KEY POINTS:
The Auckland Electricity Consumer Trust [AECT] owns 75.1 per cent of Vector, largely for the benefit of 290,000 power users in the old Auckland Electric Power Board's catchment.
Documents released to the Herald last month showed the councils have been trying to wind up the "dysfunctional" trust and get their hands on its $1.6 billion of Vector assets.
The councils, as the capital beneficiaries of the trust, are not due to receive the assets until 2073.
In the meantime, 290,000 consumers from the old Auckland Electric Power Board receive an annual dividend from the trust as the income beneficiaries.
The Auckland Energy Consumer Trust sold a quarter of Vector in a $593 million IPO in 2005, which was used to fund the takeover of gas distribution concern NGC Holdings.
The float was oversubscribed, attracting a groundswell of interest from institutional and "mum and dad" investors.
Shares in Vector debuted on the stock exchange at $3 -- a 26 per cent premium to the issue price. Shares closed yesterday at $2.77.
Vector's energy infrastructure networks include:
* Electricity distribution.
* Gas transmission and distribution.
* Electricity and gas metering installations and data management services (including in Australia).
* Natural gas and LPG, including 60.25 per cent ownership of bulk LPG distributor Liquigas.
In addition to energy assets, Vector owns:
* Fibre-optic networks in Auckland and Wellington, delivering high speed broadband services.
* Utilitech, a utilities training business accredited by the New Zealand Qualifications Authority.
* A 50 per cent share in Treescape, the largest arboriculture and vegetation management company in New Zealand.
IN THE NEWS:
January 2007
Documents released to the Herald under the Official Information Act show Auckland, Manukau and Papakura councils, led by Auckland, are set to lobby the Government for a law change to unwind the Auckland Energy Consumer Trust, which owns 75.1 per cent of Vector.
They would divvy the booty among themselves and 290,000 power consumers in their area.
Consumers could each get shares or cash worth $3000-$4000 and the councils would receive the rest of the shareholding, worth between $450 million and $750 million, depending on the payout to consumers.
December 2006
Three of Vector's independent directors Tony Gibbs, Greg Muir and John Goulter quit the board, publicly declaring their lack of confidence in chairman Michael Stiassny.
They complained the relationship between him and the AECT was too close.
November 2006
Winter chills and a growing customer base boosted energy distributor Vector's first-quarter earnings.
After-tax profits rose from $36.4 million to $41.4 million, while sales rose from $339.3 million to $391.3 million as people used more electricity and gas to keep warm.
October 2006
AECT board election saw three sitting members on the Citizens & Ratepayers Now ticket - Warren Kyd, Karen Sherry and Mike Buczkowski - retain their seat and joined by fellow C&R James Carmichael.
Shale Chambers of the centre-left Powerlynk ticket was also re-elected to the trust.
About 21 per cent of 290,000 eligible voters in Auckland City, Manukau and part of Papakura voted - a similar figure to previous elections.
Vector promises the Commerce Commission it will rebalance power prices from April 1 in a move that is likely to result in higher power prices for Aucklanders and others.
In August, the commission declared its intention to take control of Vector's prices and accused it of abusing its monopoly position.
The commission had threatened to regulate the country's biggest lines company because it said it was subsidising some customers.
The commmission said the voluntary move was part of an administrative settlement offer presented to the commission last month and was an alternative to regulatory control.
The commission's threat to regulate caused Vector to suspend $630 million of planned investment, claiming it was no longer certain it would make an adequate return.
Vector was accused of overcharging many industrial and commercial customers and undercharging other customers, particularly Auckland residential consumers who are the beneficiaries of the Auckland Energy Consumer Trust, Vector's principal shareholder.
If rebalancing does occur, it is likely to mean that Auckland residential consumers will pay more but North Shore customers could pay less. Businesses, too, could have lower bills.
- NZ HERALD STAFF
