Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Lines Businesses thresholds to apply from 04

Electricity Lines Businesses: Commission releases final decisions on the thresholds to apply from 2004

The Commerce Commission today released final decisions relating to the regulation of large electricity lines businesses (distribution businesses and Transpower). This work is part of the Commission’s development of a regulatory regime for lines businesses, as required by Part 4A of the Commerce Act.

The decisions outline the thresholds for the declaration of control that will apply to lines businesses from 2004. The Commission has decided to retain the two existing thresholds: a price path threshold, representing the expected annual change in lines business average prices; and a quality threshold, comprising a reliability criterion and a consumer engagement criterion.

However, for the price path threshold, new parameters will apply.

“In combination, the thresholds will continue to place strong incentives on the industry to improve efficiency and to share the benefits of efficiency gains with consumers over the long term,” said Commission Chair, Paula Rebstock.

“In making its decisions, the Commission has given careful consideration to ensuring that lines businesses will face incentives to invest in their networks and maintain quality of service, including reliability of supply.”

“The Commission has allocated lines businesses to four groups, each of which is assigned a different price path. All businesses will retain incentives to make efficiency improvements each year to avoid breaching the thresholds, and the majority of lines businesses will be expected to reduce their prices in real terms.”

Businesses with below-average productivity, or with relatively high prices, will face a steeper price path than more productive businesses, or those which have been consistently maintaining low prices. These better performing businesses will be able to retain relatively more of the benefits of any efficiency gains that they can make.

Three distribution businesses have been consistently maintaining lower prices while exhibiting higher productivity. These businesses will be able to gradually increase prices to more efficient and sustainable levels without breaching the price path threshold.

Distribution businesses will be assessed annually against the thresholds, over a regulatory period of five years beginning on 1 April 2004.

Transpower’s thresholds will be set for a period of one year from 1 July 2004, primarily due to uncertainties regarding the approach the Electricity Commission will take with respect to Transpower’s investment programme. For this one year period, Transpower’s price path threshold will be set the same as for average-performing distribution businesses.

The Commission also released today a report prepared for the Commission by Meyrick and Associates, titled Regulation of Electricity Lines Businesses, Analysis of Lines Business Performance (1996-2003). The report presents the analysis of industry performance used to inform the Commission’s decisions on allocating lines businesses to different groups.

The Commission’s final decisions and Meyrick and Associates’ report can be found on the Commission’s website, www.comcom.govt.nz.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Dairy NZ: ‘More Milk From Fewer Cows’ Trend Continues In A Record Year
Vodafone says it has 10,000 customers using its Wi-Fi Calling service. It took less than three months to reach that milestone; the service began operating in September... More>>

Statistics: Consents Remain At Record Levels
There were 47,715 new homes consented in the year ended October 2021, up 26 percent compared with the year ended October 2020, Stats NZ said today. "The year ended October 2021 marks another record for the annual number of new homes consented,” construction statistics manager Michael Heslop said... More>>



Foodstuffs: New World & Four Square Trial NZ’s First Grocery Delivery Offer With Uber Eats

New World & Four Square have partnered with Uber Eats to unlock the first grocery offering available on the platform in Aotearoa. For New World and Four Square it’s yet another way to put New Zealanders first, particularly with those inevitable last-minute grocery needs... More>>


Canterbury Museum: New Research - Bald Haast's Eagle Feasted On Moa Guts

New Zealand’s extinct Haast’s Eagle (Hieraaetus moorei), the largest known eagle, gulped down viscera like a vulture and may even have been bald, new research suggests... More>>

ABC Business Sales: Demand High For Covid-proof Businesses
Despite the continuing challenges facing businesses in this Covid environment, right now there are more buyers looking for a small-medium sized business than there are sellers in the market... More>>


PriceSpy: Producer Prices Increase
New Black Friday and Covid-19 Report* released by PriceSpy says people’s fear of stepping inside physical shops during big sales events like Black Friday has risen since last year; Kiwis are still planning to shop, but more than ever will do it online this year... More>>

NZ Skeptics Society: Announce Their 2021 Awards, And Dr Simon Thornley Wins The Bent Spoon

Every year the New Zealand Skeptics presents its awards to people and organisations who have impressed us or dismayed us, and this year it’s been hard to pick our winners because there have been so many choices!.. More>>