Media Release
Issued 30 January 2013
Release No. 59
New Report Tracks Electricity Distributor Trends 2008 –2011
A new report from the Commerce Commission gives consumers information on how well their local electricity distribution
business is performing.
The report, Electricity distributors’ performance from 2008 to 2011, covers key aspects of performance of interest to
customers, including revenue, demand, service reliability and expenditure on the network. It shows trends and
comparisons across the industry as a whole, and for the 29 individual businesses.
The industry trend was for increases in revenue, total expenditure and demand, but there was wide variation across
individual distributors. Overall reliability of services was largely unchanged.
Commerce Commission General Manager Regulation, Dr John Hamill, said that total revenue across all 29 distributors had
increased by 5% above inflation over the four years.
“What we have seen over 2008 to 2011 at an industry level is that electricity distribution prices have increased, though
again, there is wide variation among distribution businesses,” said Dr Hamill.
Dr Hamill said that some of the increase in revenue for the industry was due to increasing demand for electricity
distribution services, but it was mostly due to prices increasing for reasons such as the need for investment in the
network and increased operating costs.
Dr Hamill said that a recent price reset for the 16 distributors subject to price-quality regulation was not covered in
the new report as it fell outside the 2008 to 2011 time period.
The overall trend for electricity outages across the industry had not changed over the three year period, but
reliability varied widely between businesses.
“Some distributors had a significantly larger number of outages, and a significantly longer duration of outages than
others,” Dr Hamill said.
Total expenditure in the electricity distribution industry increased faster than inflation from 2008 to 2011. Operating
expenditure grew 6% over and above inflation from 2008 to 2011 while capital expenditure grew 8% above inflation over
the same period.
“The Commission’s role is to summarise and analyse the information provided by distribution businesses to give
transparency about how they are performing,” said Dr Hamill. “We hope that reports like this will provide useful
information for the distributors and their stakeholders to keep improving business performance.”
All information in the report is publicly available, but this the first time it has been brought together in one
document.
A copy of the report, including links to individual distributor chapters, is available on the Commission’s website. http://www.comcom.govt.nz/electricity-distributors-performance-from-2008-to-2011/
Background
There are 29 electricity distribution businesses in New Zealand. Distributors transport electricity to homes and
businesses. Distribution charges account for around a quarter of a typical household bill. Part of their charge goes
towards maintaining and investing in the network.
The Commission regulates electricity distributors under the Commerce Act because there is little or no competition in
this market. The Commission’s regulation aims to ensure there is an appropriate balance between providing incentives for
suppliers to invest in their regulated services, and ensuring that their prices are aligned with the cost of services
they provide.
All electricity distributors are subject to information disclosure regulation, under which they must publish information
such as prices, measures of quality, financial information, plans for managing and investing in their assets, and
forecasts of future expenditure (including investment planned in the network). In 2012 the Commission set new
information requirements for all of the distributors.
Price-quality paths are regulatory controls for electricity distributors that do not meet the definition of
consumer-owned set in the legislation. Seventeen electricity distributors are subject to price-quality paths.
The Commission reset the default price-quality paths for 16 electricity distributors in November 2012 with new price
limits taking effect from 1 April 2013. The remaining 12 distributors are subject to information disclosure only.
ENDS