KEY POINTS:
Eight months after hailing Vector's "much strengthened relationship" with the Commerce Commission, chairman Michael Stiassny fired a withering salvo at the regulator during the company's annual meeting in Auckland yesterday.
Stiassny said his pleasure in addressing shareholders on Vector's solid recent financial performance, was "tempered by disappointment that our business environment remains uncertain due to a volatile and unpredictable regulatory and policy environment that continues to impact on our investment confidence".
Almost a year ago Stiassny said "behind the bike shed" discussions with the commission, kept secret from Vector's then-chief executive Mark Franklin and the rest of the board, had smoothed out the lines company's previously difficult relationship with the regulator.
However, early this month the commission said Vector and Powerco, the other major gas network company in Auckland, were charging excessively for services and it would force them to cut prices by 15 to 42 per cent, on top of 9 per cent cuts already forced on the pair.
Yesterday, Stiassny said Vector had put "every effort" into trying to understand and comply with the commission's requirements in "a professional and constructive way.
"However, we continue to receive decisions from the commission which have adverse implications for our businesses, our shareholders and the wider infrastructure sector - and if investment in new infrastructure is to be blunted, it will also ultimately have adverse implications for the ordinary public."
Vector has for some time indicated it has ambitious plans to invest in substantial new fibre-optic telecommunications networks and renewable energy generation projects. But at the same time it has said the plans are dependent on a favourable regulatory environment.
"For Vector there currently remains a considerable gap between what we'd like to do, and what we feel we can responsibly do in this unpredictable regulatory regime," Stiassny told shareholders yesterday.
While generally supportive of the government's goal of reducing the energy sector's greenhouse gas emissions, Stiassny said Vector had concerns that the "decision to ban any new base load fossil fuel electricity generation" could threaten security of supply, particularly in the North Island.
Stiassny gave no further information on the potential sale or otherwise of Vector's Wellington electricity network.
Investment bank Goldman Sachs JBWere is currently assessing "various strategic options" for the network which Vector reportedly values at about $1 billion.
Meanwhile, acting chief executive Simon Mackenzie also emphasised that regulation was Vector's "number one issue" at present.
