KEY POINTS:
Powerco, New Zealand's second biggest energy network company, has failed in a court bid to overthrow a Commerce Commission decision to regulate its gas distribution business.
The commission took direct control of Powerco and Vector's monopoly gas pipeline services in 2005, after deciding that gas charges were excessive and operators were abusing their monopoly positions.
Powerco challenged this in the Court of Appeal, but the court has rejected its claims.
"The court confirmed the commission's view that reducing monopoly profits through lower prices is an obvious and significant benefit to gas consumers," said Commerce Commission chairwoman Paula Rebstock.
"Gas consumers have been receiving such benefits since October 2005, when the commission required Powerco and Vector to lower their average gas pipeline prices by 9 per cent and 9.5 per cent, respectively."
The commission had taken into account factors such as the ability for gas pipeline businesses to make efficient investments, she said.
A Powerco spokesman said the company was reviewing the decision which it received yesterday, and will decide over the next fortnight if it will take any further action.
Powerco, owned by Australia's Babcock and Brown, accounts for 46 per cent of gas connections and has around 100,000 gas customers in the central and lower North Island regions. Babcock and Brown currently has a 50 per cent stake in the company on the market.
Vector has around 70,000 Auckland gas customers.
The final authorisation terms and conditions are expected to be in place by October, a commission spokeswoman said. Offers of undertaking from the two companies are also being considered ahead of the final authorisation.
Earlier, the High Court had rejected the company's bid for a judicial review of the decisions made by the Commerce Commission and the Minister of Energy.
The Court of Appeal awarded costs to the Commerce Commission and the Attorney General, acting on behalf of the Minister of Energy.
- NZPA
