Vector ready to argue against paper

Vector chief executive Simon Mackenzie. Photo / Brett Phibbs

Vector says a Commerce Commission paper set to form the basis of what electricity lines businesses can charge could create greater uncertainty.

Vector chief executive Simon Mackenzie said the company did not think the commission had taken enough account of the global financial crisis and market volatility.

"While the commission has referenced the need for long-term certainty, there is little recognition of the need to attract offshore capital to New Zealand for investment in growth and security of supply," he said.

The issues covered by the paper include such areas as cost allocation, asset values, depreciation, tax obligations and cost of capital estimates.

The commission says the purpose of input methodologies was to promote certainty for suppliers and consumers under the Commerce Act and promote long-term benefit for consumers in markets with little or no competition, or no likelihood of a substantial increase in competition.

Commission chairman Mark Berry said the input methodologies work would, in the long term, provide greater certainty for regulated businesses.

Mackenzie said Vector had consistently stated that regulation must strike the right balance between protecting the consumer and ensuring businesses earned "commercially appropriate returns".

"Clearly the release of the paper is only a starting point and we intend to continue to be proactively involved in the process, which still has a long way to go."

Vector shares closed up 2c at $2.17 yesterday.