Wellington Electricity’s 2018-2021 CPP

On 28 March 2018 we set a customised price-quality path applying new revenue limits and quality standards to Wellington Electricity for the period 1 April 2018 to 31 March 2021.

Wellington Electricity owns and operates the electricity distribution network supplying 166,000 homes and businesses in the Wellington, Hutt Valley and Porirua regions.

On 5 December 2017 Wellington Electricity submitted a CPP application to us as it no longer considered the default price-quality path met its needs. Wellington Electricity’s proposal is designed to ensure its network is better prepared to withstand and respond to a major earthquake by bringing emergency hardware, mobile substations, switchboards, critical emergency spares, and enhanced communication systems into the region, as well as strengthening substations.

The application followed a Government Policy Statement issued in light of the 2016 Kaikoura earthquakes, which increased the risk of a major earthquake occurring in Wellington and highlighted the capital city’s vulnerability to seismic activity. The statement outlined the Government’s expectation that the Commission consider options to allow Wellington Electricity to recover resilience-related expenditure that was not anticipated when its price limits were set in 2014.

Our final decision provides for the full $31.2 million of expenditure that Wellington Electricity proposed. We are satisfied that this expenditure is prudent and appropriate costed to deliver a more resilient network that is less susceptible to earthquake damage.

A key feature of the decision has been to set a resilience quality standard that incentivises Wellington Electricity to complete this urgent work.

We expect the investment will result in a typical Wellington Electricity consumer’s monthly bill of $185 increasing by about $1.70. However, the total price a consumer pays also depends on other components including generation, transmission, and retail which make up the majority of a consumer’s electricity bill.

  Wgtn Electricity Earthquake readiness infographic HiRes2

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Documents

Cross-submissions received on Wellington Electricity CPP draft decision

12/03/2018 (2 documents)

MEUG – cross-submission on WELL CPP draft decision – 1 March 2018 PDF (170 KB)
Published on 12 March 2018
Wellington Electricity – cross-submission on WELL CPP draft decision – 1 March 2018 PDF (1.4 MB)
Published on 12 March 2018

Process for determining Wellington Electricity’s customised price-quality path

06/12/2017 (1 documents)

Wellington Electricity customised price-quality path – Process paper – 6 December 2017 PDF (462 KB)
Published on 06 December 2017

Wellington Electricity’s customised price-quality path proposal

06/12/2017 (19 documents)

CPP application cover letter – 5 December 2017 PDF (351 KB)
Published on 06 December 2017
CPP application – 5 December 2017 PDF (594 KB)
Published on 06 December 2017
Main proposal Wellington Electricity – 5 December 2017 PDF (1.2 MB)
Published on 06 December 2017
Earthquake readiness business case – 5 December 2017 PDF (1.9 MB)
Published on 06 December 2017
Jacobs letter WE earthquake readiness independent review – 27 October 2017 PDF (156 KB)
Published on 06 December 2017
Stakeholder engagement – 5 December 2017 PDF (13 MB)
Published on 06 December 2017
2017 asset management plan – December 2017 PDF (13 MB)
Published on 06 December 2017
Further stakeholder engagement addendum – 5 December 2017 PDF (698 KB)
Published on 06 December 2017
Regulatory compliance schedules WE – 5 December 2017 PDF (1.6 MB)
Published on 06 December 2017
IM modification and exemptions letter – 30 November 2017 PDF (309 KB)
Published on 06 December 2017
Directors certification WE – 4 December 2017 PDF (466 KB)
Published on 06 December 2017
Deloitte’s terms of engagement – 14 November 2017 PDF (1.8 MB)
Published on 06 December 2017
Deloitte’s assurance report – 4 December 2017 PDF (269 KB)
Published on 06 December 2017
Deloitte’s assurance invoice – 30 November 2017 PDF (13 KB)
Published on 06 December 2017
CPP financial model – November 2017 PDF (481 KB)
Published on 06 December 2017
Supporting model – CPP readiness capex and opex – December 2017 PDF (192 KB)
Published on 06 December 2017
Supporting model – AMP 2017 schedules – December 2017 PDF (158 KB)
Published on 06 December 2017
Supporting model – CPI projections – November 2014 PDF (357 KB)
Published on 06 December 2017
Supporting model – Other regulated income and disposed assets – December 2017 PDF (232 KB)
Published on 06 December 2017

Amendment to DPP determination to specify an additional CPP application window

01/12/2017 (1 documents)

Electricity distribution services default price-quality path (CPP Window) – Amendment determination – 30 November 2017 PDF (255 KB)
Published on 01 December 2017