The Commerce Commission has commenced the process for setting new maximum prices and new quality standards for Orion New Zealand Limited (“Orion”).

 Orion has submitted a Customised Price-Quality Path (CPP) proposal to change the maximum prices that Canterbury consumers will pay for electricity lines services and to set new required quality standards for those services. The Commission invites interested parties to comment on the Orion proposal by 17 May 2013.

 The Commission has today released a Process Paper to explain how interested people can have their say on Orion’s proposal. The Commission’s Process Paper and Orion’s CPP proposal are available on the Commission’s website at: http://www.comcom.govt.nz/orion-cpp/

The Commission also proposes to release an issues paper around 29 April 2013 setting out its preliminary list of issues and questions on the Orion proposal. Submitters will be able to consider those issues and questions when commenting on the Orion proposal.

The submissions from interested parties will assist in informing the Commission’s draft decision on Orion’s price-quality path. The draft decision is expected to be released in July 2013 for further public comment. A final decision by the Commission is currently scheduled for November 2013.

 Background

Orion’s current maximum prices and its quality targets are set in a price-quality path determined in 2009. To alter those prices and targets Orion has made a CPP proposal which may lead to changes in its prices and quality standards from 1 April 2014, for the following five years.

 The Commission has examined Orion’s CPP proposal to decide whether the proposal complies with the Commission’s rules for the process and content for a CPP application. These are set out in the Electricity Distribution Services Input Methodologies Determination 2012 at http://www.comcom.govt.nz/electricity-distribution/.

The Commission asked for more information from Orion to ensure the CPP proposal fully met the requirements of that determination. The additional information provided by Orion is set out in the Addendum of additional information provided by Orion. The Addendum is also available on the Commission’s website.

The Commission has decided that Orion’s CPP proposal, in combination with an Addendum of additional information, complies with the relevant rules.