Commission chair Paula Rebstock last night said the commission was trying to achieve an administrative settlement.

“The key issue here is the imbalance in Vector’s charges to difference consumer types,” Rebstock said.

She said Vector had breached price thresholds set under Part 4A of the Commerce Act.

The commission administers regulation of 28 electricity distribution companies and Transpower under Part 4A of the Commerce Act.

The companies are regulated because they face limited competition, and without regulation could charge too much for their services and earn excess profits. The companies are regulated for service quality and price rises, which are linked to the consumer price index rate of inflation.

Vector said it had previously reported threshold breaches.

In 2003-04, it breached the price threshold by $NZ74,000 ($A98,7000) on $477 million of revenue, the difference between forecast and actual recovery of Transpower transmission charges. During the same period, it also breached quality thresholds because of extreme weather.

Last September, the commission announced plans to impose price controls on Hawkes Bay’s Unison Networks and in December it announced plans to control Transpower’s transmission services. However, in both cases, the commission said administrative settlements would remove the need for price controls.