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

 

Post-Post: Brian Roche To Step Down As NZ Post CEO

Brian Roche will step down as chief executive of New Zealand Post in April 2017, having led the state-owned postal service's drive to adjust to shrinking mail volumes with a combination of cost cuts, asset sales, modernisation and expansion of new businesses. More>>

ALSO:

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news