The Commerce Commission has been asked to authorise two agreements relating to the sale of electricity in the period before the wholesale electricity market becomes fully-operative in October next year.

Commission Chairman Dr Alan Bollard said the Electricity Market Company (EMCO), the Electricity Corporation of New Zealand (ECNZ) and Contact Energy have applied for authorisation of the proposed rules of the New Zealand Electricity Market until September 30 next year.

EMCO is the company formed to administer the wholesale market, and Contact is the recently created SOE which proposes to acquire eight power stations from ECNZ and to compete with it in the wholesale market.

In the other application, ECNZ and Contact have asked for authorisation of an interim supply agreement under which Contact would supply electricity to ECNZ until September 30.

The applicants have said that both interim agreements are necessary transitional measures to allow a competitive wholesale electricity market to be operating from October 1 next year.

Dr Bollard said the Commerce Act prohibits contracts and agreements that substantially lessen competition. However, it also allows them to be authorised if it can be shown that the public benefits they bring are greater than the detriments to competition.

Agreements between competitors, such as the interim rules and the interim supply agreement, could be at risk of breaching the Act if they are not authorised.

An authorisation, if granted, protects contracts and agreements from court action under the Commerce Act.

"We propose to look at both applications together," Dr Bollard said. "The Commission has decided to hold a conference of interested parties in mid-January and we anticipate making a final decision around the end of that month.

"We are asking those with a direct interest in the proposed agreements, and who wish to make submissions on them, to contact us."

He stressed that submissions should be limited to comment on how these specific agreements affect competition. The Commission is not investigating the Government's energy sector reforms, and comment on them is not relevant to the matter in hand.

Media contact:Communications Officer, Vincent Cholewa

Phone work (04) 498 0920, home (04) 479 1432

The Commission's provisional timetable for considering the applications is:

ASAP: public notice advising of applications and asking people and organisations who may be interested parties to register their interest

by December 1: interested parties to register their interest with the Commission

by December 12: receive initial submissions from interested parties

by December 21: release draft determination giving Commission's preliminary view

by January 12: applicants and interested parties to make submissions on draft determination

January 18-19: conference in Wellington to give applicants and interested parties the opportunity to provide further comment and for the Commission to ask questions

by about January 31: release final decision