The Costs of Moving the Goalposts
Posted by Hamish on September 12th, 2006
All regulation has costs, but some costs are more predictable than others. As Alex Sundakov of Castalia pointed out over the weekend, the Commerce Commission’s decision to investigate Vector’s internal cross subsidy, imposes costs on the electricity industry. But it is not only the electricity industry where these changes hurt the businesses - and ultimately the consumers.
Clearly natural monopolies - and you can’t get much closer to a natural monopoly than an electricity lines company - requires regulation, but that regulation should be predictable.
Those proposing changes in the regulatory environment for bus services should bear that in mind. Otherwise it is the passengers, and ratepayers, who will pay.