Notification of Commerce Commission’s Final Determination on Powerco’s Proposal to Customise its Prices and Quality Standards

Notice Type: Authorities/Other Agencies of State
Notice Title: Notification of Commerce Commission’s Final Determination on Powerco’s Proposal to Customise its Prices and Quality Standards

The Commerce Commission (“Commission”) gives the following notice under Part 4 of the Commerce Act 1986 (“Act”).

Notice of determination

On 28 March 2018, the Commission made a determination to customise Powerco Limited’s prices and quality standards pursuant to section 52P of the Act.
The determination sets out the Customised Price-Quality Path (“CPP”) applicable to Powerco Limited (“Powerco”).
The determination is made in accordance with the Commission’s input methodologies.
This notice summarises the determination in accordance with section 52P(7)(b) of the Act.

Summary of the determination

The determination applies for the regulatory period starting 1 April 2018 and expiring 31 March 2023.
The Commission has provided for total expenditure of $1,272 million for the regulatory period, of which $825 million should be capital expenditure and $447 million should be operational expenditure.
For quality standards, the Commission has set separate limits for unplanned and planned interruptions. For unplanned interruptions, the limits require a 10% improvement in unplanned System Average Interruption Duration Index (SAIDI), and a 5% improvement in unplanned System Average Interruptions Frequency Index (SAIFI), by the end of the CPP period.
For planned interruptions, the Commission has used Powerco’s own forecasts with a margin added to provide some flexibility in the delivery of the CPP work programme. Powerco is also required to comply with a 5 year aggregate standard for planned interruptions.
Powerco will be required to provide a CPP annual delivery report which will detail its progress on delivering its work programme and give reasons for any areas where it has not delivered as expected.

Further information

A copy of the determination and the reasons paper is available on the Commission’s website: http://comcom.govt.nz/regulated-industries/electricity/cpp/cpp-proposals-and-decisions/, and for inspection free of charge, or for purchase at a reasonable price, at the Commission’s Office at 44 The Terrace, Wellington (during ordinary office hours).

Date of Notice: 29 March 2018.

COMMERCE COMMISSION.