Unison bites back at competition watchdog claims

Hawke's Bay-based power lines company Unison has hit back at the Commerce Commission over accusations it is overcharging consumers in Taupo and Rotorua.

Unison chairman Brian Martin said its prices were set to allow for the replacement of ageing infrastructure.

"By any normal commercial measure our earnings are reasonable and not excessive."

The commission last week published its intent to declare control of Unison, in a move that means that -- after a final submission process -- it will impose price controls on the company.

It says consumers in Rotorua and Taupo could be better off by $193 and $321 a year, respectively, if it assumes control.

Hawke's Bay consumers, who are beneficiaries of the trust which owns Unison, would be better off by about $77.

Last month, the commission used similar powers to impose price controls on the gas-pipeline business of energy network companies Vector and Powerco.

This will be the first time it has assumed control of an electricity network.

The commission claims Unison breached the legal thresholds for distribution, with price rises in April 2002 and March 2004.

Mr Martin today denied those claims.

"Unison has not made excessive distributions to its owners but rather reinvested in maintaining and improving its networks," he said.

Unison chief executive Ken Sutherland said Unison aimed to provide similar service levels across all of its networks and has "invested significantly" in improving service quality in Taupo and Rotorua.

The Commerce Commission intervention would "dramatically reduce" Unison's capacity to continue with its infrastructure work and "put at risk the service levels of all its networks".

"It is important, at a time when substantial investment is required in New Zealand's infrastructure, that regulatory intervention does not act as a disincentive to such investment," Mr Martin said.

Unison is 100 per cent owned by the Hawke's Bay Consumers Trust which acts on behalf of consumers connected to Unison's network in Hawke's Bay.

By publishing its intent to take control, the Commerce Commission effectively gives Unison one last chance to prove its case before price controls are imposed.

The process will now be opened up to public submissions and a conference on the issue -- at this stage scheduled for November -- will be held.

Last month, Unison sought a High Court injunction to prevent the commission from publishing its intent to declare control. That injunction was dismissed.

- NZPA