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Recommendation on Transpower regulation

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, April 14 NZPA - The Commerce Commission is recommending Transpower be subject to a form of regulation it believes would allow more flexibility than the alternative, in dealing with the national grid owner's capital spending programme.

The commission said today it had recommended to the commerce minister that Transpower be under individual price-quality regulation, rather than the alternative, default/customised price-quality regulation.

Commission general manager regulation Brent Alderton said that individual regulation had many advantages, allowing more flexibility to accommodate Transpower's large and uncertain capital expenditure programme in a revenue path.

It also provided a more stable environment for setting and implementing long-term performance incentives, he said.

The commission's recommendation was supported by Transpower and all parties who submitted during consultation.

Price-quality regulation controls the price and quality of goods or services in markets with limited or no competition and little or no likelihood of a substantial increase in competition.

The new regulation will replace an administrative settlement now in place, once that settlement expires.

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