Sharechat Logo

Regulator takes its time on gas meter sale to Vector

Thursday 10th January 2013

Text too small?

The Commerce Commission has given itself an extra two months to consider competition issues raised by Vector's proposed purchase of Contact Energy's gas metering business, following submissions claiming the move will create a "virtual monopoly" in gas metering in Auckland.

While Vector's application for clearance of the purchase by the competition watchdog attracted only two submissions, the commission has extended its original decision date of Dec. 21 last year to Feb. 22 "to allow further detailed enquiry and analysis," a spokesperson said.

The $63 million transaction was announced last October and attracted opposition from the Southern Cross Healthcare group and an Auckland gas industry consultancy, Energy Select.

Both argued Vector's application underplayed or mis-stated how difficult it would be for competitors to establish competitive gas meter service provision and decried the loss of Contact as the only non-network owner to provide gas meters.

"Replacement of existing assets is already almost non-existent and allowing one participant to have 76 percent of the market (nationwide) can only further lessen competition," said Energy Select's Shaun Hayward in a submission published on the commission's website. As a retail business rather than a monopoly network owner, Contact's ownership of gas meters "creates 'some' competitive tension."

Southern Cross Hospitals technical services manager Brendon Clifford described as "offensive" to suggest gas metering was low cost when there were major variations between the daily charges applied for industrial consumers of similar amounts of gas.

"If Vector is permitted to go ahead, Southern Cross Hospitals could expect Vector to align the current Contact customers with the Vector pricing schedule."

In some cases, that could see meter rental costs rise 350 percent, in a situation where customers cannot see how metering charges are set.

"The gas industry keeps a very closed shop and the fee schedules not published or available to customers," Clifford said in his submission.

 

BusinessDesk.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar headed for 1.3% weekly gain on expectations of a Fed rate cut
RBNZ knock-back gives Resolution chance to low-ball AMP - Jarden
Rail hubs may not boost Napier Port log trade
O'Connor looks to overhaul Biosecurity Act, improve animal tracing
Denton Morrell undefended at liquidation hearing
Contact steam to heat Norske Skog pellet business secured
Air NZ to amend booking engine after lawyer’s complaint
Ross McEwan to take helm at NAB
KPMG says bank capital proposals will wreck havoc on dairy farmers
Mild weather saps Vector's June-qtr volumes

IRG See IRG research reports