Return of levy funds welcomed

Energy and Resources Minister Gerry Brownlee today welcomed the Gas Industry Company (GIC) board’s decision to hand back about $1.5 million in surplus levy funds to industry participants.

The decision follows a comprehensive review of GIC’s capital structure requested by the Associate Minister of Energy and Resources. The review identified that the GIC did not need to hold such high levels of reserve funds. The company’s operating environment had changed significantly since its inception and it now had a much improved understanding of the costs of its operations.

“All statutory authorities with levy raising powers have an obligation to be extremely careful with how these powers are exercised,” Mr Brownlee said.

“GIC had adopted a very conservative budget approach since its inception and it is pleasing to see the board return some of these funds after a lengthy process, now that it is clear they are surplus to requirements.

“As an aside, it is disappointing that the board has made no announcement of its own on this matter, given the size of the refund.”

GIC’s levy is paid by gas industry participants – major end users, gas retailers and wholesalers – with many then passing the cost through to end-users and consumers.

“I expect a reduction in next year’s levy from financial year 2010-2011, and that future levies should remain stable in anticipation of a more steady work programme,” Mr Brownlee said.

“While it is up to the gas companies to decide how they will deal with the refund, it is my hope that consumers, who ultimately pay the levy, will receive some benefit from this payment.”