Recent storm damage to be considered extreme event

Media Release

Issued 20 February 2003-04/093

Electricity Lines Businesses: Recent storm damage to be considered an 'extreme event' in quality threshold assessments

The Commerce Commission has today confirmed that interruptions to electricity supply in the lower North Island due to severe storms this week would be taken into account in the electricity lines businesses quality threshold assessments for the current period.

Chair Paula Rebstock said that as a result of the recent storms, a number of lines businesses had advised the Commission that they are likely to breach the Commission's quality threshold for the period to 31 March 2004. "Final details will not be known, however, until lines businesses provide threshold compliance statements for the period at the end of May," she said.

The purpose of the quality threshold is to provide incentives for lines businesses to not allow their reliability to fall as a means of reducing costs in response to the price path threshold, and to incentivise them to provide services at a quality demanded by consumers.

In response to evidence provided by Powerco on the impact of this week's storms, the Commission has advised the company that the recent weather conditions were consistent with the 'extreme event explanation' described in the Commission's Assessment and Inquiry Guidelines, and would be considered as such in the Commission's threshold assessments.

ENDS

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