What: The Commerce Commission has today released its Methodology Paper: Update concerning the reset of thresholds for electricity distribution businesses (EDB). It is part of the process for the reset of the current price-path and quality thresholds applying to EDBs; to take effect from 1 April 2009.

In December 2007, the Commission published its Discussion Paper on the threshold reset. The Discussion Paper set out a discussion on a range of issues that the Commission considered relevant in resetting thresholds for EDBs. The Methodology Paper: Update considers the views provided by submitters in response to the Discussion Paper, together with the Commission's preliminary views on specific issues relevant to the reset of the price-path and quality thresholds.

The Methodology Paper: Update sets out the Commission's preliminary views on:

  • various components of the price-path and quality thresholds;
  • the requirement for a mechanism to incentivise network investment; and
  • a number of areas where refinements to the thresholds may be appropriate.

The Methodology Paper: Update also sets out a number of areas where the Commission intends to undertake further research before setting out its views.

The document's title is Regulation of Electricity Lines Businesses, Targeted Control Regime, Threshold Reset 2009, Methodology Paper: Update. It can be found on the Commission's website: www.comcom.govt.nz under Threshold Reset Project

Why: The Commerce Commission, as part of its regulatory responsibilities under Part 4A of the Commerce Act, is required to set the thresholds as part of the targeted control regime for large electricity lines businesses. The current thresholds were set from 1 April 2004 for a period of five years. The Commission proposes to reset the thresholds from 1 April 2009. This is the second stage in the reset process.

Next steps: The Commission is not inviting submissions on the Methodology Paper: Update. Correspondence received will be considered as part of the consultation following the publication of the Commission's Initial Decisions Paper scheduled for September 2008.