Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Keeping the Vector Promise and pursuing damages


The Coalition: Business NZ Inc

Consumers’ Institute

Federated Farmers of NZ Inc

Major Electricity Users’ Group Inc

12 July 2006

Mr Mark Franklin

Chief Executive Officer

Vector Limited

Dear Mr Franklin

Keeping the Vector Promise and pursuing damage claim

The Consumer Coalition on Energy represents a wide range electricity consumers’ in New Zealand. The Coalition is frequently referred to as CC93 because it was formed in 1993. The fact that CC93 still exists shows how prolonged the reforms of the electricity sector have been. It also shows there are some common fundamental values and needs among each of our constituent groups.

CC93 is not a regular commentator on energy issues as each member tends to comment on particular areas of their interest and expertise. However, when an issue arises that is significant across all consumers, either directly or indirectly; then CC93 can express our concerns jointly.

The blackout in Auckland and other voltage related incidents throughout the North Island due to a failure at the Otahuhu substation on 12 June has been the subject of technical reports by Transpower. More technical reports and technical solutions to minimise the risk of similar repeat events are likely. This is useful and while consumers that were adversely affected because of the event will be relieved this work has commenced; there are unanswered questions about compensation, contractual liability and contractual incentives to minimise such risks in the future.

With respect to Vector, CC93 is concerned that the company has decided to retract the Vector Promise of paying consumers if restoration times for outages are excessive.

CC93 believe Vector should stand by the Vector Promise and in turn cover that liability to consumers by pursuing damages from Transpower. From the material made public to date there appears to be more than a remote chance of success of a damages claim against Transpower and or their contractors. If Vector decides not to stand by the Vector Promise and not to pursue a damages claim we believe Vector should explain to consumers why that decision is not in the best interest its customers.

Actual harm incurred by consumers is likely to be substantially greater than the compensation consumers would get if the Vector Promise is paid. CC93 suggest there may be also be a case for Vector assessing the actual harm to its customers and pursuing damages on that wider claim also. In aggregate end consumers do not have the technical expertise to mount a damages claim against Transpower but Vector does. Customers are looking to Vector as the counterparty to Transpower to pursue damages on behalf of customers that have been significantly harmed by events that appear to have been avoidable.

CC93 has also copied this letter to the Commerce Commission, Electricity Commission and Minister of Energy. Copies of those letters are attached for your information.

Yours sincerely
David Russell

Chief Executive

Consumers’ Institute

George Riddell

Manager Energy, Environment & Infrastructure

Business New Zealand

Catherine Petrey

Executive Director, Policy

Federated Farmers

Ralph Matthes

Executive Director

Major Electricity Users’ Group

cc Ms Paula Rebstock, Chair, Commerce Commission

Mr Roy Hemmingway, Chair, Electricity Commission

Hon David Parker, Minister of Energy


© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade: NZ Trade Deficit Widens To A Record In September

Oct. 27 (BusinessDesk) - New Zealand's monthly trade deficit widened to a record in September as meat exports dropped to their lowest level in more than three years. More>>


Animal Welfare: Cruel Practices Condemned By DairyNZ Chief

DairyNZ chief executive Tim Mackle says cruel and illegal practices are not in any way condoned or accepted by the industry as part of dairy farming.

Tim says the video released today by Farmwatch shows some footage of transport companies and their workers, as well as some unacceptable behaviour by farmers of dragging calves. More>>


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


International Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news