Vector says court challenge is an option

Mark Franklin

Vector is considering challenging the Commerce Commission in court if the competition watchdog pushes ahead with plans to impose price controls on the electricity lines company.

Vector chief executive Mark Franklin told the Herald a judicial review of the decision was one of several options it could use to resolve the impasse with the commission. Others included an immediate price reduction and a negotiated settlement.

The commission said on Wednesday it might impose price controls because Vector had not delivered quickly enough on commitments to remove price disparities between some of its customers. It claimed Vector's Auckland residential customers were getting a free ride at the expense of others, particularly those in Wellington, and has proposed average price cuts of between 2 per cent and 11 per cent over the next two years.

Under the Commerce Act, Vector can ask the court to rule whether the commission has followed due process. "We are considering [a judicial review]." The disparities reflected Vector's history as a company created from the merger of several companies, all with different pricing policies, Franklin said.

Meanwhile investor outrage at the threat of control continued yesterday, especially the view that Vector should not be allowed to earn a return on its assets of more than 7.35 per cent.