40ABPrinciples to be taken into account in making determinations under section 40AA

40AB Principles to be taken into account in making determinations under section 40AA

[Section 40AB Inserted by No. 5 of 2013, s. 12, Applied:01 Jun 2013]

(1)  In determining for the purposes of section 40AA the maximum prices that may be charged by a regulated offer retailer under standard retail contracts in respect of small customers, or a method of determining the maximum prices that may be charged by a regulated offer retailer under standard retail contracts in respect of small customers, the Regulator is to –

(a) estimate the operational costs of the retailer in providing standard retail services; and

(b) take into account the principle that the maximum prices that may be imposed by the retailer under standard retail contracts in respect of small customers are to be such as will enable the retailer, after the operational costs are taken into account, to make a reasonable return on its investment in respect of the provision of standard retail services, taking into account the risk of making that investment; and

(c) take into account the principle that small customers should be protected from the adverse effects of the exercise of substantial market power by –

(i) the Hydro-Electric Corporation;or

(ii) the regulated offer retailer in relation to prices, pricing policies and standards of service in respect of the provision of standard retail services by the regulated offer retailer; and

(d) take into account the principle that, for the purpose of benefiting the public interest, there is a need for efficiency in the provision of standard retail services.

(2)  For the purposes of this section, the operational costs of the regulated offer retailer in providing standard retail services are –

(a) the wholesale electricity costs of the regulated offer retailer in relation to the provision of those services; and

(b) the transmission and distribution costs of the regulated offer retailer in relation to the provision of those services; and

(c) the cost to serve of the regulated offer retailer in relation to the provision of those services; and