Capital costs set for regulated industries

The Commerce Commission has set the weighted average cost of capital (WACC) - the expected rate of return businesses need on investments to compensate for risks - for several regulated industries.

Those industries are electricity lines services, gas pipeline services, and some airport services supplied by the companies operating Auckland, Christchurch and Wellington airports.

Commission general manager regulation John Hamill today said most WACCs would be re-estimated annually to reflect changes in market interest rates.

Several WACCs had been developed because they applied to different services and types of regulation.

The commission said it was satisfied the estimates of the WACC were commercially realistic and appropriate for the regulated suppliers.

NZPA

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