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Enabling investment and innovation

Energy Competition Task Force

Investigating actions to strengthen the performance of the electricity market in the short- to medium-term, for the benefit of all consumers.

  • Consumers
  • Wholesale

    • Overview

    The Electricity Authority and Commerce Commission have jointly established the Energy Competition Task Force (Task Force) to investigate ways to improve the performance of the electricity market. Representatives from the Ministry of Business, Innovation and Employment participate on the Task Force as observers.

    The Task Force was established in response to the fuel shortage and period of sustained high wholesale prices in August 2024 and its work programme focuses on two overarching outcomes:

    • enabling new generators and independent retailers to enter, and better compete in, the market
    • providing more options for consumers.

    These outcomes will encourage more and faster investment in new electricity generation, boost competition, enable homes, businesses and industrials to better manage their own electricity use and costs, and put downward pressure on prices.

    The Task Force is considering both new initiatives and some that are already underway but can be accelerated so New Zealanders can benefit from a better performing electricity system sooner.

    The Task Force’s recommendations will go to the Authority Board for final decisions. Any options that change market settings or regulations will follow the normal consultation processes.

    The Task Force expects its work programme will be flexible, adapting to emergeing evidence about the potential impacts of different options.

    Decisions

    After considering the Task Force’s recommendations, the Authority Board decides on options that change market settings or regulations. Following the consultation processes, the Authority Board then confirms final changes to regulation to achieve the Task Force objectives.

    Decisions to level the playing field by introducing non-discrimination obligations (Initiative 1D)

    Competition in retail markets brings dynamic efficiency benefits which drive innovation and investment for the benefit of consumers.

    On 26 May 2026 the Authority published the Non-discrimination obligations – Code amendment decision paper announcing the Authority’s decision to amend the Electricity Industry Participation Code 2010 (Code) to impose non-discrimination obligations (NDOs) on the four large gentailers regarding their trading of risk management contracts (hedges).

    The NDOs are intended to provide independent generators and retailers with greater confidence that they can compete on a level playing field, promoting competition and the efficient operation of the electricity industry for the long-term benefit of consumers.

    Read the decision papers and guidance documents

    Decisions on changes to give consumers more choices for how they use, buy and sell electricity – and lower their power bills (Initiatives 2A, B and C)

    We have confirmed new rules requiring large retailers (those with five per cent or more market share) now have to offer a pricing plan that gives small consumers cheaper rates for off-peak electricity. This means we expect ‘time-of-use’ plans will be available to most New Zealanders by 1 July 2026.

    We have also confirmed changes that will reward those households who supply power to the network from small-scale generation systems (such as rooftop solar and batteries) at times when it’s needed most to keep the country powered up. This means we expect plans that offer fair rates for power sold into the network at peak times will be available by 1 July 2026.

    In September 2025, we published three guidance documents to support distributors and retailers to implement the new rules.

    Read the decision papers and guidance documents

    Work programme

    Task Force work programme 2026

    Task Force work programme 2026
    Pro-competition policy reform roadmap

    Pro-competition policy reform roadmap

    Package one

    Enable new generators and independent retailers to enter, and better compete in, the market.

    This will encourage more and faster investment in new generation, which puts more energy into the system, strengthens resilience against future shortages and puts downward pressure on prices.

    1A. Consider requiring gentailers to offer firming for Power Purchase Agreements

    This option supports the development of new intermittent generation, such as wind and solar. Access to firming (from flexible generation that can run at any time, such as hydro or gas peakers) enables developers to enter into power purchase agreements (PPAs) with large users and retailers that match their supply of electricity to their customers’ demand profile, and manage the risks of variable generation volume (eg, when the wind does not blow or the sun does not shine).

    The Electricity Authority considered requiring gentailers to offer a minimum volume of flexible electricity in the form of long-duration contracts that could be used to firm new generators’ PPAs (an “allocation” approach). Based on feedback from a wide range of stakeholders we now believe that:

    • While access to firming is a key issue affecting investment in new power generation projects
    • An allocation approach is not the best way to address this issue, because it distorts market signals and incentives.

    We instead believe it is more effective to consider improved access to firming via the work on standardised flexibility products, the proposed level playing field measures (particularly the non-discrimination obligations) and complementary initiatives to encourage PPAs which will enable new investment without the risks associated with allocating firming volumes.

    View update paper

    1B. Introduce standardised flexibility products

    Standardised flexibility products enable retailers to offer stable prices to consumers while managing their exposure to volatile morning and evening peak wholesale prices.

    This increases competition in the market, brings more power into the system, provides more choice for consumers, and puts downward pressure on retail prices.

    These products are becoming increasingly important as the electricity system becomes more reliant on renewable generation and spot market pricing becomes more volatile.

    In 2024 we established an industry co-design group to develop a new standardised flexibility product. The group recommended a super peak product which will provide buyers with protection against high prices in morning and evening peaks.

    See the product specification sheet for details.

    Voluntary trading in the super-peak product began in January 2025.

    Aotearoa Energy is facilitating voluntary trading in the products by running fortnightly trading events.

    The Electricity Authority is actively monitoring trading and publishing auction results.

    Our flexibility hedge products dashboard shows prices and traded volumes of key types of flexibility products to help industry make operational and investment decisions.

    While voluntary trading of the new super-peak product has already improved availability and pricing, the market remains shallow, with limited seller diversity and low trading volumes.

    To address this, we are proposing to set clear expectations for robust participation in voluntary trading by the gentailers. The gentailers own over 95% of flexible generation, which backs shaped hedge contracts.

    Regulation may follow if trading does not improve, and we are ready to intervene with urgent regulation if there is a sudden material reduction in the supply of shaped hedges.

    We are now seeking feedback on options for regulation to apply if voluntary trading fails to deliver sufficient competition. This includes seeking feedback on market making on the over the counter (OTC) market as our preferred approach.

    Feedback closes at 5pm, Tuesday 30 September 2025.

    View the consultation: Regulating the standardised super-peak hedge product

    1C. Prepare for virtual disaggregation of the flexible generation base

    This option would design rules to require gentailers to offer a minimum volume of their flexible generation base to buyers in the form of risk management contracts. This option will be considered as a backstop if previous measures aimed at increasing the supply of firming contracts in the market don’t produce the intended uplift in competition. This is consistent with the Market Development Advisory Group’s recommendation 13. Although this is a backstop measure, designing the rules now will advance the work so it can be implemented quickly if needed.

    1D. Investigate level playing field measures such as non-discrimination rules as a regulatory backstop

    The Energy Competition Task Force has considered the pros and cons of various measures to ensure a level playing field between gentailers and independent retailers.

    In February 2025, we consulted on four options for improving retailer and gentailer access to hedge contracts. View Level Playing Field measures options paper

    In October 2025, we consulted on proposed Code amendments to impose non-discrimination obligations (NDOs) on the four major gentailers, supported by record keeping and disclosure requirements. We also proposed a requirement on the gentailers to undertake Retail Price Comparison Assessments (RPCAs).

    The RPCAs demonstrate compliance with Principle 1(3), which requires that gentailers do not discriminate in favour of their own internal business units when pricing risk management contracts, without an objectively justifiable reason. View consultation: Level playing field proposed Code amendments

    In February 2026 we consulted further on Non-discrimination obligations: RPCA, uncommitted capacity and other matters.

    On 26 May 2026 the Authority published the Non-discrimination obligations – Code amendment decision paper announcing its decision to amend the Code to impose NDOs on the four large gentailers regarding their trading of risk management contracts (hedges).

    The NDOs require gentailers to supply risk management contracts on a non-discriminatory basis and will apply to all risk management contracts offered by gentailers.

    The NDOs will provide independent generators and retailers with greater confidence that they can compete on a level playing field, promoting competition and the efficient operation of the electricity industry for the long-term benefit of consumers.

    We have also amended the Code to introduce Retail Price Consistency Assessments which require gentailers to illustrate the link between their retail prices and their expected cost of supply every six months. This is to demonstrate that there are no barriers to an equally efficient retailer competing with a gentailer it relies on for wholesale supply.

    1. The NDOs require gentailers to publish non-discrimination policies that capture how they will comply with the NDOs. Gentailers will also be required to carry out regular audits of their NDO compliance.
    2. The NDOs will come into force from 1 July 2026. Gentailers’ implementation plans, and the first RPCAs are required on 3 September 2026.

    View Level playing field measures – Code amendment decision paper

    Package two

    Provide more options for consumers. Initiatives 2A, 2B and 2C, as described below, have been updated to reflect recent decisions. Package Two initiatives are:

    2A. Requiring distributors to pay a rebate when consumers supply electricity at peak times

    In July 2025 we introduced a requirement that, from 1 April 2026, electricity distribution businesses will need to pay rebates (negative charges) to households and small businesses supplying power to the network at peak times. View Guidance.

    However, distributors told us that applying the definition of “small business consumer” (defined in the Electricity Industry Act 2010 as those using less than 40,000 kWh per year) was not workable because they generally work with connection capacity (kVA), not annual consumption.

    In November 2025 we consulted on a proposal to clarify the definition of “small business consumers”, and on 22 December 2025 we announced our decision that, from 1 April 2026, distributors will be required to pay rebates to small businesses that have a network connection size of up to 45kVA and that export up to 45kW of electricity back to the network at peak times.

    The full decision paper was published on 20 January 2026.

    We consider these changes will make the policy clearer and easier to apply, ensuring that the rebates apply to small business consumers we intended to target, while avoiding an unintended extension of the policy to larger-scale generators.

    Importantly, this decision means all consumers in price categories that target households and target small businesses with a connection capacity of up to 45kVA, and that export up to 45kW will be eligible. The rebates will also apply to those with higher generation potential so long as they adjust their inverters to limit injection to 45kW.

    This decision is part of a progressive and staged approach the Authority is taking to ensure consumers are rewarded for the benefits their export provides. It anticipates a future where there is increasing participation in the electricity system from homes and business consumers.

    2B. Requiring more retailers to offer time-of-use pricing

    We have confirmed new rules that large retailers (those with 5% or more market share) now have to offer a pricing plan that gives consumers cheaper rates for off-peak electricity. This means we expect ‘time-of-use’ plans will be available to most New Zealanders by 1 July 2026.

    View decision

    We encourage all large retailers to read the guidance document below to ensure they meet the new time-of-use pricing plan requirements.

    Time-varying price plan requirements – retailer guidance

    Distributors are encouraged to read this guidance to ensure they meet the new Code requirements for assigning time-varying tariffs to customers with smart meters and billing retailers using more accurate consumption data.

    Charging based on time-varying distribution charges – distributor guidance

    2C. Requiring large retailers to better reward consumers for supplying power

    We have confirmed changes that will reward those households who supply power to the network from small-scale generation systems (such as rooftop solar and batteries) at times when it’s needed most to keep the country powered up. This means plans that offer fair rates for power sold into the network at peak times will be available by 1 July 2026.

    View decision

    We encourage all retailers to read the guidance document below to ensure they meet the new requirements to offer buy-back rates for customers who supply power when it’s needed.

    Time-varying price plan requirements – retailer guidance

    2D. Reward industrial consumers for providing short-term demand flexibility

    Our electricity system must ensure supply can always meet demand, including at peak times. Some industrial consumers can make a meaningful contribution by shifting the timing of their demand, ie, using less electricity when it’s scarce and expensive, or by generating more and supplying it to the network.

    The Task Force is considering measures that would enable industrials to be appropriately rewarded for the benefit their flexibility brings to the system.

    We received broad industry support for our consultation in August 2025 on Establishing an Emergency Reserve Scheme and for our November 2025 consultation on the Emergency Reserve Scheme Code amendment required for it to be established.

    On 13 January 2026 we announced our decision to proceed with the Emergency Reserve Scheme. Transpower, as System Operator, will work with industry to develop and implement the scheme which should be in place towards the end of 2026.

    Timeline

    Past activity

    FAQs

    Question?

    Read our frequently asked questions or get in touch!

    Project background

    New Zealand experienced a fuel shortage in August 2024 due to unexpected lower gas reserves, low hydro storage and rainfall, and low wind. The shortage led to very high wholesale prices, which affected those industrial business whose electricity costs were tied to the wholesale spot price.

    Regulators, the Government and industry took action to manage security of supply and help bring wholesale prices down. Households were generally not affected by the price spike as they pay retail prices set by their electricity retailer.

    The interventions and increased hydro storage caused wholesale prices to drop significantly by the end of the month. Although the event was rare, it highlighted the need to improve the electricity market’s performance and better bolster security of supply.

    The Authority is now working with the Commerce Commission to investigate ways to adjust regulatory settings to strengthen the electricity market.

    The Energy Competition Task Force, co-led by the Authority’s Chair Anna Kominik and the Commission’s Chair Dr John Small, brings together a number of sector and regulatory experts from both regulators. Representatives from the Ministry of Business, Innovation and Employment attend as observers.

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