Settlement following 2015/6 quality standard breaches

VECTOR AND COMMERCE COMMISSION
TO SETTLE FOLLOWING 2015 AND 2016
QUALITY STANDARD BREACHES


Following breaches of an electricity network quality standard in 2015 and 2016, Vector has announced
today it is agreeing to a settlement with the Commerce Commission. A penalty hearing will take place
in due course at which the details of the settlement will be heard.

Like other lines companies, Vector’s prices and service quality are regulated by the Commission using
a price-quality path, which means Vector is required to meet certain network quality standards, relative
to its own historical performance, and is limited in the amount of revenue it can earn.

One of the Commerce Commission’s quality standards is the average duration in minutes of network
interruptions. The Commission found that Vector breached this quality standard by 51 minutes in the
2015 regulatory year and 13 minutes in the 2016 regulatory year.

Vector has noted to the Commission the circumstances that it believes contributed to its breach of the
service quality standards in 2015 and 2016. These conditions included increased storm frequency and
other weather-related impacts, increases in Auckland’s traffic congestion, which have slowed travel
times and can prevent maintenance crews from reaching network faults in a timely fashion and
Vector’s decision to prioritise safety of its people by introducing a best-practice policy to avoid working
on live lives wherever possible, which can lead to extended outages.

Vector’s Chief Network Officer Andre Botha said, “We understand the disruption these breaches have
caused for some Aucklanders and we have been working hard on a range of measures to reduce the
impact. However, we also believe the existing regime for quality control no longer reflects the reality of
the changed operating environment, particularly in Auckland, and meeting these legacy quality
standards will remain a significant challenge for ourselves and others in the industry.

“It is pleasing that we have been able to table these concerns with the Commerce Commission directly
and we will continue to work constructively with them to determine new quality standards that will take
effect on 1 April 2020 following the next regulatory reset process.”

ENDS


MARKET RELEASE
10 October 2018

MEDIA RELEASE
10 October 2018

About Vector

Vector is New Zealand’s leading multi-network infrastructure company which delivers energy and communication
services to more than one million homes and businesses across the country.

Vector is listed on the New Zealand Stock Exchange with ticker symbol VCT. Our majority shareholder, with
voting rights of 75.1%, is Entrust.

For further information, visit www.vector.co.nz



Contact
MEDIA QUERIES:
Elissa Downey
External Relations
Mobile 021 866 146
ANALYST QUERIES:
Dan Molloy
Chief Financial Officer
64-9-213-5179
Mobile 021-441-311