Powerco Regulation and Business Manager Paul Goodeve said the Company was cautiously optimistic about the future of regulation in New Zealand following the release of the Commerce Commission's latest determination on electricity distribution pricing.

The Commerce Commission this week released its determination and decisions paper for the price-quality path which will apply to electricity distribution businesses from 1 April 2010. The decision will allow businesses to increase prices by the rate of inflation while ensuring the quality of supply to consumers is maintained. The Commerce Commission will not release a decision on whether an initial price adjustment is required until the end of 2010. Powerco remains positive that any decision on the initial price adjustment will not detract from the investment that is likely to result from the Commerce Commission's latest determination on electricity distribution pricing.

"This decision will determine the future price path for Powerco's electricity networks which supply more than 314,000 customers in Wairarapa, Manawatu, Wanganui, Taranaki, Western Bay of Plenty, South Waikato, Hauraki Plains and Coromandel."

"The default price path goes some way in recognising the increasing investment that Powerco, and others in the industry, are making in their networks"

Mr Goodeve said Powerco had been working closely with the Commerce Commission to contribute to a sustainable regulatory regime which ensured electricity consumers' expectations around price and quality were met while improving certainty around the infrastructure investment.

"While there is lot of work to be done in the regulatory area, the recent signs that New Zealand's regulatory policy is maturing, backed by last year's amendments to the Commerce Act, have certainly provided an improvement to Powerco's outlook when compared to the view we held three to four years ago."

Powerco is New Zealand's second largest electricity and gas distribution utility with around 400,000 consumers connected to its networks. Powerco's electricity networks are in Tauranga, Thames, Coromandel, Eastern and Southern Waikato, Taranaki, Wanganui, Rangitikei, Manawatu and the Wairarapa. Its gas pipeline networks are in Taranaki, Hutt Valley, Porirua, Wellington, Horowhenua, Manawatu and Hawke's Bay.