New Zealand Gazette – 2008 – No. 92

Page 2490

✨ Commerce Commission Interrelationship

2490 NEW ZEALAND GAZETTE, No. 92 4 JUNE 2008

Interrelationship with the Commerce Commission

This section sets out the Government’s expectations and intentions regarding the interrelationship between the Commerce Commission and the Commission with regard to the regulation of Transpower and electricity lines businesses by the Commerce Commission under the Commerce Act 1986 and the Commission under the Electricity Act 1992.
The Government expects the Commerce Commission and the Commission to work together closely to ensure that their respective roles are well coordinated, and to minimise any scope for uncertainties regarding jurisdictional issues.
The Government notes that the two Commissions have developed and published a Memorandum of Understanding on their respective roles.
The Government’s economic policy is that investment and other costs in relation to approved grid upgrade plans should be recoverable by Transpower. The Government also wishes to ensure that interested parties have certainty and clarity on how the two Commissions will operationalise the coordination of their respective roles.
Accordingly the Government requests that the Memorandum of Understanding between the Commerce Commission and the Commission continues to address the following matters in relation to transmission:

• the methodology for determining how each relevant expenditure component in relation to approved grid upgrade plans will be treated over time under the Commerce Act 1986

• how price setting as regulated by the Commerce Commission interacts operationally with the pricing methodology approved by the Commission

• how issues relating to valuation methodologies, pricing and pricing methodologies, quality and information disclosure will be coordinated and harmonised where possible between the two Commissions.

In addition, the Government requests that the Commerce Commission and the Commission review their Memorandum of Understanding by 30 November 2008 to specifically address the following matters in relation to improving incentives for electricity lines businesses in respect of:

• managing distribution losses

• facilitating uptake of advanced metering infrastructure and more efficient distribution pricing

• ensuring target security levels for distribution networks are met at least cost

• facilitating investment in energy efficiency (including consumer end-use efficiency), demand side management and distributed generation.

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