Report highlights electricity lines companies’ financial performance and service quality
Published04 Mar 2021
In December the Commerce Commission published a report and dashboard on trends in performance of local lines companies, to help New Zealanders better understand how and why the prices and quality of their local electricity lines services have changed over time.
The report presented analysis of revenue, profitability and reliability trends between 2008 and 2020 at both overall industry and individual lines company levels.
Key findings of the report included:
Profits have been reasonable: The level of profitability across the industry has remained roughly consistent, averaging between 5% to 6% over time, which is below the Commission’s estimates of a reasonable return.
Lines charges have increased to support infrastructure investment: Households are paying $350 more in lines charges per year now than in 2008 ($165 if adjusted for inflation), with most of this increase spent on network investment. Nearly half of the $350 increase has been passed on to customers from other parties – most notably Transpower, which is recovering the costs of large investments it made in the transmission network.
There has been little change to reliability: The average number of unplanned power outages per customer across the industry has remained fairly similar over this time. However, most local lines companies have had more planned outages, and these tend to last longer than they used to. Planned outages are required for lines companies to undertake important maintenance and investment work.
Alongside the report, the Commission created an interactive dashboard that can be used to view the change in performance of each local lines company and the industry as a whole.
Lines charges – both transmission (Transpower) and distribution (local lines companies) – make up approximately 38% of the average customer electricity bill.
The Commission intends to develop a suite of trends in local lines company performance reports that focus on different aspects of the lines sector. The report and interactive dashboard released in December will also be continually updated with the latest industry data as it becomes available.
A copy of the report, fact sheet of the key findings and link to the dashboard can be found here on our website.