The Commerce Commission has today declined to grant Central Electric Limited an exemption from sections 30 and 46 of the Electricity Industry Reform Act 1998 (EIR Act).

Commissioner Dr Kate Brown said that Central Electric, a trust-owned electricity supply business, wished to acquire the Monowai power station from The Power Company. The EIR Act prevents trust-owned electricity supply businesses from growing by acquisition.

Dr Brown said, "in making its decision the Commission was not satisfied that the members (beneficiaries) of the trust which owns Central Electric could exercise influence over the trustees in a manner similar to that of shareholders exercising influence on directors of a company. As a result, Central Electric did not 'get over' the hurdle of section 46. The Commission therefore declined to grant the application for exemption."

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.

Central Electric is wholly owned by the Otago Central Electric Power Trust. It owns the electricity network which services the Central Otago region including Queenstown, Wanaka, Cromwell, Roxburgh and Alexandra. It currently distributes and retails approximately 270GWh per annum to about 19,000 consumers connected to its network but is in the process of selling its distribution and retail businesses.

Monowai is a hydro-electric power station situated on the boundary of Fiordland National Park in Southland. It has a nameplate capacity of 7.4MW and generates between 35GWh and 40GWh of electricity per annum. Monowai is presently owned by The Power Company Ltd.

Public copies of the Central Electric decision are available from reception at the Commission's Wellington office, level 7 Landcorp House, 101 Lambton Quay.

Media contact: Commissioner Dr Kate Brown

Phone (03) 482-1558

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

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