Move to give control of Vector to councils

Moves are afoot to wrestle control of $6 billion energy company Vector from consumers and hand it to three Auckland councils.

Auckland City finance committee chairman Vern Walsh has told the Herald he wants to bring forward a handover of Vector assets from 290,000 power consumers to the Auckland, Manukau and Papakura councils.

Mr Walsh also wants to protect those councils' interest in Vector if the Auckland Energy Consumer Trust's public shareholding becomes part of a new regional governance structure

Rumours that the councils were trying to get their hands on the trust's assets have been denied in the past but now Mr Walsh has said it "would be nice to get hold of the assets sooner rather than later".

The councils, which are capital beneficiaries of the trust, are not due to take ownership of the assets until 2073. Until then, 290,000 power consumers are income beneficiaries and get an annual dividend. Last month, they got $310 for this year's dividend. The trust has distributed more than $546 million in dividends since 1993.

Mr Walsh said he intended to look at the issue after this month's trust elections. Elections for five trustees are held every three years.

The three tickets contesting the elections have promised to keep the trust's 75.1 per cent stake in Vector after the Citizens & Ratepayers Now-controlled trust privatised 24.9 per cent of the company last year to pay for the takeover of gas lines company NGC.

Mr Walsh said he would hate to see the trust assets end up in a new regional governance structure benefiting North Shore and Waitakere ratepayers, who sold their power company for a one-off share windfall.

"I would want to see the beneficial interest of the trust utilised within the current boundaries [of Auckland, Manukau and Papakura]," said the City Vision councillor.

Trust chairman and C&R Now candidate Warren Kyd said the assets were owned by the consumers, not the councils, which would use them as a cash cow for their own spending projects. "This is an infrastructure asset that should be preserved for that purpose and no other purpose."

Leader of the left-leaning Powerlynk ticket contesting the elections Shale Chambers said if the councils got the assets the money would be dispersed and Auckland's security of power supply would be the loser.

The trust commissioned a report by the New Zealand Institute of Economic Research looking at different ownership structures, including handing over the shares to the three councils. Dr John Yeabsley, one of the authors, said the conclusion was "the current arrangements are superior".

Spokespeople for Finance Minister Dr Michael Cullen and for Energy Minister David Parker said officials were not working on a governance review of the trust and its assets.

"It is an issue for the shareholders of the region," Dr Cullen's spokeswoman said.