Electricity Tariffs

Oversight by the ECB

The ECB, among its diverse responsibilities, oversees the regulation, reviewing, setting, and approval of electricity tariffs. This aligns with Section 27, subsection (2) of the Electricity Act 4 2007.
1. The Tariff Methodology
A cost-plus tariff methodology is applied annually to enable utilities to recover allowable costs and a regulated return. This ensures the utility's ability to cover the costs of providing electricity to consumers.
2. Determining (Calculating) the Electricity Tariff
The ECB conducts a comprehensive assessment of all costs involved in electricity provision. This includes primary electricity generation, imports, operating and maintenance costs, customer service, overheads, asset-related costs, and investment expenses.
3. Keeping it Fair
Following a Cabinet decision in 2011/12, tariffs are mandated to be cost-reflective, aligning with sound economic principles. The ECB ensures that the approved tariff covers the cost of producing a unit of electricity (kWh), allowing utilities to recover all approved costs. Presently, most tariffs, including NamPower's, are cost reflective.
4. Listening to You
The ECB values stakeholder input from various sectors, including the government, private industry, licensees, and consumers. This inclusive approach ensures a balanced and protected environment for all stakeholders in the electricity industry.
5. Key Tariffs
In the campaign, the ECB will emphasise two main tariffs:
• Bulk Tariff: Encompassing local generation, imports, NamPower's transmission, and levies.
• Distribution Tariff: Covering the cost of distributing electricity to homes, businesses, mines, and industries.

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