Under section 52W of the Commerce Act 1986 (“Act”), the Commerce Commission (“Commission”) gives notice that it has amended the input methodologies (IMs) applicable to electricity lines services under Part 4 of the Act.

The amended IMs are set out in the Electricity Distribution Services Input Methodologies Determination 2012 [2012] NZCC 26.

The amendments are set out in Electricity Distribution Services Input Methodologies (Accelerated Depreciation) Amendments Determination 2018 [2018] NZCC 19.

These amendments relate to implementation changes to the IMs for default price-quality paths (DPPs) in respect of the valuation of assets, specifically the accelerated depreciation of existing assets of electricity distribution businesses (EDBs).

We have also made consequential changes to the IMs for DPPs and EDB information disclosure (ID) in respect of the treatment of taxation.

These amendments aim to clarify the provisions relating to:

• the timing for us to receive accelerated depreciation applications from EDBs;
• the applicable adjustment factor; and
• the applicable remaining asset lives used in calculating ‘adjusted depreciation’.

We prioritised these amendments to allow EDBs, which may be considering proposing an adjustment factor for the next EDB DPP reset, to have sufficient time before our draft DPP decision on the 2020 reset in Q2 2019, to:

• consult with interested persons on their proposed adjustment factor; and
• if they wish, propose the adjustment factor to us in writing.

These amendments come into effect on the date of this notice.

Copies of the amendments determination and the reasons paper are available on the Commission’s website at https://comcom.govt.nz/regulated-industries/input-methodologies/projects/amendments-necessary-to-implement-the-2020-electricity-distribution-default-price-quality-path/_nocache#projecttab and are available for inspection free of charge at the Commission (during ordinary office hours), or for purchase at a reasonable price at the Commission, 44 The Terrace, Wellington.

Dated this 8th day of November 2018.

COMMERCE COMMISSION.