Proposed Amendments to Line Charge Disclosure Requirements
Regulations 22 & 23
16. Regulation 22 requires any line business or retailer that invoices any consumer for any line charge to: (i) publicly disclose details of line charges; and (ii) provide written notification to customers of details of their line charge. This disclosure/notification is required both annually and whenever charges are changed.
17. The objective of this disclosure is to facilitate comparisons of different businesses' line charges and to facilitate competition by ensuring that the unavoidable part of customers' bills is known. In order for customers to assess the appropriateness of their line charge, information about the line charge imposed by the relevant line business in respect of that customer is required.
18. The following problems arise with the current wording of Regulations 22 and 23:
- Regulation 22 requires disclosure of the charge imposed on the final customer. In some cases, this charge may have been rebundled by the retailer, rather than being the line charge imposed by the line business in respect of that customer.
- Regulation 23 provides that parties subject to Regulation 22 may impute line charges. Imputed line charges are unlikely to be identical to the line charges actually imposed by the line business, and therefore will be of limited use.
- Regulation 22 requires disclosure of "...the amount [of the line charge] that represents the line charge imposed by each other person...." This means that the amount of the line charge which represents Transpower charges must be disclosed. Given that Transpower does not impose transmission charges on a per customer basis, these line companies must be imputing the Transpower component. This is effectively an arbitrary allocation of Transpower charges, which does not provide useful information.
- 19. Accordingly, the Ministry proposes that Regulation 23 be revoked, and that Regulation 22 be amended to:
- require line companies (rather than retailers) to disclose line charge information;
- make it clear that imputed Transpower charges need not be separately identified in this disclosure;
- require that, in relation to standard contracts (as defined in the Regulations), line companies must:
- publish line charges in local newspapers and on the Internet;
- advise line charges to any person requesting the information;
- require that, in relation to non-standard contracts, line companies must provide line information in the same manner as for standard contracts, except that:
- publication in local newspapers would not be required; but
- line companies must advise line charges to final consumers (this might be done either directly or by arrangement with retailers);
- require disclosure of line charges only when they are changed, and not annually;
- require disclosure at least 20 working days prior to the change taking effect; and
- require disclosure of both the new and old line charges (together).
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