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


Asset management of electricity distributors key focus

Media Release

Issued 9 November 2017
Release No. 47

Asset management of electricity distributors key focus for Commission
The Commerce Commission has today published an open letter outlining how asset management is a key priority for the Commission’s work in the electricity distribution sector over the coming year.

Asset management was signalled as a focus area at the Commission’s annual stakeholder briefings in September, with today’s letter providing more details.

“Focusing on asset management of regulated energy suppliers is the logical next step now the upfront rules, processes, and price-quality paths are bedded in,” Commission General Manager of Regulation Nick Russ said.

“It’s increasingly important that electricity distributors prioritise investment and maintenance of their assets to ensure their networks provide the reliability, safety, and resilience consumers expect.”

“This priority is about us becoming increasingly proactive in working with electricity distribution businesses to ensure we and other stakeholders understand the extent to which electricity distributors are investing appropriately in their networks and managing them well.”

“We also recognise that sunlight is a powerful tool for incentivising good performance, which is why in conjunction with the open letter, we’ve also launched a new online tool to help make performance information about electricity distributors more accessible.”

The data visualisation tool can be found here.

The open letter can be found here.

The Commission welcomes feedback on the open letter and online tool by the end of the year.

Regulation of electricity distribution businesses
As monopoly utilities, all 29 of the country’s electricity distribution businesses are regulated by the Commission under Part 4 of the Commerce Act. The aim of this regulation is to ensure they have similar incentives and pressures to those operating in competitive markets to innovate, invest, and improve their efficiency. Each distribution business is required to publicly disclose information on its performance. 17 of the 29 also have revenue limits and quality standards set by the Commission. Revenue limits determine the maximum revenue the company can collect from customers to limit their ability to earn excessive profits, while minimum quality is measured in power outages. If a business breaches its quality standards (eg, asset degradation leads to more outages on its network than is allowed), it may face prosecution under the Commerce Act. The remaining 12 distribution businesses are exempt from price-quality regulation as they are consumer-owned.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Commerce Commission: Warns Genesis Over Business Billing Errors

The Commerce Commission has issued a warning to Genesis Energy Limited about billing errors concerning electricity line charges to business customers. Genesis reported the errors to the Commission. The Commission considers that Genesis is likely to ... More>>

QV: Tax Changes Yet To Dampen Red-Hot Housing Market

Just over a month has passed since the Government announced measures aimed at dampening the rampant growth of the property market, and yet the latest QV House Price Index data shows the market hit a new high in April. The average value increased 8.9% nationally ... More>>

Stats NZ: Consents For New Homes At All-Time High

A record 41,028 new homes have been consented in the year ended March 2021, Stats NZ said today. The previous record for the annual number of new homes consented was 40,025 in the year ended February 1974. “Within 10 years the number of new homes ... More>>

The Conversation: The Outlook For Coral Reefs Remains Grim Unless We Cut Emissions Fast — New Research

A study of 183 coral reefs worldwide quantified the impacts of ocean warming and acidification on reef growth rates. Even under the lowest emissions scenarios, the future of reefs is not bright. More>>

The Conversation: Why Now Would Be A Good Time For The Reserve Bank Of New Zealand To Publish Stress Test Results For Individual Banks

Set against the backdrop of an economy healing from 2020’s annus horribilis , this week’s Financial Stability Report (FSR) from the Reserve Bank (RBNZ) was cautiously reassuring: the country’s financial system is sound, though vulnerabilities remain. More>>

Reserve Bank: Concerned About New Zealand's Rising House Prices

New Zealand house prices have risen significantly in the past 12 months. This has raised concerns at the Reserve Bank of New Zealand – Te Putea Matua about the risk this poses to financial stability. Central banks responded swiftly to the global ... More>>