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Commerce Act 1986

Regulated goods or services - Default/customised price-quality regulation

53M: Content and timing of price-quality paths

You could also call this:

"What suppliers can charge and the quality they must provide"

Illustration for Commerce Act 1986

When you look at the prices of goods or services that are regulated, you will see something called a price-quality path. This path must say what the maximum price is that a supplier can charge you, or how much money they can make from selling you something. It must also say what quality standards the supplier must meet. The price-quality path will cover a certain period of time, which is usually five years.

You can find more information about individual price-quality paths under subpart 7. The quality standards might include things like how well a supplier responds to you, or how reliable their service is.

The time period for a price-quality path is usually five years, but it can be shorter if the Commission thinks that would be better. However, it cannot be less than four years. You can find more information about this in section 53W and section 52P, which also says when a default price-quality path starts applying to a supplier.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1685617.

Topics:
Money and consumer rights > Consumer protection
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53L: Overview of default/customised price-quality regulation, or

"Rules for fair prices and quality of goods and services"

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53N: Monitoring compliance with price-quality paths, or

"The Commission checks if companies are following the rules about prices and quality."

Part 4Regulated goods or services
Default/customised price-quality regulation

53MContent and timing of price-quality paths

  1. Every price-quality path (whether a default price-quality path or a customised price-quality path under this subpart, or an individual price-quality path under subpart 7) must specify,—

  2. in relation to prices, either or both of the following with respect to a specified regulatory period:
    1. the maximum price or prices that may be charged by a regulated supplier:
      1. the maximum revenues that may be recovered by a regulated supplier; and
      2. the quality standards that must be met by the regulated supplier; and
        1. the regulatory period.

          1. A price-quality path may include incentives for an individual supplier to maintain or improve its quality of supply, and those incentives may include (without limitation) any of the following:

          2. penalties by way of a reduction in the supplier's maximum prices or revenues based on whether, or by what amount, the supplier fails to meet the required quality standards:
            1. rewards by way of an increase in the supplier's maximum prices or revenue based on whether, or by what amount, the supplier meets or exceeds the required quality standards:
              1. consumer compensation schemes that set minimum standards of performance and require the supplier to pay prescribed amounts of compensation to consumers if it fails to meet those standards:
                1. reporting requirements, including special reporting requirements in asset management plans, if the supplier fails to meet the quality standards.

                  1. Quality standards may be prescribed in any way the Commission considers appropriate (such as targets, bands, or formulae) and may include (without limitation)—

                  2. responsiveness to consumers; and
                    1. in relation to electricity lines services, reliability of supply, reduction in energy losses, and voltage stability or other technical requirements.

                      1. A regulatory period must be 5 years.

                      2. However, the Commission may set a shorter period than 5 years if it considers that it would better meet the purposes of this Part, but in any event may not set a term less than 4 years.

                      3. Subsections (4) and (5) are subject to section 53W.

                      4. No default price-quality path applies to a supplier until the date specified in the relevant section 52P determination, which must be a date at least 4 months after the determination is published as referred to in section 52P(9).

                      Notes
                      • Section 53M: inserted, on , by section 4 of the Commerce Amendment Act 2008 (2008 No 70).
                      • Section 53M(7): amended, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).