What: The Commerce Commission has today released a discussion document concerning the reset of thresholds for electricity distribution businesses ("EDB"). It has been published as part of a consultative package including supporting research.

The discussion document includes the Commission's initial views on issues relevant to the reset of EDB thresholds. Among the issues discussed within the consultative package are:

  • industry performance under the current thresholds and possible implications for resetting the thresholds;
  • issues relevant to setting a price-path threshold;
  • the quality of service provided to New Zealand consumers;
  • distribution network investment in New Zealand; and
  • other areas where refinements to the thresholds may be appropriate.

The document's title is 'Discussion Paper on the Threshold Reset 2009'. It can be found on the Commission's website under: Threshold Reset.

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. The Commission proposes to reset the thresholds from 1 April 2009. This is the first substantive consultative package in the process.

On 22 November 2007, the Government announced Cabinet's Decision recommending changes to Parts 4 and 4A of the Commerce Act. The Commission notes that legislation to implement these changes is planned to be introduced next year. If the legislation is passed by Parliament then the thresholds, currently being developed under this reset process, will be transitioned to become the proposed 'default price-quality path'.

Next steps: Submissions are invited from all interested parties by 5pm on Monday, 18 February 2008. After taking into consideration submissions, the Commission intends to publish a methodology paper in May/June 2008.