Commission receives four submissions on Powerco/Egmont
Published17 Jun 1997
The Commerce Commission has received four submissions after it released a draft determination stating that, on information currently available to it, it would authorise Powerco Ltd to acquire up to 100 percent of Egmont Electricity Limited.
Commission Chairman Dr Alan Bollard said that the deadline for ordinary submissions was Friday June 13, and that for expert submissions is Friday June 20.
Submissions received to date are from Powerco, Mercury Energy Limited, the South Taranaki Energy Users Association and Todd Petroleum Mining Company Limited.
Interested parties will also have the opportunity to give further information to and answer questions from the Commission at a conference to be held in the National Library Conference Room in Wellington on June 30 and July 1. Only interested parties can participate in the conference, but the public can observe and the media can report proceedings.
In its final decision, to be made by July 21, the Commission will draw together information from its investigation, from the submissions and from the conference.
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market. However, it allows an otherwise prohibited acquisition to be authorised if the Commission is satisfied that public benefits from the acquisition outweigh its detriments to competition.
The Act requires the Commission to release a draft determination giving its preliminary view, and giving interested parties a clear indication of how the Commission views the issue and where it wants further information.
In this case, the Commission's preliminary view is that the proposed merger would give rise to a dominant position in the market for the supply of natural gas and electricity to small consumers in the Hawera area. However, it is also the Commission's preliminary view that the benefits of the merger outweigh any detriments.
Currently small consumers in that area have a choice of natural gas from Powerco, and electricity from Egmont. If the merger proceeds, that competition will be lost.
However, the combined entity would appear to benefit from reduced costs and greater profitability, its customers would receive improved services and those who are now Egmont's customers would get improved access to technology.
