Economic regulation of the electricity distribution industry is two-fold:
A price-quality path that caps the prices Powerco can charge and provides a minimum level of reliability of electricity
An annual information disclosure regime
Price and Service Levels
From 2004-2010, distribution prices were regulated by a threshold set by the Commerce Commission. In 2010, this was replaced by the Default Price-Quality Path (DPP). Under the DPP, Powerco can only increase its prices each year by CPI, with an adjustment for a limited number of costs that can be passed through to electricity customers.
Powerco must also meet two reliability targets - SAIDI and SAIFI. SAIDI measures how many minutes any consumer on the Powerco network, on average, is without electricity supply during the year. Powerco’s target is 210 minutes. SAIFI measures how often an average consumer will experience electricity interruptions during the year. Powerco’s target is 2.5.
Non-standard Contract Disclosure
Each year, Powerco discloses both the new non-standard contracts it has entered into for the provision of electricity lines services, and existing non-standard contracts where the prescribed terms and conditions have been modified during the period.
A contract is considered non-standard if:
(a) The price at which the electricity line services are to be provided is not determined solely by reference to a schedule of prescribed terms and conditions that is publicly disclosed; and
(b) fewer than five people have such contracts with Powerco.