Commerce Commission

PRJ0046416_Productivity and Efficiency Study

The Commission regulates New Zealand’s electricity distribution businesses (EDBs) and national grid owner (Transpower) under Part 4 of the Commerce Act 1986 (Part 4) for the long-term benefit of consumers. Part 4 includes Information disclosure regulation, which applies to all EDBs, and requires public disclosure of information on the EDBs’ performance and network plans.

The Commission has a statutory obligation under Part 4 to publish a summary and analysis of disclosed information for the purpose of understanding the changes in EDBs’ performance over time. Such analysis can examine the relative performance of EDBs, which includes their productivity and efficiency. In accordance with this obligation the Commission is undertaking a study of the productivity and efficiency of New Zealand EDBs. The study will be undertaken in three phases:

Phase One – Total factor and partial productivity analysis of the EDB sector
An assessment of the total factor productivity (TFP) and partial factor productivity (PFP) for EDBs in aggregate.

Phase Two – Proof of concept for EDB comparative efficiency study
Develop and test appropriate analytical technique(s)/methodology for assessing EDBs’ relative productivity and efficiency, including incorporating engineering expertise.

Phase Three – Apply analytical technique(s) and methodology to produce EDB comparative efficiency analysis and performance assessment
Select and apply the chosen analytical technique(s)/methodology to EDBs to obtain draft comparative EDB efficiency/productivity analysis.
The Commission is seeking an experienced consultancy firm(s) to undertake phase one of the study - Total factor and partial productivity analysis for EDBs in aggregate.