Stage: 2 (Review) Status: Complete

The Authority announced in August 2016 that it would review the load control and pricing practices of The Lines Company, focusing on the interaction between those practices, the incentives they place on consumers and the outcomes they influence.

We ran an initial questionnaire on the Authority’s website to obtain feedback from TLC customers about their experiences with TLC’s pricing and load control. Over 700 responses were received. The questionnaire was followed by a formal survey of 500 TLC consumers carried out in November 2016 by UMR Research. Load control data was obtained from TLC and a number of other distribution companies.

We found that TLC’s use of load control was consistent with the current incentives on TLC to reduce transmission charges by reducing peak network load. The majority of any harm associated with TLC’s use of load control arises from TLC’s pricing methodology rather than the actual amount of load controlling.

There are number of features of TLC’s current pricing that cause consumer stress and uncertainty. We believe that this is resulting in inefficient consumer behaviour and investments. TLC’s pricing approach does not appear to have negatively affected retail competition or system reliability in the TLC region.

The report outlines a number of general lessons for distribution businesses considering their own pricing approach that the Authority drew during the course of the review.

 

TLC survey responses - redacted