VECTOR ACKNOWLEDGES UNINTENDED BREACH
Vector has reached a settlement with the Commerce Commission for an
unintended breach of its regulated price path.
The breach arose in April 2013 when Vector restructured its prices to enable
residential consumers to benefit from either a low user fixed charge or
standard user tariffs. While Vector was legally prevented from unilaterally
switching consumers onto the optimal tariff for their usage pattern, it
relied on electricity retailers to identify and proactively request Vector to
switch those consumers who would benefit from a low use fixed charge tariff.
Vector assumed that competition in the electricity retail market would ensure
retailers selected the most beneficial tariffs for their customers. This did
not occur. The Commerce Commission noted that this has highlighted the need
for consumers to check that if eligible, the low use tariff is being used as
it could save households up to $200 a year.
Vector will return $13.9 million to Auckland electricity consumers by
reducing the amount of revenue it recovers over two regulatory years starting
in April 2018. In the FY2018 financial year, Vector''s electricity revenues
(and EBITDA) will be $0.9m lower than they would otherwise have been, with
the remainder spread across FY2019 and FY2020. The $13.9m to be returned to
consumers also includes accumulated interest of $3.8m.
ENDS
About Vector
Vector is New Zealand''s leading multi-network infrastructure company which
delivers energy and communication services to more than one million homes and
businesses across the country.
Vector is listed on the New Zealand Stock Exchange with ticker symbol VCT.
Our majority shareholder, with voting rights of 75.4%, is Entrust (formerly
Auckland Energy Consumer Trust).
For further information, visit www.vector.co.nz
Contact
Dan Molloy, Chief Financial Officer
021-441-311
OR
Melanie Tuala, External Relations (Media)
021 518 459
End CA:00303766 For:VCT Type:GENERAL Time:2017-07-07 15:40:22