MDAG recommendations update: strengthening price signals

This is the Electricity Authority’s latest update on how we are implementing the recommendations in the Market Development Advisory Group’s (MDAG) final report. It covers January to April 2026.

Overall, the Authority has implemented 13 of the 31 recommendations and is making steady progress on a further 13, bringing to 26 the number of recommendations completed or in train.

Support price discovery in the wholesale market

Accurate and efficient price discovery is one of the key pillars of the wholesale market. It helps to ensure the development of the right type and mix of resources (generation, storage and demand response) in the right place at the right time so the system can deliver reliable electricity at the lowest possible cost.

Since the start of 2026, we have made final decisions on three actions that will strengthen price signals in the electricity market (recommendations 18, 24 and 28).

Two of these recommendations will be implemented over the second half of 2026 (recommendations 18 and 24), and one in early 2027 (recommendation 28).

We have also advanced work on two additional recommendations that will improve transparency and better enable efficient decision-making (recommendations 19 and 21).

Further detail on our work on these and other MDAG recommendations is provided below.

You can also see the status of all the recommendations in our latest report.

Milestones in early 2026:

• Requiring half-hourly data from smart meters to be used to calculate energy bills: In March, we decided that traders must submit aggregated half-hourly data (where it is available) from 1 October 2026. This will support stronger price signals for consumers and greater incentives on retailers to ensure their plans are more cost-reflective, particularly following the mandatory offering of time-of-use tariffs by large retailers from July (recommendation 18).
  

• Market-making review: strengthening price discovery in future electricity markets: In April, we made final decisions on the review of market-making. This includes decisions to introduce market-making requirements for standardised super-peak futures (with effect from 31 July 2026) and to extend market making of baseload futures from three to five years (with effect from 1 March 2027). These changes are intended to create a robust forward price curve and improve access to risk management contracts. This will benefit consumers by enabling independent retailers to better manage risk and offer competitive pricing and support the entry of new intermittent generation into the electricity market (recommendations 24 and 28).
  

• Investigating options to undertake a study into the ‘value of lost load’: In March, we issued a request for information to test market capability and interest in delivering an updated economic study of New Zealand’s ‘value of lost load’. Updating this value will provide more accurate price signals for Transpower and distributors, helping them to make better reliability planning decisions (recommendation 16).

• Optimising distribution investment pricing: We have started a project to develop improved guidance on ‘long-run marginal cost’ distribution pricing. This is part of the long-term plan to improve the cost-reflectivity and economic efficiency of distribution pricing, which supports lower network investment costs and prices for consumers (recommendation 4).

We have also started publishing monthly hedge market reports to provide greater visibility of market signals, including standardised super-peak prices and prices of long-dated contracts. These reports support more informed and more efficient investment decisions for the long-term benefit of consumers.

Progress on additional recommendations:

• Enforcement and compliance: We are improving the effectiveness of our monitoring, enforcement and compliance functions, with a greater focus on compliance. We have also developed new monitoring reports, including generation investment, and hedge market monitoring. In future, we plan to publish regular retail market monitoring data, and price margin data (recommendation 21).

• Demand-side flexibility: We are exploring the need for new regulation to allow the Code to be applied to flexibility aggregators. We will also publish a consultation paper shortly about improving network visibility focusing on the high-voltage network. The proposed improvements are expected to streamline processes and support more efficient investment decisions. In the longer term, this may facilitate MDAG’s specific recommendation relating to distribution network capacity and demand side flexibility dispatch (recommendation 19).

MDAG’s recommendations form an important part of our work programme and we will continue to report on our progress.

About the Market Development Advisory Group's work