Vector to Follow Commerce Commission Repayment Terms

Press Release – Vector Limited

Vector to Follow Commerce Commission Repayment Terms

Vector Limited confirms that it will be following the legal terms of the settlement with the Commerce Commission.

Under the terms of that settlement the proceeds of the unintended breach of its regulated price path will be repaid by holding residential prices flat for the next two years, resulting in consumers paying less.

Responding to a media release issued by Mercury, Vector Chief Executive Simon Mackenzie said it was interesting that Mercury was purporting to act as consumer advocate given that it – along with other retailers – had failed in its duty to identify consumers who should have been placed on a lower cost tariff.

“We have been totally upfront throughout, acknowledged our mistake and the Commerce Commission accepted that we did not intend to breach our regulated price path at the time we restructured prices.

“Ironically, the breach was a result of our misplaced confidence in thinking retailers like Mercury would do the right thing for low user consumers and that retail market competition would prevail.

“Vector was legally prevented from unilaterally switching consumers between low use and standard use tariffs. We were forced to rely on retailers to identify and request Vector to switch those consumers who would benefit from a low use fixed charge tariff. In many cases, the retailers simply didn’t do it,” Mr Mackenzie said

Vector settled on the reduced lines charge repayment plan with the Commerce Commission because it is the most reliable way to ensure the over recovery is returned to customers. There is no regulatory power to force retailers to pass on refunds to customers.

“Vector wants to ensure the money gets to consumers, particularly in light of how the breach came to pass. This way we can be sure that all consumers will get what is owed,” he said.

In the Commerce Commission statement regarding this matter Deputy Commissioner, Sue Begg said that all consumers should ask their retailers to check that they are on the best tariff for their circumstances.

“We can only again endorse Ms Begg’s comments and reach out to Aucklanders to hold their retailers to account. We are restricted in our communication with consumers so it’s important retailers use their insight to step up and put consumers on the right plan,” Mr Mackenzie said.

ENDS

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