NEXT STEPS
AEMO is seeking comments on the findings and recommendations of this draft report. In particular, we are
seeking feedback on:
1. Our basis for determining the level of residual CPT risk that may be excessive or unmanageable,
and therefore the basis of our justification for recommending alternative CPP and CPT settings.
a. Our use of the model retailer, R3, representing a proxy for a new-entrant or rapidly growing
retailer.
b. Our choice of the risk threshold, 500 days of average operating profit foregone, for major
CPT events having an assumed likelihood of ~1 in 10 years.
2. Our recommended setting of 35 scheduling intervals (7 days) for the Cumulative Price Period (CPP).
3. Our recommended setting of $1800 for the Cumulative Price Threshold (CPT).
Comments are due by Monday July 22, 2013.
A final report and recommendations will be prepared for information and consideration at the GWCF meeting
on August 13, 2013.
DWGM CPT REVIEW
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7 Appendix A IMPACTS OF CPT SETTINGS ON RETAILERS
The following graphs show the impact of CPT settings on retailer gross operating profit for different CPP test
values, when there are two days of high price outcomes.
Figure A-1: Impact on Retailer profit for a 2 day CPT Event, when CPP = 15
Figure A-2: Impact on Retailer profit for a 2 day CPT Event, when CPP = 25
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Figure A-3: Impact on Retailer profit for a 2 day CPT Event, when CPP = 50
Figure A-4: Impact on Retailer profit for a 2 day CPT Event, when CPP = 70
DWGM CPT REVIEW
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The following graphs show the impact of CPT settings on retailer gross operating profit for different CPP test
values, when there are three days of high price outcomes.
Figure A-5: Impact on Retailer profit for a 3 day CPT Event, when CPP = 15
Figure A-6: Impact on Retailer profit for a 3 day CPT Event, when CPP = 25
DWGM CPT REVIEW
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Figure A-7: Impact on Retailer profit for a 3 day CPT Event, when CPP = 50
Figure A-8: Impact on Retailer profit for a 3 day CPT Event, when CPP = 70
DWGM CPT REVIEW
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The following graphs show the impact of CPT settings on retailer gross operating profit for different CPP test
values, when there are four days of high price outcomes.
Figure A-9: Impact on Retailer profit for a 4 day CPT Event, when CPP = 15
Figure A-10: Impact on Retailer profit for a 4 day CPT Event, when CPP = 25
DWGM CPT REVIEW
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Figure A-11: Impact on Retailer profit for a 4 day CPT Event, when CPP = 50
Figure A-12: Impact on Retailer profit for a 4 day CPT Event, when CPP = 70
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The following graphs show the impact of CPT settings on retailer gross operating profit for different CPP test
values, when there are five days of high price outcomes.
Figure A-13: Impact on Retailer profit for a 5 day CPT Event, when CPP = 15
Figure A-14: Impact on Retailer profit for a 5 day CPT Event, when CPP = 25
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Figure A-15: Impact on Retailer profit for a 5 day CPT Event, when CPP = 50
Figure A-16: Impact on Retailer profit for a 5 day CPT Event, when CPP = 70
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8 Appendix B IMPACTS OF CPT SETTINGS ON CUSTOMER
MARGIN
The following tables show the CPT settings impact on the retailers’ days of customer margin foregone, when
there are two days of high price outcomes.
Table B-1: Customer impacts for a 2-day CPT Event Scenario for R2
Table B-2: Customer impacts for a 2-day CPT Event Scenario for R3
C_10 C_30 C_60 C_500
Event Description
112.9722 170.8273 197.3892 148.1921 2 days of prices at VoLL, CPT = 1800, CPP =15
112.9722 170.8273 197.3892 148.1921 2 days of prices at VoLL, CPT = 1800, CPP =25
112.9722 170.8273 197.3892 148.1921 2 days of prices at VoLL, CPT = 1800, CPP =35
67.18082 101.5853 117.3808 88.12488 2 days of prices at VoLL, CPT = 1800, CPP =50
67.18082 101.5853 117.3808 88.12488 2 days of prices at VoLL, CPT = 1800, CPP =70
158.7636 240.0692 277.3976 208.2592 2 days of prices at VoLL, CPT = 2500, CPP =15
112.9722 170.8273 197.3892 148.1921 2 days of prices at VoLL, CPT = 2500, CPP =25
112.9722 170.8273 197.3892 148.1921 2 days of prices at VoLL, CPT = 2500, CPP =35
112.9722 170.8273 197.3892 148.1921 2 days of prices at VoLL, CPT = 2500, CPP =50
112.9722 170.8273 197.3892 148.1921 2 days of prices at VoLL, CPT = 2500, CPP =70
204.555 309.3112 357.406 268.3264 2 days of prices at VoLL, CPT = 3700, CPP =15
204.555 309.3112 357.406 268.3264 2 days of prices at VoLL, CPT = 3700, CPP =25
204.555 309.3112 357.406 268.3264 2 days of prices at VoLL, CPT = 3700, CPP =35
204.555 309.3112 357.406 268.3264 2 days of prices at VoLL, CPT = 3700, CPP =50
204.555 309.3112 357.406 268.3264 2 days of prices at VoLL, CPT = 3700, CPP =70
250.3464 378.5532 437.4145 328.3936 2 days of prices at VoLL, CPT = 4500, CPP =15
250.3464 378.5532 437.4145 328.3936 2 days of prices at VoLL, CPT = 4500, CPP =25
250.3464 378.5532 437.4145 328.3936 2 days of prices at VoLL, CPT = 4500, CPP =35
250.3464 378.5532 437.4145 328.3936 2 days of prices at VoLL, CPT = 4500, CPP =50
250.3464 378.5532 437.4145 328.3936 2 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
C_10 C_30 C_60 C_500
Event Description
282.4306 427.0681 493.473 370.4801 2 days of prices at VoLL, CPT = 1800, CPP =15
282.4306 427.0681 493.473 370.4801 2 days of prices at VoLL, CPT = 1800, CPP =25
282.4306 427.0681 493.473 370.4801 2 days of prices at VoLL, CPT = 1800, CPP =35
167.952 253.9632 293.4519 220.3122 2 days of prices at VoLL, CPT = 1800, CPP =50
167.952 253.9632 293.4519 220.3122 2 days of prices at VoLL, CPT = 1800, CPP =70
396.9091 600.1731 693.4941 520.6481 2 days of prices at VoLL, CPT = 2500, CPP =15
282.4306 427.0681 493.473 370.4801 2 days of prices at VoLL, CPT = 2500, CPP =25
282.4306 427.0681 493.473 370.4801 2 days of prices at VoLL, CPT = 2500, CPP =35
282.4306 427.0681 493.473 370.4801 2 days of prices at VoLL, CPT = 2500, CPP =50
282.4306 427.0681 493.473 370.4801 2 days of prices at VoLL, CPT = 2500, CPP =70
511.3876 773.2781 893.5151 670.816 2 days of prices at VoLL, CPT = 3700, CPP =15
511.3876 773.2781 893.5151 670.816 2 days of prices at VoLL, CPT = 3700, CPP =25
511.3876 773.2781 893.5151 670.816 2 days of prices at VoLL, CPT = 3700, CPP =35
511.3876 773.2781 893.5151 670.816 2 days of prices at VoLL, CPT = 3700, CPP =50
511.3876 773.2781 893.5151 670.816 2 days of prices at VoLL, CPT = 3700, CPP =70
625.8661 946.383 1093.536 820.984 2 days of prices at VoLL, CPT = 4500, CPP =15
625.8661 946.383 1093.536 820.984 2 days of prices at VoLL, CPT = 4500, CPP =25
625.8661 946.383 1093.536 820.984 2 days of prices at VoLL, CPT = 4500, CPP =35
625.8661 946.383 1093.536 820.984 2 days of prices at VoLL, CPT = 4500, CPP =50
625.8661 946.383 1093.536 820.984 2 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
DWGM CPT REVIEW
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Table B-3: Customer impacts for a 2-day CPT Event Scenario for R4
Table B-4: Customer impacts for a 2-day CPT Event Scenario for R5
C_10 C_30 C_60 C_500
Event Description
564.8611 854.1363 986.946 0 2 days of prices at VoLL, CPT = 1800, CPP =15
564.8611 854.1363 986.946 0 2 days of prices at VoLL, CPT = 1800, CPP =25
564.8611 854.1363 986.946 0 2 days of prices at VoLL, CPT = 1800, CPP =35
335.9041 507.9264 586.9039 0 2 days of prices at VoLL, CPT = 1800, CPP =50
335.9041 507.9264 586.9039 0 2 days of prices at VoLL, CPT = 1800, CPP =70
793.8182 1200.346 1386.988 0 2 days of prices at VoLL, CPT = 2500, CPP =15
564.8611 854.1363 986.946 0 2 days of prices at VoLL, CPT = 2500, CPP =25
564.8611 854.1363 986.946 0 2 days of prices at VoLL, CPT = 2500, CPP =35
564.8611 854.1363 986.946 0 2 days of prices at VoLL, CPT = 2500, CPP =50
564.8611 854.1363 986.946 0 2 days of prices at VoLL, CPT = 2500, CPP =70
1022.775 1546.556 1787.03 0 2 days of prices at VoLL, CPT = 3700, CPP =15
1022.775 1546.556 1787.03 0 2 days of prices at VoLL, CPT = 3700, CPP =25
1022.775 1546.556 1787.03 0 2 days of prices at VoLL, CPT = 3700, CPP =35
1022.775 1546.556 1787.03 0 2 days of prices at VoLL, CPT = 3700, CPP =50
1022.775 1546.556 1787.03 0 2 days of prices at VoLL, CPT = 3700, CPP =70
1251.732 1892.766 2187.072 0 2 days of prices at VoLL, CPT = 4500, CPP =15
1251.732 1892.766 2187.072 0 2 days of prices at VoLL, CPT = 4500, CPP =25
1251.732 1892.766 2187.072 0 2 days of prices at VoLL, CPT = 4500, CPP =35
1251.732 1892.766 2187.072 0 2 days of prices at VoLL, CPT = 4500, CPP =50
1251.732 1892.766 2187.072 0 2 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
C_10 C_30 C_60 C_500
Event Description
0 0 0 740.9603 2 days of prices at VoLL, CPT = 1800, CPP =15
0 0 0 740.9603 2 days of prices at VoLL, CPT = 1800, CPP =25
0 0 0 740.9603 2 days of prices at VoLL, CPT = 1800, CPP =35
0 0 0 440.6244 2 days of prices at VoLL, CPT = 1800, CPP =50
0 0 0 440.6244 2 days of prices at VoLL, CPT = 1800, CPP =70
0 0 0 1041.296 2 days of prices at VoLL, CPT = 2500, CPP =15
0 0 0 740.9603 2 days of prices at VoLL, CPT = 2500, CPP =25
0 0 0 740.9603 2 days of prices at VoLL, CPT = 2500, CPP =35
0 0 0 740.9603 2 days of prices at VoLL, CPT = 2500, CPP =50
0 0 0 740.9603 2 days of prices at VoLL, CPT = 2500, CPP =70
0 0 0 1341.632 2 days of prices at VoLL, CPT = 3700, CPP =15
0 0 0 1341.632 2 days of prices at VoLL, CPT = 3700, CPP =25
0 0 0 1341.632 2 days of prices at VoLL, CPT = 3700, CPP =35
0 0 0 1341.632 2 days of prices at VoLL, CPT = 3700, CPP =50
0 0 0 1341.632 2 days of prices at VoLL, CPT = 3700, CPP =70
0 0 0 1641.968 2 days of prices at VoLL, CPT = 4500, CPP =15
0 0 0 1641.968 2 days of prices at VoLL, CPT = 4500, CPP =25
0 0 0 1641.968 2 days of prices at VoLL, CPT = 4500, CPP =35
0 0 0 1641.968 2 days of prices at VoLL, CPT = 4500, CPP =50
0 0 0 1641.968 2 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
DWGM CPT REVIEW
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The following tables show the CPT settings impact on the retailers’ days of customer margin foregone, when
there are three days of high price outcomes.
Table B-5: Customer impacts for a 3-day CPT Event Scenario for R2
Table B-6: Customer impacts for a 3-day CPT Event Scenario for R3
C_10 C_30 C_60 C_500
Event Description
123.6669 186.9989 216.0754 162.2209 3 days of prices at VoLL, CPT = 1800, CPP =15
123.6669 186.9989 216.0754 162.2209 3 days of prices at VoLL, CPT = 1800, CPP =25
123.6669 186.9989 216.0754 162.2209 3 days of prices at VoLL, CPT = 1800, CPP =35
77.87552 117.7569 136.067 102.1537 3 days of prices at VoLL, CPT = 1800, CPP =50
77.87552 117.7569 136.067 102.1537 3 days of prices at VoLL, CPT = 1800, CPP =70
169.4583 256.2409 296.0838 222.2881 3 days of prices at VoLL, CPT = 2500, CPP =15
123.6669 186.9989 216.0754 162.2209 3 days of prices at VoLL, CPT = 2500, CPP =25
123.6669 186.9989 216.0754 162.2209 3 days of prices at VoLL, CPT = 2500, CPP =35
123.6669 186.9989 216.0754 162.2209 3 days of prices at VoLL, CPT = 2500, CPP =50
123.6669 186.9989 216.0754 162.2209 3 days of prices at VoLL, CPT = 2500, CPP =70
215.2497 325.4829 376.0922 282.3553 3 days of prices at VoLL, CPT = 3700, CPP =15
215.2497 325.4829 376.0922 282.3553 3 days of prices at VoLL, CPT = 3700, CPP =25
215.2497 325.4829 376.0922 282.3553 3 days of prices at VoLL, CPT = 3700, CPP =35
215.2497 325.4829 376.0922 282.3553 3 days of prices at VoLL, CPT = 3700, CPP =50
215.2497 325.4829 376.0922 282.3553 3 days of prices at VoLL, CPT = 3700, CPP =70
261.0412 394.7249 456.1006 342.4224 3 days of prices at VoLL, CPT = 4500, CPP =15
261.0412 394.7249 456.1006 342.4224 3 days of prices at VoLL, CPT = 4500, CPP =25
261.0412 394.7249 456.1006 342.4224 3 days of prices at VoLL, CPT = 4500, CPP =35
261.0412 394.7249 456.1006 342.4224 3 days of prices at VoLL, CPT = 4500, CPP =50
261.0412 394.7249 456.1006 342.4224 3 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
C_10 C_30 C_60 C_500
Event Description
309.1673 467.4973 540.1884 405.5523 3 days of prices at VoLL, CPT = 1800, CPP =15
309.1673 467.4973 540.1884 405.5523 3 days of prices at VoLL, CPT = 1800, CPP =25
309.1673 467.4973 540.1884 405.5523 3 days of prices at VoLL, CPT = 1800, CPP =35
194.6888 294.3923 340.1674 255.3843 3 days of prices at VoLL, CPT = 1800, CPP =50
194.6888 294.3923 340.1674 255.3843 3 days of prices at VoLL, CPT = 1800, CPP =70
423.6458 640.6022 740.2095 555.7202 3 days of prices at VoLL, CPT = 2500, CPP =15
309.1673 467.4973 540.1884 405.5523 3 days of prices at VoLL, CPT = 2500, CPP =25
309.1673 467.4973 540.1884 405.5523 3 days of prices at VoLL, CPT = 2500, CPP =35
309.1673 467.4973 540.1884 405.5523 3 days of prices at VoLL, CPT = 2500, CPP =50
309.1673 467.4973 540.1884 405.5523 3 days of prices at VoLL, CPT = 2500, CPP =70
538.1244 813.7072 940.2306 705.8882 3 days of prices at VoLL, CPT = 3700, CPP =15
538.1244 813.7072 940.2306 705.8882 3 days of prices at VoLL, CPT = 3700, CPP =25
538.1244 813.7072 940.2306 705.8882 3 days of prices at VoLL, CPT = 3700, CPP =35
538.1244 813.7072 940.2306 705.8882 3 days of prices at VoLL, CPT = 3700, CPP =50
538.1244 813.7072 940.2306 705.8882 3 days of prices at VoLL, CPT = 3700, CPP =70
652.6029 986.8121 1140.252 856.0561 3 days of prices at VoLL, CPT = 4500, CPP =15
652.6029 986.8121 1140.252 856.0561 3 days of prices at VoLL, CPT = 4500, CPP =25
652.6029 986.8121 1140.252 856.0561 3 days of prices at VoLL, CPT = 4500, CPP =35
652.6029 986.8121 1140.252 856.0561 3 days of prices at VoLL, CPT = 4500, CPP =50
652.6029 986.8121 1140.252 856.0561 3 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 55 of 59
Table B-7: Customer impacts for a 3-day CPT Event Scenario for R4
Table B-8: Customer impacts for a 3-day CPT Event Scenario for R5
C_10 C_30 C_60 C_500
Event Description
618.3346 934.9945 1080.377 0 3 days of prices at VoLL, CPT = 1800, CPP =15
618.3346 934.9945 1080.377 0 3 days of prices at VoLL, CPT = 1800, CPP =25
618.3346 934.9945 1080.377 0 3 days of prices at VoLL, CPT = 1800, CPP =35
389.3776 588.7846 680.3348 0 3 days of prices at VoLL, CPT = 1800, CPP =50
389.3776 588.7846 680.3348 0 3 days of prices at VoLL, CPT = 1800, CPP =70
847.2917 1281.204 1480.419 0 3 days of prices at VoLL, CPT = 2500, CPP =15
618.3346 934.9945 1080.377 0 3 days of prices at VoLL, CPT = 2500, CPP =25
618.3346 934.9945 1080.377 0 3 days of prices at VoLL, CPT = 2500, CPP =35
618.3346 934.9945 1080.377 0 3 days of prices at VoLL, CPT = 2500, CPP =50
618.3346 934.9945 1080.377 0 3 days of prices at VoLL, CPT = 2500, CPP =70
1076.249 1627.414 1880.461 0 3 days of prices at VoLL, CPT = 3700, CPP =15
1076.249 1627.414 1880.461 0 3 days of prices at VoLL, CPT = 3700, CPP =25
1076.249 1627.414 1880.461 0 3 days of prices at VoLL, CPT = 3700, CPP =35
1076.249 1627.414 1880.461 0 3 days of prices at VoLL, CPT = 3700, CPP =50
1076.249 1627.414 1880.461 0 3 days of prices at VoLL, CPT = 3700, CPP =70
1305.206 1973.624 2280.503 0 3 days of prices at VoLL, CPT = 4500, CPP =15
1305.206 1973.624 2280.503 0 3 days of prices at VoLL, CPT = 4500, CPP =25
1305.206 1973.624 2280.503 0 3 days of prices at VoLL, CPT = 4500, CPP =35
1305.206 1973.624 2280.503 0 3 days of prices at VoLL, CPT = 4500, CPP =50
1305.206 1973.624 2280.503 0 3 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
C_10 C_30 C_60 C_500
Event Description
0 0 0 811.1045 3 days of prices at VoLL, CPT = 1800, CPP =15
0 0 0 811.1045 3 days of prices at VoLL, CPT = 1800, CPP =25
0 0 0 811.1045 3 days of prices at VoLL, CPT = 1800, CPP =35
0 0 0 510.7686 3 days of prices at VoLL, CPT = 1800, CPP =50
0 0 0 510.7686 3 days of prices at VoLL, CPT = 1800, CPP =70
0 0 0 1111.44 3 days of prices at VoLL, CPT = 2500, CPP =15
0 0 0 811.1045 3 days of prices at VoLL, CPT = 2500, CPP =25
0 0 0 811.1045 3 days of prices at VoLL, CPT = 2500, CPP =35
0 0 0 811.1045 3 days of prices at VoLL, CPT = 2500, CPP =50
0 0 0 811.1045 3 days of prices at VoLL, CPT = 2500, CPP =70
0 0 0 1411.776 3 days of prices at VoLL, CPT = 3700, CPP =15
0 0 0 1411.776 3 days of prices at VoLL, CPT = 3700, CPP =25
0 0 0 1411.776 3 days of prices at VoLL, CPT = 3700, CPP =35
0 0 0 1411.776 3 days of prices at VoLL, CPT = 3700, CPP =50
0 0 0 1411.776 3 days of prices at VoLL, CPT = 3700, CPP =70
0 0 0 1712.112 3 days of prices at VoLL, CPT = 4500, CPP =15
0 0 0 1712.112 3 days of prices at VoLL, CPT = 4500, CPP =25
0 0 0 1712.112 3 days of prices at VoLL, CPT = 4500, CPP =35
0 0 0 1712.112 3 days of prices at VoLL, CPT = 4500, CPP =50
0 0 0 1712.112 3 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 56 of 59
The following tables show the CPT settings impact on the retailers’ days of customer margin foregone, when
there are four days of high price outcomes.
Table B-9: Customer impacts for a 4-day CPT Event Scenario for R2
Table B-10: Customer impacts for a 4-day CPT Event Scenario for R3
C_10 C_30 C_60 C_500
Event Description
180.153 272.4125 314.77 236.3169 4 days of prices at VoLL, CPT = 1800, CPP =15
134.3616 203.1706 234.7616 176.2498 4 days of prices at VoLL, CPT = 1800, CPP =25
134.3616 203.1706 234.7616 176.2498 4 days of prices at VoLL, CPT = 1800, CPP =35
88.57022 133.9286 154.7531 116.1826 4 days of prices at VoLL, CPT = 1800, CPP =50
88.57022 133.9286 154.7531 116.1826 4 days of prices at VoLL, CPT = 1800, CPP =70
271.7359 410.8965 474.7868 356.4513 4 days of prices at VoLL, CPT = 2500, CPP =15
134.3616 203.1706 234.7616 176.2498 4 days of prices at VoLL, CPT = 2500, CPP =25
134.3616 203.1706 234.7616 176.2498 4 days of prices at VoLL, CPT = 2500, CPP =35
134.3616 203.1706 234.7616 176.2498 4 days of prices at VoLL, CPT = 2500, CPP =50
134.3616 203.1706 234.7616 176.2498 4 days of prices at VoLL, CPT = 2500, CPP =70
409.1101 618.6224 714.8121 536.6528 4 days of prices at VoLL, CPT = 3700, CPP =15
225.9444 341.6545 394.7784 296.3841 4 days of prices at VoLL, CPT = 3700, CPP =25
225.9444 341.6545 394.7784 296.3841 4 days of prices at VoLL, CPT = 3700, CPP =35
225.9444 341.6545 394.7784 296.3841 4 days of prices at VoLL, CPT = 3700, CPP =50
225.9444 341.6545 394.7784 296.3841 4 days of prices at VoLL, CPT = 3700, CPP =70
454.9015 687.8644 794.8205 596.72 4 days of prices at VoLL, CPT = 4500, CPP =15
271.7359 410.8965 474.7868 356.4513 4 days of prices at VoLL, CPT = 4500, CPP =25
271.7359 410.8965 474.7868 356.4513 4 days of prices at VoLL, CPT = 4500, CPP =35
271.7359 410.8965 474.7868 356.4513 4 days of prices at VoLL, CPT = 4500, CPP =50
271.7359 410.8965 474.7868 356.4513 4 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
C_10 C_30 C_60 C_500
Event Description
450.3826 681.0313 786.9249 590.7923 4 days of prices at VoLL, CPT = 1800, CPP =15
335.9041 507.9264 586.9039 440.6244 4 days of prices at VoLL, CPT = 1800, CPP =25
335.9041 507.9264 586.9039 440.6244 4 days of prices at VoLL, CPT = 1800, CPP =35
221.4256 334.8214 386.8828 290.4564 4 days of prices at VoLL, CPT = 1800, CPP =50
221.4256 334.8214 386.8828 290.4564 4 days of prices at VoLL, CPT = 1800, CPP =70
679.3396 1027.241 1186.967 891.1282 4 days of prices at VoLL, CPT = 2500, CPP =15
335.9041 507.9264 586.9039 440.6244 4 days of prices at VoLL, CPT = 2500, CPP =25
335.9041 507.9264 586.9039 440.6244 4 days of prices at VoLL, CPT = 2500, CPP =35
335.9041 507.9264 586.9039 440.6244 4 days of prices at VoLL, CPT = 2500, CPP =50
335.9041 507.9264 586.9039 440.6244 4 days of prices at VoLL, CPT = 2500, CPP =70
1022.775 1546.556 1787.03 1341.632 4 days of prices at VoLL, CPT = 3700, CPP =15
564.8611 854.1363 986.946 740.9603 4 days of prices at VoLL, CPT = 3700, CPP =25
564.8611 854.1363 986.946 740.9603 4 days of prices at VoLL, CPT = 3700, CPP =35
564.8611 854.1363 986.946 740.9603 4 days of prices at VoLL, CPT = 3700, CPP =50
564.8611 854.1363 986.946 740.9603 4 days of prices at VoLL, CPT = 3700, CPP =70
1137.254 1719.661 1987.051 1491.8 4 days of prices at VoLL, CPT = 4500, CPP =15
679.3396 1027.241 1186.967 891.1282 4 days of prices at VoLL, CPT = 4500, CPP =25
679.3396 1027.241 1186.967 891.1282 4 days of prices at VoLL, CPT = 4500, CPP =35
679.3396 1027.241 1186.967 891.1282 4 days of prices at VoLL, CPT = 4500, CPP =50
679.3396 1027.241 1186.967 891.1282 4 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 57 of 59
Table B-11: Customer impacts for a 4-day CPT Event Scenario for R4
Table B-12: Customer impacts for a 4-day CPT Event Scenario for R5
C_10 C_30 C_60 C_500
Event Description
900.7652 1362.063 1573.85 0 4 days of prices at VoLL, CPT = 1800, CPP =15
671.8082 1015.853 1173.808 0 4 days of prices at VoLL, CPT = 1800, CPP =25
671.8082 1015.853 1173.808 0 4 days of prices at VoLL, CPT = 1800, CPP =35
442.8511 669.6429 773.7657 0 4 days of prices at VoLL, CPT = 1800, CPP =50
442.8511 669.6429 773.7657 0 4 days of prices at VoLL, CPT = 1800, CPP =70
1358.679 2054.483 2373.934 0 4 days of prices at VoLL, CPT = 2500, CPP =15
671.8082 1015.853 1173.808 0 4 days of prices at VoLL, CPT = 2500, CPP =25
671.8082 1015.853 1173.808 0 4 days of prices at VoLL, CPT = 2500, CPP =35
671.8082 1015.853 1173.808 0 4 days of prices at VoLL, CPT = 2500, CPP =50
671.8082 1015.853 1173.808 0 4 days of prices at VoLL, CPT = 2500, CPP =70
2045.55 3093.112 3574.06 0 4 days of prices at VoLL, CPT = 3700, CPP =15
1129.722 1708.273 1973.892 0 4 days of prices at VoLL, CPT = 3700, CPP =25
1129.722 1708.273 1973.892 0 4 days of prices at VoLL, CPT = 3700, CPP =35
1129.722 1708.273 1973.892 0 4 days of prices at VoLL, CPT = 3700, CPP =50
1129.722 1708.273 1973.892 0 4 days of prices at VoLL, CPT = 3700, CPP =70
2274.507 3439.322 3974.103 0 4 days of prices at VoLL, CPT = 4500, CPP =15
1358.679 2054.483 2373.934 0 4 days of prices at VoLL, CPT = 4500, CPP =25
1358.679 2054.483 2373.934 0 4 days of prices at VoLL, CPT = 4500, CPP =35
1358.679 2054.483 2373.934 0 4 days of prices at VoLL, CPT = 4500, CPP =50
1358.679 2054.483 2373.934 0 4 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
C_10 C_30 C_60 C_500
Event Description
0 0 0 1181.585 4 days of prices at VoLL, CPT = 1800, CPP =15
0 0 0 881.2488 4 days of prices at VoLL, CPT = 1800, CPP =25
0 0 0 881.2488 4 days of prices at VoLL, CPT = 1800, CPP =35
0 0 0 580.9129 4 days of prices at VoLL, CPT = 1800, CPP =50
0 0 0 580.9129 4 days of prices at VoLL, CPT = 1800, CPP =70
0 0 0 1782.256 4 days of prices at VoLL, CPT = 2500, CPP =15
0 0 0 881.2488 4 days of prices at VoLL, CPT = 2500, CPP =25
0 0 0 881.2488 4 days of prices at VoLL, CPT = 2500, CPP =35
0 0 0 881.2488 4 days of prices at VoLL, CPT = 2500, CPP =50
0 0 0 881.2488 4 days of prices at VoLL, CPT = 2500, CPP =70
0 0 0 2683.264 4 days of prices at VoLL, CPT = 3700, CPP =15
0 0 0 1481.921 4 days of prices at VoLL, CPT = 3700, CPP =25
0 0 0 1481.921 4 days of prices at VoLL, CPT = 3700, CPP =35
0 0 0 1481.921 4 days of prices at VoLL, CPT = 3700, CPP =50
0 0 0 1481.921 4 days of prices at VoLL, CPT = 3700, CPP =70
0 0 0 2983.6 4 days of prices at VoLL, CPT = 4500, CPP =15
0 0 0 1782.256 4 days of prices at VoLL, CPT = 4500, CPP =25
0 0 0 1782.256 4 days of prices at VoLL, CPT = 4500, CPP =35
0 0 0 1782.256 4 days of prices at VoLL, CPT = 4500, CPP =50
0 0 0 1782.256 4 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 58 of 59
The following tables show the CPT settings impact on the retailers’ days of customer margin foregone, when
there are five days of high price outcomes.
Table B-13: Customer impacts for a 5-day CPT Event Scenario for R2
Table B-14: Customer impacts for a 5-day CPT Event Scenario for R3
C_10 C_30 C_60 C_500
Event Description
190.8477 288.5842 333.4562 250.3458 5 days of prices at VoLL, CPT = 1800, CPP =15
145.0563 219.3422 253.4477 190.2786 5 days of prices at VoLL, CPT = 1800, CPP =25
145.0563 219.3422 253.4477 190.2786 5 days of prices at VoLL, CPT = 1800, CPP =35
99.26493 150.1002 173.4393 130.2114 5 days of prices at VoLL, CPT = 1800, CPP =50
99.26493 150.1002 173.4393 130.2114 5 days of prices at VoLL, CPT = 1800, CPP =70
282.4306 427.0681 493.473 370.4801 5 days of prices at VoLL, CPT = 2500, CPP =15
145.0563 219.3422 253.4477 190.2786 5 days of prices at VoLL, CPT = 2500, CPP =25
145.0563 219.3422 253.4477 190.2786 5 days of prices at VoLL, CPT = 2500, CPP =35
145.0563 219.3422 253.4477 190.2786 5 days of prices at VoLL, CPT = 2500, CPP =50
145.0563 219.3422 253.4477 190.2786 5 days of prices at VoLL, CPT = 2500, CPP =70
419.8048 634.7941 733.4983 550.6817 5 days of prices at VoLL, CPT = 3700, CPP =15
236.6392 357.8262 413.4646 310.413 5 days of prices at VoLL, CPT = 3700, CPP =25
236.6392 357.8262 413.4646 310.413 5 days of prices at VoLL, CPT = 3700, CPP =35
236.6392 357.8262 413.4646 310.413 5 days of prices at VoLL, CPT = 3700, CPP =50
236.6392 357.8262 413.4646 310.413 5 days of prices at VoLL, CPT = 3700, CPP =70
511.3876 773.2781 893.5151 670.816 5 days of prices at VoLL, CPT = 4500, CPP =15
282.4306 427.0681 493.473 370.4801 5 days of prices at VoLL, CPT = 4500, CPP =25
282.4306 427.0681 493.473 370.4801 5 days of prices at VoLL, CPT = 4500, CPP =35
282.4306 427.0681 493.473 370.4801 5 days of prices at VoLL, CPT = 4500, CPP =50
282.4306 427.0681 493.473 370.4801 5 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
C_10 C_30 C_60 C_500
Event Description
477.1194 721.4605 833.6404 625.8645 5 days of prices at VoLL, CPT = 1800, CPP =15
362.6408 548.3555 633.6193 475.6965 5 days of prices at VoLL, CPT = 1800, CPP =25
362.6408 548.3555 633.6193 475.6965 5 days of prices at VoLL, CPT = 1800, CPP =35
248.1623 375.2505 433.5983 325.5286 5 days of prices at VoLL, CPT = 1800, CPP =50
248.1623 375.2505 433.5983 325.5286 5 days of prices at VoLL, CPT = 1800, CPP =70
706.0764 1067.67 1233.682 926.2004 5 days of prices at VoLL, CPT = 2500, CPP =15
362.6408 548.3555 633.6193 475.6965 5 days of prices at VoLL, CPT = 2500, CPP =25
362.6408 548.3555 633.6193 475.6965 5 days of prices at VoLL, CPT = 2500, CPP =35
362.6408 548.3555 633.6193 475.6965 5 days of prices at VoLL, CPT = 2500, CPP =50
362.6408 548.3555 633.6193 475.6965 5 days of prices at VoLL, CPT = 2500, CPP =70
1049.512 1586.985 1833.746 1376.704 5 days of prices at VoLL, CPT = 3700, CPP =15
591.5979 894.5654 1033.661 776.0324 5 days of prices at VoLL, CPT = 3700, CPP =25
591.5979 894.5654 1033.661 776.0324 5 days of prices at VoLL, CPT = 3700, CPP =35
591.5979 894.5654 1033.661 776.0324 5 days of prices at VoLL, CPT = 3700, CPP =50
591.5979 894.5654 1033.661 776.0324 5 days of prices at VoLL, CPT = 3700, CPP =70
1278.469 1933.195 2233.788 1677.04 5 days of prices at VoLL, CPT = 4500, CPP =15
706.0764 1067.67 1233.682 926.2004 5 days of prices at VoLL, CPT = 4500, CPP =25
706.0764 1067.67 1233.682 926.2004 5 days of prices at VoLL, CPT = 4500, CPP =35
706.0764 1067.67 1233.682 926.2004 5 days of prices at VoLL, CPT = 4500, CPP =50
706.0764 1067.67 1233.682 926.2004 5 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
DWGM CPT REVIEW
Doc Ref: DWGM CPT REVIEW – DRAFT REPORT v1.0 2 July 2013 Page 59 of 59
Table B-15: Customer impacts for a 5-day CPT Event Scenario for R4
Table B-16: Customer impacts for a 5-day CPT Event Scenario for R5
C_10 C_30 C_60 C_500
Event Description
954.2387 1442.921 1667.281 0 5 days of prices at VoLL, CPT = 1800, CPP =15
725.2817 1096.711 1267.239 0 5 days of prices at VoLL, CPT = 1800, CPP =25
725.2817 1096.711 1267.239 0 5 days of prices at VoLL, CPT = 1800, CPP =35
496.3246 750.5011 867.1965 0 5 days of prices at VoLL, CPT = 1800, CPP =50
496.3246 750.5011 867.1965 0 5 days of prices at VoLL, CPT = 1800, CPP =70
1412.153 2135.341 2467.365 0 5 days of prices at VoLL, CPT = 2500, CPP =15
725.2817 1096.711 1267.239 0 5 days of prices at VoLL, CPT = 2500, CPP =25
725.2817 1096.711 1267.239 0 5 days of prices at VoLL, CPT = 2500, CPP =35
725.2817 1096.711 1267.239 0 5 days of prices at VoLL, CPT = 2500, CPP =50
725.2817 1096.711 1267.239 0 5 days of prices at VoLL, CPT = 2500, CPP =70
2099.024 3173.97 3667.491 0 5 days of prices at VoLL, CPT = 3700, CPP =15
1183.196 1789.131 2067.323 0 5 days of prices at VoLL, CPT = 3700, CPP =25
1183.196 1789.131 2067.323 0 5 days of prices at VoLL, CPT = 3700, CPP =35
1183.196 1789.131 2067.323 0 5 days of prices at VoLL, CPT = 3700, CPP =50
1183.196 1789.131 2067.323 0 5 days of prices at VoLL, CPT = 3700, CPP =70
2556.938 3866.39 4467.576 0 5 days of prices at VoLL, CPT = 4500, CPP =15
1412.153 2135.341 2467.365 0 5 days of prices at VoLL, CPT = 4500, CPP =25
1412.153 2135.341 2467.365 0 5 days of prices at VoLL, CPT = 4500, CPP =35
1412.153 2135.341 2467.365 0 5 days of prices at VoLL, CPT = 4500, CPP =50
1412.153 2135.341 2467.365 0 5 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone
C_10 C_30 C_60 C_500
Event Description
0 0 0 1251.729 5 days of prices at VoLL, CPT = 1800, CPP =15
0 0 0 951.393 5 days of prices at VoLL, CPT = 1800, CPP =25
0 0 0 951.393 5 days of prices at VoLL, CPT = 1800, CPP =35
0 0 0 651.0571 5 days of prices at VoLL, CPT = 1800, CPP =50
0 0 0 651.0571 5 days of prices at VoLL, CPT = 1800, CPP =70
0 0 0 1852.401 5 days of prices at VoLL, CPT = 2500, CPP =15
0 0 0 951.393 5 days of prices at VoLL, CPT = 2500, CPP =25
0 0 0 951.393 5 days of prices at VoLL, CPT = 2500, CPP =35
0 0 0 951.393 5 days of prices at VoLL, CPT = 2500, CPP =50
0 0 0 951.393 5 days of prices at VoLL, CPT = 2500, CPP =70
0 0 0 2753.408 5 days of prices at VoLL, CPT = 3700, CPP =15
0 0 0 1552.065 5 days of prices at VoLL, CPT = 3700, CPP =25
0 0 0 1552.065 5 days of prices at VoLL, CPT = 3700, CPP =35
0 0 0 1552.065 5 days of prices at VoLL, CPT = 3700, CPP =50
0 0 0 1552.065 5 days of prices at VoLL, CPT = 3700, CPP =70
0 0 0 3354.08 5 days of prices at VoLL, CPT = 4500, CPP =15
0 0 0 1852.401 5 days of prices at VoLL, CPT = 4500, CPP =25
0 0 0 1852.401 5 days of prices at VoLL, CPT = 4500, CPP =35
0 0 0 1852.401 5 days of prices at VoLL, CPT = 4500, CPP =50
0 0 0 1852.401 5 days of prices at VoLL, CPT = 4500, CPP =70
Impact Assessment
Days of customer margin foregone