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Input methodologies are the rules, requirements and processes that underpin regulation under Part 4 of the Commerce Act.
Input methodologies (IMs) are the rules, requirements and processes that underpin regulation under Part 4 of the Commerce Act. We must apply the input methodologies when we set price-quality paths and set information disclosure requirements. Regulated businesses are also required to apply the input methodologies.
The IMs cover matters like how assets are to be valued, depreciated and revalued, how we estimate the cost of capital, how tax should be treated, and how common costs should be allocated where businesses provide both regulated and unregulated services.
The IMs also set out certain process requirements, as well as the rules relating to electricity distribution businesses applying for customised price-quality paths.
The purpose of IMs is to promote certainty for suppliers and consumers in relation to the rules, processes and requirements for regulation.
The IMs for electricity distribution businesses were originally determined in 2010 and there have been amendments made to the IMs since then.
We are required to to review the IMs at least every seven years. We completed our first review of the IMs in 2016, and you can find more information about this below.
The reasons for the current IMs for electricity distribution businesses are captured in the reasons papers for the original IM determination and all subsequent amendment determinations – these can be found via the links below.
Current input methodologies for electricity distribution businesses
These are the current input methodologies that apply to electricity distribution businesses.