The Commerce Commission (“Commission”) gives notice that it has amended the customised price-quality path determinations (CPPs) applicable to Powerco Limited (“Powerco”) and Wellington Electricity Lines Limited (“Wellington Electricity”)—two electricity distribution businesses (EDBs) regulated under Part 4 of the Commerce Act 1986 (“Act”). The regulatory period for Powerco’s CPP is 1 April 2018 to 31 March 2023 and the regulatory period for Wellington Electricity’s CPP is 1 April 2018 to 31 March 2021.

The amended CPPs are:

• Wellington Electricity Lines Limited Electricity Distribution Customised Price-Quality Path Determination 2018 [2018] NZCC 6; and
• Powerco Limited Electricity Distribution Customised Price-Quality Path Determination 2018 [2018] NZCC 5.

The amendments are respectively set out in:

• Wellington Electricity Lines Limited Electricity Distribution Customised Price-Quality Path (Allowable Revenue) Amendments Determination 2020 [2020] NZCC 5; and
• Powerco Limited Electricity Distribution Customised Price-Quality Path (Allowable Revenue) Amendments Determination 2020 [2020] NZCC 4.

On 25 September 2019, we determined and published the weighted average cost of capital for the default price-quality path regulatory period commencing on 1 April 2020 (“WACC change”). Following the WACC change, we reconsidered the above two CPPs under subpart 6 of Part 5 of the Electricity Distribution Services Input Methodologies Determination 2012 [2012] NZCC 26 (“IMs”). After reconsidering a CPP in these circumstances, and to align the CPP’s allowable revenues with the WACC change, the IMs:

(a) require us to amend the CPP’s “maximum allowable revenue after tax” and “forecast net allowable revenue”; and

(b) enable us to further amend the CPP’s price path provided such amendments are reasonably necessary to take account of a change in costs.

The amendments to Powerco’s CPP and Wellington Electricity’s CPP provide for (a) and (b) above, aligning the two CPPs’ allowable revenues with the WACC change.

Further Information

A copy of the amendments and our final decision paper on the amendments is available on our website, https://comcom.govt.nz/regulated-industries/electricity-lines/electricity-lines-price-quality-paths/electricity-lines-customised-price-quality-path/wellington-electricitys-20182021-cpp?target=documents&root=212367, and, https://comcom.govt.nz/regulated-industries/electricity-lines/electricity-lines-price-quality-paths/electricity-lines-customised-price-quality-path/powercos-20182023-cpp?target=documents&root=212363, and for inspection free of charge, or for purchase at a reasonable price, at our office at 44 The Terrace, Wellington (during ordinary office hours).

Date of Notice: 31 March 2020.

COMMERCE COMMISSION.