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Households on a plan that passes on wholesale rates could have paid an extra $20 for their power that night.The Electricity Authority said it had investigated and decided that the incident was not an "undesirable trading situation" - a situation that threatens confidence in the wholesale market.
But it has requested a market performance review that would look at June 2's trading, other similar events and how the electricity market performed.
Chief executive Carl Hansen said the investigation had highlighted issues that needed more analysis.
"I would like to thank Electric Kiwi for proactively escalating this matter. Our review will consider the performance of the electricity market and the conduct of all participants. In particular, we need to examine whether the market performed in a manner consistent with the Authority's statutory objective of promoting competition, reliability and efficiency for the long-term benefit of consumers."
Hansen said occasional spikes in spot prices were desirable to provide a reliable and secure electricity supply. This is because back-up generation plants operate very little of the time and so they need to earn high prices when they do, to recover their costs.
He said, of the past three months, there had only been one hour where prices reached more than $1000/Mwh.
Consumers on plans that left them exposed to wholesale prices had been given a good amount of warning, he said. Most adjusted their consumption accordingly.
Meridian welcomed the decision.
Its chief executive, Mark Binns, said it was good to see the regulator confirm it had behaved appropriately.
"Price spikes are a normal function of any working wholesale market here and overseas," he said.
"The vast majority of consumers are shielded from wholesale market fluctuations by tariffs with fixed prices. Residential customers who do choose to take spot market exposure with their retailer have had the risks explained to them."
But Electric Kiwi also said it was a good result.
Phillip Anderson, director, said his firm thought that excessive use of market power by big companies had contributed to New Zealanders paying unnecessarily high power prices.
"We look forward to engaging in the review and continuing to argue for a fairer deal for consumers. For too long consumers interests haven't been strongly represented in the debate over the technical rules that determine how the electricity market operates. These rules have significant implications for what New Zealanders pay for power. Electric Kiwi is committed to championing the interests of consumers and arguing for a fairer interpretation of the rules."
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