Control of Powerco, Vector gas pipeline services
Issued 24 August 2005/no 016
Powerco and Vector gas pipeline services:
Commission issues Provisional Authorisation
The Commission has today issued a Provisional Authorisation to implement control over the gas pipeline services of Powerco and Vector from 25 August 2005.
The Provisional Authorisation requires Powerco to ensure that its average price for controlled services as at 1 October 2005 be at least 9% lower than the average price charged at 30 June 2005.
For Vector the average price as at 1 October 2005 must be at least 9.5% lower than the average price charged at 30 June 2005.
Commerce Commission Chair Paula Rebstock said the Provisional Authorisation struck an appropriate balance.
“The Provisional Authorisation takes into account the interests of all those affected,” Ms Rebstock said.
“The decision on price reductions has been made with due regard to issues identified in the Gas Control Inquiry Final Report, submissions made to the Ministry of Economic Development on that report, and subsequent submissions made to the Commission by Powerco and Vector."
Ms Rebstock said the Commission will be writing to the gas retailers contracted to Powerco and Vector, seeking information on how the price reductions will be passed through to consumers.
The release of the Provisional Authorisation follows the decision by the High Court today to reject applications from both Powerco and Vector for urgent interim orders directing the form of control to be implemented by the Commerce Commission.
In dismissing the applications, Justice Goddard said: “A grant of interim relief would have the effect of frustrating the regulatory process that now must follow the Order-in-Council, to the detriment of the direct and indirect consumers; the effect of delaying the Commission's process for implementing the decision of the Minister and Executive in Council; and the effect of deferring the benefits to acquirers of lower prices.”
Commission media releases can be viewed on its web site www.comcom.govt.nz