Electricity Industry Participation Code (Market Making Arrangements) Amendment 2026

This amendment to the Electricity Industry Participation Code 2010 (Code) is made under section 38 of the Electricity Industry Act 2010 (Act) by the Electricity Authority having complied with section 39 of the Act.

Amendment

1. Title

   This is the Electricity Industry Participation Code (Market Making Arrangements) Amendment 2026.

   
   

2. Commencement

   This amendment comes into force on 31 July 2026, except for clauses 10 to 11 which come into force on 1 March 2027.

   
   

3. Code amended

   This amendment amends the Electricity Industry Participation Code 2010.

   
   

   Part 1

   Amendments to Parts 1 and 13 of the Electricity Industry Participation Code that come into force on 31 July 2026

4. Clause 1.1 amended (Interpretation)

   1. In clause 1.1(1), insert in their appropriate alphabetical order:

      
      

      evening peak trading period means a trading period between 1700 to 2100 hours New Zealand time

      forward contract means a base load electricity future or a super-peak electricity contract

      market-making period means the base load market-making period or super-peak market-making period, whichever is applicable

      morning peak trading period means a trading period between 0700 hours and 1030 hours New Zealand time

      super-peak electricity contract means a contract for differences relating to 0.1 MW of electricity for all morning peak trading periods and evening peak trading periods in the contract term in respect of the Otahuhu reference node or the Benmore reference node available for trade on an exchange

      super-peak market-making period means the 30-minute period each fortnight specified by an exchange, when super-peak electricity contracts are traded on that exchange, but which must exclude 1530 to 1600 New Zealand time

      total required super-peak volume means 1.5 MW equivalent of super-peak electricity contracts, taking into account traded super-peak electricity contracts across both buy quotes and sell quotes

1. In clause 1.1(1), definition of bid-ask spread,—

   1. replace “NZ electricity future” with “forward contract” in each place; and

   2. in paragraph (b), delete “.”.

2. In clause 1.1(1), definition of exchange, replace “New Zealand electricity base load futures contracts” with “forward contracts”.

3. In clause 1.1(1), definition of NZ electricity future, replace “NZ” with “base load”.

4. In clause 1.1(1), definition of NZEF market-making agreement,—

   1. replace “NZEF” with “base load”; and

   2. replace “NZ” with “base load”.

5. In clause 1.1(1), definition of NZEF market-making period,—

   1. replace “NZEF” with “base load”; and

   2. replace “NZ” with “base load”.

6. In clause 1.1(1), definition of order, replace “simultaneously, placed” with “simultaneously placed”.

7. In clause 1.1(1), definition of quote, replace “NZ electricity future” with “forward contract”.

8. In clause 1.1(1), replace the definition of total traded NZEF with:

   
   

   total traded volume means the cumulative total amount of buy quotes and sell quotes traded by that participant as base load electricity futures up to the start of the current volume refresh period in that base load market-making period in relation to the applicable reference node (Benmore or Otahuhu) and for the particular month or calendar quarter referred to in clause 13.236L(1)

1. In clause 1.1(1), definition of volume refresh,—

   1. delete “, for the purposes of subpart 5B of Part 13,”; and

   2. replace “13.236L(3)” with “13.236L(3)(b)”.

2. In clause 1.1(1), definition of volume refresh period,—

   1. delete “, for the purposes of subpart 5B of Part 13,”; and

   2. replace “NZ” with “base load”.

1. Part 13, Subpart 5B heading amended (Hedge market arrangements)

   In the heading to Subpart 5B of Part 13, replace “Hedge market” with “Market making”.

   
   

2. Clause 13.236K amended (Application of subpart)

   (1) In clause 13.236K(2),—

   1. replace “This subpart” with “Clause 13.236L only”; and

   2. replace “NZEF” with “base load” in each place.

      (2) In clause 13.236K(3), replace “this subpart” with “clause 13.236L” in each place.

      
      

3. Clause 13.236L amended (Requirement to quote)

   1. In the heading to clause 13.236L, insert “base load electricity futures” after “quote”.

   2. In clause 13.236L(1),—

      1. replace “Subject to subclauses (2) to (5), the participant” with “A participant to whom this clause applies under clause 13.236K”;

      2. replace “NZEF” with “base load”; and

      3. replace “NZ” with “base load” in each place.

   3. In clause 13.236L(2), replace “NZEF” with “base load”.

   4. Replace clause 13.236L(3) with:

   1. When providing quotes under subclause (1), the participant must:

      1. place an initial buy order and an initial sell order, each of which must be for at least half the number of quotes required under subclause (1), at or after the start of the base load market-making period:

      2. if either initial buy order or sell order is fully traded during the base load market-making period then that participant must (as applicable) refresh its order(s) so that, at the end of the volume refresh period, the number of quotes comprising each of the buy order and sell order respectively are a minimum of X, where—

         X = number of quotes required under subclause (1) – total traded volume

      3. once the participant has traded the total required volume it may withdraw any remaining quotes.

1. New clause 13.236LB inserted (Requirement to quote super-peak electricity contracts)

   After clause 13.236LA, insert:

   13.236LB Requirement to quote super-peak electricity contracts

   1. A participant to whom this clause applies under clause 13.236K must, for a minimum of 25 minutes in every super-peak market-making period, provide quotes for a minimum of—

      1. 15 monthly super-peak electricity contracts for each of the Otahuhu reference node and the Benmore reference node (being 15 buy quotes and 15 sell quotes for each reference node) for each month in the current calendar quarter (excluding the current month and any previous months), and for each month in the following 2 calendar quarters; and

      2. 15 quarterly super-peak electricity contracts for each of the Otahuhu reference node and the Benmore reference node (being 15 buy quotes and 15 sell quotes for each reference node) for each of the 9 calendar quarters following the last calendar quarter referred to in paragraph (a).

   2. Once the participant has traded the total required super-peak volume it may withdraw any remaining quotes in that super-peak market making period.

   3. The participant must not provide a quote under subclause (1) with a bid-ask spread that exceeds the greater of 5% or NZ$2. For the avoidance of doubt, where there are multiple buy orders and sell orders for a particular reference node for a particular month or calendar quarter in a super-peak market-making period, the requirement in this subclause means the bid-ask spread between the lowest priced buy order and the highest priced sell order (across those multiple orders) must not exceed the greater of 5% or NZ$2.

1. Clause 13.236N replaced (Exemptions from requirement to quote)

   Replace clause 13.236N with:

   13.236N Exemptions from requirement to quote

   1. The participant is exempt from the requirements in clause 13.236L or clause 13.236LB in the following circumstances:

      1. for a market-making period if—

         1. the participant cannot comply with a requirement in clause 13.236L or clause 13.236LB (as applicable) in that market-making period because the relevant exchange is disrupted or unavailable; or

         2. in the reasonable opinion of the participant—

            1. entering into a forward contract in that market-making period is likely to cause the participant to breach an applicable law; and

            2. the participant has taken all reasonable steps that would have enabled it to enter into a forward contract in that market making period while avoiding the likely breach of an applicable law;

      2. in addition to the exemptions in paragraph (a), for up to:

         1. 2 base load market-making periods within any 20 consecutive base load market-making periods at the participant’s discretion:

         2. 5 super-peak market-making periods within any 26 consecutive super-peak market-making periods at the participant’s discretion.

   2. To avoid doubt, if the participant meets the criteria for exemption in subclause (1)(a)(i) or (1)(a)(ii) in relation to a market-making period, that market-making period will not count towards the participant’s exemptions in subclause (1)(b).

   3. If the participant relies on an exemption under this clause from the requirement to quote, the participant must notify the Authority of the exemption it has relied on and the basis for the exemption as soon as practicable but in any case no later than 1700 New Zealand time on the same business day that an exemption is relied on.

   Part 2

   Amendments to Parts 1 and 13 of the Electricity Industry Participation Code that come into force on 1 March 2027

2. Clause 1.1 amended (Interpretation)

   In clause 1.1(1), replace the definition of total required volume with:

   
   

   total required base load volume means, taking into account traded base load electricity futures across both buy quotes and sell quotes,—

   1. 2.4 MW equivalent of base load electricity futures for each month and quarter and at each node referred to in clause 13.236L(1)(a) and (b):

   2. 1.6 MW equivalent of base load electricity futures for each quarter and at each

   node referred to in clause 13.236L(1)(c)

1. Clause 13.236L amended (Requirement to quote base load electricity futures)

1. Replace clause 13.236L(1)(b) with:

   (b) 24 quarterly base load electricity futures for each of the Otahuhu reference node

   and the Benmore reference node (being 24 buy quotes and 24 sell quotes for

1. In clause 13.236L(3)(c), replace “total required volume” with “total required base load volume”.

Made at Wellington on 8 May 2026

Erik Westergaard Acting Chair Electricity Authority

Certified in order for signature:

Nichola Lambie Paul Comrie-Thomson

Manager Legal – Legislation Partner

Electricity Authority Cuncannon

6 May 2026 5 May 2026

Explanatory Note

This note is not part of the amendment but is intended to indicate its general effect.

This amendment to the Electricity Industry Participation Code 2010 (Code) comes into force on 31 July 2026, except for clauses 10–11 which come into force on 1 March 2027.

The amendment amends Parts 1 and 13 of the Code to update the regulated market making arrangements in the hedge market to:

1. introduce market making requirements on participants subject to Subpart 5B of Part 13 for super-peak electricity contracts, with a total offer volume requirement of 6 MW per contract at a 5% bid-ask spread (or NZ$2, whichever is greater);

2. extend market making requirements for quarterly base load contracts from 3 years to 5 years ahead;

3. reduce the total offer volume from 12 MW to 8 MW for quarterly base load contracts for year 3, and apply this volume to years 4 and 5 ahead; and

4. clarify the operation of exemptions to the market making obligations and make other

minor, technical improvements to the market making provisions.