The New Zealand Herald reports that submissions to Mallard from 16 firms and organisations have now been released by the Ministry for Economic Development, and that they include strong calls from energy networks companies Vector and Powerco for the minister to reject any price controls.

The Wellington-based commission last year said it estimated Auckland-based Vector would garner monopoly profits of NZ$76.9 million from its gas networks from 1997-2008, and New Plymouth-headquartered Powerco would reap just over NZ$50 million.

The commission also said that if direct controls were imposed, there would be a public benefit of NZ$6.9 million a year from Vector and NZ$3.7 million a year from Powerco.

But Vector’s submission to the minister maintains there is no case for control and says the recently established gas industry regulatory regime, to be overseen by the new Gas Industry Company, would be cheaper and more effective than price controls.

Vector claims there is already stiff competition in the gas supply business as natural gas is a discretionary fuel.

"The day-to-day reality for our gas business is competition with other energy options, particularly LPG," its submission says.

"Only about 25% of customers that could connect to Vector’s gas network choose to do so, underscoring the discretionary nature of gas and the range of other energy options available to consumers."

The market for bottled LPG is growing quickly and poses a significant competitive threat to pipeline gas, and there is also the risk that regulation will suppress vital investment in new infrastructure, according to the submission.

Merchant bankers and stockbrokers ABN Amro also say there is no need for new price controls. Research head James Miller argues any decisions by the minister could have "significant implications" for the infrastructure investment community.

But major gas player Contact Energy supports plans for regulating gas pipelines in the same way as electricity lines companies are controlled, saying it appeared that “some pipeline companies are earning returns that are inconsistent with efficient operations".

Meanwhile, Vector and Mercury Energy - part of government-owned Mighty River Power - have both just announced increased energy charges.

Mercury is increasing its residential gas prices by an average of 6.2% from May, while Vector’s prices increase by an average of 5.9%, also from May.

Mercury says wholesale gas prices are still increasing, while Vector cites higher labour and maintenance costs.