Price-Quality Path Compliance
The Commerce Commission’s price-quality regulation is designed to ensure electricity distributors have similar incentives and pressures to suppliers operating in competitive markets to innovate, invest and improve their efficiency, for the benefit of the customer.
Centralines prices and quality of service are regulated by what is known as a default price-quality path (DPP), which lasts for a five-year period. The main components of a DPP are:
- The maximum prices/revenues allowed at the start of the regulatory period.
- The annual rate at which electricity distributors’ maximum allowed prices can increase.
- The minimum service quality standards (SAIDI and SAIFI) that must be met.
The annual disclosures, submitted to the Commerce Commission, demonstrate Centralines' compliance with price and quality limits set under the DPP.
What are ‘SAIDI’ and ‘SAIFI’?
The Commerce Commission has two tools for ensuring that customers are receiving a reliable standard of service – SAIDI and SAIFI.
System Average Interruption Duration Index (SAIDI) – this is calculated by adding all customer interruption durations and dividing it by the total number of customers served, to give, on average, the number of minutes a customer was without power over the course of the year.
System Average Interruption Frequency Index (SAIFI) – this is calculated by taking the total number of customer interruptions divided by the total number of customers served, to tell us, on average, how many times the power went out for each customer over the course of the year.
The Commerce Commission sets a target ‘threshold’ for these indexes that all regulated electricity distributors are tasked with achieving. In the past two years Centralines has easily met its regulatory network performance requirements as well as its own internal targets.