The Commerce Commission recently released their discussion document, “Price-Quality Path for Watercare.” Commerce Commission’s preliminary view is that Watercare’s revenue should be regulated using a price-quality path (PQP). PQP is the regulatory framework that defines both the prices a monopoly provider can charge and the quality of the services Watercare must deliver.
The suggested economic regulation for price-quality path includes:
- high-level approach to limiting Watercare’s revenues
- standardised accounting model underpinning how revenue limits are set
- quality standards, performance requirements and incentives
- expense forecasts and incentives, and
- other price-quality path design and implementation choices.
The Commerce Commission’s decisions affect development through its calculations for Infrastructure Growth Charges because it decides how much capital Watercare can collect to develop new pipes. This can potentially add more costs to development. Property Council will be making a submission on the discussion document. For full detail on the consultation proposed, see the Commerce Commission website here.
For any further questions, please contact Leonard for any initial feedback on Watercare.
Author | Leonard Hong
An accomplished economist and public policy professional, Leonard brings a global perspective and analytical edge to Property Council New Zealand’s advocacy team.
With a background spanning macroeconomics, international political economy, and urban development policy, Leonard’s career has taken him from the New Zealand Parliament to leading think tanks and industry bodies across the Asia-Pacific.
Passionate about evidence-based policy and the intersection of economics, cities, and governance, Leonard’s work supports Property Council’s mission to create thriving, well-designed communities across Aotearoa New Zealand.