Commission turning up the heat on Transpower

Transpower executives have been counting down the days until tomorrow when the Commerce Commission lays out the reasons price control should be imposed on the national power grid operator.

The state-owned enterprise was told just before Christmas that commission competition regulators wanted to impose such control. The commission believes such a move will lead to long-term benefits for consumers.

Transpower is unhappy at the short amount of time given to make submissions on the decision.

The deadline for submissions closes on February 15, just 13 working days after the reasons are made public for the first time. Cross-submissions will be due by February 22.

The commission says it is aiming to make a final decision on whether to take control by March 17.

Transpower and all 28 local lines companies are monopolies, so the commission operates a regulatory regime designed to stop them extracting excessive profits and to maintain service quality.

The companies are allocated a percentage rate above or below the rate of inflation, which they are allowed to raise prices by. Transpower wanted to raise transmission charges 19 per cent from April 1, breaching its threshold as it had in previous years.

It believes it is caught unfairly between two conflicting pieces of legislation - the commission's "threshold" regime and rules covering transmission charges for the national grid.

After April's rise, Transpower wanted to lift charges about 13 per cent every year for the next four years.