Commission seeks comment on Enerco bid for Capital Power
Published22 Sep 1994
What would happen to competition if Wellington's gas supplier also owned 49 percent of its electricity company?
The Commerce Commission is asking interested parties to comment by the end of the month on gas company Enerco's proposal to buy 49 percent of Wellington electricity company Capital Power.
Commission Chairman Alan Bollard said the Commission views gas and electricity as being substitutable energy forms in some, but not all, circumstances.
"What we would like people to comment on is how they see common ownership of the electricity and gas utilities in Wellington affecting competition," Dr Bollard said. "Do the utilities constrain each other now? What would happen to those constraints if Enerco owned 49 percent of Capital Power?"
Comments on other competition issues relating to this proposal would also be welcome.
The Commission can only consider the proposal in terms of the Commerce Act. Consequently comments must focus on competition issues, detriments caused by any loss of competition and the economic efficiencies which may result if the proposal went ahead.
The Act prohibits any business becoming dominant in a market, or strengthening an existing dominant position.
Enerco has applied to the Commission for authorisation of its proposal. If granted, authorisation would prevent other parties challenging the proposal in court.
Any public comments should be sent by September 30 to: David Taylor, Chief Investigator, Commerce Commission, PO Box 2351, Wellington.
Media contact:Vince Cholewa, Communications Officer