Commission receives application for EIR Act exemption from Vector Limited
Published31 May 2007
The Commerce Commission has received an application from Vector Limited, seeking exemption from section 17 of the Electricity Industry Reform Act 1998 in relation to its involvement in the proposed development of the Te Rere Hau wind farm situated on the Tararua Ranges near Palmerston North.
NZ Windfarms Ltd and NPBB Pty Ltd have entered into a joint venture to develop the Te Rere Hau wind farm. Vector has agreed to subscribe for an interest in NZ Windfarms.
Vector Limited is involved in electricity distribution in the Auckland and Wellington regions and also owns a portfolio of infrastructure assets, including gas transmission and distribution pipelines. Vector is listed on the New Zealand Stock Exchange with its majority shareholder being the Auckland Energy Consumer trust.
Section 17 of the EIR Act prohibits the cross-involvement of electricity lines and supply companies.
Background
The purpose of the EIR Act is to reform the electricity industry:
to better ensure that costs and prices in the electricity industry are subject to sustained downward pressure;
to ensure the benefits of efficient electricity pricing flow through to all classes of consumers; and
by effectively separating electricity distribution from generation and retail and promoting effective competition in electricity generation and retail markets.
The Commission may grant an exemption only where doing so:
a. would not result in certain involvements in electricity lines businesses and electricity supply businesses which may create incentives or opportunities:
i. to inhibit competition in the electricity industry; or
ii. to cross-subsidise generation activities from electricity lines businesses; and
b. would not result in relationships between electricity lines businesses and electricity supply businesses which are not at arms length.
