Vector responds to Commerce Commission initial decision

Vector responds to Commerce Commission initial decision on request to reopen the default price-quality path (DPP)

Vector has today welcomed the Commerce Commission’s statements that “it is unlikely that enforcement action would be warranted” where a quality standards breach was caused solely and legitimately by safety policies to de-energise live lines when working on networks.

While Vector welcomes this indication, it does not agree with the Commission’s view that the significant reforms of the Health and Safety (H&S) legislation in 2015 did not require enough change to workplace safety rules to warrant the re-examination of the Commission’s current quality settings for companies such as Vector.

Vector Group Chief Executive Simon Mackenzie said, “We believe we have done the right thing following the introduction of the new health & safety (H&S) laws by prioritising the safety of our people and the public above all other considerations.

“At the time of the introduction of the new H&S legislation in 2015, we used it as a catalyst to take an even harder look at our own workplace systems and processes, and we asked ourselves if we were doing absolutely everything we could to protect our people. We reviewed international best-practice, and, ultimately, made the tough call to implement new safety policies. This was not a decision we took lightly, but in the end, we felt we could not compromise safety for the sake of some people potentially having a few minutes less without power each year.”

The first of these changes requires that live power lines be de-energised wherever possible before Vector can start working on the network. The second sees live lines remotely de-energised as soon as Vector is notified of a possible safety issue, such as downed or damaged lines. WorkSafe New Zealand and the Electrical Engineers Association have supported Vector’s adoption of these policies.

Mr Mackenzie, said, “We have been working hard to mitigate the impact that the adoption of these policies has had on some customers, in terms of longer outages. This change to operational policy has also meant that balancing compliance with both new H&S legislation and the current regulated DPP quality standards has become very challenging. We have regularly updated and constructively engaged with both the Commerce Commission and WorkSafe on how we might be able to balance these competing tensions.

“Under the current regulatory rules that govern them, companies can seek what is called a ‘reopener’ of the DPP rules, on the basis of a change in or a new legislative or regulatory requirement. Based on the significant changes to H&S legislation and the changes to our workplace safety policies, we had requested a reopener of the DPP. Unfortunately, the Commission has declined this request.”

Vector will submit on this initial decision and will continue to work constructively with the Commission to ensure regulatory settings for 2020 onwards appropriately reflect the significant changes to the operating and legislative environment, recognise the need to prioritise safety above all, and do not discourage others in the industry from adopting similar safety policies.

“Electricity is an inherently dangerous product and we have a ‘safety always’ approach to everything we do at Vector”, said Mr Mackenzie, “so we are pleased the Commission have signalled in their decision that they will not seek to penalise us for our approach to live lines work in the lead up to the regulation framework reset in 2020.

“We also welcome the Commission’s invitation for public submissions on this initial decision, and we encourage industry participants and stakeholders in both the electricity and health & safety sectors to submit. When the safety of people is at stake, it’s critical that all the relevant parties work together to get the balance right.”

ENDS

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