Vector's chairman says the firm is not "robbing" its customers and that the annual increases to the fee it charges to transport gas to their homes tracks consumer price inflation.
Michael Stiassny, speaking on Radio New Zealand this morning, was responding to a draft Commerce Commission report on pipeline pricing which aims to bring gas transport charges into line with the costs of providing the service.
In the proposal, the competition watchdog recommended Vector, the Auckland gas and electricity distribution monopoly, reduce its prices by between 16 per cent and 25 per cent. The Commerce Commission believes that could save more than 140,000 residential customers $4.60 a month or $55 a year.
Stiassny denied the implication that meant the watchdog thought Vector was overcharging customers and stressed the firm only increased it prices by "a maximum of CPI every year".
According to Statistics New Zealand figures, CPI rose 0.8 per cent over the year ending in September.
"We are company owned by New Zealanders and our consumers are basically our shareholders," Stiassny told Radio NZ.
"I don't think robbing them on one side and then giving back on another is normally what we do. We try find a balance between charging a fair price and giving a dividend and we have been doing that for quite a few years."
He said the Commerce Commission methodology used to calculate the costs was out of date and would hinder the firm's ability to spend money on capital expenditure.
Yesterday's proposal did allow for customised pricing based on project needs to address capital expenditure issues but Stiassny said the costs of applying for an exemption to the pricing structure could make it impractical.
"We are spending $17 to $18 million in dealing with the regulator. The cost of going through process is significant, and we are going to have to measure up whether the benefit of going through that process is worth the trouble," he said.
Stiassny shrugged off the 5 per cent drop in Vectors share price which saw it close at $2.75 yesterday, telling Radio NZ the firm's consistent dividend policy would underpin the stock.
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