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.
Vector chief financial officer Dan Molloy said on Friday: “While Vector was legally prevented from unilaterally switching consumers onto the optimal tariff for their usage pattern, it relied on electricity retailers to identify & 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/year.”
Mr Molloy said Vector would return $13.9 million to Auckland electricity consumers by reducing the amount of revenue it recovers over 2 regulatory years starting in April 2018. In the 2018 financial year, Vector’s electricity revenues (& ebitda) will be $900,000 lower than they would otherwise have been, and the rest will be spread across the 2019 & 2020 financial years. The $13.9 million to be returned to consumers also includes accumulated interest of $3.8 million.
Attribution: Company release.