The Commerce Commission is seeking feedback on the level of funding needed over the next five years to help deliver its regulation of the telecommunications, electricity and gas sectors.

The Commission’s regulatory functions are funded through levies recovered from the businesses it regulates. These levies were last reviewed for telecommunications in 2012 and for electricity lines and gas pipelines in 2014. 

In its funding review papers released today, the Commission considers it requires funding of:

• $15 million a year for the telecommunications and fibre sector (a $3.7 million increase on the $11.3 million spent in 2019/2020)
• $12 million a year in total for the electricity lines and gas pipeline sectors (a $1.8 million increase on the $10.2 million spent in 2019/2020)
• One-off funding of $8 million, spread over two years, for the input methodologies review due to be completed by 2023.

Chief Executive Adrienne Meikle said the Commission’s role as an economic regulator had grown over the past decade as a result of legislative and technological change.

“In today’s world a modern regulator needs to be increasingly dynamic and responsive to change. The proposed increase in our funding will enable us to deliver on the Government’s, and the public’s, expectations of us,” Ms Meikle said.

“We believe the preferred funding options we have outlined in the review will address the cost pressures we currently face and enable delivery of our unfunded work programmes, including the on-going delivery of the new fibre regime.

“Our funding proposals are subject to consultation and we want to hear from the companies we regulate and consumer groups about the type of regulator they need us to be in the years ahead.”
Copies of the Telecommunications and Part 4 (Electricity and Gas) funding review documents can be found here.

Submissions close on 12 February 2021.

The Commission, along with MBIE officials, is open to meeting with affected stakeholders to discuss this funding review in the new year. Any party that would like to meet in person can register their interest at regulation@comcom.govt.nz before 23 December 2020.

Background

The reviews published today do not cover levies that fund the Commission’s activities in the regulation of airports under Part 4 of the Commerce Act 1986, or dairy under the Dairy Industry Restructuring Act 2001. With the exception of the IM review costs which are apportioned across all industries subject to regulation under Part 4 of the Commerce Act 1986, including Airports.

Input methodologies review

Input methodologies are the rules, requirements and processes that must be applied to regulation under Part 4 of the Commerce Act. We are required to review each IM within 7 years of its date of publication. These reviews give us the opportunity to assess whether there are any necessary changes to the IMs to more effectively promote the purpose of Part 4, the purpose of the IMs, or significantly reduce complexity and compliance costs, for the long-term benefit of consumers.