Our role in electricity lines

We are also responsible for enforcing the competition and consumer laws that apply to all New Zealand businesses, including those we regulate. The Fair Trading Act covers anything an electricity business might say about the service it's providing, either verbally or in writing. This includes any impression you might get from an electricity business' advertising, promotional material or sales pitch, or by something it doesn't tell you – that is, by important information being left out. The Act also has specific provisions for door-to-door and telemarketing sales, which include a 5-day cooling off period for you to change your mind if, for instance, you feel you have been pressured to switch providers.

We routinely receive enquiries or complaints about the cost of electricity. However, just because prices are high, or have risen, does not mean it is because of anti-competitive behaviour in breach of the Commerce Act. There are many reasons why prices may rise, but where we would take action under this Act is if we find evidence of businesses colluding or businesses with substantial market power misusing their market power.

What we can do

• Look into concerns an electricity business has misled or deceived you in certain situations. We may use this information to open an investigation.
• Look into concerns an electricity business is using its market power to drive a competitor out of business or to prevent a new competitor from starting up.
• Provide information to consumers and the industry about how distribution businesses and Transpower are performing.
• Set the maximum revenue that some distribution businesses and Transpower can charge and require them to meet certain quality standards.
• Require distribution businesses and Transpower to publish information about their performance.

What we can't do

• Tell electricity retailers what they can and can’t charge their customers.
• Control what distribution businesses or Transpower charge individual customers or groups of customers.
• Get involved in a dispute between you and your electricity retailer or distribution business.
• Take action on your behalf. While your complaint may spark an investigation, we won’t be acting on your behalf – we’ll be acting in the wider public good.

The Electricity Authority

The Electricity Authority promotes competition, reliable supply and efficient operation in the electricity sector. It does this through market design, overseeing market operations and monitoring and enforcing compliance with market rules. The Electricity Authority also runs the What’s my number campaign, which encourages consumers to shop around for power. It is linked to Consumer NZ’s Powerswitch website.

Utilities Disputes Ltd

If you have an issue or problem with your electricity or gas supplier you can contact Utilities Disputes Ltd. They offer a free, independent dispute resolution service for consumers. It can look into most complaints, including billing (but not the amount electricity retailers or distribution businesses charge), disconnections, damaged property, property access issues and difficulties in switching companies.

Phone: 0800 22 33 40

Under Part 4 of the Commerce Act we have a role regulating markets where there is little or no competition (and little prospect of future competition). Our aim is to mimic the effects seen in competitive markets so that consumers benefit in the long term.

Among other things, Part 4 is intended to ensure that regulated businesses have incentives to innovate, invest, and meet customers’ quality demands, but are also limited in their ability to earn excessive profits. Parliament decided that transmission and distribution businesses should be subject to regulation under Part 4 because there is little or no competition in the markets for these services.

Why is there little or no competition?

New Zealand’s geography and the nature of the electricity industry mean that Transpower (the only transmission business) and distribution businesses are natural monopolies. A monopoly is where a single business has all or nearly all of the market for a certain product or service. In the case of electricity transmission and distribution, it makes sense to have monopolies as it would be very expensive to invest in two (or more) sets of power lines that run side by side.

Public disclosure of performance

We set requirements for Transpower and all distribution businesses to publish information about their performance. This is called ‘information disclosure’ regulation. The purpose of this form of regulation is to give transparency about how the regulated businesses are performing and provide a check that regulation is working.

The businesses must publish information such as data on prices, measures of quality, financial information, and forecasts of future expenditure (including investment planned in the network). We also produce a summary and analysis of this information to help people understand the performance of individual businesses, how they’re performing compared to each other and any changes over time.

Regulating price and quality

We also set price and quality controls for Transpower and distribution businesses that aren’t consumer-owned. Distribution businesses that are consumer-owned (12 of 29) are exempt from these controls as Parliament has decided that their consumers have enough input into how the business is run.

The ‘non-exempt’ businesses are subject to ‘price-quality paths’. These restrict the revenue these businesses can earn or the maximum average prices they can charge and require them to deliver services at a quality that consumers would expect.