20Directions about prices

20 Directions about prices (1) At the conclusion of an investigation on an industry reference authorising the commission to make a price direction in a regulated industry, the commission must decide on the level of prices for services in relation to the period specified in the reference, or decided by the commission, and give a direction accordingly to each person providing regulated services to whom the price direction applies. (2) In making a decision under subsection (1), the commission must have regard to— (a) the protection of consumers from abuses of monopoly power in terms of prices, pricing policies (including policies relating to the level or structure of prices for services) and standard of regulated services; and (b) standards of quality, reliability and safety of the regulated services; and (c) the need for greater efficiency in the provision of regulated services to reduce costs to consumers and taxpayers; and (d) an appropriate rate of return on any investment in the regulated industry; and (e) the cost of providing the regulated services; and

(f) the principles of ecologically sustainable development mentioned in subsection (5); (g) the social impacts of the decision; and (h) considerations of demand management and least cost planning; and (i) the borrowing, capital and cash flow requirements of people providing regulated services and the need to renew or increase relevant assets in the regulated industry; and (j) the effect on general price inflation over the medium term; and (k) any arrangements that a person providing regulated services has entered into for the exercise of its functions by some other person. (3) Also, in making a decision under subsection (1), the commission must allow a declared fee to be passed on in full to consumers of the (4) In a price direction, the commission must indicate to what extent it has had regard to the matters referred to in subsection (2). (5) For subsection (2) (f), ecologically sustainable development requires the effective integration of economic and environmental considerations in decision-making processes through the implementation of the following principles: (a) the precautionary principle—that if there is a threat of serious or irreversible environmental damage, a lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation; (b) the inter-generational equity principle—that the present generation should ensure that the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations;

(c) conservation of biological diversity and ecological integrity; (d) improved valuation and pricing of environmental resources.