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

 


WACC draft decision constrains Vector investment

WACC draft decision constrains Vector investment


The Commerce Commission has released its draft decision on the proposed amendment to the Weighted Average Cost of Capital (WACC) percentile, recommending a decrease from the current 75th percentile to the 67th percentile.

This change would reduce the allowable return on our assets when all previous investment decisions have been based on the returns we would expect from a 75th percentile. A WACC setting at the 75th percentile is a position long-held by the Commission.

The draft decision reduces the investment returns from the network and, when added to other approaches by the Commission, places further pressure on our ability to invest in network sustainability and growth.

Current technology advances greatly increase risk and uncertainty in network investments, which should be increasing the allowable return on assets or WACC percentile, not reducing it.

The correct balance between lower prices for consumers and a suitable return on investment in the network is critical to maintaining the long-term, security of supply that is essential for Auckland’s growth and success.

The Commission has exercised considerable discretion in proposing the 67th percentile in light of two of its independent expert advisors recommending the status quo or higher percentiles.

Vector continues to engage with the Commerce Commission on the draft WACC percentile decision.

The draft decision can be found on the Commerce Commission website.


ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Auckland Port Study: Port To Ship Out – No Departure Date

Interest groups in Auckland and its waterfront chose a group of representatives to determine the future of the port. Their consensus is that the Port is going to have to move but not before a credible location is confirmed... More>>

ALSO:

Tax: GST Threshold For Online Purchases Won't Lower Before 2018

The government wants to lower the threshold on online purchases which qualify for GST from mid-2018, but says more work is needed and there will be no change without public consultation. More>>

ALSO:

North Canterbury: Government Extends Drought Classification

The government has extended a drought classification for the eastern South Island until the end of the year, meaning the area will have officially been in drought for almost two years, the longest period for such a category. More>>

ALSO:

Negotiations Fail: Christchurch Convention Centre Build To Proceed Without PCNZ

After protracted negotiations, the government has ditched the construction consortium it picked to build Christchurch's replacement convention centre, which it now anticipates delivering at least two years behind the original schedule. More>>

ALSO:

Other Centres' Convention Centres:

Ruataniwha: Greenpeace Launches Legal Challenge Against $1b Dam Plan

Greenpeace NZ is launching a legal challenge against a controversial plan to build a dam that’s set to cost close to $1 billion and will pollute a region’s rivers. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news