KEY POINTS:
The Electricity Networks Association and Air New Zealand have welcomed Government proposals to overhaul the law governing the regulation of monopolies.
The proposals aim to strike a balance between empowering consumers and ensuring monopoly firms like electricity distributors and airports have confidence to invest.
Commerce Minister Lianne Dalziel
and Energy Minister David Parker yesterday released a discussion document arising from a review of the Commerce Act launched last May.
It envisages giving the Commerce Commission more light-handed alternatives in the spectrum that ranges from doing nothing at one end and price control at the other.
They include a negotiate/arbitrate regime under which a monopoly supplier would be encouraged to negotiate an agreement with its customers - or with the regulator as a back-stop - to make binding decisions on supply terms and conditions should the parties fail to reach a commercial agreement.
"It's an interesting new approach which takes away the regulator's role as a proxy for consumers and passes more power across to consumers themselves," said ENA chief executive Alan Jenkins.
"If you can go to the consumer and say 'this is what we are proposing to invest and why' you won't get the sense of alienation consumers tend to get right now."
He also welcomed proposals to introduce a purpose statement into the legislation which would make it explicit that regulation should ensure firms have incentives to innovate and to invest in infrastructure.
"It puts more focus on investment and certainty for investors and not just on giving the consumer the lowest price."
Dalziel said the discussion document recognised that there were not enough tools in the tool kit to get that balance right.
Air New Zealand also welcomed the review.
Chief financial officer Rob McDonald said it would give the airline an opportunity to address its frustration at the lack of progress in changing the airport charging regime.
"At the moment airports are obliged to consult with airlines on charges for using airports, but at the end of the consultation period, they can set charges as they see fit."
McDonald notes that the discussion document sees the negotiate/arbitrate model as especially suitable where there are monopoly suppliers with relatively few large customers.
"It potentially ensures travellers don't end up paying for unnecessary airport developments."
The discussion document also goes some way towards meeting calls for the introduction of a merits review, which would allow the Commerce Commission's regulatory decisions to be appealed against on substantive grounds and not just matters of law and process.
But it would be limited. New evidence could only be presented to a court if it was fresh and material.
Submissions are open for three months. Dalziel said she hoped there would be an outcome to put to the Cabinet by September or October.
