This has largely been triggered by the Government’s move to strengthen the Health and Safety in Employment Act, including significantly boosting the penalties under the Act and making senior executives and directors directly accountable for protecting their staff and the public. These legislative changes took effect in 2016.

Vector made policy changes so that maintenance and repairs can in most cases only be undertaken on de-energised lines, which has increased the frequency and length of outages on its network. Vector has asked the Commission to reopen its price-quality path and we have now formally responded to that request.

Generally, decisions on price limits and quality standards are not ‘reopened’ in the 5 years after they are set. However, where there is a significant unforeseen regulatory change, there are mechanisms in our input methodologies (upfront rules and processes) to allow us to change the price cap or quality standards in response.

To qualify to have its price-quality path reopened, a business must establish:

  • a new or changed regulatory or legislative requirement has taken effect
  • that this obligation was not provided for in setting the DPP
  • that this new or changed obligation has necessitated the business to incur costs greater than 1% of its annual revenue.

Our provisional view is that the underlying requirements of the Health and Safety in Employment Act have not changed. This means the test in our rules to consider adjusting Vector’s reliability standards has not been met.

Given this issue affects more than just Vector, we are seeking the industry’s views on our provisional response and how changes to health and safety practices should be accounted for in the monitoring of the existing reliability standards. This matter will also be addressed in setting the reliability standards that will apply from April 2020.

It’s important we again make it clear that we accept lines companies should not be unfairly penalised for implementing changes they consider are necessary to meet their health and safety obligations. If a company were to breach the reliability standards we have set for outages on its network purely because it had legitimately and efficiently de-energised lines for safety reasons, then it is unlikely enforcement action would be warranted. This is an important assurance and one we are happy to discuss with lines companies at any time.

We welcome input from anyone with an interest in this issue. For further information see our website.