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

 


Commission to begin further work on WACC input methodologies

Commission to begin further work on WACC input methodologies

Following recent stakeholder consultation, the Commerce Commission has decided to issue a notice of intention to do further work on the input methodologies relating to the percentile estimate of the weighted average cost of capital (WACC). The WACC is used in the price-quality path and information disclosure regimes that apply to businesses regulated under Part 4 of the Commerce Act 1986.

In its recent merits review judgment, the High Court suggested that using the 75th percentile may be at odds with the Part 4 objective to limit the ability of regulated suppliers to earn excessive profits. In light of the High Court’s comments, and subsequent requests from consumers, the Commission sought submissions on whether it should consider reviewing or amending the input methodologies for the cost of capital at this time.

“Having considered submitters’ views, we have decided to begin further work on whether using the 75th percentile is appropriate,” said Commerce Commission Deputy Chair Sue Begg. “We believe that this process is necessary to address the return on investment uncertainty that will exist until this issue is resolved. Our aim is to complete this work prior to November 2014, when electricity lines prices will be set for the next five years,” said Ms Begg.

“The Commission has an open mind about the outcome of this work and we are keen to hear from interested parties with further evidence or expert reports. We are not pre-judging the direction of any potential change or whether any change is even necessary,” Ms Begg said.

“While we aim to complete the work by November, in the event that all the issues involved cannot be satisfactorily resolved before then, we will consider bringing forward the overall review of the WACC input methodologies,” said Ms Begg.

The process update paper can be viewed at http://www.comcom.govt.nz/regulated-industries/input-methodologies-2/further-work-on-wacc/

The Commission welcomes further submissions until 5pm on 1 May 2014, these should be emailed toregulation.branch@comcom.govt.nz

Ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Scoop Business: ComCom Charges Hawkins’ Finance Companies Over Debt Recovery

The Commerce Commission has filed criminal proceedings against two finance companies run by former 1980s high-flyer Allan Hawkins over their debt recovery practices. More>>

ALSO:

Science Media Centre: The Big Science Stories Of 2014

It was a dramatic year for science, one that witnessed a severe outbreak of Ebola in West Africa and an historic mission to land a space probe on a comet. On the home front... headlines with animal testing for 'legal highs', 1080 use to tackle increased pest numbers and court action over genetically modified organisms among the most-covered stories. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news