Vector Acknowledges Default Price Path Final Decision

creating a new energy future


VECTOR ACKNOWLEDGES DEFAULT PRICE PATH FINAL
DECISION

The Commerce Commission has today released its final decision on the Default Price Quality
Path (DPP3), applicable to electricity distribution networks for the period 1 April 2020 to 31
March 2025.

The decision has set Vector’s electricity network a Maximum Allowable Revenue (MAR) of
$389m for the regulatory year starting 1 April 2020.

This is a revenue reduction of -$25m (-6.0%) relative to the year to 31 March 2020. The
revenue impact would have been greater had Vector been earning its full allowable revenue
in RY20 which is impacted by the Commerce Commission’s forecasting errors.

In March this year Vector published its 2019 Asset Management Plan (AMP) that outlined our
view on the operating and capital expenditure necessary to meet Auckland growth and the
reliability standards for the network.

However, in the calculating the MAR, the Commission has used a capital expenditure
allowance of $1,041m for the five-year DPP period, which is $189m lower than we included
in the AMP and an operating expenditure allowance of $689m, which is $46m lower than our
AMP.


As previously advised the Vector Board will review its dividend policy and approach to capital
projects. We will advise the market of any change to dividend policy when a decision is
made.

ENDS

Investor contact
Jason Hollingworth, Chief Financial Officer, Vector
Jason.hollingworth@vector.co.nz, 021 312 928

Media contact
Elissa Downey, Senior Manager Corporate Communications, Vector
Elissa.downey@vector.co.nz, 021 866 146

About Vector
Vector is New Zealand’s leading network infrastructure company which runs a portfolio of
businesses delivering energy and communication services to more than one million homes
and commercial customers across the country. Vector is leading the country in creating a
new energy future for customers and continues to grow and invest in the growth of Auckland,
and in a wide range of activities and locations. 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

market release
27 November 2019

creating a new energy future