Contact out of pocket by $2.2m

By BRIAN FALLOW and CHRIS DANIELS

The Court of Appeal has ruled against Contact Energy in a dispute with the Crown about the amount it pays for Maui gas.

The court upheld a judgment against Contact for $2.25 million, plus interest, by Justice Lowell Goddard in the High Court.

One component of the price paid for Maui gas first by ECNZ and then by Contact is a profit margin for the Crown that includes a formula to adjust it for inflation.

But the formula is expressed in terms of the producers price index (inputs) series, which Statistics New Zealand overhauled in 1996.

The case relates only to the calculation of the Crown margin from April 2001. It turns on arcane statistical issues relating to the transition from the old series to the new.

A Contact spokesman said the company paid about $2.25 million to the Crown last year, on the understanding that if the appeal was successful it would be refunded.

It was too early to say if further action would be taken.