Gas consumers would have better access to quality information if proposals set out in a Ministry of Commerce discussion paper were implemented.

Minister for Enterprise and Commerce Max Bradford said the gas disclosure discussion paper released today would require gas pipeline owners to meet more stringent information disclosure regulations.

“The paper contains proposals designed to tighten disclosure provisions and to improve the quality and comparability of disclosures.
Key proposals include:

 better accounting definition of the monopoly and contestable parts of gas businesses;

 requiring pipeline owners to adopt a common balance date for disclosure purposes; and

 introducing a mandatory optimised deprival valuation (ODV) methodology.
“Gas companies already use ODV to value their pipelines,” Mr Bradford.said.
“But the methodologies are not standardised or transparent. This creates a risk that pipeline owners could over-inflate valuations to hide monopoly profits.”

Other proposals in the discussion paper include requiring more detailed information about the reliability performance of gas pipelines.

There is also a proposal to drop the requirement for the Natural Gas Corporation to disclose its wholesale gas contracts, in recognition of advances in wholesale gas competition.

“The discussion paper also asks some key questions about the effectiveness and value of gas sector information disclosure,” Mr Bradford said.

The discussion paper is being sent by the Ministry of Commerce to industry participants. It can also be downloaded from the Ministry of Commerce website at http://www.moc.govt.nz. Submissions close on 29 November.

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