Productivity and efficiency study of electricity distributors
This page was updated2 months ago
The Commission is reviewing the productivity and efficiency of EDBs. This will be an ongoing project with the intention of embedding periodic assessments and publications on EDBs’ productivity/efficiency within the Commission’s performance and understanding function.
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.
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.
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.
Phase 3 – Apply analytical technique(s) and methodology(ies) to produce EDB comparative efficiency analysis and performance assessment.
We engaged Cambridge Economic Policy Associates Ltd (CEPA) to do phase 1. We have renamed the phase 1 report to EDB Productivity Study.
We published CEPA’s Final Report on 26 June 2024. This report was finalised following consideration of stakeholder feedback on the 27 March draft report.
Following a stakeholder request, we have published the slide pack “Productivity performance of EDBs – draft findings” that we presented to the Electricity Trusts of New Zealand May 2024 Conference in Wellington. We have made a minor amendment to slide 16 of the presentation to clarify a point raised by the stakeholder
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. We will notify stakeholders once we have clearer dates to initiate phase 2.
This view shows the latest stage in the project. Click on the circled dates to see details.
Navigate to other months, or scroll down, to see all stages.
Note: these dates are indicative only and are subject to change.
