The Commerce Commission ("Commission") gives the following notice under Part 4 of the Commerce Act 1986 ("Act")
1. Electricity Distribution Services Default Price-Quality Path Determination 2012
On 30 November 2012, the Commission made the Electricity Distribution Services Default Price-Quality Path Determination 2012 NZCC 35 ("Determination").
The Determination resets the default price-quality path for all electricity distribution businesses except those that are "consumer-owned" as defined in section 54D of the Act, and Orion New Zealand Limited. The Determination is made under section 54K(3) of the Act.
In accordance with section 52P(7)(b) of the Act, this notice is published as a summary of the Determination.
2. Summary of the Determination
The Determination resets the default price-quality paths applying to 16 electricity distribution businesses that
are subject to default/customised price-quality regulation under the Act ("Non-exempt EDBs") other than Orion New Zealand Limited. The Non-exempt EDBs subject to the Determination are:
" Alpine Energy Limited
" Aurora Energy Limited
" Centralines Limited
" Eastland Networks Limited
" Electricity Ashburton Limited
" Electricity Invercargill Limited
" Horizon Energy Limited
" Network Tasman Limited
" Nelson Electricity Limited
" OtagoNet Joint Venture
" Powerco Limited
" The Lines Company Limited
" Top Energy Limited
" Unison Networks Limited
" Vector Limited
" Wellington Electricity Lines Limited
The Determination applies for the period 1 April 2010 to 31 March 2015 ("Regulatory Period").
The reset default price-quality paths consist of a price path and quality standard that each Non-exempt EDB must comply with for the assessment periods ending 31 March 2014 and 31 March 2015.
The Determination applies the input methodologies for electricity distribution services set out in Electricity Distribution Services Input Methodologies Determination 2012 NZCC 26 (including all amendments to
16 November 2012).
In relation to the price path, the determination specifies:
a) the maximum prices a Non-exempt EDB may charge for the supply of electricity lines services, which are derived from its allowable notional revenue; and
b) starting prices based on the current and projected profitability of each Non-exempt EDB in accordance with s53P(3)(b); and
c) annual rates of change in prices, relative to the consumer price index that are allowed during the Regulatory Period for Non-Exempt EDBs.
In relation to quality standards, the Determination specifies:
a) annual reliability limits based on historic reliability performance; and
b) that annual compliance will be assessed by comparing the businesses annual performance against its reliability limits; and
c) that compliance with the quality standards will require annual compliance in no less than two out of three consecutive years.
Each Non-exempt EDB business is required to provide the Commission with an audited statement demonstrating whether or not it has complied with the default price-quality path within 50 working days of the assessment periods ending 31 March 2014 and 31 March 2015.
3. Further information
Copies of the Electricity Distribution Services Default Price-Quality Path Determination 2012 NZCC 35, Electricity Distribution Services Default Price-Quality Path Determination Amendment No. 4 NZCC 36, and reasons paper are available on the Commission's website at:
http://www.comcom.govt.nz/2010-2015-default-price-quality-path/
30 November 2012.
COMMERCE COMMISSION.
Explanatory Note
On 30 November 2009, the Commission made the Electricity Distribution Default Price-Quality Path Determination 2010 Decision 685 (the 2010 Determination) under Part 4 of the Commerce Act 1986 ("Act"). The 2010 Determination sets 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
("Non-exempt EDBs").
The Commission subsequently determined input methodologies that apply to the default price-quality regulation of Non-exempt EDBs in Electricity Distribution Services Input Methodologies Determination 2012 NZCC 26 (including all amendments to 16 November 2012). Section 54K(3) of the Act allows the Commission to reset the default price-quality path previously set under section 54K(2) where the application of the input methodologies would have resulted in a materially different path being set.
On 30 November 2012, the Commission reset the default price-quality path for all for all Non-exempt EDBs except Orion New Zealand Limited under section 54K(3) by issuing the Electricity Distribution Services Default Price-Quality Path Determination 2012 NZCC 35. All Non-exempt EDBs must comply with the reset default price-quality path for the assessment periods ending 31 March 2014 and 31 March 2015. The quality standards are the same as those contained in the 2010 Determination.
The 2010 Determination has been amended by the Electricity Distribution Services Default Price-Quality Path Determination Amendment No. 4 NZCC 36 so that only Orion New Zealand Limited remains subject to the default price-quality path contained in the 2010 Determination. All Non-exempt EDBs must comply with the 2010 Determination for the assessment period ending 31 March 2013 and for the earlier assessment periods.