7 February 2018
Commission seeks input on Transpower's proposed price-quality path
The Commerce Commission has today released a consultation paper seeking feedback on the key issues it will be
considering when resetting Transpower’s individual price-quality path.
As the operator of New Zealand’s national grid, Transpower is subject to price-quality regulation that sets the total
amount of money it can collect from its customers and the minimum standards of quality it must deliver in return. Its
next reset covers the five-year period from 2020 to 2025.
Deputy Chair Sue Begg said the Commission wants to hear stakeholders’ views on what aspects of Transpower’s final
proposal and the independent verifier’s report they believe would benefit from more detailed review.
“The paper released today outlines a number of key issues we will be considering, including the usefulness of
Transpower’s consultation with its customers; how we can set effective performance measures; and how we can encourage
Transpower to further improve its asset management practices,” Ms Begg said.
“We particularly want to hear from gentailers, lines companies, major electricity users and consumer groups on the
issues of concern to them and how consumers’ long-term interests can best be provided for.”
The issues paper, along with Transpower’s final proposal and the independent verifier’s report, can be found on the
Commission’s website.
Submissions close on 28 February 2019, with cross-submissions due on 7 March 2019.
Background
Transpower is a State-Owned Enterprise that owns and operates the national high voltage electricity transmission
network. Transpower is also the system operator, responsible for managing the real-time coordination of the electricity
market.
As it is the monopoly supplier of electricity transmission services, the revenue that Transpower is allowed to earn from
its customers and the quality standards it must meet are regulated by the Commission under Part 4 of the Commerce Act.
The Electricity Authority estimates that transmission charges make up about 10% of a typical household electricity bill.
Price-quality regulation is designed to achieve similar outcomes to competitive markets so that consumers benefit in the
long term. This includes making sure that monopoly suppliers are limited in their ability to earn excessive profits and
have incentives to innovate and invest in their infrastructure and deliver services at a quality their consumers expect.
ends