Sector-specific input price escalation forecasts for Electricity Distribution Businesses (EDBs). A report to the Commerce Commission.

The Commerce Commission is in the process of the 2025 reset of the electricity default price-quality path in a time of uncertainty and high-inflation. The Commission tasked Principal Economics to provide a solution for dealing with supply chain and economic uncertainty for regulating $25 billion of assets of the electricity distribution businesses over the DPP4 (2025-2030) period. For that work, we used a combination of methods, including stakeholder engagement, CGE analysis (for the impact of climate policy on cost categories), econometric analysis and forecasting. The work included significant stakeholder engagement and inputs from the electricity distribution businesses from their submissions (to the Commission). The outputs are adopted in the Commission’s latest decision and are available here.