✨ Commerce Commission Decision
NEW ZEALAND GAZETTE, No. 105
25 JUNE 2008
Draft decision not to declare control of Transpower
On 5 October 2007, the Commission published a paper titled Commerce Commission, Regulation of Electricity Lines Businesses, Targeted Control Regime, Draft Decisions and Reasons for Not Declaring Control & Draft Decision on Resetting Transpower’s Thresholds, Transpower New Zealand Limited which contained the Commission’s preliminary view to accept the administrative settlement proposal made by Transpower dated 31 August 2007 (Proposal) and not to make a declaration of control under Part 4A of the Act in respect of transmission services supplied by Transpower. The Commission also published a copy of Transpower’s Proposal. The Commission invited interested persons to give their view on the matter by 9 November 2007. The Commission requested that cross-submissions be received by 30 November 2007.
Revised Offer
The Commission has had regard to all views expressed by interested parties in written submissions, in relation to this matter.
In response to points raised in submissions, and following discussion with the Commission, on 11 April 2008 Transpower submitted a revised offer of administrative settlement (Revised Offer). This incorporated a number of changes to its previous proposal to address those matters raised during consultation.
Decision not to declare control
The Commission has determined not to make a declaration of control under Part 4A of the Act in respect of transmission services supplied by Transpower, for the following reasons:
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The Commission has the ability to enter into an administrative settlement with a business that has breached the thresholds in order to further the objectives of the targeted regime in Part 4A of the Act;
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the Proposal sets out three new thresholds that replace the existing price path threshold. The constraints applied under these new thresholds are appropriate going forward, considering Transpower’s investment profile will be significantly increased over the near future;
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the quality threshold continues to apply under the Proposal;
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the Proposal applies both appropriate constraints to the inputs to Transpower’s revenue requirement and provides appropriate efficiency incentives going forward;
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having evaluated the proposal and taken into account the views of interested parties, the Commission has decided that control is not necessary, as acceptance and implementation of Transpower’s offer addresses the Commission’s concerns regarding section 57E of the Act. Accordingly, a declaration of control in respect of Transpower’s transmission services is not necessary to ensure the objectives of the targeted control regime are achieved;
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implementation of the settlement proposal will provide appropriate constraints on Transpower’s prices;
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NZ Gazette 2008, No 103
✨ LLM interpretation of page content
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Decision not to declare control of Transpower New Zealand Limited
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🏭 Trade, Customs & IndustryCommerce Act, Decision, Transpower New Zealand Limited, Price Path Threshold, Quality Threshold