Unison drops prices as Commission threatens control

The Commerce Commission has delayed a decision about whether to place Hawke's Bay electricity distribution business Unison Networks under its control, after Unison said it would reverse recent price rises.

Unison has told the Commerce Commission it would reverse its most recent distribution price rises in Taupo and Rotorua from April 1.

According to Unison this would lead to savings on the cost of electricity distribution of about $46, or 8.3 per cent, a year for Taupo consumers, while Rotorua consumers will save $40, or about 7.1 per cent.

Distribution charges make up around a quarter of the average power bill for residential consumers in those regions.

Commerce Commission Chair Paula Rebstock said the undertaking was a gesture of good faith from Unison.

The Commission said delaying its decision on control would give Unison time to prepare an administrative settlement offer, which would be a less intrusive and cheaper alternative to the Commission declaring control.

A settlement would probably involve the Commission and Unison agreeing on average price levels for the company for a number of years.

The Commission said it expected Unison to provide it with a settlement offer by the end of May. If the pair can reach a preliminary agreement with Unison on the settlement offer, the Commission would then consult on the terms of that settlement with interested parties.

"In the meantime, consumers in Taupo and Rotorua will not have to wait until the end of that process to see results. They should get the benefit of reduced distribution charges immediately," Ms Rebstock said.

If they can't reach an agreement the Commission will again look at declaring control of Unison's distribution services.

The Commission published its intention to make a declaration of control of Unison's electricity distribution services in September last year, following an inquiry in which it found the company had breached price and quality thresholds.

Unison supplies electricity consumers in the Hawke's Bay, Taupo and Rotorua regions. The company is 100 per cent owned by the Hawke's Bay Power Consumers' Trust, which acts on behalf of the consumers connected to Unison's network in Hawke's Bay.

- NZPA