VECTOR LIMITED V COMMERCE COMMISSION HC WN CIV-2011-485-536

VECTOR LIMITED V COMMERCE COMMISSION HC WN CIV-2011-485-536

The Court held the Commission misinterpreted Part 4 by failing to determine and publish IMs for valuation of assets, allocation of common costs and treatment of taxation as applicable to Electricity DPP regulation and by failing to determine and publish a stand-alone SPA IM; further held s54K(3) permits a reset only to the extent a subsequently published IM would have materially altered the original DPP, therefore the Commission must consult and publish the required IMs and SPA IM before any s54K(3) reset based on those methodologies.

Citation
openlaw-a33bd16b_a06f_4aee_a8b2_033d80976ac7.pdf
Parties
Applicant: Vector Limited; Respondent: Commerce Commission
Court
High Court
Jurisdiction
New Zealand
Judgment Date
26 September 2011
Procedural Posture
Judicial Review / Judgment Delivered 26 September 2011
Outcome
Application granted in part: declaration that Commission misinterpreted Part 4 by not determining specified IMs and a SPA IM and consequential relief ordering further consultation and publication
Legal Topics
Input Methodologies, Default Price Quality Path (dpp), Starting Price Adjustment (spa), Commerce Act Part 4 Interpretation, Appeals and Remedies
Competition Law Regulatory Law Administrative Law Energy Law Input Methodologies Default Price Quality Path (dpp) Starting Price Adjustment (spa) Commerce Act Part 4 Interpretation +1 more

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Parties

Vector Limited

Applicant

Commerce Commission

Respondent

Procedural Posture

Judicial Review / Judgment Delivered 26 September 2011

Legal Issues

  1. 1 Whether input methodologies (IMs) for asset valuation, allocation of common costs and treatment of taxation were required to be determined for Electricity DPP regulation
  2. 2 Whether a stand-alone starting price adjustment (SPA) input methodology was required under Part 4
  3. 3 Proper construction of ss 52T, 52R, 52P, 53P, 53O, 53ZB and 54K of the Commerce Act 1986

Ratio Decidendi

The Court held the Commission misinterpreted Part 4 by failing to determine and publish IMs for valuation of assets, allocation of common costs and treatment of taxation as applicable to Electricity DPP regulation and by failing to determine and publish a stand-alone SPA IM; further held s54K(3) permits a reset only to the extent a subsequently published IM would have materially altered the original DPP, therefore the Commission must consult and publish the required IMs and SPA IM before any s54K(3) reset based on those methodologies.

Court Disposition

Application granted in part: declaration that Commission misinterpreted Part 4 by not determining specified IMs and a SPA IM and consequential relief ordering further consultation and publication

Orders

  • Commission to specify IMs for valuation of assets, allocation of common costs and treatment of taxation as applicable to Electricity DPP regulation or adopt equivalent Electricity ID IMs for DPPs
  • Commission to consult under s52V and to determine and publish a stand-alone SPA IM for Electricity DPP regulation