Update on our Customised Price-Quality Path (CPP) proposal

In January 2017 we publicly released material informing of our intention to make a CPP proposal which will increase our current levels of expenditure to ensure that we:

  • Provide safe, secure and resilient networks.
  • Invest for customer growth.
  • Enable our customers energy choices.

During recent months we have completed our customer and stakeholder consultation process and continue to work on other CPP application requirements, including the independent verification and audit of our proposal.

The “Investing to ensure safety, security and resilience” consultation document was published in January 2017. That represented the culmination of an extensive engagement process with customers and stakeholders on our future investment plans.

As well as telling our customers of our intention to submit a CPP proposal, as required by the Commerce Commission, the document explained the choices and trade-offs we proposed to balance service outcomes and cost. The consultation document was supported by a video, public forums and bilateral meetings.

We have now updated our indicative plans to reflect the feedback and findings we received to date from the consultation, verification and audit processes. We will continue to make minor refinements as the process is finalised. We intend to submit our CPP proposal to the Commerce Commission on 12 June 2017.

Refinements to our proposal has reduced the overall expenditure forecasts yet broadly remains consistent with the proposal as presented in the “Investing to ensure safety, security and resilience” consultation documents. Notably:

  • Our CPP proposal will seek to maintain current levels of reliability in accordance with the customer and stakeholder feedback we have received.
  • The expected impact of our indicative CPP proposal on our revenue and quality of distribution services is explained in chapter 6 of “Investing to ensure safety, security and resilience”.
  • The alternative price versus quality trade-offs we considered are presented in chapter 10 of “Investing to ensure safety, security and resilience”, and further detail is provided in the appendices to that document.
  • Our CPP application will propose to include a quality standard variation to provide for the forecast increase in planned outages, as explained in chapter 6 of “Investing to ensure safety, security and resilience.

We will continue to test the forecasts and develop the required documentation for submission to the Commission on 12 June and will provide notifications as the process proceeds.