Commission grants EIR Act exemption to Dr Keith Turner
Published06 Apr 2004
The Commerce Commission has granted an exemption under the Electricity Industry Reform Act 1998 (EIR Act) to the Chief Executive of Meridian Energy Limited, Dr Keith Turner, in respect of his impending appointment to the board of Auckland International Airport Limited (AIAL).
Issued 6 April 2004
The Commerce Commission has granted an exemption under the Electricity Industry Reform Act 1998 (EIR Act) to the Chief Executive of Meridian Energy Limited, Dr Keith Turner, in respect of his impending appointment to the board of Auckland International Airport Limited (AIAL).
Dr Turner had applied for an exemption from s 17 of the EIR Act which prohibits such cross-involvement. The EIR Act would deem Dr Turner to have material influence over Meridian's electricity supply business and AIAL's electricity lines business (in respect of its internal network).
Chair Paula Rebstock said that the Commission considers that provided there is no relationship between the two companies in which Dr Turner would be cross-involved, his application passes the Commission's criteria for granting exemptions from section 17 of the EIR Act.
"The Commission has made it a condition of the exemption that there should not in future be any connection or relationship between the two companies in respect of electricity supply or distribution whilst Dr Turner remains involved in both," said Ms Rebstock.
"In other words, Meridian should not become an electricity retailer to consumers connected to AIAL's electricity distribution network."
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 and the benefits of efficient electricity pricing flow through to all classes of consumers, 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 in respect of a business or involvement or interest, 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.
