|
Administrative Settlement Best Path Forward - 13 October 2006 |
 |
“The Auckland Energy Consumer Trust is pleased the Commerce Commission has accepted in principle Vector’s administrative settlement offer and agreed to put it out for public consultation,” Trust Chairman Warren Kyd said today.
“It was the recommendation of the Trust’s industry and legal advisors that the Trust support the proposed settlement in the awareness that rebalancing is inevitable as the Commission is requiring other lines businesses also to rebalance their prices. We will now participate in the consultative procedure and do all in our power to secure a successful outcome,” Mr Kyd said.
“The Commission will make a final decision when the consultations are completed. Acceptance of the administrative settlement, and the Trust believes this is highly likely, will supercede the price control inquiry into Vector’s electricity lines business.
“This is in the best interests of consumers and investors because it preserves the incentives to invest and will help preserve shareholder returns, including those to the Trust’s almost 300,000 beneficiaries.
“Price control would threaten Vector’s overall rate of return and therefore its ability to meet capital and maintenance needs and to pay dividends,” Mr Kyd said.
The settlement proposal formalises the staged rebalancing in rates of return across customer classes voluntarily embarked on by Vector two years ago and due for completion in 2009.
“The Trust recognises that the rebalancing will mean higher prices for Auckland residents but notes that two of the four price increases have already been delivered through adjustments this year and last year.
“Removal of the spectre of price control will be positive for the company and for the wider public because it will restore certainty and stability to the Commission’s thresholds regime and will give investors the confidence to invest in much needed infrastructure,” Mr Kyd said.
Contact: Warren Kyd 0274-462-489
|
|
