Clearing and settlement processes and requirements are set out in Part 14 of the Code

Part 14 - Clearing and settlement

The clearing manager invoices industry participants by combining reconciled quantity information, provided by the reconciliation manager, with half-hourly pricing information, from the pricing manager, to determine the amounts owed to and by each industry participant.

Every year the clearing manager acts as the counterparty for over $6 billion worth of electricity transactions.

The clearing manager is also responsible for making sure industry participants will be able to pay their invoices for the electricity they have consumed and the financial transmission rights they have purchased. 

Hedge market – Financial transmission rights

This role is particularly important in an electricity market because, unlike other products, the electricity has been consumed before it is invoiced, and can't be repossessed. If a purchaser fails to pay, then generators cannot be paid, potentially causing them cash flow issues.

The clearing manager provides participants with confidence that they will be able to be paid by continuously calculating and collecting prudential security requirements.

Clearing manager - Prudential security

They also manage any disputes or payment defaults.

A participant may dispute an invoice through the clearing manager. If the clearing manager upholds the dispute, the clearing manager may reissue invoices.

NZX is contracted as clearing manager. 

NZX website