Vector (VCT) Ltd., which distributes gas in New Zealand’s biggest city, fell the most in 3 1/2 years after the industry regulator said it will have to cut prices from next year.
Under the preliminary ruling, Vector will have to drop its gas distribution prices by an average 16 percent, while charges for using its high-pressure gas pipelines that transmit gas from elsewhere in the North Island must be cut by 25 percent, the Auckland-based company said in a statement. The shares tumbled 5.2 percent, the biggest drop since April 1, 2009.
Vector is in dispute with the Commerce Commission, which regulates gas and electricity distributors, saying its decisions will stall investment. The company has already begun court action to review the commission’s methodology.
“We are concerned at the commission’s approach to investment in gas transmission and distribution,” Chief Executive Officer Simon Mackenzie said in a statement. “We find it difficult to reconcile the decision against the Minister of Energy’s view of the criticality of the gas infrastructure in New Zealand and the need to ensure that those assets remain in excellent condition.”
Vector fell 15 cents to NZ$2.75 at the 5 p.m. market close in Wellington.
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