Gas price control call queried

Energy companies Vector and NGC Holdings yesterday said they were checking the details of a Commerce Commission call for price controls on natural gas pipelines.

On Friday, the commission said Vector, NGC, Powerco and Maui Development should be subject to pipeline price controls.

Chairwoman Paula Rebstock said these companies faced limited competition in the gas pipeline services they provided.

"There are likely to be net benefits ... from the introduction of control," she said.

Vector chief executive Mark Franklin said he was surprised by the commission's finding.

The company was still "digesting the full details of the report", and intended to prove there was no need for regulatory controls on its gas pipeline business.

NGC chief executive Phil James said his company was "carefully analysing" the draft finding before commenting.

"The commission's draft report raises broader issues regarding foreign investment in New Zealand," he said.

Foreign capital was needed in the domestic energy sector to fund upstream exploration and production.

It was also needed for downstream infrastructure development.

Both James and Franklin noted that the commission's finding was only at its draft stage.

There would be opportunities to make submissions, including at a conference hearing in July.

NGC and Vector were willing to work with the commission, which was expected to issue a final report for the Government by November.

The commission has been assessing the gas distribution industry since April last year.

- NZPA