Unison challenges watchdog over power bills

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

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 the legal threshold for electricity distribution by raising prices in April 2002 and March 2004.

It said that if controls were imposed, consumers would be better off a year by $193 in Rotorua, $321 in Taupo and $77 in the Hawkes Bay.

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

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

He said Parliament did not intend the commission to have unstructured and highly discretionary power.

The targeting was designed to enable the commission to rein in "out of control" companies.

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