2010-2015 Default Price-Quality Path

Subscribe to 2010-2015 Default Price-Quality Path

The 2010-15 default price-quality paths were first set in 2009

On 30 November 2009 we published a determination setting out the requirements of the 2010-15 default price-quality path including:

• Starting prices as the prices that applied as at 31 March 2010
• The annual rate of change as CPI-0%
• Quality standards based on historical averages of reliability
• The requirements for reporting compliance annually.

In 2012 the default price-quality paths were reset

On 30 November 2012 the default price-quality paths were reset to apply input methodologies to the default price-quality paths for the first time. The most notable feature of the reset was new starting prices based on the current and projected profitability of each supplier.

Other important features of the reset are:

• Alternative rates of change were applied to some suppliers to minimise the risk of price shocks to consumers
• Claw-back was applied for the 2012-13 year to offset the impact of the delay in resetting the default price-quality paths arising from Vector Limited’s 2011 appeal to the High Court
• Orion New Zealand Limited was not subject to the reset in light of their intention to submit a customised price-quality path proposal in early 2013
• Quality standards remained unchanged as there are no input methodologies to apply to the quality standards.