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Wellington, June 14, 2018
The Commerce Commission has released the key milestones and consultation steps for the 2020 reset of 17 electricity lines companies’ price-quality paths.
As monopoly electricity lines companies regulated under the Commerce Act, the Commission sets the maximum revenues lines companies can earn from their customers and the minimum quality standards they must meet. The current five-year price-quality paths expire on March 31, 2020.
Consumer engagement
“This reset is important as it affects the price and quality of electricity lines services that consumers can expect from 2020. We’re exploring ways to increase consumer engagement in the process, as well as ensuring electricity sector stakeholders can have significant input,” Commission Deputy Chair Sue Begg said.
Issue Paper in November
The first major milestone in the process is an issues paper expected to be released in November, which will provide early views on the key topics for the default price-quality paths. This includes how the priorities the Commission signalled in its November 2017 open letter to the electricity distribution sector, and subsequent submissions, should be taken into account.
Electricity distribution services make up approximately 26% of a consumer’s average monthly power bill.
Submissions on the process paper can be made by email to regulation.branch@comcom.govt.nz by 5 pm on Tuesday, July 17, 2018.
The paper can be found here.
Background to the Issue
Regulation of electricity lines companies
As monopoly utilities, all 29 of the country’s electricity lines companies are regulated by the Commerce Commission under Part 4 of the Commerce Act.
This requires each to publicly disclose information on its performance.
Seventeen of the 29 lines companies also have their maximum revenues and quality standards set by the Commission.
Price paths determine the maximum revenue the company can earn from its customers, while quality is measured in power outages.
If a lines company breaches its price-quality path it may face prosecution under the Commerce Act.
The remaining 12 lines companies are exempt from price-quality regulation as they meet community ownership criteria.
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Photo Caption:
Electricity Lines companies are vital for power supply
(Image sourced 123RF)
