Gas companies lose latest tussle over price control

A bid to make the Commerce Commission reveal how it decided price controls of gas businesses Vector and Powerco has failed in the High Court at Wellington.

The gas companies sought to see internal documents for the preparation of the commission's report in 2004 resulting from its natural gas control inquiry, requested by the Government.

The commission had opposed the application, saying the material did not relate to the report and it was subject to public interest immunity.

In other words, the information is privileged.

The documents included emails, memoranda, minutes of meetings, notes, drafts of documents and draft correspondence.

However, this was an interlocutory application and the gas companies and the commission will face off again in court later in the year.

The commission took direct control of the businesses late last year, following a report on gas control, sparked by complaints that gas charges were excessive and operators were abusing their monopoly positions.

In its first use of new price control powers, the commission ordered Vector to drop its average prices -- based on June 30 levels -- from October 1 by 9.5 per cent and Powerco to cut its prices by 9 per cent.

Vector has around 70,000 Auckland gas customers, while Powerco has around 104,000 nationwide.

In 2004 the commission said abuse of market position meant Vector would reap monopoly profits of $76.9 million from its gas pipes between 1997 and 2008, and Powerco would gain just over $50 million.

Both companies are unhappy with the regulation, saying use of gas in homes and businesses was not compulsory, and that gas competes with other fuels, notably electricity.

Legal challenges by them against the regulatory moves failed in the High Court.

In judgment for the latest tussle for power, Justice Alan MacKenzie said he was not satisfied that Powerco had met the onus on it to satisfy the court there were grounds for believing that the internal documents were relevant and of such signifiance that revealing them was necessary.

The adequacy of the commission's reasoning was not an issue to be resolved on this interlocutory application, he said.

- NZPA