What if we’d had price control in the good old days ??
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What if we’d had price control in the good old days ?? A light-hearted look at the NZ power lines industry in the early years of the 20 th century
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What if we’d had price control in the good old days ??. A light-hearted look at the NZ power lines industry in the early years of the 20 th century. South Canterbury Electric Power Board, about 1927. C’mon Cyril … we’ve got to out-perform the economy-wide efficiency gain by 2.3%. - PowerPoint PPT Presentation
Transcript of What if we’d had price control in the good old days ??
What if we’d had price controlin the good old days ??
A light-hearted look at the NZ power lines industryin the early years of the 20th century
South Canterbury Electric Power Board, about 1927
C’mon Cyril … we’ve got to out-perform the economy-wide
efficiency gain by 2.3%
110kV line construction near Levin, about 1924
Hey George, what d’ya reckon the efficiency claw-back on this would
be ?
Addington transformer workshop, 1930’s
Remember to roll this into the RAB at standard cost, Harry
Hutt Valley Electric Power Board’s first pole, Petone, 1924
Ya know, indexed historical cost could be a suitable replacement
for RAB, Fred.
Waitemata Electric Power Board erecting pole, possibly 1920’s
Well Tom, I’m really not convinced that Government Bonds are a
good proxy for the risk-free rate.
Bay Of Plenty Electric Power Board’s pole factory, 1927
Now remember, guys - your efficiency gains will be shared with customers at the next price re-set.
Wanganui Rangitikei Electric Power Board line gang near the Woollen Mill at Aramoho, 1925
So tell me again, Percy, why does the most efficient capital structure have
60% debt ?
Waitaki Electric Power Board, 1925
Hey guys, I’m a bit worried that we might have over-run the efficient
bench-mark cost for this job.
Laying cables in Auckland, 1908
Hey, Bill, I’m sure the price increase of bitumen is way above
CPI
Southland Electric Power Board erecting poles, 1920’s
C’mon Albert, I’ll bet ya £2 that a hypothetically efficient new entrant wouldn’t do this.
Franklin Electric Power Board first pole, 1925
Des, are you sure you considered the efficient non-network
alternative ?
North Auckland Electric Power Board trucks at the Mangawhai pub, 1946
Guess we’d better hold off those
efficiency gains until after the next re-set
Wellington Municipal Electricity Department erecting a pole, 1935
Hopefully this won’t get optimised out of the RAB
Ashburton Electric Power Board erecting a pole, 1935
Well, Eric, my view is that we really do need to allow for non-
diversifiable risk when estimating the WACC.
Marlborough Electric Power Board erecting its first concrete pole, 1920’s
I reckon we could really do with a valuation methodology that safe-harbors marginal assets, George
Marlborough Electric Power Board erecting its first concrete pole, 1920’s
For insights on how price regulation works today, contact Phil Caffyn…
Phone (07) 854-6541 Email [email protected] Web www.utilityconsultants.co.nz
