Report compares performance of power distribution companies

Electricity distribution companies have been assessed in a Commerce Commission report that looks...
Electricity distribution companies have been assessed in a Commerce Commission report that looks at their performance between 2008 and 2011.
The performance report of electricity distribution businesses in New Zealand from 2008 to 2011 has been released and most southern suppliers have greater increases in line charges, spend less and have mixed reliability records compared with national averages.

The Commerce Commission report tracked the performance of the 29 electricity distribution businesses in New Zealand who transported electricity to homes and businesses between 2008 and 2011.

The report includes trends in the collection of revenue from customers for line charges, expenditure and the reliability of the service.

Commerce Commission general manager of regulation Dr John Hamill said the average revenue collected by distributors in New Zealand had increased by 5% above inflation.

The revenue collected from customers for the electricity distribution services accounted for about a quarter of a typical household power bill, Dr Hamill said.

Four of the five southern suppliers had greater revenue increases than the national average. The exception was Aurora Energy.

Nationally, the increase in revenue collection was due to increased demand for electricity distribution services, the need for investment in the network and increased operating costs, Dr Hamill said.

The operating expenditure in New Zealand increased 6% over and above inflation from 2008 to 2011, Dr Hamill said.

Just one southern supplier, Electricity Invercargill, had a greater increase in expenditure than the national average, with most suppliers spending less than half the national average.

The overall trend for electricity outages across the industry had not changed but reliability varied widely between businesses, Dr Hamill said.

''Some distributors had a significantly larger number of outages, and a significantly longer duration of outages than others.''


Line charge revenue
Southern electricity distributors line charge revenue (over and above inflation from 2008 to 2011). -
Aurora Energy: Increased by about 3%. Revenue from residential and smaller commercial customers stayed flat, while revenue from medium-sized customers increased by about 20%. Most of the revenue collected was from residential and small commercial customers.
Otago Net: Increased by about 17%. Revenue from residential and smaller commercial customers increased by 13% and from medium-sized customers by 35%. Most of the revenue collected was from residential and small commercial customers.
The Power Company: Increased by about 15%. Revenue from residential and smaller commercial customers increased by 36%, medium-sized customers' revenue was flat and large-sized customers' decreased by 1%. Most of the revenue collected was from residential and small commercial customers.
The Network Waitaki: Increased by about 15%. Revenue from residential and smaller commercial customers decreased by 2%, medium-sized customers' increased 26% and large-sized customers' increased by 50%
Electricity Invercargill: Increased by about 9%. Revenue from residential and smaller commercial customers increased by 10% and from medium-sized customers by 18% and for large-sized customers revenue fell by 7%. Most of the revenue collected was from residential and small commercial customers.

Expenditure
Southern electricity distributors expenditure (over and above inflation from 2008 to 2011).-
Aurora Energy: Operating expenditure decreased 1%. Less than half was related to the network.
Otago Net: Operating expenditure increased 3%. Most was related to the network.
The Power Company: Operating expenditure increased 1.5%. Investment in the network declined significantly in 2011. This may be because a large project finished.
The Network Waitaki: Operating expenditure increased 2%. About half was related to the network.
Electricity Invercargill: Operating expenditure increased 10%.

Reliability
Southern electricity distributors reliability (from 2008 to 2011).-
Aurora Energy: Average duration and frequency of interruptions were below the industry average.
Otago Net: Average duration and frequency of interruptions were above the industry average.
The Power Company: Average duration and frequency of interruptions were above the industry average most years; in 2009 the average duration of interruptions was below the industry average.
The Network Waitaki: Average duration and frequency of interruptions were below the industry average.
Electricity Invercargill: Average duration and frequency of interruptions were below the industry average.


- shawn.mcavinue@odt.co.nz

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