The appeal court has upheld an earlier judgment against Contact for $NZ2.25 million, plus interest, made by Justice Lowell Goddard in the High Court, the New Zealand Herald has reported.
The case related to how the government's profit margin on Maui gas had been calculated since April 2001. The 1973 Maui White Paper essentially limits escalation clauses in the government's profit margin to half the rate of inflation. Originally this was based on movements in the Producers Price Index, but was overhauled by Statistics New Zealand in 1996.
There have been previous disputes between the government and the big three Maui gas users - Methanex, NGC and Contact - particularly in times in low inflation, even deflation, where the Consumers Price Index has fallen.
Contact spokesman Pattrick Smellie said the company had already paid about $NZ2.25 million to the government last year, on the understanding that if the appeal was successful it would be refunded. It was too early to say if further action would be taken.
Contact inherited ECNZ's approximate 40% stake in Maui gas when the former government-owned monopoly electricity generator was, in the late 1990s, split into Contact and the State-owned Enterprises of Genesis Power, Meridian Energy and Mighty River.
