The Commerce Commission has today released guidelines on how it intends to carry out the new responsibilities given to it under the Government's electricity reforms.

Commission Member Dr Kate Brown said that the reforms have extended the Commission's jurisdiction by giving it a third Act to enforce, the Electricity Industry Reform Act 1998 (EIR Act).

Today the Commission released its guidelines, Practice Note 3: Electricity Industry Reform Act 1998, Commission's Role and Processes. Practice Notes are formal Commission guidelines setting out how the Commission intends to apply particular parts of the law.

Prior to the EIR Act the Commission's jurisdiction encompassed the Commerce and Fair Trading Acts.

Dr Brown said that all involved in the electricity industry must understand that the EIR Act does not replace the two Acts already enforced by the Commission but is additional to them. Nor does this mean the Commission will reduce its focus on Commerce and Fair Trading Act issues in the electricity industry.

Under the EIR Act the Commission is given additional enforcement and adjudication roles.

Enforcement

Enforcement refers to the Commission dealing with a potential or alleged contravention of a relevant section of the EIR Act. The Commission's process would involve investigations which would end with the Commission deciding to take court action, accept a settlement, issue a warning or take no further action.

The Commission has been given jurisdiction over three enforcement areas:

  • the "ownership separation rules" in the EIR Act that require existing companies to separate their generation and retailing businesses from their line businesses;
  • the "arms length rules" that restrict future relationships between these businesses; and
  • the duty the EIR Act imposes on all parties not to defeat the purposes of the Act.

Adjudication

Adjudication refers to the Commission considering and adjudicating on a matter under the relevant section of the EIR Act. Adjudication would primarily involve the Commission deciding whether or not it should:

  • extend coverage of the EIR Act to include a specified electricity industry activity; or
  • exempt a specified activity from the EIR Act.

Copies of Practice Note 3 are available from reception at the Commission's Wellington office, level 7, Landcorp House, 101 Lambton Quay and on its web site.

Media contact: Commerce Act Manager Jo Bransgrove

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