The Government and Commerce Commission are paying proper attention to key infrastructure regulation, Vector chairman Michael Stiassny told the energy distributor's inaugural annual meeting yesterday.
Vector won a significant reprieve from harsh regulation last week when the Commerce Commission backed away from claims that the company was earning an unreasonable
return on its investments.
Instead the commission formalised arrangements requiring Vector to remove subsidies enjoyed by its Auckland domestic customers at the expense of others, particularly those in Wellington.
"The progress made with the commission, coupled with recent initiatives by the Government to incentivise urgently needed infrastructure investment, is encouraging and indicates that due attention is being paid to these important issues," Stiassny said.
"This, in itself, is positive for companies like Vector and for the New Zealand economy, and we will continue to work with the commission to build on the positive progress of the last two months."
Stiassny said Vector recognised regulation was necessary for essential services, but it should be consistent, stable and transparent.
The Government's directive to regulators at the start of August that they must consider the need to encourage investment in infrastructure was a source of optimism and Vector would participate in the impending ministerial review of regulatory frameworks.
"The review will also consider whether Commerce Commission decisions should be subject to merits-based appeals - something we see as desirable in the interests of regulatory transparency and confidence in regulatory processes," he said.
Regulation was uppermost in the minds of the more than 350 shareholders at the meeting. One asked directors to explain why investors had not been warned of the commission's plans to take control of Vector's prices. Another simply said the commission should keep out of Vector's affairs.
One shareholder said the directors representing Vector's major shareholder, the Auckland Energy Consumer Trust, should publicly make their case for re-election to the board, since they were at the same time campaigning for re-election to the trust. Stiassny declined the request saying it was outside the scope of the meeting.
Stiassny, Karen Sherry and Shale Chambers were all re-elected.
Vector's shares rose 3c to $2.53.
