Feedback sought on relief during times of market stress

We are seeking feedback on whether to allow an urgent Code amendment implemented in response to winter 2024 market stress to expire, or to make it permanent.

In August 2024, we implemented an urgent Electricity Authority Participation Code 2010 (Code) amendment to reduce obligations on regulated market makers during a period of high futures market prices. Under the amendment, a price-based test would be used to adjust market-making settings during times of stress.

The urgent Code process was used to address a risk that price spikes and volatility in the futures market may reoccur with little warning, and before the standard Code consultation process could take place.

An urgent Code amendment expires after nine months unless made permanent following a consultation process. This urgent Code amendment will expire on 12 June 2025.

The Authority is now consulting on options, including whether there is an ongoing need for a relief mechanism for effective market making operations in New Zealand’s electricity futures market.

The Authority’s current view is to let the urgent Code amendment expire. Our view is based on information and analysis not available when the original decision was made. We welcome feedback and are open to alternative views, and comments to inform a wider review of market making settings we’re commencing later this year.

Submissions are due by 5pm on Monday 14 April.

View consultation: Expiry of Urgent Code regarding market making under high stress conditions