Commerce Commission review shows improvement in electricity asset management planning
21 October 2011
Electricity distribution businesses (EDBs) have made real progress towards best practice in asset management planning, Commerce Commission Deputy Chair, Sue Begg said today. The Commission released a review of asset management plans disclosed by the EDBs for the period beginning 1 April 2011.
This year the Commission's review assessed the three disclosure areas identified in the 2009 review as having relatively weak compliance: service levels, network development planning, and expenditure forecasts, reconciliations and assumptions.
"The results showed marked improvements in the asset management plans prepared by EDBs since the 2009 review", said Commerce Commission Deputy Chair, Sue Begg. Of the 28 businesses whose asset management plans were reviewed, 21 showed an improved disclosure rating and 10 EBDs exceeded the highest average rating achieved in 2009," said Ms Begg.
Key results from this year's review included:
- the top performers were Top Energy, Centralines and The Lines Company;
- the EDBs who made the most significant gains from the 2009 review were Top Energy, Northpower and Vector; and
- the EDBs with the greatest room for improvement were The Power Company, Electricity Invercargill and Network Waitaki.
"In future years the Commission intends to look more closely at the quality of the planning processes as well as making sure that compliance with public disclosure requirements is maintained," Ms Begg said.
The Commission is currently reviewing the information disclosure requirements for EDBs. As part of the review, the Commission is considering what information is required to assess the quality of asset management.
As with previous asset management plan (AMP) reviews, this year's review evaluates each AMP against a set of compliance criteria to assess the extent that the EDB has complied with disclosure provisions of the Electricity Distribution (Information Disclosure) Requirements (2008) (Requirements) and the Electricity Information Disclosure Handbook (2004) (Handbook).
The Commerce Commission's review has been informed by a report prepared by PB New Zealand Ltd. The report assesses the publicly disclosed asset management plans (AMPs) of 28 EDBs against the Requirements and the Handbook, and their amendments. This year, Orion New Zealand Limited was exempted from the requirement to publicly disclose an AMP.
There are 29 electricity distribution businesses currently providing distribution services between Transpower and end users in New Zealand.
Feedback that an EDB receives from compliance reviews enables it to continuously improve its plans and, by doing so, improve its management processes.
The chart attached compares the assessed performance of the EDB' 2009 and 2011 AMPs. The AMPs each have a minimum planning horizon of ten years, commencing 1 April 2009, and 1 April 2011 respectively.