The Commerce Commission today received an application from Auckland International Airport Limited for an exemption from the Electricity Industry Reform Act (EIR Act).

Commissioner Dr Kate Brown said that this is the first application from an organisation other than a traditional power company. The EIR Act covers Auckland Airport because the company both owns a network of power lines and retails electricity. It owns and operates an 11KV network on the airport site and sells electricity to customers on the site.

Dr Brown said the Commission's decision would be of considerable significance to other organisations in similar circumstances. That includes larger property investment companies that also sell electricity to their tenants and industrial companies that have built networks for their own use and also sell electricity to neighbours.

The EIR Act was passed last year and gives companies involved in electricity markets until April 1 this year to put in place corporate separation of their electricity generation and trading businesses from their lines businesses or to have obtained an exemption from the Commission.

Dr Brown said that the Commission has not yet estimated the date by which it expects to make its decision.

In considering an exemption, the Commission must answer three questions:

1. Would the exemption inhibit competition?

2. Would the exemption allow cross-subsidisation between electricity generation and lines businesses?

3. Would the exemption create a relationship between electricity lines and supply businesses, which was not at arms length?

"The presumption must be that if the answer to any of these questions is 'yes', the Commission must not grant an exemption from the EIR Act," Dr Brown said.

The Commission has produced free publications that would be of considerable use to companies to whom the Act applies. These include in particular:

* Practice Note 3: Electricity Industry Reform Act 1998, Commission's Role, Processes and Procedures (also published in the October issue of the Commission's newsletter Compliance);

* Business Acquisitions Guidelines.

Media contact: Commerce Act Manager Geoff Thorn

Phone work (04) 498 0958

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz