The Commerce Commission has today published two reports detailing the findings of its review of regulated gas pipeline
businesses’ risk management practices.
The review was undertaken for the Commission by independent experts AECOM. The reports:
• assessed how well First Gas had specifically assessed, documented and managed geotechnical risk and geohazards
affecting its gas transmission pipelines; and
• reviewed regulated gas pipeline businesses’ risk management practices more generally.
Commission Deputy Chair Sue Begg said the purpose of the review was to gain a greater understanding of the processes New
Zealand’s regulated gas pipeline businesses have in place to identify and manage risks to their network. Buried gas
pipelines, for example, are susceptible to natural land movements which may lead to ruptures and associated health and
safety, supply, environmental and cost impacts.
“The review found that risk management practices are generally in good shape and reasonably consistent across all the
gas pipeline businesses. The independent experts noted the businesses were already taking steps to address many of the
concerns they identified. They also found that First Gas had a good understanding of the geohazards present in its
transmission network and has appropriate processes in place to identify and mitigate the risks posed,” Ms Begg said.
Copies of the reports can be found on the Commission’s website
There is one transmission business (First Gas – Transmission) and four gas distribution businesses (First Gas–
Distribution, Vector, Powerco and GasNet) that are subject to price-quality and information disclosure regulation under
Part 4 of the Commerce Act 1986.
Responsibility and accountability for sound asset management practices and decisions rests with the regulated gas
pipeline businesses. However, the Commission seeks to encourage improved practices, as well as a better understanding of
those practices by stakeholders, because poor asset management can impose significant costs on consumers through
inefficient delivery of services and poor-quality outcomes.
Under the Commission’s information disclosure requirements, gas pipeline businesses are required to publicly disclose an
asset management plan (AMP) or AMP update each year. The AMP provides information on how the business intends to manage
its network assets.
Under our summary and analysis powers we may monitor and review disclosed information for the purpose of promoting
greater understanding of the performance of individual regulated suppliers. More generally, we also have powers to
investigate how effectively and efficiently any regulated supplier is supplying regulated services, and in this instance
have chosen to focus specifically on risk management practices.