The Wellington-headquartered commission says it has identified Electricity Invercargill, Network Waitaki, OtagoNet, The Power Company, and Waipa Networks as having breached initial thresholds set by the commission last June.

However, rather than taking direct action to control those companies, commission chair Paula Rebstock said the commission would be “closely monitoring” the firms’ future pricing behaviour.

Three of the companies - Electricity Invercargill, Network Waitaki and OtagoNet - had exhibited relatively low profitability and-or relatively high productivity, compared with their peers; while The Power Company’s and Waipa Networks’ breaches were attributable to timing differences between movements in transmission costs and in their average prices.

“The commission does not consider it would be in the long-term interests of consumers to take further action at this stage.”

Thirteen of the lines businesses complied with the thresholds: Alpine Energy, Aurora Energy, Counties Power, Eastland Network, Electricity Ashburton, Horizon Energy Distribution, Network Tasman, Northpower, Orion, Scanpower, Vector, WEL Networks and Waipukurau-based Centralines. Nine businesses are still being assessed for their average net prices over the period August 2001 to September 2003.

Rebstock said new criteria and parameters would apply to the commission’s new price and quality thresholds that come into effect from today (April 1) for five years. The thresholds currently applying to national grid owner-operator Transpower until June 30 remained, however, but probably only until mid-2005 given the uncertainties associated with Transpower’s national grid investment program.

The purpose of the thresholds is to provide incentives for distribution businesses to improve efficiencies, share the benefits of efficiency gains with consumers over the long term and be limited in their ability to extract excessive profits.