The Electricity Authority says it will step in if trading on the electricity hedge market does not reach satisfactory levels.
The Government mandated an electricity hedge market as part of ways to promote competition.
The market allows buying and selling electricity at future date to reduce volatility in prices, but users have criticised a wide spread between prices on the market and the limited volumes of electricity on offer.
EA chief executive Carl Hansen told Evening Business on Checkpoint three large generator-retailers have now signed new arrangements which will sharply reduce the spread between bid and ask prices for futures contracts, as well as substantially increase trading volumes.
"It helps because more trades can be done and the second component to it is that there's been quite a substantial increase in the trading volume and in the amount of what's called 'uncovered open interest' and that means that the players have much more skin in the game, so they're going to want to get the pricing right because it affects the values they can report in their accounts."
He says the authority has also set targets for the amount of electricity to be offered on the market.
They are at least 1000 gigawatt hours by the start of December, 2000 by March and 3000 by June next year.
Mr Hanson says the authority hopes the changes will help attract small retailers, large consumers and financial intermediaries to the hedge market.
