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- Release Date: 22/05/14 11:00
- Summary: GENERAL: CNU: Final Pricing Principle timetabling change disappointing
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CNU
22/05/2014 09:00
GENERAL
REL: 0900 HRS Chorus Limited (NS)
GENERAL: CNU: Final Pricing Principle timetabling change disappointing
STOCK EXCHANGE ANNOUNCEMENT
22 May 2014
Final Pricing Principle timetabling change disappointing
The Commerce Commission has today released revised timetabling for pending
final pricing principle (FPP) reviews.
The Commission no longer aims to complete the FPP reviews by 30 November
2014, and instead is now aiming for a draft decision on both prices by 1
December 2014, and a final decision by 1 April 2015.
This means that the UBA price determined by benchmarking two European
countries will now take effect before the Commission completes its price
reviews using cost modelling.
"While we acknowledge the FPP processes are challenging, we are very
disappointed that the timetabling aims announced by the Commission in
February have now been changed," said Vanessa Oakley, Chorus General Counsel.
"We agreed with the Commission's statements in March that prompt completion
of those processes provided the best certainty for everyone."
"We also believed that appropriate levels of consultation could be undertaken
within the original timeframe.
"The implementation difficulties with benchmarking are well known. The High
Court has described it as a "quick and cheap" methodology. The Act says
benchmarked prices can be reviewed by TSLRIC cost modelling."
Applications for the FPP processes were made in February 2013 and December
2013 for UCLL and UBA respectively.
The delays mean that the UCLL and UBA benchmarked prices will both be in the
market from 1 December 2014 because the cost modelling hasn't been completed.
"We note that the Commission does not have the option to take more time to
complete cost modelling processes but also hold the benchmarking prices from
coming into effect until it completes them. However it can backdate, and has
in a recent decision."
"Uncertainty increases for everyone today. Unpredictability on process and
outcomes remains a challenge for Chorus and our Retail Service Provider (RSP)
customers," she said.
ENDS
For further information:
Ian Bonnar
Corporate Affairs Manager
Mobile: +64 (27) 215 7564
Email: [email protected]
Brett Jackson
Investor Relations Manager
Mobile: +64 (27) 488 7808
Email: [email protected]
End CA:00250733 For:CNU Type:GENERAL Time:2014-05-22 09:00:17
