✨ Gas Industry Disclosure
Regulation 21 - Disclosure of the methodologies for the allocation of costs, revenues, assets and liabilities.
Enerco has a number of business interests that include the following:
Gas Distribution Activities: Enerco owns and operates local distribution networks that have been reported under Regulation 6-(b) of the Gas (Information Disclosure) Regulations 1997.
Energy Retailing Activities: Enerco retails gas supplies direct to customers that have been reported under Regulation 6-(c) of the Gas (Information Disclosure) Regulations 1997.
Enerco also operates other business activities that are not required to be disclosed as part of the Gas (Information Disclosure) Regulations 1997.
The following methodology has been applied to establish the relevant assets, liabilities, revenues and costs for the gas distribution and energy retailing activities.
The Avoidable Cost Methodology
The avoidable cost methodology has been employed by Enerco to determine the allocation of the assets, liabilities, revenues and costs.
The avoidable cost methodology defines Enerco’s distribution business as its core activity. An assessment has then been made as to what assets, liabilities, revenues and costs could be avoided by the distribution business.
Costs and Revenues
The avoidable cost methodology requires an assessment to be made of the costs and revenues that relate to the non core business activities. The costs and revenues that are avoided are the measure of the costs and revenues assigned to that non core activity. Costs and revenues remaining after all avoidable costs and revenues are assigned to non core activities are deemed to be the costs and revenues for the core business.
The costs that have been incurred by the gas distribution business for the service provided by other business activities are charged against the distribution business. This reflects the requirement that the distribution business needs to incur these costs irrespective of whether or not these services are provided by Enerco. Such services are provided on a commercial arms-length business.
Similarly revenue charged by the distribution business to the other business activities within Enerco is treated as revenue to the distribution business. These services are provided on a commercial arms-length basis.
Next Page →
PDF embedding disabled (Crown copyright)
View this page online at:
VUW Te Waharoa —
NZ Gazette 1998, No 121
NZLII —
NZ Gazette 1998, No 121
✨ LLM interpretation of page content
💰
Disclosure of Financial and Efficiency Measures
(continued from previous page)
💰 Finance & RevenueFinancial Performance, Efficiency Measures, Accounting Return, Profitability, Cost Analysis, Gas Distribution, Energy Retailing, Avoidable Cost Methodology