7 Aug 2017

Commerce Commission denies going easy on Powerco

7:14 pm on 7 August 2017

The Commerce Commission is defending itself against allegations that is going soft on electric lines companies.

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Photo: 123rf.com

The accusation came from the Major Electricity Users Group, which represents large-scale buyers of electricity like New Zealand Steel, Pacific Aluminium and Fonterra.

The commission regulates electric lines companies that are natural monopolies and so cannot be constrained by market forces.

The group accused the commission of making it easy for New Zealand's second-biggest lines company, Powerco, to raise prices.

Powerco said it needed more money to pay for $1.4 billion of technical improvements to its ageing network of wires, poles and transformers.

The major users group said recent comments showed the commission was trying to encourage Powerco, when it should have been more neutral.

The Commerce Commission has denied this, however. It said its processes for handling matters like this were determined after a long review that was completed last year and had input from across the industry.

These streamlined the process in a way that could be in the interests of consumers where significant extra investment was required because many network assets were nearing the end of their lives, the commission said.

It said the Powerco application and its impact on consumers had already been subject to rigorous analysis and would now be subject to further scrutiny by the Commission.

Further input was available to interested parties, including the Major Electricity Users Group.

A final decision on Powerco would be done by next March.

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