Productivity and efficiency study of electricity distributors

The productivity and efficiency of EDBs is relevant to Part 4 purpose (section 52A) of the Commerce Act. We have an obligation (under s53B(2)(b)) to publish a summary and analysis of disclosed information for the purpose of understanding the changes in EDB performance over time, and the relative performance of EDBs, which includes their productivity and efficiency.

The productivity and efficiency review will be undertaken in three phases.

1. Phase 1 – Total factor and partial productivity analysis of the EDB sector. An assessment of the total factor productivity (TFP) and partial factor productivity (PFP) for all EDBs in aggregate.
2. Phase 2 – Proof of concept for EDB comparative efficiency study. Developing and testing appropriate analytical technique(s)/methodology(ies) for assessing EDBs’ relative productivity and efficiency, including incorporating engineering expertise.
3. Phase 3 – Apply analytical technique(s) and methodology(ies) to produce EDB comparative efficiency analysis and performance assessment.

We may use the phase 1 findings on TFP and ‘opex’ PFP as context for the draft decision on the DPP4 reset.

We engaged Cambridge Economic Policy Associates Ltd (CEPA) to do phase 1. We have renamed the phase 1 report to EDP Productivity Study.

We published CEPA’s report on our website on 27 March 2024 for stakeholder feedback. Feedback is due by 24 April 2024.

For context, phase 2 of the study aims to develop a proof of concept for an EDB comparative efficiency study, while phase 3 aims to apply analytical technique(s) and methodology(ies) to produce EDB comparative efficiency analysis and performance assessment. We do not expect to initiate phase 2 of the study until the second half of the 2024 calendar year at the earliest, with most of the engagement more likely to occur after the November 2024 DPP4 reset decision.

Contact us

If you would like to contact the team, please email infrastructure.regulation@comcom.govt.nz

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