KEY POINTS:
The Commerce Commission is planning to cut the price of gas supplied by energy companies Vector and Powerco.
The commission is proposing to take over the authorisation of the pricing by the two companies.
This could see Powerco's gas price fall by 42 per cent and Vector's pricing decrease by 15 per cent.
The commission is now seeking submissions on its proposal.
"The commission takes the approach that consumers should expect prices and quality from monopoly businesses commensurate with what prices and quality would result if the market were competitive," said commission chairwoman Paula Rebstock.
"Our preliminary view is that, despite the impact of the average price reductions ... Powerco and Vector are still making significant excess returns in respect of the supply of the controlled services. These excess returns should be limited further."
The commission's announcement is another shot in a long-running battle with Vector.
Last year Vector was in trouble with the commission over its charging regime for Aucklanders and others.
In August, the commission threatened to take control of Vector's prices and accused it of abusing its monopoly position.
Today Vector shares fell 6 per cent or 14c to $2.33.
Last year, the company offered to readjust its prices to avoid controls after the watchdog said it would take over Vector's pricing because the company had abused its monopoly position and was not making enough progress in redressing the overcharging of some customers.
Vector said today it had only just received the commission's draft determination and was considering its response.
- NZPA
