Control of Gas Pipeline Services: Policy Approval and Order in Council - Cabinet Minute

1. noted the contents of the submission and the additional paper attached to CAB (05) 330 on the proposal to impose control in respect of the gas distribution pipelines of Powerco and Vector following the Commerce Commission's Inquiry under Part 4 of the Commerce Act;

2. noted that the Minister of Energy (the Minister) is satisfied that the tests in section 52 of the Commerce Act have been met and that control may be imposed in respect of the gas distribution pipelines of Powerco and Vector;

3. noted that the Minister intends to recommend to the Governor General that an Order in Council be made under section 53(2) of the Commerce Act that imposes control over:

4. noted that the Minister intends to recommend that the Order in Council have effect for a period of 11 years;

5. authorised the submission to the Executive Council of the Commerce (Control of Natural Gas Services) Order 2005 [PCO 6666/5];

6. agreed in principle to the preparation of draft regulations by Parliamentary Counsel (to be made under section 74 of the Commerce Act) to recover the costs of administering the control described in paragraph 3, subject to the final decision of the Minister after consultation with Vector Limited and Powerco Limited;

7. noted that the Minister will be seeking fiscally neutral changes to appropriations if levy funding is implemented;

8. agreed that a targeted (thresholds) control regime should be imposed in respect of natural gas distribution and transmission pipelines modelled on the regime for electricity lines businesses in Part 4A of the Commerce Act;

9. agreed that the gas pipelines of Powerco and Vector be transferred from Part 5 control to the targeted (thresholds) regime once this is in place;

10. noted that there is some doubt in Part 4A that section 57ZF (which allows the Commerce Commission (the Commission) to use all the powers available to it under the Commerce Act) covers section 70E (which allows the Commission to require companies to provide information, including forecasts);

11. agreed that, for the avoidance of doubt, the Commission's powers under the targeted (thresholds) regime for gas should include section 70E powers to obtain information, including forecasts;

12. invited the Minister to instruct Parliamentary Counsel to prepare draft legislation to implement the above decisions;

13. noted that under the targeted (thresholds) regime responsibility for the information disclosure regime will be transferred to the Commission;

14. noted that the Minister indicates that consultation is not required with the government caucuses or other parties represented in Parliament.