16 June 2016
Auckland Airport has received the Commerce Commission’s draft decisions for consultation on its review of input methodologies – the rules, requirements and processes that apply to electricity, gas and airport services, which the Commission regulates under Part 4 of the Commerce Act.
Phil Neutze, Auckland Airport’s chief financial officer, says, “Auckland Airport welcomes the continued recognition by the Commerce Commission that it does not set pricing for airport services and that its focus is on ensuring there is transparency in relation to the pricing decisions made by the airports.”
“The Commission is proposing that it will publish a mid-point weighted average cost of capital, or WACC, and a standard error estimate. If a regulated airport’s targeted return differs from the Commission’s WACC estimate, the airport would then have to provide an explanation and disclose evidence to justify the difference.”
“We understand this approach would provide flexibility to take into account different contextual factors, including the risk profile of different projects.”
“We await the Commission’s publication next week of the full draft amended input methodologies determinations and the draft amended airports information disclosure determination, as well as the report presenting the more detailed findings of the review. Auckland Airport intends to make a submission on the draft decisions,” says Mr Neutze.
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