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Enabling investment and innovation

Energy Competition Task Force

Collaboration 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 jointly established the Energy Competition Task Force (Task Force) in response to the fuel shortage and sustained high wholesale prices in August 2024. Representatives from the Ministry of Business, Innovation and Employment also participate on the Task Force as observers.

    The intent of the Task Force was to 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’s initial work programme comprised eight initiatives focused on enabling new generators and independent retailers to enter, and better compete in, the market providing more options for consumers.

    In April 2026 the Task Force announced a revised set of collaboration priorities (see below) and a renewed focus on strengthening inter-agency collaboration.

    This shift reflected the recognition that these focus areas require the agencies to work closely together, using their separate powers and tools side-by-side to achieve shared goals that could not be managed separately.

    Terms of Reference

    The Task Force updated its Terms of Reference in May 2026 with a new joint regulatory model, and to provide an updated statement of its role, objectives and oversight responsibilities.

    Read the updated Energy Competition Task Force Terms of Reference.

    Collaboration priorities

    Following an open letter to sector stakeholders, the Task Force consulted with public and electricity sector stakeholders to identify important areas of work beyond its original work programme. Feedback indicated broad support for the Task Force’s three new collaboration priorities for 2026-27.

    Collaboration priority 1: Review of the efficiency of grid exit point upgrades

    Improving network performance through better investment decisions – including by harnessing alternatives, such as local battery storage and flexibility services, to manage demand and avoid the need for transmission investments at grid exit points (GXPs).

    This review will assess the costs passed on to consumers from new or upgraded grid connection projects. These projects are initiated by electricity distribution businesses (EDBs) and delivered by Transpower.

    It will assess whether the needs case and option evaluation process for these projects is robust and test the framework on a sample of the projects. ​

    The Commission has identified a number of recent GXP investments (completed, underway or planned) and four GXPs were selected for a more detailed case study review. ​

    An issues paper covering the findings is planned for release in August 2026, which may prompt further regulatory considerations by the Commerce Commission.

    Collaboration priority 2: Connection issues

    Addressing lines company pricing and competition issues, including connection challenges.

    Connection pricing

    As part of this priority, the following documents were published in July 2026:

    1. Code change decision paper on targeted intervention for connection pricing with balance point principle and monitoring of obligation to supply
    2. Draft guidance for balance point principle to support targeted intervention
    3. Issues paper and consultation paper on further reform of connection pricing ahead of the Distribution default price-quality path (DPP5, March 2030).

    Subsequent stages are outlined in the timeline below. Note timelines are based on changes to revenue allowances being in place by 1 April 2028. EDBs may choose to move earlier.

    Competition for works ​

    This review will examine potential issues relating to competition and customer choice in connection delivery markets. This will include scoping of potential future work, such as whether intervention or regulatory measures may be required.

    Formal work is expected to commence in 2027. EDBs will be contacted earlier about our expectations around transparency, customer choice and openness to competition.

    Collaboration priority 3: Non-discrimination obligations

    Continued work on level playing field measures – with a focus on monitoring and compliance

    Non-discrimination obligations (NDOs) imposed on gentailers in May 2026 will require a comprehensive monitoring programme to ensure gentailers comply with the NDOs and to monitor the NDOs' effectiveness.

    This project will develop monitoring and compliance guidelines, a review and analysis of Retail Price Consistency Assessments (RPCAs), and a review of gentailers’ non-discrimination implementation plans/non-discrimination policies.

    Monitoring and compliance work is already underway. Find out more.

    Work programme

    Task Force work programme 2026-27

    Decisions

    The Task Force’s recommendations go to the Electricity Authority or Commerce Commission Board for final decisions. Any options that change market settings or regulations follow the normal consultation processes, after which the Authority Board confirms final changes to regulations that will 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

    Timeline

    Past activity

    FAQs

    Question?

    Read our frequently asked questions or get in touch!

    Task force initial work programme

    Task Force work programme to June 2026

    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 business consumers supplying power to the network at peak times. View guidance.

    In November 2025 we consulted 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 businesses consumers with a network connection size of up to 45kVA and (only in terms of distributed generation) with maximum deliverable capacity of 45kW.

    The decision was published on 20 January 2026.

    From 1 April 2027, the rebates distributors pay must be based on long run marginal cost (LRMC) of demand. While the requirement applies specifically to injection rebates, we strongly encourage distributors to use the guidance more broadly when developing other cost-reflective network pricing signals.

    In August 2026 we published guidance advising distributors about how they can use LRMC methodology to calculate their distribution pricing, including rebate payments for injection during peak times.

    We consider these changes will make the policy clearer and easier to apply, ensuring that the rebates apply to those 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 business consumers with a connection capacity of up to 45kVA, and in respect of distributed generation, with maximum deliverable capacity of 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.

    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 has since been collaborating with the Commerce Commission to investigate ways to adjust regulatory settings to strengthen the electricity market.

    The Energy Competition Task Force, co-led by Authority Chair John Harbord 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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