From 25 May to 22 June 2021, we consulted on changes to the Electricity Industry Levy to support the implementation of a commercial market-making scheme. The commercial scheme is part of our long-term approach to market making, which involves a deliberate transition, over several years, to commercial providers.
As a result of this consultation we decided to request an increase to our appropriation from Cabinet on 10 November 2021.
On 22 September 2021, Cabinet approved an increase in our appropriation of $3.6m from April to June 2021, and an ongoing annual increase to our appropriation from 2022/23. The appropriation increase is for a maximum of $14.4m on an annual basis, which was informed by indicative prices from our request for information in early 2021. Read the Cabinet paper.
Following Cabinet’s approval of the increase to our appropriation, we will continue our procurement of commercial market-making services. The addition of commercial market-making service providers will help strengthen and support the operation of the hedge market, enhance efficiency, and improve trust and confidence in forward prices in the wholesale electricity market.
Levy consultation - Commercial market-making scheme consultation paper
This consultation paper seeks feedback on the preferred level of service from the commercial scheme and its impact on the levy and on industry participants. The levy calculator can be used to understand what changes to volume and bid-ask spread mean for the cost of the scheme and participant’s levy.