Electricity Authority Consults On Rule Changes To Level The Power Playing Field

The Electricity Authority Te Mana Hiko (the Authority) is seeking feedback on proposed rule changes to level the playing field between the four large gentailers (Genesis, Contact, Meridian and Mercury) and independent participants in the electricity market.

"The recommended new rules make sure all retailers are operating on a level playing field and help ensure accountability and transparency in the market," says Electricity Authority Chair Anna Kominik.

The proposals have been developed by the Energy Competition Task Force and have been designed to boost competition, build confidence in the wholesale market, and ultimately give New Zealanders better access to affordable electricity.

"The mandatory non-discrimination obligations we are consulting on would mean the gentailers’ wholesale businesses cannot treat independent retailers differently from their own retail arms.

"This is the latest of a series of pro-competition measures that are designed to help address concerns about the market from independent players, and future-proof the system for the benefit of all New Zealanders," says Kominik.

In February, the Authority sought public and industry views on options to improve competition. Following that feedback, the Authority announced in August it would proceed with consultation on mandatory non-discrimination obligations.

"We’ve revised parts of the proposed approach after feedback and believe it should now be faster to implement and easier to enforce.

"The Authority wants to have any changes in place early next year, but we want to hear whether we’ve got the settings right." says Kominik.

Commerce Commission Chair and Task Force member Dr John Small says: "We want to give new players and investors the confidence to enter the market, encourage the expansion of existing independent generators and retailers and promote the development of innovative new products and services. This, and the other pro-competition measures announced in August, will improve transparency for all participants."

Subject to feedback it is proposed that the non-discrimination obligations regime be included in the Electricity Industry Participation Code in early 2026, with the first gentailer reports on their compliance with the new obligations due by 1 July 2026.

Visit the Task Force webpage to see the Level playing field measures - proposed Code amendment consultation paper for more information.

Note:

The six proposed principles-based non-discrimination obligations

Principle Proposed non-discrimination obligations Principle 1: Non-discriminatory supply (1) A gentailer must not discriminate between buyers for the supply of risk management contracts without an objectively justifiable reason. (2) A gentailer must not discriminate against buyers in favour of its own internal business units for the supply of uncommitted capacity without an objectively justifiable reason. (3) A gentailer must not discriminate against buyers in favour of its own internal business units when pricing risk management contracts without an objectively justifiable reason. (4) For the avoidance of doubt, subclause (3) requires pricing of risk management contracts in such a way as to ensure that any buyer that supplies electricity to end users at retail, that is as efficient with regard to operating costs as the gentailer’s own retail internal business unit, and adopts a reasonable risk management approach, is not prevented from operating profitably. Principle 2: Obligation to trade in good faith A gentailer must engage with buyers in good faith and in a timely and constructive manner in relation to the supply of risk management contracts. Principle 3: Objective credit assessments A gentailer’s credit terms and collateral arrangements relating to the supply of risk management contracts to buyers must reflect a reasonable, consistent and transparent assessment of the risk of trading with a buyer. Principle 4: Equal access to commercial information A gentailer must ensure that any commercial information relating to risk management contracts made available to its internal business units that compete with buyers is also made available to buyers at the same time. Principle 5: Protection of confidential information A gentailer must protect buyer confidential information and establish robust processes to prevent disclosure of buyer confidential information to, and use of buyer confidential information by, any of the gentailer’s internal business units that may compete with the buyer. Principle 6: Record-keeping A gentailer must establish, maintain and keep records that demonstrate its compliance with these non-discrimination principles.

About the Energy Competition Task Force

The Energy Competition Task Force was established by the Commerce Commission Te Komihana Tauhokohoko and Electricity Authority Te Mana Hiko, with the Ministry of Business, Innovation and Employment as observers, in August 2024 to investigate ways to improve the performance of the electricity market.

The Task Force has been considering eight initiatives that 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.

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