New Zealand Acts

COMMERCE ACT 1986 - SECT 53M

53M Content and timing of price-quality paths

1 Every price-quality path (whether a default price-quality path or a customised price-quality path under this subpart, or an individual price-quality path under subpart 7 ) must specify,—

a) in relation to prices, either or both of the following with respect to a specified regulatory period:

i) the maximum price or prices that may be charged by a regulated supplier:

ii) the maximum revenues that may be recovered by a regulated supplier; and

b) the quality standards that must be met by the regulated supplier; and

c) the regulatory period.

2 A price-quality path may include incentives for an individual supplier to maintain or improve its quality of supply, and those incentives may include (without limitation) any of the following:

a) penalties by way of a reduction in the supplier's maximum prices or revenues based on whether, or by what amount, the supplier fails to meet the required quality standards:

b) rewards by way of an increase in the supplier's maximum prices or revenue based on whether, or by what amount, the supplier meets or exceeds the required quality standards:

c) consumer compensation schemes that set minimum standards of performance and require the supplier to pay prescribed amounts of compensation to consumers if it fails to meet those standards:

d) reporting requirements, including special reporting requirements in asset management plans, if the supplier fails to meet the quality standards.

3 Quality standards may be prescribed in any way the Commission considers appropriate (such as targets, bands, or formulae) and may include (without limitation)—

a) responsiveness to consumers; and

b) in relation to electricity lines services, reliability of supply, reduction in energy losses, and voltage stability or other technical requirements.

4 A regulatory period must be 5 years.

5 However, the Commission may set a shorter period than 5 years if it considers that it would better meet the purposes of this Part, but in any event may not set a term less than 4 years.

6 Subsections (4) and (5) are subject to section 53W .

7 No default price-quality path applies to a supplier until the date specified in the relevant section 52P determination, which must be a date at least 4 months after the determination is published as referred to in section 52P(9) .

History: Section 53M: inserted, on 14 October 2008, by section 4 of the Commerce Amendment Act 2008 (2008 No 70).   Section 53M(7): amended, on 28 October 2021, by section 3 of the Secondary Legislation Act 2021 (2021 No 7).