Energy markets regulatory system
This page describes the energy markets regulatory system and its objectives. It also lists the main statutes and changes to regulation either planned or in progress.
On this page
System description and outcomes
The energy markets regulatory system provides for the effective and efficient operation of energy markets by regulating the allocation of, access to, and standards applying to energy resources and infrastructure in New Zealand. It aims to ensure that people, businesses, and communities have access to an affordable, secure and sustainable energy system that supports productivity.
The system includes the institutions and legislation governing the production, supply and consumption of energy and related services, particularly electricity, natural gas, and liquid fuels. It also includes regulatory and non-regulatory measures to support the reliability and security, competition, efficient access and affordability of energy. The system supports the achievement of New Zealand’s target to reach net zero emissions by 2050, set out in the Climate Change Response Act.
The system excludes aspects of energy sector legislation relating to electricity and gas safety, and monitoring and enforcing petrol and diesel quality standards. Those issues are included in the health and safety at work and the consumer and commercial regulatory systems.
In early 2024, the regulatory system’s governance group, the Council of Energy Regulators, agreed to refresh the regulatory system’s outcomes and objectives. The system’s revised outcomes include:
- Our energy supply is secure and reliable
- New Zealanders have affordable and equitable access to energy
- Our energy supply is from sustainable sources
- The energy system facilitates economic productivity
- A dynamic and agile system that enables innovation.
The regulatory system’s guiding principles are set out in the Energy Markets Regulatory System Charter. Since the Charter was published in 2019, New Zealand’s energy system has changed significantly. The Council of Energy Regulators plans to refresh the Charter to reflect the revised outcomes for the system and latest developments in the system in 2025.
Energy markets regulatory system charter [PDF 848KB]
Ministerial portfolio and key statutes
| Portfolio | Key statutes |
|---|---|
|
Energy(external link) — Department of the Prime Minister and Cabinet |
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Regulatory agencies and their roles
| Agency | Role |
|---|---|
|
MBIE |
MBIE is the steward of this system and leads system strategy and policy advice. MBIE collects and publishes a range of energy statistics, including supply and demand by fuel types, energy balance tables, pricing information, international comparisons and greenhouse gas emissions. These are used to monitor energy markets (e.g. identifying trends and issues) and inform related work programmes. MBIE monitors and enforces minimum fuel stockholding obligations under Part 4 of the Fuel Industry Act 2020. |
|
Electricity Authority |
The Electricity Authority is an independent Crown entity responsible for overseeing and regulating the New Zealand electricity market. The Electricity Authority regulates the electricity market by developing and setting the market rules, enforcing and administering them and monitoring the market’s performance. |
|
Gas Industry Company
|
The Gas Industry Company Limited was established in 2004 as the ‘industry body’ under Part 4A of the Gas Act 1992. The Company’s role as the industry body and co-regulator is to:
|
|
Energy Efficiency and Conservation Authority (EECA) |
EECA is responsible for improving the energy efficiency of New Zealand homes, vehicle fleets and businesses, and encouraging the uptake of renewable energy. |
|
Commerce Commission |
The Commerce Commission is responsible for enforcing laws relating to competition, fair trading, and consumer credit contracts. Its responsibilities in the energy markets regulatory system include regulating the electricity lines and gas pipelines sectors under Part 4 of the Commerce Act, and promoting competition in engine fuel markets under the Fuel Industry Act 2020. |
Regulatory system governance
The Council of Energy Regulators is the energy markets regulatory system’s governance group. The Council of Energy Regulators facilitates a whole-of-system approach to opportunities, issues and risks within the energy markets’ regulatory system. This ensures the members collectively meet the Government’s Expectations for Good Regulatory Practice as they relate to the regulatory system. The Council convenes regularly to:
- coordinate and collaborate on their activities and those of other actors in the system
- proactively monitor emerging risks (both within and outside of government)
- exchange information and align on each other’s work programmes.
MBIE meets regularly with each of the other agencies in the system to share information and monitor progress of relevant work programmes. MBIE has memorandums of understanding (MOUs) with the Electricity Authority and the Energy Efficiency and Conservation Authority.
The MOUs explicitly identify matters of common interest where there are potential overlaps in the respective roles of the agencies and provide a framework for the agencies to coordinate and collaborate on the work.
Some of the agencies also have regular bilateral meetings at board and staff levels to keep each other informed of relevant work programmes, priorities and issues or risks. In addition, the Electricity Authority and Gas Industry Company each have an MOU with the Commerce Commission setting out how they will work with one another on matters of common interest.
Joint working groups are also used to coordinate and/or progress activities in which two or more agencies have an interest. Agencies may share some data when working on joint projects.
Regulated parties and main stakeholders
Regulated parties include:
- electricity generators and network operators
- electricity retailers
- metering equipment providers
- gas pipeline operators and sellers
- fuel suppliers
- suppliers, manufacturers and importers of some products and appliances.
Other key stakeholders include consumer representatives like:
- the Major Electricity Users Group
- the Major Gas Users Group
- Consumer NZ
- Business NZ
- the Automobile Association.
Processes for engagement with regulated parties and stakeholders
The Electricity Authority and Commerce Commission have have developed a joint consultation calendar and have regular stakeholder events, conferences, seminars, workshops and meetings.
Agencies routinely consult with stakeholders on their priorities, work programmes and specific regulatory proposals.
MBIE also develops specific engagement plans when we are planning public consultations on policy proposals. Each plan includes a customised approach to engaging with iwi, which may involve seeking written feedback and/or hui, depending on the nature of the policy proposals and the level of interest iwi may have in those proposals.
System's fitness for purpose
The energy markets regulatory system’s fitness for purpose assessment was carried out in 2017. The Council intends to carry out an updated fitness for purpose assessment in due course.
In 2023 and 2024 the Council has focused on strengthening its approach to regulatory system governance to ensure it is fulfilling its core functions and responsibilities. This includes specifying system outcomes, monitoring system performance, ensuring capability, and managing system risk and assurance. After refreshing its Terms of Reference to centre on these functions, the Council and its Secretariat have worked across regulatory agencies to develop revised outcomes and objectives for the system and a risk register to guide its forward programme of work and ensure it is focusing on key issues for the energy system.