Feedback sought on funding for electricity, gas, airport regulation

Commerce Minister Simon Power today released a discussion document on funding for the regulation of electricity and gas lines, and airports under Part 4 of the Commerce Act.

The discussion document proposes to increase levies paid to the Commerce Commission by the regulated businesses, which are considered monopolies.

“Since the level of funding was set there have been significant changes to the regulations, mainly in 2008, which is why we need to revisit the levels of funding,” Mr Power said.

“To reach a fair outcome, we need to consult fully with the regulated businesses and the public on how to calculate these levies.”

The document sets out two options for ongoing funding: an increase or no change.

All interested stakeholders are encouraged to make a submission to the Ministry of Economic Development by Monday 7 March.

The discussion document is available here.
 

Questions and answers
 

What are the two options proposed for ongoing funding?

The first option is to leave the funding levels as they currently are.

The second option is to increase the baseline as proposed by the Commerce Commission and set out in the following table:
 

[1] Excludes expense transfers 
 

What will the impact on the suppliers’ levies be?

Under both considered options, regulated suppliers’ levies will, on average, be reduced from the levels of 2009/10 and 2010/11. The choice of funding option will determine how large that reduction will be.