Under subpart 9 of Part 4 of the Commerce Act 1986 (the Act), suppliers of electricity lines services (both transmission and distribution) are subject to price-quality regulation. Electricity lines services have the meaning given to them in section 54C of the Act. The provisions of subpart 9 of Part 4 largely take effect from 1 April 2009.
Distribution
Suppliers of electricity (distribution) lines services (electricity distribution businesses or EDBs) that do not meet the criteria of being “consumer-owned” are subject to default/customised price-quality regulation. The main features of default/customised price-quality regulation, which replaces the Part 4A thresholds regime, are:
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the Commission sets default price-quality paths (“DPPs”) that apply for a regulatory period, and all regulated suppliers must apply those DPPs; but
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individual suppliers may make proposals to the Commission for a customised price-quality path (“CPP”) and propose alternative price and/or quality paths; and
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the Commission may set a CPP for the supplier that better meets that supplier’s particular circumstances. The CPP applies for a set period instead of a specified DPP; and
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any breaches of price-quality paths are subject to the penalty provisions as set out in Part 6 of the Act.