There are certain requirements for customised price-quality path proposals that potential applicants need to be aware of.
The rules and processes for a CPP proposal, including the requirements for a proposal and the criteria we must consider when evaluating a proposal, are set out in input methodologies that we have developed. Input methodologies are rules, processes, requirements and evaluation criteria for services that are regulated under Part 4 of the Commerce Act.
When can a proposal be submitted?
Electricity distribution businesses have specified timeframes in which they can submit a customised price-quality proposal to us – potential applicants should contact us.
However, in the case of a ‘catastrophic event’, a business can submit a proposal at any time in the 24 months following the event, except in the 12 months before the default price-quality path is due to be reset.
What does an application need to include?
The information an applicant must provide when proposing a CPP is set out in the input methodologies. This includes:
the reasons for the proposal
the duration of the CPP the applicant is seeking (if less than 5 years)
financial and other relevant information (such as forecast capital and operating expenditure) to allow us to assess an appropriate price path
an audit report and certification from the directors confirming the information provided within a proposal is accurate
an independent expert’s opinion verifying the contents of the proposal and the reasonableness of the assumptions and methodologies used.
Before formally submitting a proposal, a business will provide a summary of the expected proposal, and consult with consumers about the changes it is proposing. In its application it must provide evidence of consultation with consumers, a description of all issues raised and an explanation of whether its proposal accommodates these issues and if not, why not.
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.