Distribution pricing scorecards 2020

2020 Distribution pricing scorecards

There are 29 distribution companies in New Zealand providing and maintaining the local power networks that carry electricity via power poles and lines from the national transmission grid to homes and businesses. 

The Commerce Commission sets and enforces minimum network reliability standards and determines the maximum amount of money each distributor can charge consumers in its region through distribution charges. The Electricity Authority oversees how each distributor can charge customers to recover this money.

The Authority published updated distribution pricing principles(external link) for distributors in 2019, expects them to update their prices to be more efficient (consistent with these pricing principles) and runs regular reviews of whether distributors’ pricing aligns with those principles.

We want distribution pricing to send the right signals about the cost of the electricity that’s being fed to your home or business. When these signals are right, we should see better use of the electricity network, which over time, helps keep overall distribution costs lower for consumers. We call pricing that results in these outcomes, “efficient distribution pricing”.

To push for faster change and hold distributors to account, the Authority has started to publish scorecards on how well each distributor is progressing towards making its pricing more efficient.

The scorecards assess distributors’ published pricing methodology and roadmaps at a point in time. These scorecards refer to distributors’ 2020 pricing methodologies.

Read the Distribution pricing scorecards 2020 summary of findings and key themes [PDF, 307 KB]

Read Distributors' scorecards further below.

Aurora’s scorecard and regional distribution pricing review

Aurora’s scorecard is measured against its pricing methodology published on 1 April 2020. It does not reflect the recent announcement about the changes Aurora plans to make to its distribution pricing this year.  Having previously heavily focussed on preparing its Customised Price-Quality Path application to the Commerce Commission, Aurora is aware of the need to now urgently focus on network pricing reform and has committed to doing so in 2021. The Authority welcomes this commitment.

Additionally, the Authority has listened to the concerns of households, families and businesses in Aurora’s network about substantial price increases coming, and how those prices will balance between its regions. 

The Authority commissioned an independent review of Aurora’s approach to setting regional prices and whether it is consistent with the distribution pricing principles. We can assure consumers we have checked Aurora’s regional pricing to make sure that the way the pricing is balanced across the regions is appropriate.

The review found Aurora’s overall approach to regional distribution pricing is sound and largely reflects the differing costs across its three regions. However, the Authority did find some areas where Aurora can make improvements, which will see future costs shared in a way that more closely reflects the cost of providing services to each of the regions.

The Authority is pleased to see Aurora has already committed to making immediate changes to its regional distribution pricing to start to fix up the main concerns we raised with them by 1 April 2021, with further changes to come by April 2022. The Authority will work closely with Aurora as they make these important changes, will check they are tested and encourage Aurora to keep its community regularly updated about the changes.

Read how distribution pricing works and the summary of Aurora’s review here [PDF, 2.3 MB].

Read the full independent review here [PDF, 543 KB].

View Aurora’s distribution pricing scorecard here [PDF, 270 KB]. [PDF, 311 KB]