Eight lines firms get official nod

By DANIEL RIORDAN

The Commerce Commission has given the big tick to the asset valuations of eight electricity lines companies, but another 21, plus transmission company Transpower, await approval.

The watchdog began its audit last September, checking if the valuations - which influence the prices charged to electricity retailers, and ultimately consumers - had been carried out correctly using the standard industry methodology of optimised deprival valuation (ODV) basis.

The eight approved so far are: Dunedin Electricity, Electricity Ashburton, MainPower NZ, Northpower, ScanPower, UnitedNetworks, Waipa Networks and WEL Energy Group.

The commission is not saying if there are problems with the asset valuations of the 22 companies awaiting their audit, but several industry sources the Business Herald spoke to say that is likely to be the case.

All lines companies must publicly disclose by March 31 an asset valuation report that has been approved by the commission.

In a separate but related exercise, the commission is also examining whether ODV is the most appropriate method to value assets.

UnitedNetworks chief executive Dan Warnock said yesterday that his company, the biggest in the industry with about 30 per cent of all customers, had been told by the commission that it had been rated top of the eight approved so far.