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

 


Commission requested to review basis for monopolies' cost

Commerce Commission requested to urgently review basis for monopolies' cost of capital

The High Court has identified an error in how Transpower and other monopoly suppliers calculate their cost of capital which may be costing power consumers $150 million a year in excessive profits.

As a result the Employers and Manufacturers Association together with the Major Electricity Users Group (MEUG) and the Consumers Institute have written to the Commerce Commission requesting an urgent review of how the cost of capital for monopolies such as Transpower is calculated.

"We need the issue to be reviewed with urgency because in 2015 a regulation about to be triggered would allow power transmission costs to remain as they are until 2020," said Kim Campbell, EMA's chief executive.

"If that were to happen, New Zealand power users could end up paying about $1billion more than they should over the next few years.

"Smaller businesses in particular need to be confident that the power transmission charges they pay reflect the real costs without anything hidden.

"The Commerce Commission has the power to investigate the error identified by the High Court and to make sure it does not keep on being repeated.

"In its decision the High Court expressed the view that the Commerce Commission should review the 'Cost of Capital Input Methodology" but stopped short of requiring this of the Commission. Hence our letter to the Commission seeking the review.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Interest Rates: Wheeler Hikes OCR To 3% On Inflationary Pressures, Eyes Kiwi

Reserve Bank governor Graeme Wheeler lifted the official cash rate for the second time in as many months, saying non-tradable inflationary pressures were "becoming apparent" in an economy that’s picking up pace and he's watching the impact of a strong kiwi dollar on import prices. More>>

ALSO:

Scoop Business: Equity Crowd Funding Carries Risks, High Failure Rate

Equity crowd funding, which became legal in New Zealand this month, comes with a high risk of failure based on figures showing existing forays into social capital have a success rate of less than 50 percent, one new entrant says. More>>

ALSO:

Scoop Business: NZ Migration Rises To 11-Year High In March

The country gained a seasonally adjusted 3,800 net new migrants in March, the most since February 2003, said Statistics New Zealand. A net 400 people left for Australia in March, down from 600 in February, according to seasonally adjusted figures. More>>

ALSO:

Hugh Pavletich: New Zealand’s Bubble Economy Is Vulnerable

The recent Forbes e-edition article by Jesse Colombo assesses the New Zealand economy “ 12 Reasons Why New Zealand's Economic Bubble Will End In Disaster ”, seems to have created quite a stir, creating extensive media coverage in New Zealand. More>>

ALSO:

Thursday Market Close: Genesis Debut Sparks Energy Rally

New Zealand stock rose after shares in the partially privatised Genesis Energy soared as much as 18 percent in its debut listing on the NZX, buoying other listed energy companies in the process. Meridian Energy, MightyRiverPower, Contact Energy and TrustPower paced gains. More>>

ALSO:

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news