Meridian Energy has been cleared of claims it manipulated the electricity market on 2 June.
But the Electricity Authority still wants to investigate further.
Small retailer Electric Kiwi earlier protested when electricity prices briefly spiked to over $4000 a megawatt hour, and averaged around $230.
They usually average $50 to $80, with far more modest price spikes.
The company said this happened because Meridian Energy withheld electricity and re-offered it at a high rate.
But in a ruling just out, the Authority said the rules of the market were not breached.
Chief executive Carl Hansen said a serious offence - with the official title, an Undesirable Trading Situation (UTS) - had not occurred.
"The Board reviewed a significant amount of analysis about the situation on 2 June. While this event is not a UTS, the investigation has highlighted a number of issues that need further analysis and consideration," he said.
Mr Hansen said that review would look at the performance of the electricity market and the conduct of all participants.
In particular, it would examine whether the market performed in a manner consistent with the statutory objective of promoting competition, reliability and efficiency.
"We just have questions around whether the right kinds of risk management products are available in the market," Mr Hansen said.
"We also have questions around whether the trading behaviour met the high standards for trading conduct which have been introduced into the market rules.
"We also need to see whether the market performed in a manner which is consistent with our statutory objectives."
Meridian Energy has welcomed the decision.
Chief executive Mark Binns said the regulator confirmed that Meridian worked within the market rules and behaved appropriately.
"Price spikes are a normal function of any working wholesale market here and overseas," he said.
He added the vast majority of consumers are shielded from wholesale market fluctuations by tariffs with fixed prices, and residential customers who choose to take spot market exposure have had the risks explained to them.
Electric Kiwi said it was disappointed that the authority had not taken a stronger line, but its director Phillip Anderson was pleased a further investigation was being done.
"Our view hasn't changed that we think Meridian manipulated prices and we think it hurt consumers and we think they broke the rules of the electricity code.
"We hope that as this investigation goes on we get to the bottom of this and get the rules set right for the benefit of consumers."