PURSUANT TO PART 4
OF THE COMMERCE ACT 1986
COMMERCE ACT (ELECTRICITY DISTRIBUTION
DEFAULT PRICE-QUALITY PATH) AMENDMENT DETERMINATION 2010
Pursuant to Part 4 of the Commerce Act 1986, the Commerce Commission makes the following "amendment determination":
1 Title
1.1 This amendment determination is the Commerce Act (Electricity Distribution Default Price-Quality Path) Amendment Determination 2010.
1.2 In this amendment determination, the Commerce Act (Electricity Distribution Default Price-Quality Path) Determination 2010 is called the "principal determination".
2 Commencement date
This amendment determination comes into force on 1 April 2011.
3 Amendment to price path compliance assessment formulae
The principal determination is amended by omitting clause 8.4, and substituting the following:
8.4 Compliance with the price path
The notional revenue (NRt) of a Non-exempt EDB at any time during the Assessment Period must not exceed the allowable notional revenue (Rt) for the Assessment Period, such that:
*Formula here*
where:
NRt is the notional revenue for the Assessment Period t, being equal to:
*Formula here*
Rt is the allowable notional revenue for the Assessment Period t, other than the First Assessment Period, being equal to:
*Formula here*
where:
t denotes the year of the Assessment Date in the Assessment Period, for which compliance is being assessed;
i denotes each Price relating to an Electricity Lines Service;
Pi,t is the ith Price during any part of the Assessment Period t;
Pi,t-1 is the ith Price during any part of the Pricing Period t 1;
Qi,t-2 is the Quantity corresponding to the ith Price during the Pricing Period t-2;
Kt is the sum of all Pass-Through Costs during the Assessment Period t;
Kt-1 is the sum of all Pass-Through Costs during the Pricing Period t 1;
Rt-1 is the allowable notional revenue during the Assessment Period t-1;
NRt-1 is the notional revenue during the Assessment Period t-1;
X is the rate of change for the Non-exempt EDB as specified in Schedule 2; and
?CPIt is the derived change in the CPI to be applied during the Assessment Period t, being equal to:
*Formula here*
where:
CPIq, t is the CPI for the quarter q of year t
Dated at Wellington this 30th day of November 2010.
COMMERCE COMMISSION.
EXPLANATORY NOTE
On 30 November 2009, the Commission reset the default price-quality path for electricity distribution businesses as required by section 54K(1) of the Commerce Act 1986 (the "Act") by publishing Decision 685 - Commerce Act (Electricity Distribution Default Price-Quality Path) Determination 2010 (the "Initial Reset Determination").
The Initial Reset Determination sets out the default price-quality path that applies from 1 April 2010 to 31 March 2015 to all electricity distribution businesses except those that are "consumer-owned" as defined in section 54D of the Act. Electricity distribution businesses meeting the requirements of section 54D are exempt from default/customised price-quality regulation under section 54G(2) of the Act.
The Commerce Act (Electricity Distribution Default Price-Quality Path) Amendment Determination 2010 amends clause 8.4 of the Initial Reset Determination to specify a revenue differential term within the compliance assessment formulae. Further information, including a consolidated version of the Initial Reset Determination; the Commission's reasons for the revenue differential term; and submissions received during consultation can be found on the Commission's website at www.comcom.govt.nz/2010-2015-default-price-quality-path/