Possible implications for efficient distribution pricing
We have published a letter from the Authority’s Chief Executive to the Commerce Commission on the possible implications for efficient distribution pricing of a proposal by the Commission to regulate distributors using a revenue cap.
The Commission’s draft decision forms part of its Input methodologies review. The Commission’s proposal is relevant to the Authority’s distribution pricing review because it may affect distributors’ incentives to introduce efficient pricing. If a revenue cap is introduced, we would need to take that into account in deciding what further development, if any, to the existing distribution pricing arrangements would be appropriate.