Power lines company protests price controls

Power lines company Unison is taking legal action to stop the Commerce Commission imposing price controls on the Hawke's Bay-based company.

The commission claims consumers in Rotorua and Taupo are being overcharged and has moved to assume control of Unison. It will be the first time that a regulatory body has assumed control of an electricity network.

The commission claims Unison reached legal threshold for electricity distribution by raising prices in April 2002 and March 2004.

If controls were imposed, consumers will be better off per year by $193 in Rotorua, $321 in Taupo and $77 in the Hawke's Bay, the commission said.

Unison, New Zealand's fourth largest power lines company, is seeking an injunction in the High Court in Wellington to stop the commission assuming control.

Unison lawyer David Goddard, QC, told the court today legal threshold enabled the commission to limit all company profits, not just excessive profits, which was not the intention of the legislation.

Parliament did not intent the commission to have unstructured and highly discretionary power, he said.

NZ's unique targeting was designed to enable the commission to rein in "out of control" companies, Mr Goddard said.

In August the commission imposed price control on the gas pipeline businesses of energy companies Vector and Powerco.

The hearing is set down for three days.

- NZPA