Consultation

On 27 October 2021 the Authority released an Information Paper and an Issues Paper as part of the Wholesale Market Review. The Authority is seeking feedback on both papers. The Issues paper focuses on just one key observation highlighted by the review.

In addition, the Authority has published an extended set of consultation questions for the Information Paper. After receiving initial feedback, the Authority considers that providing more specific consultation questions will help stakeholders prepare more targeted responses.

The extended questions are published in an updated version of the Information Paper, ‘Market Monitoring Review of Structure Conduct and Performance in the Wholesale Electricity Market - Information Paper [updated].’

The Authority expects to develop additional workstreams following submissions on both papers. Those workstreams need to support the transition to a low carbon future and maintain security of supply, while enhancing competitive tension in the wholesale market to support efficient outcomes.

Consultation is open on observations in a review paper of competition in the wholesale market during the review period and the possible options explored in an issues paper on potential inefficient price discrimination.  

Market Monitoring Review of structure, conduct and performance in the wholesale electricity market

This review looks at competition in the wholesale market from January 2019 until early 2021. The review used the structure, conduct and performance framework as set out in an Authority’s 2011 information paper: Industry and market monitoring: Competition. This review does not review the HVDC outage from 7 January 2020 to 28 March 2020 and the UTS investigation period from 10 November 2019 to 16 January 2020, as these periods have been reviewed elsewhere.

In undertaking this review the Authority sought specific information from the four largest generator-retailers under section 46 of the Electricity Industry Act 2010, as well as using information in the public domain. A number of market participants were also interviewed about investment issues.

The Authority is seeking feedback on the content and methodology of this review paper.  The Authority is aware that there are a number of possible indicators that can be used to assess competition in the electricity market. The 2011 paper sets out a number of these under the Structure, Conduct, and Performance approach. In determining which indicators to use for present purposes the Authority considered issues including the availability of reliable data; measures that are tracked regularly so that trends can be observed; and timeliness. The Authority is interested to hear feedback on the indicators used and whether any others should be considered.

Inefficient Price Discrimination in the Wholesale Electricity Market - Issues and Options paper

The purpose of the issues paper is to consult with interested parties on inefficient price discrimination in the wholesale market. The Authority seeks feedback on whether regulatory interventions are required to mitigate efficiency concerns. This consultation is at a preliminary stage and no specific amendment to the Electricity Industry Participation Code 2010 (Code) is being considered now. Instead, a range of potential options are being explored.

This list is not exhaustive and there may be other approaches that enhance the long-term interests of consumers. The options are not mutually exclusive, nor are they fully developed at this time. Rather the intention is to get feedback on what options the Authority should consider further and how those options are in the interests of consumers. At this time, no single policy option or amendment to the Code is being proposed. If this consultation process demonstrates to the Authority that there is need for a policy response to the issues raised, then the Authority would publish a subsequent consultation paper to develop a Code change to improve outcomes.

Please note the Authority wants to publish all submissions it receives. If you consider that we should not publish any part of your submission, please:

• indicate which part should not be published
• explain why you consider we should not publish that part
• provide a version of your submission that we can publish (if we agree not to publish your full submission).

If you indicate there is part of your submission that should not be published, we will discuss with you before deciding whether to not publish that part of your submission.

However, please note that all submissions we receive, including any parts that we do not publish, can be requested under the Official Information Act 1982. This means we would be required to release material that we did not publish unless good reason existed under the Official Information Act to withhold it. We would normally consult with you before releasing any material that you said should not be published.

View supporting and background information here

Link to data for the Authority’s dynamic regression analysis of spot price drivers