13may electricity prices hero default

Commission releases price-quality paths

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Sixteen lines companies have had their price-quality paths, which determine how much revenue they’re allowed to make, set by the Commission Commission.

Overall, distribution prices nationwide will see a decrease by 1.1 percent, but there is significant regional variation.

Eight of the companies are allowed to raise prices next year.

Alpine Energy, the distributor for South Canterbury, can put prices up by 12.49 percent and Network Tasman, the distributor for the wider Nelson and Tasman areas, will have to drop prices by 13.97 percent.

The two largest increases – those of Alpine Energy and Centralines (8.85 percent) in Central Hawke’s Bay - are a result of an under-recovery in the previous regulatory period.

The Commission has placed caps on increases to allow this under recovery to be spread over the 2015-2020 period.

From 2016 through to 2020, most distributors will only be allowed to increase revenues by a rate equivalent to the Consumer Price Index, while a small number are entitled to larger increases to balance their costs.

Orion, Christchurch’s lines company, was given a customised price-quality path because of the earthquakes.

Those distributors that are consumer-owned do not have a price-quality path because its assumed consumers can influence price and quality.

The Commerce Commission also set quality of service standards, which are based on how often an outage occurs and how long it lasts. The Commission could take enforcement action if the standards were breached in two years out of three.

The Commission has also put in place incentives to encourage lines companies to make energy-efficient gains. Companies that lose revenue because of decreased demand when they invest in energy-efficiency initiatives will be compensated in the short-term.

Which electricity distribution businesses are covered

Distributor[totals][sort;desc]Maximum Allowable Revenue 2015 ($000s)[sort;asc]Price limit change 1 April 2015[sort;dec]
Rate of change 2016-20
Alpine Energy30,45812.49%CPI+11%pa
Aurora Energy56,512-4.30%CPI+0%
Electricity Ashburton33,0475.73%CPI+0%
Electricity Invercargill13,565-2.78%CPI+0%
Horizon Energy22,0276.76%CPI+0%
Nelson Electricity 6824-8.95%CPI+0%
Network Tasman28,092-13.97%CPI+0%
Powerco 250,4240.16%CPI+0%
The Lines Company 34,705-7.20%CPI+0%
Top Energy 34,2318.29%CPI+7%pa
Unison 100,102-0.06%CPI+0%
Vector 395,2450.80%CPI+0%
Wellington Electricity 98,788-13.66%CPI+0%
Industry wide 1,161,515-1.07%CPI+0.61%