Transpower welcomes agreement with Commerce Commis

31 March 2006

Transpower welcomes agreement with Commerce Commission

Transpower is welcoming the agreement reached with the Commerce Commission to work on an administrative settlement.

The Commission had announced its Intention to Declare Control, following Transpower’s announcement of a 19% average price increase for 2006/07.

Transpower Chief Executive Dr Ralph Craven says both sides have shown real willingness during discussions held in the past week to achieve a workable outcome.

“We are hopeful that an appropriate way forward can be worked out in a matter of weeks.

“The new prices will take effect as planned from 1 April 2006, but Transpower will provide an interim monthly rebate to customers, which will effectively hold their charges around the levels applying now.

“The interim rebate will continue until the discussions with the Commerce Commission are concluded. The Commission has agreed to defer any decision on whether to declare control to allow those discussions to take place.

“Transpower is particularly encouraged that the Commission has indicated willingness to make changes, within the regulatory framework, that will provide for an approach more suited to a transmission business such as Transpower.

“We believe it is possible to reach a settlement on future revenue setting with the Commerce Commission that would be in the best interests of Transpower and consumers.

“Transpower hopes that through continued open and effective engagement it can conclude discussions with the Commerce Commission as speedily as possible to provide certainty to transmission customers,” Dr Craven said.

ENDS

Background

As owner and operator of the national grid, Transpower has 46 customers – 35 electricity companies and 11 industrial plants.

On 22 December 2005 the Commerce Commission announced its Intention to Declare Control of Transpower. On 31 January 2006 the Commission’s reasons for making this declaration were published, with a submission period ending on 27 February 2006.

Transpower’s submission and cross-submission can be viewed at www.transpower.co.nz

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