Under the Commerce Amendment Act (No. 2) 2001 (Part 4A, Subpart 4, sections 57ZD and 57ZE), the Commerce Commission ("the Commission") must carry out a review of valuation methodologies for electricity line business system fixed assets as soon as practicable ("the review").
The Commission is also required under the Act to publish
its intention to carry out this work by publication in the
New Zealand Gazette and by any other means it considers appropriate.
This is notice of the Commission's intention to carry out the review of valuation methodologies.
The Commission's process for completing the review will involve the following steps:
1. An Issues Paper;
2. A Discussion Paper;
3. Submissions on a Discussion Paper;
4. A public conference on the Discussion Paper; and
5. A Final Paper.
Interested parties may provide their initial views on the review as the Commission prepares its Discussion Paper.
To assist initial submissions to the review, the Commission has prepared an Issues Paper for consideration by interested parties.
The Issues Paper is available on the Commission's web site: www.comcom.govt.nz, or in hard copy on request.
Broadly speaking, the Commission envisages the review will consider:
(a) the various valuation methodologies (including possible modifications to the optimised deprival valuation ("ODV") method currently used for information disclosure purposes) that can be used to value the capital assets of electricity line businesses and, in particular, their system fixed assets; and
(b) the costs and benefits of the current ODV method compared to alternative valuation methodologies (including variations to the current ODV method) for regulatory purposes, including disclosures and thresholds assessments. This will include, if necessary, consideration of the transition costs of moving from one valuation methodology to another.
The Commission aims to release a Discussion Paper in the second quarter of 2002.
Interested parties will then be invited to provide submissions on the Discussion Paper.
The process for accepting submissions will be advised when submissions are called for.
Inquiries regarding this review can be directed to
Peter Alsop, Manager, Network Performance, telephone (04) 498 4721.
Requests for the Issues Paper can be directed to
Catherine Best, telephone (04) 498 0953.
JOHN BELGRAVE, Chair, Commerce Commission.