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

 


Z Energy in stoush over cost of ETS

Z Energy in stoush over cost of ETS

By Pattrick Smellie

Feb. 5 (BusinessDesk) - South Island mining OceanaGold Corp is refusing to pay for diesel it bought from Z Energy, which charged for the fuel based on a higher cost of the emissions trading scheme than the New Zealand-owned company actually pays.

Z's lawyers agreed in court the company had charged more than it paid for carbon costs under the ETS, but that there was "nothing wrong with this," according to a High Court judgment from Associate Judge David Gendall on the dispute.

Z had sought but was refused a summary judgment requiring OceanaGold to cough up close to $1.2 million more than the gold miner believes it should have to pay under its contract for supply.

The government's ETS, intended to price carbon and help control carbon emissions, sets a top price per tonne of carbon of $25, and makes Z liable to pay carbon costs on one in every two tonnes of carbon emitted.

However, carbon prices over the period of the contract in dispute were more in the region of $14 a tonne and OceanaGold claims Z is attempting to impose an additional element of "windfall" profit margin.

OceanaGold argues its contract specified a fixed margin, so the additional charge is unlawful under the contract.

The agreement terminated in May 2012, before global carbon prices collapsed further.

Justice Gendall said while Z regarded the issue as "a simple debt recovery exercise", OceanaGold argued "the supply agreement required pricing of the fuel to be 'detailed and transparent' and that although the plaintiff could recoup the actual underlying costs of supply of fuel… as those costs fluctuated over the life of the contract, (Z's) margin on the supply was visible and fixed."

The judge said OceanaGold contended Z "could not … by charging more for the ETS than it paid, obtain additional profit margin on its supply of fuel to (OceanaGold)."

Justice Gendall ruled the issue raised sufficient issues to mean a summary judgment was not warranted. The issue will go to a full hearing at a date to be determined.

Z Energy, formerly the domestic wholesale, retail and distribution arm of Shell New Zealand, is owned 50/50 by infrastructure group Infratil and the New Zealand Superannuation Fund.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Business Research And Development Up 29 Percent

Computer services and machinery manufacturing firms led the way in an almost 30 percent lift in business spending on research and development (R&D) in 2016, Stats NZ said today. Businesses spent $1.6 billion on R&D in 2016, up $356 million (29 percent) from 2014. More>>

ALSO:

China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news