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Major Gas Users’ Group v Commerce Commission - decision

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This case concerns the regulation of competition law regarding gas pipeline services in New Zealand. The plaintiff, representing the largest gas consumers in the country, sued New Zealand’s competition regulator, the Commerce Commission. They challenged decisions in which the Commission effectively allowed the country’s largest gas pipeline operators to raise prices to recover higher short-term costs in light of New Zealand’s announced phase-out of fossil fuels. The Commission essentially adjusted the useful lives of gas pipeline assets to account for this phase-out and accelerated the depreciation of those assets. 

The first of the two decisions hinged on a challenge to the Commission's selected "input methodologies" in making its decision. Section 52Z of the Commerce Act states that challenges to the Commission’s input methodologies can only succeed if the plaintiff identifies an alternative methodology that is “materially better in meeting the purpose” of the Commerce Act’s competition regulation provisions. In this instance, the Court determined that the plaintiff failed to identify a materially better methodology, concluding that the Commission’s decision fulfilled the purposes of the Act—such as promoting the long-term benefit of consumers by reflecting long-run supply costs and acknowledging the risk of stranded assets. The Court rejected arguments claiming that the decision was premature, contrary to the specific purposes of input methodologies, or that it overcompensated suppliers at the expense of consumers.

In the second decision, the Court concluded that the Commission’s ruling did not satisfy the threshold of an error of law (namely that the Commission had not failed to apply the correct legal test, had not misconstrued or misunderstood the law, and had not made a clearly untenable decision).

Major Gas Users’ Group v Commerce Commission

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

A target to reduce the prevalence of a greenhouse gas over a specific time frame

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

A ban is a legal action that prevents the sale or supply of a product or service, or that recalls a product from the market. Examples are bans on SF6, greenwashing, fossil fuel advertisement or single-use plastics.

Energy derived from biological compounds that are renewable due to their short life cycle within the carbon dioxide cycle.

Conditions that enhance the feasibility of adaptation options. Enabling conditions include finance, technological innovation, strengthening policy instruments, institutional capacity, multi-level governance and changes in human behaviour and lifestyles.

This sector provides communication services, software development, and IT solutions.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

A commitment to balance GHG emissions with removal by a certain point in time, effectively reducing the net emissions to zero

Jobs that contribute to preserving or restoring the environment. We include jobs which require a high amount of green skills or which spend much of their time on green activities, as well as jobs transforming polluting industries.

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

Codes and standards are regulatory instruments that specify minimum standards to protect health and safety. This ranges from performance standards, which prescribe outcomes while allowing flexibility to achieve compliance, to the more prescriptive approach of technology-specific standards.

A potent, short-lived greehouse gas, largely released from livestock, fossil fuel extraction and waste management.

Activities of government agencies and institutions that provide public services, enforce laws and manage public resources.

Geohazards are adverse geological phenomenon's that are capable of causing widespread damage or loss to property, life and the environment, such as earthquakes, volcano eruptions and tsunamis. Climate change can increase the frequency and severity of some geohazards, such as landslides, and soil erosion.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Major Gas Users’ Group v Commerce Commission - decision

Target

Policy instrument

Risk

Just transition

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance