Energy Minister Megan Woods says she will seek advice about stripping energy sector enforcement powers from the Electricity Authority.
In response to a letter from Electric Kiwi - in which the retailer said it had lost confidence in the performance of the wholesale market - Woods said splitting off functions was not going to happen short term.
On April 30 Luke Blincoe, the chief executive of Electric Kiwi, had raised a number of complaints about the functioning of the market.
As well as suggesting reforms of generation focused on the size of Meridian - by far New Zealand's largest electricity generator - Blincoe suggested changes to the way the market is regulated.
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"With regards to the regulatory framework. We encourage the Minister to consider if monitoring and enforcement of the market rules would more appropriately fit within the Commerce Commission's remit in a similar way the ACCC/AER performs this role in Australia at arm's length from the AEMC," Blincoe wrote.
"There is an inherent conflict in the current structure in New Zealand with the Authority responsible for both market design and enforcement. Too often the Authority has sought to put a positive spin on a market it has designed, even when it's failing."
Woods responded almost six weeks later saying she would seek advice on the suggestion.
"Some of the suggestions you make, such as the separation of regulatory rule making from enforcement are longer-term solutions requiring structural change to the market," Woods wrote.
"While this is not currently in my immediate work programme, it could be part of the longer term work programme, and I intend to seek advice from officials as to how your suggestion, and others, can best address the issues you raise about the market's performance."
Blincoe's letter said the company was pouring resources into expanding into Australia at the expense of New Zealand, saying the energy market across the Tasman was "well regulated" and electricity was "reflective of the costs of generation".
In April Woods said she had asked officials whether wholesale electricity prices were too high, at a time when analysts were warning current pricing risked political intervention.