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Also available as: Section 56 Gas Control Inquiry: Final Report - 7. Modelling Issues and Sensitivity Tests [217KB PDF](instructions for obtaining the Adobe Acrobat viewer)

Contents

• List of Tables

List of Tables

• Table 7.2: Key Variables and the Effects on Key Results
• Table 7.3: Ratio Analysis (2004)
• Table 7.4: Comparison of Gas Distributors and Electricity Distributors
• Table 7.5: Gas Distribution Productivities
• Table 7.6: Over-Recovery of Common Costs by Powerco (2004)

7.1 The Commission considers that a key tool for analysing the issues regarding control is the development of models that quantify the potential effects of its decisions. However, it is the nature of such models that they simplify a complex reality. In addition, the quality of the data used as inputs into the modelling influences the robustness of the final results. Therefore, these models are used to inform the Commission, which still has to exercise its judgement in its overall recommendations.

7.2 Sensitivity testing assists the Commission in understanding the significance of certain assumptions and modelling limitations. Therefore, sensitivity testing assists the Commission in exercising its judgement.

7.3 This chapter discusses modelling issues and the key sensitivity tests undertaken.