Submitting a customised price-quality path proposal

When can a proposal be submitted?

EDBs can submit a customised price-quality (CPP) proposal to us during the following submission periods:  

 (a)     for 2012, in the period beginning Monday, 2 July and ending Monday, 9 July.

 (b)     for 2013, in the period beginning Monday, 28 January and ending Monday, 4  February; or in the period beginning Monday 6 May and ending Monday 13 May.              

 (c)       for 2014, in the period beginning Monday, 10 February and ending Monday, 17  February.

 (d)     following a catastrophic event (as defined in the EDB input methodologies), at any time within the 24 months after the catastrophic event, except in the 12 months before the end of the regulatory period.

GPBs will be able to submit proposals to us at any time once the gas default price-quality paths (DPPs) are determined. We have decided to defer the start of the initial DPPs for GPBs beyond 1 July 2012.

Suppliers can only submit one CPP proposal during a regulatory period, and may not make a proposal within the 12 months before a DPP is due to be reset (the next reset is scheduled for 1 April 2015). A proposal cannot be withdrawn once submitted, and a supplier is bound by the CPP that we set for that supplier.

Final decision documents

Download the final decision documents for CPP submission periods and the application fee.

What does a proposal need to include?

Every CPP proposal must comply with the input methodologies relating to the process for, and content of CPP proposals, and must apply or adopt all relevant input methodologies. We determined the input methodologies for suppliers in December 2010.

There is a standard application fee of $20,000 that must be paid by all applicants at the time they submit their proposals to us. The fee is intended to be a part payment for costs that we will incur for assessing the application and setting a CPP.

How long does it take to assess a proposal?

We will determine within 40 working days, from the day on which a proposal is received, whether, or not, that proposal is complete.

Where we decide that the proposal is complete and that it complies with the input methodologies, we will:

(a)     give notice that the proposal is under consideration, and how copies of the proposal may be obtained (ie on our website or through our Wellington office)

(b)     set a date for interested parties to make submissions on the proposal

(c)        have regard to any submissions made by the specified date.

We must make a determination on a proposal within 150 working days of receiving a complete proposal (or within any extended time agreed to between the supplier and the Commission). This means we must complete our consideration of the proposal and have set a CPP for that supplier.

In the event that the supplier's proposal is complete but we do not make a determination within the timeframe, the CPP proposed by the supplier takes effect at the close of that period.

Where we decide that a proposal is not complete as it does not comply with the input methodologies we can, at our discretion:

(a)     discontinue any consideration of the proposal, or

(b)     request the supplier to remedy the deficiencies in the proposal by providing additional information within 40 working days.

Where a proposal is discontinued a supplier can make another proposal within the regulatory period, except in the 12 months before a DPP is due to be reset.

How will we prioritise proposals?

We are not required to consider more than four proposals relating to the same type of goods or services in any one year.  If we do, we may defer the additional proposals to a subsequent year, but must prioritise our consideration of the proposals in accordance with the following criteria:

(a)     quality and completeness of the initial proposal

(b)     urgency of any proposed additional investment (compared to historic rates of investment) required to meet consumer requirements on quality

(c)       materiality of the proposal relative to the size and revenues of the supplier.

There are currently four GPBs and as such we will not need to prioritise proposals submitted by GPBs. However, there are currently 17 EDBs subject to the DPP so it is possible that we might receive more than four proposals in any one year from EDBs.   We may choose to prioritise those proposals.

In submitting a proposal, an EDB will have the opportunity to explain why it considers that its proposal should be prioritised over others. In doing so, the input methodologies require a supplier to address the prioritisation criteria specified in s 53Z(3)(b) and (c).