The Authority has initiated a process to achieve robust market making for all ASX NZ electricity derivative products.  Market making is currently occurring for the quarterly and monthly baseload products.

Over the next few weeks, the Authority will engage with the six largest generator-retailers to understand what barriers are inhibiting voluntary market making in the quarterly peak and options products, and map out a path for voluntary market making in those products.

The Authority will also prepare to consult on possible amendments to the Code that would mandate market making of ASX products by the large generator-retailers.  The Authority is starting work on the mandatory approach now to minimise lost time if voluntary measures prove unsuccessful and also because the work in developing the consultation paper, particularly the cost-benefit analysis, should prove helpful in discussions about voluntary market making.

In parallel, the Wholesale Advisory Group continues its in-depth investigation into options for further developing the ASX and over-the-counter hedge markets.

A non-addressed version of the letter sent to the six generator-retailers is below: