While this country’s largest network company, Auckland-headquartered Vector, can increase its charges by 1.5% per year, second-sized Powerco has to reduce its overall charges by 0.5%.

Of the 19 companies able to raise their prices, 16 have to justify any proposed price increases to the commission, while the other three, which were found to offer low prices or higher service standards, will find it easy to increase their charges.

Three firms can raise prices by 2.5%, seven by 1.5% and nine, as well as national grid operator Transpower, by 0.5%. Transpower also has to justify any proposed price hikes.

The Wellington-headquartered commission says the thresholds, effective from April 1 for five years, are based on Consumer Price Index inflation, and the lines companies' productivity and profitability. The companies will be assessed annually.

The thresholds provide incentives for distribution businesses to improve efficiencies; share the benefits of efficiency gains, including through lower prices in real terms, with customers over the long term; and limit companies’ abilities to extract “excessive” profits.

Lines companies have been required to hold their average prices, net of certain costs, at the same level between August 2001 and September 2003.

The thresholds imposed are: Alpine Energy (up 0.5%), Aurora Energy (up 0.5), Buller Electricity (up 0.5), Centralines (down 0.5), Counties Power (down 0.5), Eastland Network (down 0.5), Electra (down 0.5), Electricity Ashburton (up 0.5), Electricity Invercargill (up 1.5), Horizon Energy Distribution (up 0.5), MainPower NZ (down 0.5), Marlborough Lines (down 0.5), Nelson Electricity (up 0.5), Network Tasman (up 0.5), Network Waitaki (up 1.5), Northpower (up 2.5), Orion NZ (up 0.5), OtagoNet JV (up 2.5), Powerco (down 0.5), Scanpower (up 1.5), The Lines Company (down 0.5), The Power Company (up 1.5), Top Energy (up 1.5), Unison Networks (up 1.5), Vector (up 1.5), Waipa Networks (up 2.5), WEL Networks (down 0.5), and Westpower (up 0.5).