The Commerce Commission has set input methodologies that will apply to electricity distribution businesses, Transpower, gas pipeline businesses and specified airport services under Part 4 of the Commerce Act.
The Commerce Commission has set input methodologies that will apply to electricity distribution businesses, Transpower, gas pipeline businesses and specified airport services under Part 4 of the Commerce Act.
This is a significant milestone for the Commission and the regulated businesses. Input methodologies are the rules, processes and requirements applying to regulation under Part 4 of the Act. Input Methodologies promote certainty for the suppliers of regulated services about the effect of regulation on them. Increased regulatory certainty is critical for fostering efficient investment.
"This work is important as it will directly affect essential infrastructure central to New Zealand's future economic prosperity," said Commission Chair Dr Mark Berry. "It is about promoting the long-term interests of consumers. This includes ensuring that there are appropriate incentives to invest as well as constraint on excess profits."
"The release of the final determinations is the culmination of a major consultation which began in December 2008. We have been very impressed with the level of engagement from the regulated businesses throughout the consultation process," said Dr Berry. "The Commission has also been greatly supported by advice from independent experts in a range of fields, including those experts provided by regulated parties."
"This has been a challenging exercise. We have been working with new and untested legislation, and there is no single 'right' answer to some of the issues. Although we have looked at regulatory regimes in other countries for guidance, there are significant differences between the New Zealand and overseas regimes. Ultimately, our key touchstone has been the purpose statement for Part 4, which is itself unique," said Dr Berry.
Following the publication of the determinations, interested parties are able to lodge a merits review appeal of the Commission's determinations in the High Court.
Background
Consultation The Commission has engaged in a comprehensive consultation process over two years in developing these input methodologies. The consultation has included conferences and workshops, and numerous consultation documents. Input from interested parties has been extensive. The Commission has received more than 600 written submissions during its input methodology consultation process.
