The Electricity Commission is to review the design of the electricity market at both wholesale and retail level.
Its acting chairman, Peter Harris, told Parliament's commerce select committee yesterday a review of the market, set up in the 1990s, was timely because of an "unrelenting" increase in pricesfor residential consumers.
There were also recurring concerns about security of supply.
"We need to see if there is something structural underneath these outcomes that should concern us," Harris said.
Fuel costs had also risen significantly as the Maui gas field was depleted and the response to climate change had emerged as a key issue.
But the review will not concern itself with whether there is "gaming" or an abuse of power in the market. The commission is already looking into that question.
"I don't think the rising price in itself is evidence of collusion," Harris said. Power prices were influenced by rising gas costs as Maui runs out, the increasing capital cost of new generating capacity, and the normal volatility in rainfall in the catchments of the hydro lakes.
Most stakeholders in the industry seemed dissatisfied with at least some aspect of the present market design, he said, though there was no agreement about what the issues were.
"We are conscious of the need to minimise uncertainty for the investor community," Harris said.
The commission will put out an issues paper by the end of next month.
