The Commerce Commission has received an application from Mark Tume, seeking exemption from sections 17 and 17A of the Electricity Industry Reform Act 1998, in relation to PowerCo Limited's proposal to appoint Mr Tume to its Board of Directors.

Currently, Mark Tume is a director of Infratil Limited, which owns a 50.5 per cent shareholding in TrustPower Limited.

TrustPower is an electricity generator and retailer. TrustPower's generation assets include hydro stations in the Bay of Plenty and Taranaki and a wind farm in the Tararua ranges.

PowerCo Limited is an electricity lines business whose distribution network includes lines in the Tauranga and Taranaki regions.

Section 17 of the EIR Act is intended to prevent a person being involved both in an electricity lines business and in the generation or supply of electricity, in certain circumstances.

Section 17A sets out the circumstances under which the connected generation cap is breached.

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 and electricity generation and retail that may create incentives or opportunities:

(i) to inhibit competition in the electricity industry; or

(ii) to cross-subsidise generation or retail activities from electricity lines activities; and

(b) where applicable, would not result in relationships between a business that has involvement in electricity lines and a business that has involvement in electricity generation or retail, where those relationships may not otherwise be at arm's length.

For further information on the Commission's role within the EIR Act visit the Commission's website www.comcom.govt.nz under Electricity Industry Reform Act.

A public version of the application is available on the Commission's website under Electricity Resources.