Published 24 December 2009
The Commerce Commission released papers yesterday detailing its emerging views on input methodologies for electricity distribution services, gas pipeline services and specified airport services supplied by Auckland, Wellington & Christchurch International Airports.
The methodologies will eventually form part of a new regulatory regime for airport services that is due to take effect from 2011.
While the commission’s statement was all about process, Auckland International Airport Ltd chief financial officer Simon Robertson noted that it had amended its earlier-announced preliminary views on several aspects relating to the way input methodologies should be determined. “Key changes relate to the valuation of airport land. The Commerce Commission’s current view is that the initial value of the regulated asset base should use 2009 land values, rather than its earlier view that a 2002 ‘base valuation’ be used. Additionally, land should be revalued at least once every 5 years, with CPI indexation applying between these revaluations.” Mr Robertson said Auckland Airport had expressed its concerns about the 2002 base valuation approach, as it would have the effect of applying regulation retrospectively. He said it was important that airport land was appropriately valued so good commercial decisions were made about its use. “A central thrust of our submissions on airport regulation has been that airports need to have the correct commercial incentives to ensure they make the necessary infrastructure investment for the benefit of travellers & other airport users, and the broader New Zealand economy. “We look forward to our ongoing consultation with the Commerce Commission as it progresses development of an information disclosure regime for airports.”
As the next step in the regulatory process, the Commerce Commission is convening 4 industry workshops to discuss its emerging views papers in February-March.
Commission chairman Mark Berry said the commission wanted to share its latest thinking with interested parties following the input methodologies conference in September and the subsequent cross-submissions.
“This additional step in the consultation process has been made possible by the extension granted by the Minister of Commerce. The papers detailing the commission’s emerging views are not intended to be exhaustive or provide full reasons. They are intended to provide key context for the workshops due to be held in February.”
The commission is seeking the initial views of interested parties on the proposals in the papers by late January & early February.
Website: Industry regulation
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Attribution: Commission & company releases, story written by Bob Dey for the Bob Dey Property Report.