Pursuant to Part 4 of the Commerce Act 1986 ("Act"), the Commerce Commission ("Commission") gives the following notice.
N o t i c e
1. Title-This notice is the Commerce Act (Summary of Transpower Individual Price-Quality Path Determination) Notice 2011.
2. Transpower individual price-quality path determination
2.1 On 22 December 2010, the Commission made the Commerce Act (Transpower Individual Price-Quality Path) Determination 2010 ("Determination").
2.2 The Determination sets out an individual price-quality path for Transpower, as defined in section 54B of the Act ("Transpower") pursuant to the Commerce (Part 4 Regulation-Transpower) Order 2010 issued under section 52N of the Act, as required by Part 4 of the Act.
2.3 In accordance with section 52P(7)(b) of the Act, this notice is published as a summary of the Determination.
3. Summary of the Determination
3.1 The Determination sets out the individual price-quality path applying to Transpower for the period 1 April 2011 to
31 March 2015 ("Regulatory Period").
3.2 The individual price-quality path consists of a price path and quality standards that Transpower is required to comply with during the Regulatory Period.
3.3 In relation to the price path, the Determination sets out Transpower’s maximum allowable revenue (which is the forecast maximum allowable revenue) for the first year in the Regulatory Period (1 April 2011 to 31 March 2012). By
30 November 2011, the Commission will amend the Determination to set out Transpower’s forecast maximum allowable revenue, and approved levels of operating and capital expenditure, for each of Transpower’s pricing years in the period
1 April 2012 to 31 March 2015.
3.4 In relation to quality standards, the Determination requires that Transpower discloses information in relation to the quality of the electricity transmission services that it supplies, by reference to certain quality measures and targets.
3.5 In order to comply with the Determination, Transpower is required to provide the Commission with an annual compliance monitoring statement and associated information pursuant to the Commission’s powers under sections 53N and 98 of the Act that:
(a) states whether Transpower has complied with the price path, and demonstrates this by showing whether the forecast revenues (exclusive of pass-through costs and recoverable costs) that it used for the purpose of setting charges under the transmission pricing methodology in the Electricity Industry Participation Code exceeded, in aggregate, the forecast maximum allowable revenue that applied to the relevant disclosure year;
(b) states whether Transpower has complied with the quality standards;
(c) supports the forecast maximum allowable revenue calculations that Transpower is required to perform under the Determination;
(d) is signed off with a directors’ certificate on compliance with the price path requirements, quality standard requirements and associated information requirements in the annual compliance monitoring statement; and
(e) is covered by an independent assurance report that expresses an opinion on whether the compliance monitoring statement and associated information has been prepared in accordance with the Determination.
4. How the Determination is publicly available
Copies of the Determination, and a reasons paper providing detailed background to and analysis of the Determination, are available for inspection free of charge at the Commission (during ordinary office hours), on the Commission’s website at www.comcom.govt.nz, or for purchase at a reasonable price at the Commission, 44 The Terrace, Wellington.
Dated at Wellington this 20th day of January 2011.
The Commerce Amendment Act 2008 introduced changes to the Commerce Act 1986 ("Act"), including a requirement for the Commerce Commission ("Commission") to recommend to the Minister of Commerce that an Order in Council be made declaring that Transpower is subject to either default/customised price-quality regulation or individual price-quality regulation under the Act. On 13 April 2010, the Commission recommended that Transpower be subject to individual price-quality regulation. On 23 August 2010, the Governor-General made the Commerce (Part 4 Regulation - Transpower) Order 2010, which provided that Transpower is subject to individual price-quality regulation on and from 1 April 2011. Pursuant to that Order in Council, the Commission has made the Commerce Act (Transpower Individual Price-Quality Path) Determination 2010. That determination contains an individual price-quality path which will take effect on 1 April 2011. Transpower must apply the relevant input methodologies in the Commerce Act (Transpower Input Methodologies) Determination 2010 in order to comply with the individual price-quality path determination.