The Commerce Commission is encouraging electricity distribution businesses (EDBs) to continue to improve their annual
Asset Management Plans (AMPs).
In its Reporting of Asset Management Practices
paper, published today, the Commission presents a targeted review of five key areas of EDBs’ asset management practices
that have particular influence on outcomes for electricity consumers.
Deputy Chair Sue Begg said the Commission’s analysis is designed to encourage EDBs to acknowledge and explain adverse
trends in asset performance and to detail the mitigating actions being taken as part of their AMP disclosures.
“Our window into an EDB’s asset management practices is through their asset management plan,” she said. “AMPs are an
important source of information to help customers and a wide range of other stakeholders understand and assess EDB
performance and asset management processes.”
The Commission uses information contained in AMPs in setting price-quality paths, undertaking investigations of
non-compliance with quality standards, performing and publishing summary and analysis of asset management practices, and
to inform its other programmes of work.
Ms Begg said the report looks to encourage EDBs to improve their asset management reporting by highlighting examples of
asset management reporting and practices that they may want to consider implementing in their own AMPs.Background
The Commission’s interest in how EDBs manage their assets comes from its statutory responsibility under Part 4 of the
Commerce Act 1986. The central purpose of Part 4 is to promote the long-term benefit of consumers in markets where there
is little or no competition and little or no likelihood of a substantial increase in competition.
Under Part 4, the Commission sets requirements for EDBs to publicly disclose information relevant to their performance -
called ‘information disclosure requirements’. The purpose of information disclosure requirements is to ensure that
sufficient information is readily available to interested persons to assess whether the purpose of Part 4 is being met.
A key component of the current information disclosure requirements relates to EDBs’ asset management. Under the current
requirements, each year all 29 EDBs must complete and publicly disclose an AMP (or an AMP update), which provides
detailed information regarding how the EDB plans to manage its assets.