Issues Paper - Providing incentives for service quality in NSW electricity distribution - May 2003

The Independent Pricing and Regulatory Tribunal (the Tribunal) is currently undertaking a price review under the National Electricity Code (the Code), the results of which will come into effect on 1st July 2004. In November 2002, the Tribunal published an Issues Paper for this review, in which the Tribunal set out its view that it would be desirable to explicitly incorporate incentives for efficient levels of service quality into the regulation of network prices for the 2004 regulatory period. The advantage of linking price to service quality is that it helps avoid any incentive for a natural monopolist to reduce costs at the expense of service quality when faced with financial incentives to minimise costs.