Gas companies respond well to new disclosure requirements
2 December 2015
The Commerce Commission has welcomed the high level of compliance from gas pipeline companies in meeting new requirements to disclose how they are managing their assets.
Four gas pipeline companies—Vector, Powerco, GasNet and Maui Development—are required to disclose asset management plans as part of the information disclosure regime under Part 4 of the Commerce Act.
These plans provide important detail on how these infrastructure businesses manage high value assets that have a long lifetime, including how they consider the benefits and risks consumers face.
The Commission employed consultants MWH to review the companies’ plans and has released its report today. Under this first formal review of the plans, the report focuses on compliance with the information disclosure requirements as well as the usability, scope, and coverage of the plans. The Commission will explore further aspects of asset management in the gas pipeline sector in the future because of its importance.
Commission Deputy Chair Sue Begg said the report found the four companies generally provided the types of information required, resulting in a good level of compliance overall
“Given this is the first time we have formally reviewed their asset management plans we are pleased with the high level of compliance found. The information they have disclosed should be useful for gas consumers, particularly major users, whose businesses can be very dependent on gas supply,” Ms Begg said.
“The report also highlighted some areas for improvement, such as stakeholder usability of the plans and communication of risk management. We expect these recommendations to be picked up in the future.”
The performance of the gas pipeline sector is currently topical, with gas-fired electricity plant closures adding to changes in sources of consumption, Vector announcing it is selling its non-Auckland assets, the input methodologies review underway and stakeholder engagement set to start on the upcoming price-quality path reset.
The Commission will be holding an initial workshop with gas pipeline sector stakeholders this month to discuss engagement on the 2017 price reset and the input methodologies review.
A copy of the report on the gas companies’ asset management plans can be found on the gas pipelines section of our website.
What is information disclosure?
Under information disclosure regulation the Commission requires regulated businesses to publish information about their performance. The aim of this type of regulation is to give transparency about how regulated businesses are performing and whether the purpose of Part 4 of the Commerce Act is being met.
Regulated businesses must publish information such as data on prices, measures of quality, financial information, and forecasts of future expenditure (including planned investment). We also produce a summary and analysis of this information to help people understand the performance of individual businesses, how they're performing compared to each other and any changes over time.
The companies’ asset management plans are each available on their respective websites.
Does this report account for Vector’s planned sale of some of its gas assets?
Vector’s asset management plan was disclosed and reviewed prior to the announcement it was selling its gas transmission and distribution assets outside Auckland to First State Funds. The sale has no bearing on the current report. Should the sale proceed, First State Funds will then take responsibility for all reporting requirements on the assets it owns.