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2023 Input Methodologies Review
This page was updated2 months ago
On 13 December 2023, we published our final decisions, completing our review of the rules and processes that underpin the Commission’s regulation of airport services, electricity lines services, and gas pipeline services.
What are the input methodologies (IMs)?
The IMs are the rules and processes that we set upfront to help provide certainty about how we will regulate specific services under Part 4 of the Commerce Act (Part 4). The IMs apply to key components of the regulatory regime such as how we value assets, allocate costs, share risk between businesses and consumers, and determine how businesses are compensated for their investments. We must apply the IMs when setting price-quality paths and determining information disclosure (ID) requirements.
Why did we review the IMs?
The IMs were first determined in 2010 and must be reviewed at least every 7 years under Part 4.
When did we last review the IMs prior to 2023?
The last IM Review was largely completed in December 2016, although some elements were completed later as allowed for under Part 4. Documentation from the 2015/16 review, including the consolidated reasons papers was published on 20 December 2016.
What was the process for this review?
We formally began the current review on 23 February 2022 by issuing the required notice of intention. We issued an amended Notice of Intention on 1 March 2023 and a further amended Notice of Intention on 22 August 2023.
We completed the current review on 13 December 2023. Last time, some IMs were reviewed on different timelines as they had been determined at different times and had longer on the 7-year review cycle to run. This time, we aligned the review of all Part 4 IMs to run on the same 7-year review cycle.
Update on the IM Review
Submissions to our draft decisions were published on 26 July 2023. Cross submissions on our draft decisions were published on 22 August 2023. On 24 August 2023 we invited cross submissions on specific parts of an expert report provided at the cross-submission stage of the IM Review 2023. We published all cross- submissions received for this specific matter on 19 September 2023.
On 20 October we published submissions on two proposed changes to a draft decision we made on the cost of debt wash-up for electricity distribution and gas transmission businesses, and the way it interacts with the overall wash-up for inflation during the regulatory period. Cross submissions were published on 2 November.
On 2 November 2023, we also published submissions on a change we are proposing to the effective dates in our [Draft] Airport Services Input Methodologies (IM Review 2023) Amendment Determination 2023 (draft Airport IM amendment determination) published with our draft decisions on 14 June 2023.
Our final decisions were published on 13 December 2023.
Process
In 2022, we sought to establish the key issues the IM Review should address and develop our thinking on how these relate to the IMs specifically and what the options might be for addressing these issues. During 2023 we narrowed down these options further and set out our draft changes to the IMs arising from our review. We finalised these changes after feedback.
Key step | Date |
23 February 2022 | |
20 May 2022 | |
20 May 2022 | |
13 October 2022 | |
Confidential Cost of debt survey issued to relevant stakeholders | 15 – 16 September 2022 |
Workshop #1 (Forecasting and incentivising efficient expenditure for EDBs) held | 7 November 2022 |
Workshop #2 (Transpower’s capital expenditure input methodologies) held | 11 November 2022 |
Workshop #3 (Price-quality path in-period adjustment mechanisms) held | 29 November 2022 |
29 November 2022 | |
Paper on options for maintaining investment incentives in the context of declining demand published | 20 December 2022 |
21 December 2022 | |
Updated Notice of Intention | 1 March 2023 |
Draft Airports, Electricity distribution, and Gas pipeline Input Methodology Amendment Determinations | 14 June 2023 |
Draft Topic Papers, Report on the IM Review, Context and summary of Draft decisions | 14 June 2023 |
Draft Transpower and Transpower Capex Input Methodology Amendment Determinations | 21 June 2023 |
Submissions on draft decisions | 19 July 2023 |
Submissions specifically relating to the Transpower IM Determinations close | 26 July 2023 |
Cross submissions on draft decisions | 9 August 2023 |
Cross submissions specifically relating to the Transpower IM Determinations | 14 August 2023 |
Further updated Notice of Intention | 22 August 2023 |
Cost of capital: Invitation to cross-submit on specific matters | 24 August 2023 |
Cross-Submissions on specific matters relating to the cost of capital | 7 September 2023 |
Invitation to submit on further consultation relating to our draft decision on the cost of debt wash-up for EDBs and GTBs | 29 September 2023 |
Invitation to submit on proposed change to effective dates in draft Airport IM amendment determination | 10 October 2023 |
Submissions on further consultation relating to our draft decision on the cost of debt wash-up for EDBs and GTBs | 17 October 2023 |
Submissions on proposed change to effective dates in draft Airport IM amendment determination | 24 October 2023 |
Cross-submissions due on further consultation relating to our draft decision on the cost of debt wash-up for EDBs and GTBs | 27 October 2023 |
Final decisions published | 13 December 2023 |
Decision-Making Framework paper
On 13 October 2022 we published our Decision-Making Framework paper, which can be found under the 'Document' tab below. This took into account the submissions received on the draft Decision-Making Framework paper.
The Decision-Making Framework paper describes the framework we applied in reaching our decisions in the IM Review. It has two main components:
- the Decision-Making Framework, which describes how we will decide whether and how to amend the IMs
- the key economic principles, which provide guidance as to how we might best promote the purpose of Part 4 under section 52A of the Act.
The framework also notes that we can have regard to section 5ZN of the Climate Change Response Act 2002, including the 2050 net zero carbon target, where consistent with promoting the section 52A purpose of Part 4. We also published a clarification note confirming what we mean by ‘consistent with promoting the section 52A purpose’.
Where to find the IMs that currently apply
The IM determinations for each sector that currently apply are available on the individual sectors' pages below.
Contact
If you have any questions about the IM Review, please email infrastructure.regulation@comcom.govt.nz
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.
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13 Dec 2023
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27 Oct 2023
Completed
Cross submissions on further consultation relating to our draft decision on the cost of debt wash-up for EDBs and GTBs
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24 Oct 2023
Completed
Submissions on proposed change to effective dates in draft Airport IM amendment determination
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20 Oct 2023
Completed
Submissions on further consultation relating to our draft decision on the cost of debt wash-up for EDBs and GTBs
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29 Sep 2023
Completed
Invitation to submit on further consultation relating to our draft decision on the cost of debt wash-up for EDBs and GTBs
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07 Sep 2023
Completed
Cross-submissions on specific matters relating to the cost of capital
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24 Aug 2023
Completed
Cost of capital: Invitation to cross-submit on specific matters
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22 Aug 2023
Completed
Notice of intention
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14 Aug 2023
Completed
Cross submissions specifically relating to the Transpower IM Determinations
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09 Aug 2023
Completed
Cross submissions on draft decisions
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26 Jul 2023
Completed
Submissions specifically relating to the Transpower IM Determinations
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19 Jul 2023
Completed
Draft decisions: Other correspondence
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19 Jul 2023
Completed
Submissions on draft decisions
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21 Jun 2023
Completed
Draft decisions on the IM Review – Draft Transpower Determinations
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14 Jun 2023
Completed
Draft decisions on the IM Review 2023
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20 Dec 202210 Feb 2023
Completed
Emerging views phase: Options to maintain investment incentives in the context of declining demand
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29 Nov 202203 Feb 2023
Completed
Emerging views phase: Expert report on cost of capital
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29 Nov 202220 Dec 2022
Completed
Emerging views phase: Workshop #3 - Price-quality path in-period adjustment mechanisms
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11 Nov 202225 Nov 2022
Completed
Emerging views phase: Workshop #2 - Transpower’s capital expenditure input methodologies
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07 Nov 202206 Dec 2022
Completed
Emerging views phase: Workshop #1 - Forecasting and incentivising efficient expenditure for EDBs
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13 Oct 2022
Completed
IM Review Decision-Making Framework paper
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01 Sep 2022
Completed
Emerging views phase: Other correspondence
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01 Sep 202228 Feb 2023
Completed
Emerging views phase
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03 Aug 2022
Completed
Cross-submissions on process and issues, and draft framework papers due
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11 Jul 2022
Completed
Submissions on process and issues, and draft framework papers due
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20 May 2022
Completed
Process and Issues paper and Draft Framework paper due
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07 Dec 2021
Completed
Summary and feedback on workshop on the impact of decarbonisation on electricity lines services
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12 Oct 2021
Completed
Summary of submissions to Open Letter
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28 May 2021
Completed
Feedback on open letter due
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29 Apr 2021
Completed
Open letter published
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13 Dec 2023
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14 Jun 2023
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23 Feb 2022
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20 Oct 2021
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29 Apr 2021