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Commerce Commission Releases Draft Decisions Paper Relating To Electricity Distribution Businesses

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Fuseworks Media
Fuseworks Media
Commerce Commission Releases Draft Decisions Paper Relating To Electricity Distribution Businesses

The Commerce Commission has today released its draft decisions paper on the default price-quality paths to apply to electricity distribution businesses from 1 April 2010. This is the fourth paper released for consultation by the Commission as part of a process to reset the default price-quality paths that currently apply to electricity distribution businesses under Part 4 of the Commerce Act 1986.

Part 4 of the Commerce Act regulates suppliers of electricity lines services, including the 29 electricity distribution businesses currently providing distribution services between Transpower and end users in New Zealand. All 29 businesses, except for those exempt on the basis of consumer ownership, have been subject to a default price-quality path since 1 April 2009. Under the Commerce Act, this initial path must be reset to specify the price paths and quality standards that will apply from 1 April 2010.

"These draft decisions propose allowing businesses to increase prices by inflation whilst ensuring that the current quality of supply to consumers will at least be maintained," said Brent Alderton, Commerce Commission's Network Performance Branch Acting Director.

"Setting the price path this way is intended to provide businesses with incentives for efficiency gains. The Commission may look to revisit price levels after the input methodology determinations scheduled for June 2010. The Commission's approach to setting quality standards is intended to improve certainty for businesses by taking into account extreme events, such as severe storms," said Mr Alderton.

The paper can be found on the Commission's website www.comcom.govt.nz under Industry Regulation/Electricity/Distribution Price-Quality/2010-2015 Default Price Path

Submissions on the draft decisions paper are due by 11am, 12 October 2009. Cross-submissions are due by 1pm, 26 October 2009.

Submissions and cross-submissions should be sent to npb@comcom.govt.nz

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